Clean Air Act (CAA) Compliance/Enforcement Policy Compendium 1988 Vol.3


Clean Air Act
Compliance
Enforcement
Policy
Compendium
1988 ed.
Volume 3

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E

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E. Section 113: Federal Enforcement
1. Documentation of Violation Extending 30 06/25/76
Days Beyond Notice of Violation Under
Section 113 of the Clean Air Act
2. Control Commitments in DCOs and 11/07/77
Preservation of Source Rights to Challenge
SIP Regulations
3. Inappropriate Issuance of Section 113(d) (4) 01/14/80
Orders to Sources Subject to NSPS
4. Interim Particulate Controls 03/11/80
5. Delayed Compliance Orders Requiring SIP 05/27/80
Compliance Through Temporary Control
Measures (amended guidance)
6. Issuance of Administrative Compliance 08/26/80
Orders in Light of Harrison v. PPG
Industries. Inc. , 446 U.S. 578 (1980)
7. Delayed Compliance Or ers Issued Under 12/11/80
Section 113(d) (5) of the Clean Air Act
8. Issuance of Section 113(a) Orders to NSPS 02/23/81
Sources for Failure to Conduct Performance
Tests
9. Final Compliance Date for Unclassified 04/24/81
Areas
10. Policy for Addressing Violations Subject to 04/27/82
Non-Promulgated Regulations
11. Federal Enforceability Under PSD 04/28/82
12. Duration of Section 113(a) Orders 04/30/82
13. Guidance on Policy for Enforcement of 05/04/82
Visible Emissions Violations Against
Sources Which are Meeting an Applicable
Mass Emission Standard
14. Procedures for Review and Federal ‘egister 04/26/83
Publication of Delayed Compliance Orders
Under Section 113(d) of the Clean Air Act
15. EPA ’s Authority to Issue Delayed Compliance 08/22/83
Orders After December 31, 1982

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E. Section 113 (Federal Enforcement), continued
16. Decision in United States v. Kaiser Steel 03/27/84
Corp. , No. CV-82—2623-IH (C.D. Cal. Feb. 8,
1984)
—— interim guidance on application of
Method 9 to enforce SIP opacity
standards
17. Achieving VOC Compliance from Department of 04/24/85
Defense Contractor Facilities
18. Penalty Computations Under Section 113 06/25/85
Civil Penalty Settlement Policy and Section
120 of the Clean Air Act
19. Guidance on Complying with the Notification 06/28/85
Requirements in Section 113(a) (1) and
113(a) (4) of the Clean Air Act
20. Particulate Matter Interim Enforcement 06/28/85
Policy
21. Impact of Intermittent Source Operations on 07/02/85
Clean Air Act Penalty Calculations
22. Issues #3(e) & #5 of the VOC Issue 01/17/86
Resolution Process: Establishing Proof of
VOC Emissions Violations and Bubbles in
Consent Decrees Resolving Civil Actions
Under § 113(b) of the Clean Air Act
23. Responses to Two VOC Questions Raised by 01/31/86
the Regional Offices
24. Responses to Four VOC Issues Raised by the 02/28/86
Regional Offices and DOJ
25. Guidance: Enforcement Applications of 04/22/86
Continuous Emissions Monitoring System Data
26. Policy on the Availability of Low Solvent 08/07/86
Technology Schedules in Clean Air Act
Enforcement Actions
27. Penalties Under “Timely and Appropriate” 09/26/86
Guidance / 4 .y:-

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E. Section 113 (Federal Enforcement), continued
28. Revised Guidance Concerning Compliance By 02/08/89
Use of Low Solvent Technology in VOC
Enforcement Cases
29. Application of August 7, 1986 Policy on LST 12/05/86
Schedules in Consent Decrees
30. Clean Air Act Stationary Source Civil 03/25/87
Penalty Policy
—- includes Supplementation to Pages 9a added
and 11 of the Penalty Policy 03/17/88
Appendix I: Penalty Policy for revised
Violations of Permit 03/25/87
Requirements
Appendix II: Vinyl Chloride Civil Penalty revised
Policy 02/08/85
Appendix III: Final Asbestos Demolition revised
and Renovation Civil Penalty 08/22/89
Policy
Appendix IV: Volatile Organic Compounds revised
Penalty Policy 03/25/87
Appendix V: Air Civil Penalty Worksheet revised
03/25/87
Appendix VI: Volatile Hazardous Air added
Pollutant Penalty Policy 03/02/88
Appendix VII: Penalty Policy for New added
Residential Wood Heaters 09/14/89
Appendix VIII: Penalty Policy For revised
Production or Importation in 11/02/90
Violation of 40 C.F.R. Part
82 of Substances that
Deplete the Stratospheric
Ozone
31. Settling Enforcement Action in Clean Air 11/23/87
Act Non-Attainment Areas Against Stationary
Air Sources Which Will Not Be In Compliance
by the Applicable Attainment Date

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E. Section 113 (Federal Enforcement), continued
32. Revised Guidance on Enforcement During revised
Pending State Implementation Plan Revisions 03/01/91
33. Guidance on Inclusion of Environmental 01/27/89
Auditing Provisions in Clean Air Act
Settlements

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1

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Documentation of Violation Extending 30 Days
Beyond Notice of Violation Under Section 113
of the Clean Air Act
(06/25/76)
File at Part E, Document #1

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON. D.C. 20460
June 25, 1976 g13
OFFICE 07 ENFORCEMENT
Stm r: Dcc entation of Vio lation ctending 30 ys
Beyond Notice of Violation wider Section 113
of the Clean Aix Act
10: Begj js at a , Begions I-X
Pecent discussions a 4 representatives of the Office of
General Counsel, the Division of Stationary So ce L fcrca t (t SE),
and the Pollution Con o1 Section at Departhent of Justice
hea quarters have led to sate c 1 RYification of ‘s responsibility
for doctrrenting a violation ext ing 30 days beyond the date of a
notice of violation (NOY) issued dar Section 113 (a) (1) of the
Cl Air Act. As you Ja,ow, Section 113 (a) (1) provides that if
the violation extends beyond the 30th day after the date of the NO 7,
EPA ray issue an adITtinis ative order or initiate a civil action.
Section 113(c) (1) (A) (ii) rakes siini1 r provision f initiation of a
or dnal action.
It is aMl#s been A’s position that t issue of factof
whether a violation has extended beyond t)* irtieth day is
subject to de nova judici 1 review. (A n aTcrandwft ].1ng with the
scope of ju cia1 review is being drafted and will be sent to you
shortly.) The Departhent of Justice conazs in this position and
has, In at dition, expressed sate that the d rtentation of
continuing violation on which the EPA regional offices rely iiay not
in sate cases be’ sufficient to s t a ormntinal action.
We t ge you, therefore, to doowient the continuing violation
with Independent evidence tefore issuing any Section 113 adrtdnis ative
order which is not on consent, rather than relying on the continuing
reporting re uire tents of a Section 114 letter. This is oriti l in any
case which ray ultfirately require ixninal action and is d ’able
In all cases. The practice of relying on the absence of evidei e of
lience after issuance of the NOV through htçosing a requiresent
on the sauce to &e t changes in inf ation supp1ic d In response
to a Sec ioi . 114 lett ..: is no longer acceptab]e. At a mtninizn, new
opacity rea 1ings, plant visits, or S114 Inquiries as appropriate
should be reli9d tçon.

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If y a )mve any questi s ca n ts c this niattt ,_p1
contact Ed Reich, Chief, P force ient Proce&Urigs anth, D E , at
(202) —755-2523. , ,

: fc uant Divisi Dfrect s, gi s I-X
Air az ) t ia1e bivisi Direct e, Regi s I-X
StuveiUan Ar a1ysis DiVISI,ITt D1ze t, gi I-X

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2

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Control Commitments in DCOs and Preservation of
Source Rights to Challenge SIP Regulations
(11/07/77)
File at Part E, Document #2

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UNITED STATES ENViRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20463

November 7, 1977
âFncE 07 EtWO CE3E1IT
MEMORANDUM
SUDJECT: Control Commitments in DCO’S and Preservation of
Source Rights to Challenge SIP Regulations
Director, Division of Stationary Source Enforce—
men t
TO: David Ulirich, Chief
Case Development Section
Air Compliance Branch -
Enforcement Division, Region V
This is to confirm our conversation on the issues you
raised by telephone on whether a delayed compliance order
(Dco), issued pursuant to Section 113(d) (1) of-the Clean Air
Act, as amended 1977 (the Act), can:
1. Require the source to inp1eL ent a specified
control program, without requiring final compli-
ance with the relevant State Implementation
Plan (SIP) requirement; and/or
2. Include a specific preservation of whatever
rights the source might have under State .aw to
challenge the regulaticn with wh.ch compliance
is ordered.
with regard to the first issue, the ans ier is clearly
no. A DCO, whether federal or State, nust require compli-
ance with the appropriate SIP regulation within t e time
1i: its set forth in Sections 113(6) (1) (D). Both the
introductory partial sentence of Section 113(d) (1) and
Section 113(d) (1) CD) use the words “final compliance” with
the “requirement of N the “applicable implementation plan”.
Co iitmcnt to a control program, without a requirement for
sucn final compliance, does not satisfy the statutory
r juirenentc for a DCO, and is not acceptable.

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With regard to the second issue, our present thinking
fecarding the preservation, in a DCO, of the source’s rights,
U any, to challenge the regulation for which compliance is
ordered is as follows. A source could preserve whatever
rights it nay have under State law to challenge the regula-
tion if (1) the DCO makes clear that any such right cannot
be exercised until after the final compliance date of the
DCO, and (2) the DCO is very specific on the controls
recuired to be installed and operated. A source clearly
would not have any right to challenge the regulation in a
ftd. ral Section 307 proceeding (assuming the time for filing
such a challenge has expired), and the source must waive any
r.. tS it might have to challenge the order itself. The
corollary of these propositions is that, even if the source
d..d nbt specifically preserve its rights, if any, to challenge
t State regulation under State law, those rights wo uld not
be waived and, therefore, the inclusion of language to this
effect in the DCO confers no new ( ghts.
Our position on preservation of existing rights to
challenge the regulation under State law is not firm. I
invite your comments on the approach we suggest and I am
also inviting the commentsof other regional offices on this
issue.
Edward E. Reich

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IIL L OI bk ’T b O 7i
. /

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Inappropriate Issuance of Section 113(d)(4) Orders
to Sources Subject to NSPS
(01/14/80)
File at Part E, Document #3

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
JAN I 4 1930
OcFICE CF ENFORCEMENT
MEMORANDUM
Subject: Inappropriate Issuance of Section 113(d)(4)
Orders to Sources Subject to NSPS
From: Director
Division of Stationary Source Enforcement
To: Enforcement Division Directors
Regions I—X
Regional offices should be alert to situations
where sources seek delayed compliance orders (DCOs)
merely for the purpose of gaining what they perceive
to be an advantage in arguing for an exemption from
noncompliance penalties under Section 120 of the
Clean Air Act. For example, in at least one case, a
regional office agreed to issue a Section 113(d) (4)
DCO for a SIP violation where a violation of an
identicial Section ill New Source Performance
Standard (NSPS) would necessarily occur - while the
source was meeting the DCO schedule. Because
national policy on this issue was not clearly
communicated to the regional offices before this
commitment was made, we will not use that policy now
to block the issuance of a DCO in this case.
However, in the future, no DCO should issue where
identical SIP and NSPS emission limits will be
violated but relief is available only on the SIP
violation.* In some cases, the SIP may be more
* In some cases involving innovative technology,
relief may be available for NSPS under Section 111(j)
and for the SIP under Section 113(d)(4). Where this
is the case, there would be no bar to granting
simultaneous relief on terms which are mutually
consistent.
7

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stringent than NSPS and the granting of a DCO might
therefore be appropriate and not inconsistent with
Section 111. Any cases in this latter category
should be brought to DSSE’s attention as soon as
possible.
It is clear that sources will attempt to obtain
Section 113(d) (4) DCOs wherever they can because
Section 120(a)(2)(B)(iii) provides an exemption from
administrative penalties for sources demonstrating
that their noncompliance is due solely to use of
innovative technology sanctioned by a DCO under
Section l13(d)(4). However, Section 113(d) itself
allows extension of compliance dates through issuance
of a DCO only to the extent that the requirements
involved are part of the State implementation plan.
It is clear that Section 111 (NSPS) and Section 112
(hazardous air pollutant) standards are not to be
extended through issuance of a DCO and, therefore, a
source could not be relieved of its obligation to
meet those standards even if an identical SIP
requirement were extended. Issuance of a DCO in such
a case is meaningless in terms of the source’s
federal legal obligation to comply with the emission
limit. The only true advantage to the source in
receiving a DCO in such a case would -be an
improvement in its position to convince an
administrative law judge that it should be exempted
from Section 120. EPA should not issue DCOs for such
a purpose. EPA and the public have gained nothing
through issuance of a DCO in such circumstances and
may in fact have damaged the ability of the Agency to
collect noncompliance penalties in situations where
exemptions were not intended to be available.
This memorandum is not intended to preclude the
use of innovative technology by sources which are
violating NSPS and which cannot qualify for a waiver
under Section 111(j). It may be appropriate in some
cases for the Agency to agree to the use of
innovative technology as part of a compliance plan in
a judicial consent decree. The circumstances
involved would have to be examined on a case—by—case
basis where this alternative is being considered.
This would not, of course, insulate the source from
Section 120 penalties, however.

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Interim Particulate Controls
(03/11/80)
File at Part E, Document #4

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j - UNITED STATES ENVIRONMENTAL PROTECTION AGENCY X
2. WASHINGTON. D.C. 20460
titARII 1980
OFFICE CF ENFORCCMCNT
MEMORANDUM
Subject: Interim Particulate Controls
From: Deputy Assistant Administrator
for Ceneral Enforcement
To: Enforcement Division Directors, Regions I—X
The Office of Enforcement has developed a policy on the
use of flue gas conditioning as a means of interim particulate
control for power plants and industrial boilers. A statement
of the policy is attached. As more experience is acquired with
flue gas conditioning and other means of interim control,
appropriate changes will be made to the policy.
We also attach sample language that reflects the policy
statement; it is suitable for use in court orders and, with
proper word changes in paragraph 6, in administrative orders.
This language should- be modified as may be appropriate to fit
the circumstances of individual cases.
The policy statement and the sample language incorporate
• reference test method for measuring sulfuric acid emissions.
A statement of the test method will be forwarded when ready.
A draft of the policy e•tatement was circulated for comment
on October 10, 1978. The comments received from the Regions
and others were considered in preparing this final statement.
The policy statement indicates that under proper circum-
stances, flue gas conditioning is an appropriate and effective
interim particulate control. It is not, of course, the only
possible means of interim particulate control and all alterna-
tives should be considered and weighed in each particular case.

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For example, it might be appropriate in a given case to require a
moderate reduction in operations as a way of reducing patticulates
on an interim basis. Of course, where a source demonstrated the
ef?bctiveness of flue gas conditioning in accordance with the
policy statement, this could obviate, in whole or in part, the
need for such derating.
If you have any questions, please contact Edward Reich
of the Division of Stationary Source Enforcement, at FTS
755—2550 or james Herlihy at FTS 423—3250.
c ard • ilson
Attachments

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March 1980
Office of Enforcement
ENFORCEMENT POLICY ON INTERIM PARTICULATE CONTROLS
It sometimes happens that a coal—fired power plant or
industrial boiler ii out of compliance with particulate
emission regulations because an existing precipitator is
inadequate. This can occur for numerous reasons. The
precipitator may be underdesigned, the boiler may be operated
above design rates, or the plant may switch from a high to a
low sulfur fuel. In all such cases, the plant may be ordered
to install a replacement or supplementary precipitator over
a two or three year time period. During this period, interim
particulate controls should be required when practical.
Flue gas conditioning to supplement precipitator
performance may be appropriate as an interim means of
control in certain situations. In many cases, the necessary
equipment can be installed and made operational in a few
months and at reasonable coat. On the other hand,
conditioning agents may be toxic and their effectiveness is
not always certain. For these reasons, flue gas conditioning
should not e required in every case. However, where it is
reasonable to expect that particulate emission redu tIona
brought about by conditioning agents will more than offset.
increased toxic emissions, conditioning may be appropriate.
The Office of Research and Development CORD) has been
consulted to determine the circumstances under which flue
gas conditioning may be appropriate for interim control.
The guidelines in this memo are conBistent with ORD
recommendations.
When a coal—fired power plant or industrial boiler iB
ordered to comply with partkculate emissions because an
existing precipitator is inadequate, it ii suggested that
flue gas conditioning be considered as a means of interim
particulate control. Alternative approaches may also be
considered. For flue gas conditioning to be appropriate,
the following conditions should normally be met:
1. Conditioning is likely to be effective . As a
guideline, it should be likely that conditioning will
reduce net particulate emissions about SO percent.
In some cases, there may be performance data
from trial runs or pilot plant studies that will help
indicate whether this condition is met. Usual1y,
however, such data will be unavailable, so the effect
of conditioning must be determined some other way.
Methods have been developed to calculate the

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effectiveness of some conditioning agents. These
calculations should be made and the results used to
determine whether a net particulate reduction of about
50 percent is likely. (A contractor will be made
available to assist with the calculations.)
The calculations require an elemental analysis
of fly ash, so samples of fly ash or coal will be
needed. If the source has not purchased its new low
sulfur coal, samples may not become available until
after the compliance order issues. If an order is
to be issued in such a situation, the order should
provide that conditioning will be required after coal
or fly ash Bamples are tested, if CPA determines that
conditioning is likely to be effective.
2. Acid sulfate emissions will not increase significantly .
- As a guideline, the increase in acid sulfate emissions,
based on averages measured by the controlled condensation
test method, should not exceed about five parts per
million.
3. An approved conditioning agent is used . To lessen
the possibility that conditioning will increase toxic
emissions, the conditioning agents should be restricted
to the following, either singly or in combinetion:
inorganic sulfate, phosphate, or carbonate salts of
sodium, ammonium, magnesium, aluminum, or iron; the
gases sulfur trioxide, ammonia, steam (or water), air,
or oxygen; the oxides of iron, or sulfamic acid. To
ensure that this condition Is met, the approximate
composition of the conditioning agents should be
disclosed to CPA.
4. The interim period has a reasonable duration . The
interim period should be of such duration that the
conditioning system will be in operation for a
reasonable length of time before final compliance is
achieved. Reasonableness must be determined on a case
by case basis considering all relevant factors such as
emission rates, expected emission reductions, air
quality, installation times, etc.
5. The costs ore reasonable . The installation and
operating costs should be reasonable. The
reasonableness of cost must be determined case by case
based on all relevant factors, as Indicated in the
preceding paragraph.
6. The precipitator is in good repair . The predicted
effects of conditioning are based on the assumptions
that the precipitator Is in good mechanical condition
end that the precipitator is operated properly. If an

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order is issued to a source with a poorly maintained or
operated precipitator, the order should include
requirements for proper maintenance and operation.
If flue gas conditioning appears to be a reasonably
p:actical means of interim control based on the above ;
conditions, the Region should consider including requirements
for conditioning in the compliance order. In making a final
decision, Bite—specific factors should be considered. for
example, if the area in which the source will be located is
nonattainment for particulates, there will be greater
incentive to require conditioning than if the ambient
standard were being met. On the other hand, if other
sources in the area are already emitting acid sulfates,
it will be less desirable to require conditioning with
agents that cause the emission of additional acid sulfates.
The Region should make determinations on a case by ease
basis, and the Division of Stationary Source Enforcement
(DSSE) will provide assistance on request.
It may also happen that flue gas conditioning is
appropriate even if the above conditions are not met;
but in ouch cases, the Region should consult with DSSE
before issuing orders.
If conditioning is ordered, emission tests should be
conducted with and without conditioning, to confirm expected
particulate reductions and to measure any increase in
acid sulfates. Net particulates should be reduced about 50
percent. The increase in acid sulfate emissions should not
be more than about five parts per million. EPA Method 5
should be used for the particulate measurements, and the
controlled condensation test method should be the reference
method for acid sulfates. If conditioning agents other than
sulfur trioxide, ammonium sdlfate, or sodium carbonate are
used, DSSE sFi uld be consulted for possible modifications to
the test method for acid sulfates.
Unfortunately, the normal variability in measurements
of acid sulfates (due to limitations in the test method and
to changes in coal sulfur content) is about the same magnitude
as the increases that need to be determined. To obtain
sufficient accuracy, it is recommended that the average of
at least eight runs be used to determine baseline emission
levels without conditioning agents. The average of at least
eight more runs should be used to measure emission levels
with conditioning agents. The increase (if any) should be
determined by subtracting the first average from the s cond.
Asa check on the validity of the acid sulfate measurements
it is recommended that simultaneous sulfur dioxide
measurements be made. This will indicate the variability

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of the sulfur in the coal and help explain any observed
variations in the acid sulfate results.
During the emission tests, the conditioning system
should be operated in a manner previously approved by EPA.
(This will normally be according to the specifications;of
the supplier of the conditioning agents.) After the test,
the source should not be allowed to deviate from the teat
mode of operation without the approval of EPA, which may be
conditioned on additional testing to determine whether other
requirements of the order are met.
Visible emissions should be recorded during the emission
tests and monitored continuously after the conditioning
system becomes operational. The order Bhould provide that
reports be made to EPA when visible emissions increase
significantly during the interim period. EPA can then
inspect the plant to determine whether the source is violating
the order by deviating from the test mode of operation.
EPA should reserve in the order an ability to require
that a different conditioning system be installed or at
least an ability to seek a further court order for such a
change If the emission tests show that net particulate
emissions are not reduced about 50 percent or that acid
sulfate emissions increase more than about 5 parts per
million. The first option is more conservative, and should
normally be Insisted upon when the source intends to select
• conditioning system that is considered less likely to be
successful than alternative systems and/or the need for
interim particulate controls is great. Interim controls are
more important, for example, when the source is located in
an area that does not meet the ambient air standards for
particulate..
Flue gas conditioning 1. potentially applicable to many
source types, but so far additives have been demonstrated
only on coal—fired power plants. Compliance orders that
require conditioning should not be issued to sources other
than coal—fired power plants or industrial boilers without
first consulting DSSE.
Flue gas conditioning should not be recommended as a
means for achieving final compliance, because of the possible
toxic effects of conditioning agents. The major reasons for
this are: I) there i greater risk when possibly toxic agents
are used on a permanent basis, because the duration of
exposure will be longer, and 2) alternative technology—such
aaprecipitotors can achieve compliance without the increased
emission of possibly toxic agents. However, if It Is shown
to EPA’. satisfaction that the conditioning agents are
nontoxic their use a. a means of achieving final compliance
may be considered on a case by case basis.

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Proper maintenance of the existing precipitator is also
important for interim control. If the precipitator is not
adequately maintained, the benefits of conditioning may be
cancelled out, so consideration should be given to requirements
for restoring the precipitator to good mechanical condition.
The following items are important: a) gas distribution to
the precipitator should meet the requirements of the Industrial
Gas Cleaning Institute; b) collector plates should be
properly aligned; c) all discharge electrodes should be in
place; d) all power supplies and controllers should be
operational; e) proper ash handling procedures should be
followed.

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March 1980
INTERIM PARTICULATE CONTROL REQUIREMENTS:
(Sample Language For Court Orders)
(Source) shall comply with the following interim requit ements.
1. On (Date), (Source) shall provide EPA with repre-
sentative samples of the coal it plans to purchase.
EPA will then make a determination whether flue gas
conditioning is likely to be effective in reducing
particulate emissions when such coal is burned at
(Affected Facility) and otherwise appropriate. If
EPA determines that flue gas conditioning is likely
to be effective and otherwise appropriate, (Source)
shall comply with the provisions of paragraphs
2 through 8 inclusive. If EPA’s determination
is to the contrary, paragraphs 2 through B shall be
void. In either case, paragraph 9 shall be
effective.
(Note: this paragraph should be used only when it
ia necessary to delay a decision on requiring flue
gee conditioning, until eamplee of a new coal
supply become available for testing.)
2. A system for conditioning the flue gas from
(Affected Facility) by the addition of chemical
agents shall be installed according to the
following schedule:
a) (Date): Final interim control plan submitted
to EPA.
b) (Date): Cont act for flue gas conditioning
system awarded.
c) (Date): On—site construction of flue gas con-
ditioning system begun.
d) (Date): On—site construction of flue gas con-
ditioning system finished.
e) (Date): Flue gas conditioning system fully
operational.

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3. Before the date specified in paragraph 2 for the
flue gas conditioning system to be fully operational,
(Source) shall perform two sets of emission
tests on the stack gases from (Affected Facility)..
One set of tests shall be run without flue gas
conditioning and one set of tests shall be run
with flue gas conditioning. The same type of ’coal
shall be burned during both sets of tests. The
boiler load, sootblowlng operations, end the amount
of excess air shall be the same for both sets of
tests. The following pollutants shell be measured
simultaneously:
a) Particuletes; for each set of tests, at least
three measurements shell be made using EPA
Method 5 (40 CFR Part 60, Appendix A) end the
results averaged.
b) Visible emissions; for each set of tests, at
least three measurements shall be made using
EPA Method 9 (40 CFR Part 60, Appendix A) and
the results averaged.
c) Acid sulfates; for each set of tests, at
least eight measurements shall be made using
the test method specified in Tab A, end.
.theresults averaged.
d) Sulfur dioxide; for each set of tests, at
least eight measurements shall be made using
EPA Method 6 (40 CFR Part 60, Appendix A), or
an equivalent test method, done simultaneously
with the tests for acid sulfates.
All measurements shall be made with (Affected
Facility), and theelectrostetic precipitator at
normal operating conditions.
For the set of tests with flue gas conditioning,
the flue gas conditioning system shall be operated
in the manner recommended by the supplier of the
conditioning agents.
Ta allow the precipitator to stabilize, the
measurements with conditioning agents shall be
preceded by at least ten days of operation with
conditioning agents. Similarly, the tests without
conditioning agents shall be preceded by at least
ten days of precipitator operation without
conditioning agents.

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(Note: if conditioning agents other than sulfur
trioxide, ammonium sulfate, or sodium carbonate are
used, DSSE should be consulted for possible
modifications to the test method for acid sulfates.)
4. Any emission tests required by paragraphs 3,
5, 6, or 7 shall be subject to the following’
additional requirements:
a) EPA shall receive two weeks written notice
before the emission tests are run, and shell
have the opportunity to observe all teata.
b) A private contractor (not the supplier of the
conditioning system and not the supplier of
the conditioning agents) shall conduct the
tests and certify the results to EPA.
c) (Source) shall certify to EPA that (Affected
Facility) and the associated electrostatic
precipitator were operating normally, and that
the flue gas conditioning system was operating
according to the supplier’s specifications
during the tests.
5. (Source) shell use (Specify) sithe conditioning
agent.
If the approximate composition of the
conditioning agent changes at any time before final
compliance with particulate emission regulations
is achieved, (Source) shall disclose the new
approximate composition to EPA in writing, within
two weeks after the change occurs. The new
cohditioning agents, however, shall be subject to
approval by EPA. Moreover, if the approximate
composition of the conditioning agents is changed
after the performance tests required by paragraph 3
have been conducted, (PA may, at its discretion,
require additional performance tests that meet the
requirements of paragraphs 3 and 4. If EPA decides
to require such additional tests, EPA shall so
notify (Source) in writing. (Source) shall cause
such tests to be completed within one month from
the date the notice is received.

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—4-
(Note 1: the conditioning agents should be
restricted to the following, either singly or in
combination: inorganic sulfate, phosphate, or
carbonate salts at sodium, ammonium, magnesium,
aluminum, or iron: the gases sulfur trioxide,
ammonia, steam (or water), air, or oxygen, thB
oxides of iron, or aulfamic acid.)
(Note 2: the Region should not specify or agree to
specification of en agent, even if listed above, if
the Region believes it will not be effective at the
subject facility.)
(Note 3: if the conditioning agents are identified
by a trade name, the approximate composition
should be disclosed to EPA.)
(Note 4: if conditioning agents other than sulfur
trioxids, ammonium sulfate,, or sodium carbonate
are selected, OSSE should be consulted ?ar
possible modifications to the teat method for acid
sulfates.)
6. If the emission teeta required by paragraph 3 (or
paragraph 5, it applicable) show that:
A) The average particulstá emissions with flue
gee conditioning are more than 50 weight
percent of the average particulate emissions
without flue gas conditioning; or
B) The average emission of acid sulfates with
flue gas conditioning exceed the average
emission of acid sulfates without flue gas
conditioning by more than five parts per
million parts of the total gee stream by
volume,
ALTERNATIVE I
Then EPA may, at its discretion, select some other
commercially available conditioning agent(s), and
such agent(s) shall be used instead of (Specify the
agent named in paragraph 3).
If EPA imposes such a requirement, EPA shall
notify (Source) in writing. (Source) shall have
six months from the date such notice is mailed, to
install a conditioning system using the agents
selected by EPA, to make said system fully
operational, and to complete a new series ol
performance tests that satisfy all the requirements
of paragraphs 3 and 4.

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—5—
ALTERNATIVE II
Then EPA and (Source) shall meet to discuss whet
further action would be appropriate, including the
possible installation, testing, and operation of a
flue gas conditioning system that uses some other
conditioning agent(s). If the parties agfa. on
further actions to be taken, the agreement shall be
submitted to the Court as a proposed modification
of this order. If the parties do not agree, (PA
may petition the Court for such further relief as
it deems appropriate.
(Note 1: only one of the above alternatives should
be selected.)
(Note 2: Alternative I should be selected if the
agent specified in paragraph 5 is considered less
likely to be successful than alternative agents
end/or the need for interim particulate controls is
great.)
7. After the date the flue gas conditioning system is
required to be fully operational, (Source) shall
operate the flue gas conditioning system until
final compliance with particulate emission
regulations is achieved, or until CPA notifies
(Source) in writing, that conditioning ii no longer
required. During this period, the flue gas
conditioning system.- shall be operated in the same
manner in which it was operated during the emission
teats, unless (PA giveB written approval for
changes. EPA may require additional performance
tests that meet the requirements of paragraphs 3
and 4 before giving such approval.
5. After the date the flu. gee conditioning system is
required to be fully operational, and until the
final particulate standards are achieved, (Source)
shall continuously monitor the opacity of the flue
gas from (Affected Facility). Each month, (Source)
shall report to EPA all periods exceeding eight
hours throughout which (Affected Facility) operated
and one of the following happened:
a) The monitor did not operate properly.
b) The opacity exceeded, by more than ten percent,
the average opacity measured during the emission
teats required by paragraph 3. (For example, if
the overage opacity during the teats was twenty
percent, en opacity greater than thirty percent
should be reported.)

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—6-
c) Any combinatjon of a) and b) occurred. (For
example, if excess opecity occurred for three
hours, end the monitor was not operating but
the plant continued to run for the next aix
hours, this incident should be reported.)
9. (Source) ahall repair the precipitator presently
inatalled on (Affected Facility) as follows:
a) All miaeing discharge electrodes shall be
installed.
b) All sections of the precipitator shall be made
operational.
c) All power supply units shall be made
operational. -
These repairs shell be completed by (Date).
(Note: This paragraph is exemplary only. Items
should be added or deleted as appropriate.)
Tab A
Test Method For Acid Sulfates

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5

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g7 q r k O S

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Delayed Coir pliance Orders Requiring SIP Compliance
Through Temporary Control Measures
(05/27/80)
File at Part E, Document #5

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MAY27 ¶980
MEMORANDUM OFFICE C ENFORCEMENT
SUBJECT: Delayed Compliance Orders Requiring SIP
Compliance Through Temporary Control
Measures—-Amended Guidance
PROM: Deputy Assistant Administrator
for General Enforcement
TO: Enforcement DiviSion Directors,
Regions I—X
As indicated by my memorandum of M rch 7, 1980, the memo-
randa dated September 15, 1978, and December 8, 1978 (‘the 1978
memoranda’), concerning delayed compliance orders (‘DCO’s’),
have been withdrawn. This memorandum supersedes the 1978
memoranda.
The 1978 memoranda interpreted the provisions of Section
113(d) of the Clean Air Act as authorizing the approval of a
DCO under certain conditions notwithstanding that the order did
not require achievement of final compliance on the applicable
deadline (in Most cases, July 1, 1979) through the eventual
means of control contemplated by the order. A source uou ld
therefore have been allowed to meet the final compliance
deadline either by ceasing its operations or by other temporary
means of compliance pending the subsequent installation of
pollutiOn controls or completion of process changes.
TheOffice of General Counsel has advised that an order
under Section 113(d) may be issued or approved only if the
order requires a demonstration of compliance by the applicable
DCO deadline through the use of the ultimate means of control.
Section 113(d)(1)(D) requires that an order ‘provide for final
compliance’ by the applicable deadline. - Thus, a DCO must
require a source to achieve and demonstrate compliance by the
deadline inSection 113(d)(1)(D) through the use of the control
measures set forth in the order’s timetable and schedule for
compliance. While Section 113(d) does not by its terms require
that compliance be achieved by the ultimate means of control,
only such a content given.to the requirements of Section
113(d)(1)(D) gives meaning to the requirement of ‘final
compliance.’ The word ‘final’ modifies the word ‘compliance’
and limits the kinds of compliance that satisfy the
requirements of Section 113(d) (1).
The structure of Section 113(d) supports this inter-
pretation of ‘final compliance’ in Section 113(d)(1)(D). Under
Section 113(d), the Agency and the States are authorized to
issue an order postponing source compliance with the applicable

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—2—
State Implementation Plan (SIP) only if the order meets the•
conditions set forth in that Section. The conditions relate
generally to the achievement in fact of final compliance and
th reduction of emissions in the interim to the maximum extent
reasonable and practicable. Source compliance with the SIP may
be deferred only if, among other things, the order establishes
an enforceable schedule of actions leading to final compliance
(Sections 1.13(d)(l)(B), 113(d)(6), and 302(p)) as expeditiously
as practicable, but not beyond the applicable deadline (Section
113(d)(l)(D)), In addition, the order must require the source
to reduce emissions by the best practicable system in the
interim (Sections ll3(d)(l)(C) and 113(d)(7)) and must require
the source to comply with SIP limitations, in so far as it is
able to do so, during the duration of the order (Section
113(d)(7)). Controlled deferral of achievement of air quality
goals by a date certain would be compromised by the issuance or
approval of an order which contemplates final compliance after
such date. This view of final compliance is also supported
by the absence within Sectiofl 113(d) of any mechanisms for
enforcing, within the four corners of the order, source
compliance with any increments of progress which might extend
beyond the applicable DCO deadline.
If you have any questions on this matter, contact Mark
Silverinintz in the Divisibn of Stationary Source Enforcement.
( TS 755—2570).
cc: Michael James
Associate General Counsel
for Air, Noise, and Radiation

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6

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Issuance of Administrative Compliance Orders in Light of
Harrison v. PPG Industries. Inc. , 446 U.S. 578 (1980)
(08/26/80)
File at Part E, Document #6

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
pjJG26l 9 SO
OFVICE OF t4FORCEMENT
MEMORANDUM
SUBJECTI Issuance of Administrative Compliance Orders in
light of Harrison v. PPG Industries, Inc .
FROM: Director
Division of Stationary Source Enforcement
TO: Enforcement Division Directors
Regions I—X
The Supreme Court recently ruled that NSPS applicability
determinations are final agency actions and, as such, are
reviewab],e only in the Court of Appeals for the appropriate
circuit pursuant to Section 307(b) of the Clean Air Act, Harrison
v. PPG Industries, Inc. , ____US , 48 USLW 4585 (1980), (copy
attached). In ho]dliig thit final actions are reviewable solely
in the Court of Appeals, the Court’s decision could have an impact
on more enforcement related activities than just applicability
determinations., The proper venue for the review of final actions
is now settled, but the question of what is a final action for
purposes of Section 307 will undoubtably be the subject of future
litigation. This memorandum addresses the issue as it relates. to
administrative compliance orders under Sections 113(a) and 167 of
the Clean Air Act (hereinafter referred to as immediate compliance
orders).
Sections 113(a)(l) and 113(a) (3), when read in conjunction
with sections 110(i), and 111(e) and 112(c) respectively, are
designed to provide an administrative means for requiring a source
to immediately comply with specified provisions of the Clean Air
Act. The compliance date established by these orders must be no
longer than 30 days from the effective date of the order. These
orders have been used to require sources to correct relatively
easily remedied violations, such as deficient operation and
maintenance practices, inadequate reporting, or failure to conduct
performance tests. Section 113(a) (3) orders are also used to
require sources to satisfy Agency requests made under Section 114
of the Clean Air Act. Sections 113(a) (5) and 167 are designed to
provide an administrative means of stopping the construction or
modification of sources proceeding in violation of the Clean Air
Act.

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—2—
The Agency and the Department of Justice have taken the
position that orders issued under Sections 113(a) and 167 are not
final agency actions and, therefore, are not reviewable except as
pertinent in defense of an action taken under Section 113(b) to
enforce the order. Because of the specific notice provision of
S ction 113(d) of the Act, the issuance of or approval of Delayed
Compliance Orders under Section 113(d) follow the informal
rulemaking procedures of 5 USC 553, and are therefore considered
to be final agency actions. This position protects the issuance
of an immediate compliance order from legal challenge until the
Agency brings an action in the district court to enforce the
order. This avoids the problem of pre—enforcement review of
Agency actions which may have the result of hampering further
enforcement activities.
Thus, the Agency and Department are prepared to continue to
argue, that immediate compliance orders are not final agency
actions. At least one Court of Appeals has upheld this
position. 1 However, other sources are currently challenging,
/ Lloyd A. Fry Roofing Co. v. U.S.E.P.A . 554 F2d 885, (8th
Cir. 1977),.(Judicial review of a’batement order under Section
113(a) (1) on grounds of technological or economic feasibility is
inconsistent with the enforcement mechanism of the Clean Air Act,
and contrary to legislative history).
The following cases have also addressed the issue of pre—
enforcement review under Title I of the Clean Air Acts
a. West Penn Power Co. v. Train , 552 F.2d 302 (3rd dr.
1975), (Decision to enforce NOV is discretionary and hence
unreviewable under the Administrative Procedure Act (APA),
5 USC 701(a)(2); issuance of NOV is not final agency action,
hence unreviewable pursuant to APA, since it may or may not be
followed by a compliance order or civil action, 5 USC 704). But
see, West Penn Power Co. v. Train , 538 F.2d 1020 (3rd Cir.
1976), cert. den . 426 U.S. 947, reb . den. 429 U.S. 873 (Dictum:
ho1ding rW st Penn I not diapositiv f question of
reviewability of compliance order).
b. Union Electric Co. v. E.P.A. , 593 F.2d 299 (8th Cir.
1979), ( NOV is procedurai prerequisite to abatement order and not
reviewable on motion for temporary stay of enforcement).
c. Philadelphia Electric Co. v. Costle , No. 78—4170, (E.D.
Pa. 1978), (NOV reviewab le on purely legal issue of effect of 1977
Clean Air Act Amendments on pre—existing consent order, pursuant
to 28 USC S133l).
d. Chrysler Corporation v. E.P.A. , No. I? 77—371—C, (S.D.
md. 1979k, (NOV is final agency ac€Tön and reviewable on purely
legal issue of applicability of regulations to source, pursuant to
28 USC S1331). Accord, Ashland Oil Inc. v McDonald , No. C79—338
(N.D. Ohio, order denying motion to dismiss dated
June 11, 1980).

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-3—
and can be expected to challenge, immediate compliance orders by
asserting that they are final actions and seeking the jurisdiction
of a Court of Appeals under the PPG decision. Thus, prior to the
issuance of an immediate compliance order, the Regional Office
should be sensitive to the possibility that a case raising this
issue, and the merits of the order itself, will be initiated by
the aource.
Regardless of how a particular Court of Appeals decides the issue
of whether the immediate compliance order is a final action and
thus reviewable, the mere fact of the challenge can divertAgency
resources from enforcement to the defense of a collateral action.
This may hamper enforcement, especially if a subsequent enforce-
ment action in the district court is stayed pending resolution by
the Court of Appeals.
For this reason, while an order can be effective in
appropriate circumstances, consideration should be given to
alternative courses of action as well. An enforcement action in
the district court, including the filing of a motion for a
preliminary injunction, may be the most appropriate response in
some cases, especially where a source is constructing in violation
of new aource requirements. The Department oZ Justice has
committed to expedite its review of cases involving this. type of
violation, and to assist the Agency in insuring that delays in the
filing of such actions are minimized.
A second enforcement tool that has been successfully used is
the show cause conferencee Under this procedure, a source is
notified by letter that the Regional Office has evidence
indicating that it is in violation of the Act, and offers the
source an opportunity to meet with the Region in order to
demonstrate why a judicial action should not be pursued against
the source. This serves the purposes of informing the source of
the Agency’s position, and initiates a meeting where measures to
remedy the violation can be discussed. If this procedure does
not result in an agreement leading to prompt resolution of the
violation, the Regional Office should proceed with a judicial
enforcement action.
If, after considering the above factors, a Regional Office
determines that an immediate compliance order is appropriate, I
recommend that the Regional Office prepare for the possibility of
a challenge in the Court of Appeals by carefully developing an
administrative record supporting the action. An adequate
administrative record will be important not only if the particular
Court of Appeals rules that the order is a final agency action,

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—4—
but also if a court postpones a decision on this issue pending
review of the record supporting the order. 2 Tht1B, prior to the
issuance of the order, the administrative record should contain
evidence of each element of the applicability of the relevant
statutory and regulatory requirements, and of the violation.
Where the record contains some evidence favorable to the source,
the record should also explain that the evidence was considered
and why it was rejected, i.e., what evidence favorable to the
Agency’s position outweighs or refutes the evidence favorable to
the source.
If you have any questions with regard to this issue, please
fee]. free to contact me at 755—2550 or Edmund 3. Gorman of my
staff at 755—2570.
EdwardE. Reich
Attachment
2 1n Hooker Chemical Co. v. E.P.A. , No. 79—2194 and Tenneco
Chemica1 , Inc. v. Beck , No. 79—2 67, the Court of A eals for the
Third [ rcuit referred the action to a merits panel to review the
orders.

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7

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CcWE

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Delayed Compliance Orders Issued Under Section 113(d) (5)
of the Clean Air Act
(12/11/80)
File at Part E, Document #7

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.x
UNITED STATES ENVIRONMENTAL PROTECTION AGENC?
WASMINGTON. D.C. 20460
CEC I I
oFYIc oc £t4FORCEM NT
MEMORANDUM
SUBJECT:
FROM:
TO:
Delayed Compliance
113(d) (5) of the
Jeffrey G. Mi
Acting Assi
for Enfi
Regional Admi
Regions I—X
Under Section
Introduction
Since early in the coal conversion program, the Agency has
taken the position that EPA compliance date, extensions .(CDE’s).
couid be issued prior to the Federal Energy Administration
(PEA) issuance of a ina1 prohibition order under the iergy
Supply and Environmental Coordination Act of 1974 (ESECA). We
have continued this policy under the Powerplant and Industrial
Fuel Use Act of 1978 (FUA) in regard to delayed compliance
orders (DCOs) issued under Section 113(d) (5) of the Clean Air
Act. However, several EPA Regional Offices have recently
raised questions about the appropriateness of this practice.
This’memorandum responds to these concerns. It affirms our
past legal position and states the policy rationale for
exercising this discretionary authority while at the. same time
recognizing the need for a new approach toward determining
whether to issue a 113(d) (5) order to a source.
The Nature of the Problem
By statute, a DCO can only be granted to a major
stationary source which has been prohibited from burning
petroleum products or natural gas by an order issued by the
Department of Energy, Under ESECA, a prohibition order could
not be finalized or made effective by FEA’s issuance of a
Notice of Effectiveness until EPA had certified or. notified PEA
of certain statutorily required dates. FUA provides that DOE
first promulgate a proposed prohibition order, then make
certain technical, financial, and environmental findings which
support the eventual issuance of a final prohibition order.
Final prohibition orders under both ESECA and FUA are major
federal actions under the National Environmental Policy Act
(NEPA) and, as such, cannot be issued until an Environmental
Impact Statement (ElS) has been finalized and published in the
Federal Register .
,o s •
Act
nistrator

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—2—
While EPA has issued CDE’s or 113(d) (5) orders to fifteen
sources, only seven of these sources have received finalized:
DOE prohibition orders. DOE attributes problems in finalizing
such orders to difficulties in completing EIS’s. According
to DOE, this has frequently been due to inadequate and/or in-
complete analysis by particular contractors. In any case, EPA
has been left, in the past, in the position of having issued a
cnE or 113(d) (5) order while the DOE order was later rescinded
or never made final. Furthermore, because DOE EIS information
was either never available or only available after the decision
was made to issue aCDE or DCO, neither DOE nor EPA necessarily
had a complete understanding of the environmental impacts which
would be caused by a particular conversion to coal at the time
the CDE or DCO was being considered.
Continuation of Policy Regarding DCO Issuance Prior to DOE
Finalization of Orders
DOE finalization of orders has taken approximately three
years in the past and DOE anticipates that FUA orders will
continue to take between two and three years. Recipients of DOE
proposed prohibition orders are frequently sources ready to
switch to coal and capable of doing so without violating primary
ambient air quality standards. We believe that to require such
sources to wait appcoxiinately three years before they can burn
coal with thi legal protection of an EPA DCO would. contradict
the Agency’s stated position to support environmentally respon-
sible coal use. (See, for instance, the Statement of David G.
Hawkins, Assistant Administrator for Air, Noise, and Radiation
before the -Subcommittee on Environment, Energy, and Natural
Resources, U.S. House of Representatives, 7/21/80.)
Furthermore, experience has convinced us that EPA issuance
of a 113(d) (5) order is preferable to other courses of action.
Should a source begin burning coal without a DCO in violation
of SIP standards, an enforcement action would be appropriate.
The process of seeking an injànction and civil penalties is far
more resource—intensive than the process of DCO issuance, As an
alternative toa 113(d) (5) order, an action under Section 110(f)
of the Act is a less attractive option because issuance of a
Section 110(f) order does not involve establishment of enforce—
able emission limits or schedules for covered sources. A source
which was granted a 110(f) petition would be able to burn coal
without controls, leading to increased emissions. Moreover, in
the past, sources have attempted in inappropriate circumstances
to invoke the emergency provisions of Section 110(f) in order to
suspend the SIP and burn coal. Such petitions could increase if
the DCO process were viewed as ineffective.

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—3—
We have concluded, therefore, that the most orderly and
effective enforcement action EPA can take with regard to
sources converting to coal is to use the statutory mechanism
of 113(d)(5). In this way, the source is subject to an enforce—
able schedule for installation of pollution control equipment
lead1.ng to compliance with the SIP. Were we to require final DOE
orders, before entertaining 113(d) (5) orders, we would be likely
to Lace an increase in SIP violations caused by uncontrolled
emISsions of coal—burning facilities or increased attempts to use
Section 110(f) in a way that does not assure eventual SIP compli-
ance while burning coal.
Resolution of COnCfrfls with Past Programs
While for the above reasons, we will continue our policy
of not necessarily requiring a final DOE order under FUA before
issuing a DCO, we are also attempting to resolve two related
problems arising from DOE’s past failure to complete the
necessary EIS work and to promulgate final ESECA orders.
We recently communicated our concerns to the Assistant
Administrator of the Office of Fuels Conversion (OFC), Robert
Davies, and members ofhis staff. To help alleviate our
concerns, DOE has agreed henceforth to publish in the Federal
Register a Notice of’ Intent to Proceed , in those cases in which
DOE staff ace firmly committed to’ finalization’ of a proposed
prohibition. order- under FUA and for which a DCO is under con—.
sideration. In no case will EPA when a DOE Notice
of Intent to Proceed has not appeared. Also, DOE will not
withdraw or rescind any proposed or final order which was
relied upon as the basis for issuance of a DCO.
We also discussed DOE’s preparation of EIS’s and were
assured that DOE is firmly committed to cairying forward their
EIS work on coal conversions as expeditiously as possible. We
emphasized to OFC that EPA issuance of 113(d) (5) orders is
discretionary (...an order may be issued by the Adminis—
tratoc...). This means that1n some circumstances, EPA may
choose to postpone issuance of a DCO or may, in fact,’ decide
not to issue one. Environmental impacts other than the air
impacts under 113(d) (5) must be adequately assessed as soon as
possible in the DCO process. We hope to turn around past
delays on £15 work so that we will have, some significant
progress towards an BIS at the time of issuing a 113(d) (5)
order. DOE anticipates completion of a regional ElS comprising
42 utilities in the northeast by early 1981. These findings
ehould.aid EPA in making decisions as to when DCO issuance may
pose problems not related to air impacts.
However, since even a draft EIS may not be available at
the time the 113(d) (5) order i. submitted, we believe, that EM
has an.obligation to make its own preliminary assessment of
possible impacts of coal—burning prior to issuing an order. We
are developing a short questionnaire that can be completed by

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—4—
EPA air programs staff at the same time that the facility is
examined for assessment of necessary work on upgrading or
installing pollution control equipment. Such problems as ash
disposal, coal pile runoff, and acid rain impacts will be
included. EPA does not intend to take over EIS work on these
projects but rather intends to use such information as one
basis for decision—making regarding DCO’s. In a case in which
environmental impacts appear unusual or severe, the D O work
could be postponed until DOE is able to do sufficient analysis
of the problem areas and arrive at plans for optimum mitigation
and, if appropriate, until the EIS process is completed.
Other factors to be considered by EPA Regional Offices in
determining the appropriateness of proceeding with a DCO should
include: The compliance status of the source at the time of
application; serious differences in modeling methods and/or
results arrived at by the applicant powerplant and EPA; and
State attitudes toward the planned.converaion. No one factor is
solely determinative in regard to DCO issuance, and each appli-
cation should be considered and discussed with care in the light
of all relevant circumstances. We have emphasized to DOE/OFC
that decisions to issue DCO’s will no longer be relatively
automatic but will require the thoughtful analysis suggeSted
here.
In summation, we are committed to continuatiàn of our
present policy of considering issuance of DCO’s prior to DOE’B
isBuance of final prohibition orders. Any other course of
action would create delays of 2—3 years before DCO issuance and
coal burning, and would be likely to result in an increased
burden on EPA to take enforcement actions against violating
converters. It is far preferable in the light of national
energy needs for EPA to aid in an orderly and expeditious
transition towards clean coal—burning by getting sources on
enforceable schedules by means of Section 113(d) (5).
However, the statutory mechanisms must not be abused. EPA
must be prepared to insure that each DCO is supportable by
findings based on the factors previously listed and by a deter-
mination that DOE intends fully to complete all steps necessary
towards finalization of the proposed order, including a complete
and detailed £15.
If you have any questions concerning this memorandum,
please call Mary Douglas Dick of the Division of Stationary
Source Enforcement at PTS 755—0940.
cc: Robert Davies, Assistant Administrator
of the Of fLee of Fuels Conversion

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8

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i IO ii t====

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Issuance of Section 113(a) Orders to NSPS Sources
for Failure to Conduct Performance Tests
(02/23/81)
File at Part E, Document #8

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FEB 2 3 t981
SU7FC ’Z Issuance of Section 113(a) Orders to NSPS Sources for
Failure to Conduct Pert ormance Tests
FPO i Director
Division of Stationary Source Enforcement
TO: Louise D. Jacobs
Director, Enforcement Division
Region VI!
This office has received copies of the administrative orç1ers
issued by your office purSuant to F 1 ection 113(a) of the Clean Air.
Act.(the Act) to the A. C.- Sherwood Construction Co. of Independ—
ence, Kansas (Dec. 22, 1980), and the Beachner Construction Co.,
Inc. of t. Paul, kansas (Nov. 26, 1980). Those orders recmired
the companies to conduct performance tests within 30 days of the
effective dates of the orders and to demonstrate compliance with
the applicable New Source Performance Standard (NSPS), or to cease
operation.
While the use of Section 113(a) orders to reciutre performance
tests is an effective enforcement tool, we believe that requiring
shutdown as a sanction for failure to conduct the test should he
judiciously applied. We believe that shutdowns should be rec!uire
only in compelling circ mistances because the burden of shutdown
falls, inpart, on the employees of the company, who are not
oulpable in causing•the violation. We recommend thElt the Recional
Office take a hard look at the facts and equities in each case
before ordering shutdown.
In determining whether reauirinq shutdown is arpcopriate
the Regional Office should be sensitive to potentially mjtiqatirq
circ nnstances. In addition to recognizina that the burden of
shutdown tails in part on innocent employees, the Regional Office
should consider the environmental impact of emissions from the
source, both in terms of their nature and amount. In connection
with this consideration, it may be appropriate to make a
preliminary determination of the probable compliance status of the
source with the applicable emission limitation. For example, it
would he appropriate to compare the control eauipinent to be
utilized (albeit, not tested) by the subject source with control
ec,uiiiiient and strategies at similar sources which have (or,
perhaps, have not) demonstrated compliance with the emission
limitation.

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—2-
We believe that it is also important to analyze the reasons
for the source owner’s failure to perform the re ruired test.
Althouch the NSFS regulations do not provide for an extension of
the 180 day f con startup limit for performance testing, some
flexibility may be appropriate in certain circui stances, e.g.,
force vnajeure situations. Indeed, the Reqional Office in the past
has recognized the need to provide additional time in which to
conduct the r erformance test, 1tu , in Prairie States
ConRtruction Co. and htllin p ti uhel, Inc. , the Recion aaree
to consent decrees rather than issue shutdown orders.
In sw’, because shutdown is the strongest civil sanction
available under the Act, EP must be able to defend its use by
reference to the factual and enuitable circumstances in each case.
Enqaging in this analysis enables the Agency to’defend more
effectively its actions when charged with discriminatory
applications of policy.
If you have any cuestions with rep ect to this Issue, nlease
do not hesitate to contact me at’ ( FS) 755 —2550,,or 4inun T ornan
• of my staff at’ (FSTS) 755—257 ’.
Fdward F. Reich
bcc: Ed Corr an
Myra Cypser

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9

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TA fi 7T T A

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Final Compliance Date for Unclassified Areas
(04/24/81)
File at Part E, Document #9

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
24 1981
O flCEG ENFORCEMENT
MEMORANDUM
SUBJECT: Final Compliance Date for Unclassified Areas
FROM: Director
Division of Stationary Source Enforcement
TO: Thomas P. Voltaggio, Acting Director
Enforcement Division, Region III
This is to confirm the Agency’s position on the acceptable
duration of compliance schedules contained in consent decrees>
applicable to sources located in Air Quality Control Regions
officially designated under. Section 107 of the Clean Air Act as
‘unclassif ied.R
As you know, schedules applicable to sources located in
non—attainment areas must, except in the case of physical
impossibility, provide for final compliance by no later than
December 31, 1982. This constraint on the timing of compliance
is based upon the provisions of Part D of the Clean .Air Act
which generally require allnon—attainmentplans toprovide for
attainment as expeditiously as practicable but not later than
December 31, 1982. Endorsement of consent decree compliance
schedules for sources in non—attainment areas which extend
beyond this date would be inconsistent with this statutory
requirement.
You have raised the issue of whether the December 31, 1982,
• compliance date applies to consent decree schedules for
violating sources located in unclassified areas. As you ace
• aware, the Agency has previously decided that this constraint
does not apply to violating sources located in attainment
areas. Part D of the Act does not require the States to adopt
new implementation plans, and the December 31, 1982, attainment
date is inapplicable foc attainment areas. Based upon this same
reasoning, the additional December 31, 1982, final compliance
constraint does not apply to violating sources located in
unclassified areas. Such areas-are not subject to the
• requirement of Part D of the Act. Therefore, the Agency can
endorse a consent decree compliance schedule applicable to a
source located in an unclassified area which incorporates an
otherwise acceptable compliance program, even though the final
compliance date extends beyond December 31, 1982.

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—2—
If you have any questions, please do not hesitate to
contact Edmund Gorman of my staff at (PTS) 755—2570.
Edward E. Reich
c-c: Enforcement Division Directors
Regions I, II, IV—X
Steven D. Ramsey, Chief
Environmental Enforcement Section

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10

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L7 Q ’T T

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Policy for Addressing Violations Subject to
Non-Promulgated Regulations
(04/27/82)
File at Part E, Document #10

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PR 21 98Z
:r ? cr7 NDu :
StEJECT: Policy for ddressthg Violations Subject to
}on —Promulgated Regulations
ethleen 1’ . Bennett i I
As isti nt i di ini trator for ir, Noise and PadLction
TOg Regional J drninietr tOr 9 Eogion IX
rhis memorandum is in response to an issue which ias raised
in thc attached mcnorar dum f oz Carl Ko1:nert, Jre, concerning
Federal enforcewent of violations of regulations .hich
(a) have been adopted by the Eti te but not yet
approved by the Z dministrator 0 or
z
C (1) are in the existing !P but k ich have been
superccded by the regulation(s) in (a).
swe unciirster d it 0 the regulatiors incwection consist
c, rnainly of State and meal gcncy variances, 1 oEt of hich arc
shcrt—terr anc source—specific. hcae variances are viewed by
the State as a u ore effective route to obtaining final
.. cornpliance than civil flti ation, Since thc,State has pri isry
enforcement responsibility 9 EPA’s position is to defer to the
State as long as the Region determines tLat the State action
deronstrates progress toward final eo plience within a
reasonable time.. It is itn ortant to keep in mind that these
State acticnscan, if rcperly used, provide for the achievem ent
re.. of our natiOnal clean air. goals by obtaining coi plianee in an
efficient and effective anner. If £P is satisfied that a
srticuDr State action is an a ’proçriate x ectanitm for assuring
corpliance pith air pollution regulations, then a Federal
enforcen cnt action i ou1d be duplicative and a non—productive use
of limited resources.
• In evaluating hcther a State aetiortisappropriate
several factors i hould be considereds
> 12
z.
0
lLJ

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—2—
(1) If the source IE in cov, liance with the rchcdue
contained in the State decree (or order/variance),
IPA should czamine the expeditiousnesa of the
cor pliance schedule (including the incremental
dates in the schedule), and the past co ].ianCe
hiEtory of the Eource.
12) If the source is not ii eeting the t te schedule,
£PA should examine both the schedule and what the
State is doin 9 to remedy the situation. In aoing
this, £ PA should look at the rest com liànce
history of the source and the record of State
cr.forcemcnt actions to dcter ine whether the State
is likely to resolve the rcble cifectively.
(3) In cases ;ihere EPA ôoes not have confidence that
the State will be able to effect cor li nce, tP
should consider factors relating to the
environx ez tal &ignificar ce of the source (z ajor
source, attainment et tuc, nature and magnitude of
er issiona — see y e o of Decernber 29, l9 l which
contains a section on the definition of sigr ificant
vio1 tors) beIore deter iining whether EPA action is
warranted.
I want to Lake it clear that £P! should not let the
ic uance of ucompliance achcdulcs which are redly no more than
consecutive variances to a source hich do not resolve the
source’s comrpliance problei ceter it frou taking Federal action.
‘ e understand that this generally is not the case hcre.
If after evaluating the above factors the detcri inaticn is
made that Federal action iE warranted, then EPA should enforce
the federally—approved SIP irresrective of non—federelly
approved State activities.
cc: Air & waste P.encgewent Division t ir.ectors
Regions I—IV, VI—Vill, X
Air P anagement Division Directors
Regions .V and IX

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1 1

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Federal Enforceability Under PSD
(04/28/82)
File at Part E, Docunient #11

-------
AFR 28 19
SU3 tCTi Federal Enforceability under PSD
1 athl.Cn Fl. Lcnnett lAf
Msistant Ad inJ.atrator for M/liY/ucise and Radiation
Dir.ctors, Air $ Waste t4aneg. nent Vivi.ions
Regions X.”IV . VI -VIlI, X
Director., Air 11anaç oz ent Divisions
‘egions V and IX
This neu oraMw i is pronçtod by a xeçuest for clarification of
the status cf the requir.r ent thcit to be cogni:able under PSO for
effsct and applicability p1 rpo.e ., • iisaion liz itstiors mast be
£edoraliy enforceable.
On Augu .t 7, 1900, EPA putlishe6 arrnndnenta to the PSD and
T en.att ir nant regulatiors which included a provision, that
e ission Linitationsimast be federally .n orccab1e in order to be
taken into account for offset, or applicability purpose.. The
a2endv ents went on to dcLlrie federally enforceable ass
all lit*itations and conditions which are
enforcea2 le by the ?4z inietrator , including
those r.quirei .nta developed pursuant to
40 CT1 parts €0 and 61, r.quirenents within
any applicable State Ii pler eztation Plan. and
any periit r.quirer ente eatablLjhed pursuant
to 40 R 52.21 or under regulations approved
purcuant to 40 Cl 1t 51.10 and 40 CFR 5144.
(40 Q} 52.21(b)(17))
Under a petition for roconsLderation of the August 7 rules.
which was sub1T itt d by several parties, this concept 6f fedorally
enforceable 1ir itationi was challenged. The petitioner.
e aintained that the roquir.tsent of fedcrally enforceable
liu itations was unnecessary.
;! t- / ‘
....
L 2’ I U1 ,f 1a..T-f I i/c ‘iI. .r 1 .1
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.h

1 iW ’4(J .1
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as. ,_s.... •sr . .... ..4.. ......ss.,.....1.,.. ...... .. ..ss .
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OFFICiAl. Pfl.f COPY

-------
T e p.gency decided to reconsider tt e requice” ent Of federally
c fc4 Ccbhle emission limitations. In a& ition to reconsidering
the issue, EPA temporarily steyed the federally en orct able
‘ruirer! ents (tee Fcdcral Pegister July 15, 1921). The stay
‘jrcd on OctoberL,. 1 21 iinä the Ac r.injstrator dcclincd an
tension of the stay, thus once again requiring federally
nfórceablecit1&siort limitationso
At the present time, the amendments, as published on
August . , 1920, are In effect end binding. The definition os
federally enforceable still t ndsz emission limitations must be
federally cnforceable in order to be taken into account for
offsets or PSD applicability. As’to the definition of federally
enforceable, the Agency continues to maintain the position that
operating permits not incorporated Into aSIP under an . pcoved
general bubble rule ace not federally enforceable.
During the past six months the Agency has been in the process
of negotiating a settlement of the industry challenges to the
August 7, 19CC amendments, including the issue of Federal
enforceability.
The Agency has offered a settlement proposal, 4 ich her been
accepted by the industry petitioners, that would change the.
federally enforceable concept.. EPA baa e ireed to propose
accepting emisEion limitations, as creditable to the extent that
they arc enforceable by either Federal, State or local
jurisdictions. The word ‘federally’ would be drorped from the
‘ scm ‘federally enforceable’ as used in. the regulations. At the
me time the term’enforeeable’ will be defined ii ‘enforceable
nder Federal,State, or local law and discoverable by the
drtinistrator and any Other person. ’ ThLs change will most likely
have the result of making operating permit. acc. ’table for offsets
and applicability.
Changes in Federal enforceability, as well a. ether changes
that result f row the settlement agreement, must go through general
rulemaking procedures. Rulemaking procedure i ill follow the
outline in the February 22, 1962 settlement agreement. The
rulemaking siay also include some type of gcandfathering provisions
for the period of the temporary stay. The qrendfathcring
prevision. may focus on the commencement of construction during
the period of the stay.
Please note ‘thet until the rulenaJcing processes ace completed
the existing rules ore still in effect. If Oi y specifJc problems
concerning Federal enforceability and applicability arise,
questions should be referred to Ed Reich at 322-28O7

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12

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Duration of Section 113(a) Orders
(04/30/82)
File at Part E, Document #12

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j UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
cr
APR 3 0 i9
OFFICE OF
AIR. NOISE AND RADIATION
SUBJECT: Duration of Section 113(a) Orders
FROM: Kathleen M.
Assistant Administrat r for Air, N ise and Radiation
TO: Regional Administrators, Regions I — X
A question has been raised regarding the rationale underlying
existing guidance on Section 113(a). orders which provides that
such orders generally must require compliance within 30 days of
the effective date of the order. A reason given for raising this
concern was the limited circumstances in which Section 113(d)
orders could be issued for SIP violations and their unavailability
for NSPS and NESHAP violations.
Regarding the use of Section 113(a) orders for SIP sources,
two new provisions were added to the Clean Air Act in 1977 which
limited the situations in which Section 113(a) could be used to
obtaincompliarice by violators of SIP requirements. First,
Section .110(i) of the Act prohibits any action, including issuance
of an order by the Administrator or a State, which modifies any
stationary source requirement of an applicable SIP, except in
accordance with specific Clean Air Act authorities. (These
authorities do not include Section 113(a) orders). Second,
Section 113(d) of the Act sets forth specific new procedures and
standards for issuance of administrative orders which extend the
time for SIP compliance. Section 110(i) permits modification of
SIP provisions in accordance with Section 113(d).
Thus, in light of Section 110(i), it was determined that
Section 113(a) orders for SIP sources must require immediate
compliance. EPA-reasoned that orders issued under that subsection
providing for compliance within 30 days could be considered as
essentially requiring immediate compliance . It was felt that any
exercise o authority claimed by the Agency to extend compliance
dates under’Section 113(a) beyond 30 days would probably have been
subjected to &tcia1 challenge and could have resulted in the
Agency losing eve th&t limited flexibility.

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-2—
No section comparable to Section 110(i) imposes such a
constraint relative to NSPS requirements. Section 113(a)
orders issued to sources subject to NSPS requirements could
specify times for compliance beyond 30 days, but only when the
delays giving rise to tne violation arise from circumstances
beyond the effective control of the source, i.e., force majeure
‘ Sttudliuns. , n uf five of aenera.L Counsel memorandum (attached)
explains in more detail those circumstances where Section
113(a) orders may specify a reasonable time for compliance
greater than 30 days. While this memorandum predated the 1977
amendments, none of those amendments would seem to affect this
interpretation.
While NESHAP sources are not addressed in the attached
memorandum, it would appear that Section 112(c i in many
respects analogous to Section 111(e), nd therefore Section
_ 113(a) orders for NESHAP sources may also specify a reasonable
time for achieving compliance beyond 30 days , when_the_need_for
additional time arises from circumstances beyond the effective
control of the source.
Obviously, there may be circumstances where the. threat to
public health from the noncomplying facility may make the grant
of additional time in an enforcement order inappropriate,
whatever the reason for the noncompliance. In addition, any
order for a source under Section 112 should assure that the
public is protected from any “imminent endangerment” to public
health (compare S1l2(c)(l)(B)(ii)). The attached memorandum
does not imply any right by a source to receive an order but
only addresses the circumstances under which EPA, in its
disci etion, may choose to issue one.
If you have any further questions with respect to this
issue, please contact Edward Reich, Director, Division of
Stationary Source Enforcement at 382—2807.
Attachment

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF GENERAL COUNSEL
SUBJECT: Section 113 Orders Extending Times for DATE: July 29, 1975
Compliance with NSPS
rROM: Gerald K. Gleason, Attorney Cc &’
Air Quality, Noise and Radiation Division (EG-333)
TO: Richard Wilson, Director
Stationary Source Enforcement Division (EG—341)
BACKGROUND
At the enforcement conference last March, several
panels considered the problem of new or modified sources
that cannot meet NSPS within the times specified in
40 CFR 60.8. Additional time might be needed for a
variety of reasons, ranging from acts of Gods to delib-
erate footdragging.
QUESTION
May EPA issue S 113 orders specifying times for
compliance with NSPS beyond the times specififd in 40
FR 60.8 Ca)? If so, in what circumstances?
ANSWER
Such orders may be issued where the need foz’ additional
time arises from- circumstances beyond the effective control-
of the source; e!q., strikes, floods, or bona fide delays
in supply of control equipment. Slowness in ordering
control equipment, choice of ineffective controls, poor
management, ignorance of the applicable NSPS, and other
circumstances within the control of the source would not
justify such orders. In addition, orders granting addi-
tional time may not be issued where interim means of
compliance ( ., use of clean fuels) are reasonably
available, except to the extent that additional time is
reasonably necessary to implement the interim measures.
Finally, EPA may refuse to grant additional time where
uncontrolled (or poorly controlled) operation of a source
would constitute a relatively “serious” violation of the
applicable standard; j., where it would cause a signi-
ficant health or welfare problem involving a non-criteria
pollutant.
VA p. ,. 132O. (b,. .73)

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—2—
DISCUSSION
We do not view this as a question of “enforcement
discretion” in the broadest sense (i.e., whether EPA may
refrain from taking any action agaii it a source in violation
of NSPS) but as one concerning the scope of EPA’s discretion
once it decides to proceed by way of an enforcement order.
Thus, the key to the problem is the following language in
5 113(a) (4):
Any order issued uflder this subsection
shall . . . specify a time for compliance
which the Administrator determines is
reasonable, taking into account the
seriousness of the violation and any
good faith efforts to comply with
applicable requirements.
In general, we believe the question resolves to one of
determining what is a “reasonable” time for compliance
in the context of S 111, where prospective source owners
are on notice that NSPS will apply before they, commence
construction and well in advance of their scheduled
startup times.
In that context,.we be1ie e a 5 113 order must require
immediate compliance unless the need for additional time
arises from circumstances beyond the effective control of
the source. Where such circumstances are shown, however,
we see nothing in the Act or its legislative history that
would preclude issuance of orders specifying reasonable
times for compliance beyond the times specified in 40 CFR
60.8(a), provided that the “seriousness of the violation”
is properly taken into account.
For convenience, our discussion of these issues is
organized as follows:
1. Authority to issue orders extending times for
compliance with NSPS.
2. Limitations on that authority.
3. Miscellaneous considerations.
Note that our analysis is confined to the problem of orders
extending times for compliance with NSPS. Different
considerations may well apply where orders are based on
violations of other requirements established under the Act.

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—3—
1. Authority to issue orders extending times for
compliance with NSPS
The language of S 113(a) (4), standing alone, purports
to authorize issuance of orders extending times for
compliance with NSPS, so long as the times specified in
such orders are “reasonable,” taking into account the
stated criteria. All S 113 orders are predicated on findings
of violation, and the language obviously contemplates orders
permitting such violations to continue in some cases; i.e.,
to continue beyond the date of the order. Had Congres6
intended to require izmnediate compliance (as of the date of
an order), it could have so stated. 1/ Accordingly, the
question is whether anything else in the Act or its legis-
lative history limits the discretion ostensibly granted by
S 113(a) (4).
Certain provisions in S 111 evidence Congressional
concern about the timing of actions taken under that
section. In general, we believe these provisions indicate
an intent to force the pace of EPA standard—setting and to
maximize the number of sources subject to particular NSPS,
rather than a specific concern about the timess by which
sources would be required to comply in the context of
enforcement.
Section 111(e), however, may be read as evidencing such
a concern. It provides that operation in---v-iolation of a
standard “after (its] effective dates shall be unlawful.
Although it can be argued that violations of SIP provisions
(and other requirements enforceable under 5 113) are
equally “unlawful,” such an argument would essentially
read S 111(e) as adding nothing to 5 113. Under standard
principles of statutory construction, of course, the courts
tend to avoid such interpretations. Thus, the courts might
read 5 111(e) as evidence (consistent with the long—lead—
time considerations mentioned above) of special Congressional
concern that new sources ordinarily be required to comply
with NSPS from the time they begin operation. 2/ We conclude
that 5 111(e) must be viewed as an important factor
1/ In fact, the Senate bill would have required issuance of
orders requiring sources in violation of NSPS to initiate
abatement within 72 hours. See discussion at page 4,
infra .
2/ Against this conclusion it can be argued that there is
• •no particular reason for such a concern, given that NSPS
(unlike the SIP’S) do not ordinarily involve direct and
immediate protection of public health. On the other
hand, it seems clear that Congress intended to maximize
the effects of S 11.1 ( j., by forcing the pace of EPA
• (Footnote continued)

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—4—
constraining the determination of a “reasonable 0 time
under S 113(a) (4). J -
Another provision that might be read as evidencing
Congressional intent to require immediate compliance with
NSPS is S 113 Cc) (1) (C), which provides criminal penalties
for violations. Such a reading would conflict with the.
reasonable—time provision of S 113(a) (4), however, and we
believe the provision for criminal penalties was intended
to provide an additional tool for enforcement rather than
to limit the civil enforcement mechanism.
Finally, it might be argued that because EPA is
authorized to issue enforcement orders for NSPS violations
without waiting 30 days. (as is ordinarily required for SIP
violations), Congress intended that enforcement actions in
such cases be taken without delay and thus evidenced an
intent that NSPS violations not be permitted to continue.
In our view, however, the 30-day requirement for SIP
violations was intendea primarily to give States a “first
chance” to enforce, and the omission of this requirement
for NSPS violations was not intended to limit EPA’S authority
to specify reasonable times for compliance in’ such cases.
Nothing in the legislative history of the Act alters
our view that enforcement orders addressing NSPS violations
may, in certain cases, specify times for compliance beyond
the times specified in 40 CFR 60.8(a). Under the House
provision applicable to violations of NSPS, the Secretary
of HEW on finding a violation would have issued a notice
specifying “the time within which such violation must
cease.” The Senate bill would have required the issuance
of an order requiring a source in violation of NSPS to
“initiate abatement” within 72 hours. In 5 113(a) (4) as
enacted, Congress omitted the Senate’s 72—hour provision,
suggesting that greater flexibility was intended, and at
the same time sharpened the House version by requiring that
Footnote 2 continued
standard-setting and by covering as many new sources
as possible). Dissatisfied with previous air pollution
control efforts and cognizant of footdragging in some
industries, Congress may well have intended that
delayed compliance resulting from circumstances within
a source owner’s control not be permitted.
See discussion of such constraints in next section.

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—5
a ‘reasonable’ time be specified and that certain factors
be considered in determining that time. 4/ We believe
these changes indicate that Congress intended no arbitrary
limitation on times permitted for compliance under S 113
orders but, at the same time, intended to limit EPA’s
discretion by precluding times shorter or longer than a
‘reasonable’ time and by specifying factors to be taken
into account, which are discussed in the following section.
2. Limitations on authority to issue orders extending
times for compliance with NSPS
Times specified under S 113(a) (4) must of course be
“reasonable,” taking into account ‘the seriousness of the
violation’ and ‘any good faith efforts to comply.” This
requirement carries the implication that the time specified
in a particular case must be neither too short nor too long
as judged by the circumstances.
In the context of S 111, those circumstances include
the long lead—time ordinarily available to prospective
source owners, and the “good faith efforts’ test necessarily
becomes quite stringent. 5/ For example, the’efforts of
one source may be measureä against the efforts of other
source owners who have managed to comply at the end of the
S 60.8 ‘break—in” period. As indicated above, 5 111(e)
must also be.viewed as a cons raint on the detërinina ion
of a- ‘reasonable’ time--in_the context of NSPS violations.
For these reasons,.we believe granting extra time to a
source whose inability to comply arose from footdragging
or other factors within the owner’s control would risk a
ruling that EPA had abused its discretion.
By the same token, we believe extra time may not be
granted where interim means of compliance ( g .,use of
clean fuels) are reasonably available, except to the
extent additional time is reasonably necessary to imple-
ment the interim measures. Note that the owners of sources
4/ Related aspects of the legislative history, omitted
— here for purposes of brevity, are consistent with this
analysis.
/ Cf. Request of Governor of West Virginia Pursuant to
Section 110(f), Docket No. CAA—l (April 29, 1975), in
which the Administrator interpreted the ‘good faith’
requirement in S 110(f) as requiring direct and
expeditious action to achieve the ability to comply
with SIP requirements once the companies in question
knew or should have known that new control require-
ments would apply on a certain future date.

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—6—
that will be unable to comply with NSPS at scheduled
startup dates will often know this in advance and should
be able to make arrangements in advance ( j., by con-
tracting for clean fuel) where interim means of compliance
are available.
Finally, proper account must be taken of the seriousness
of the violation. EPA has considerable discretion in
judging this factor, and we believe extra time may be denied
where continued operation of an uncontrolled (or poorly
controlled) source would constitute a relatively “serious”
violation; e.g., where it would cause a significant health
or welfare problem involving a non-criteria pollutant. /
Indeed, granting extra time in some cases of this nature
might be an abuse of discretion.
3. Miscellaneous considerations
Several further points deserve mention. First, we do
not suggest that distinctions be drawn in terms of the size
of a source, the importance of its product, or similar
factors. Although it can be argued that such factors are
pertinent in determining compliance times that are “reason—
able,” we believe the better view is to the contrary.
Second, in determining whether the need for extra time
arises from.circumstances within the source’s control (a
question of fact) • it may be appropriate to consider
differences between new and modified sources. For exwnple,
there may be bona fide difficulties in applying control
technology to modified sources ( j., space limitations)
that would not or should not occur in the case of new
sources. In noting this, we do not mean to suggest a more
“generous” approach to modified sources than to new sources;
we simply recognize that different factual circumstances
may be pertinent.
Third, we have not addressed the question of “enforce—
inent discretion”; i.e., whether EPA may refrain from taking
any action when itI arns that a source is operating or
proposes to operate in violation of NSPS. !/ Our analysis
6/ We assume that action would be taken to enforce SIP
— requirements where violation of an NSPS would jeopardize
attainment or maintenance of NAAQS.
!I Cf. Wisconsin’s Environmental Decade, Inc. v. Wisconsin
wer and Light Co., ___ F. Supp. ___ (W.D. Wiec.,
June 6, 1975). The question whether enforcement action
may or must be taken prior to actual operation where
EPA has reason to believe that controls will be
inadequate to achieve compliance will be addressed in
a separate memorandum now in preparation.

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- —I—
is limited to what EPA may or must do if it chooses to issue
5 113 orders in such cases. In passing, we note that
exercise of enforcement discretion is reviewable for abuse
of discretion, and that Borne (though not all) of the factors
pertinent to the exercise of such discretion are similar to
those involved in determining a reasonable” time under.
5 113(a) (4). !/
Fourth, passage of proposed amendments to the Act might i3 CA
require reexamination of our views. The Administration r
bill, for example, would revise the language of S 113(a) (4) _)
and authorize EPA to seek civil penalties for violations(
Such changes and their legislative history might alter our
view of Congressional intent as to some of the issues
discussed above. -
Finally, it seems clear that orders extending times for
compliance with NSPS would not immunize sources from
citizens’ suits to require immediate compliance, although
such orders might well;influence the courts.
cc: Robert L. Baum
1 4’dward E. Reich
/ See letter from Alan G. Kirk II to Jeffrey Schwartz,
November 26, 1973.

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13

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Guidance on Policy for Enforcement of Visible Emissions
Violations Against Sources Which are Meeting
an Applicable Mass Emission Standard
(05/04/82)
File at Part E, Document #13

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,?1 O
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASH GTON, D.C. 20460
L
2_ 1991
OFFICE OF
AIR A 4D RAOIAnO I
MEMORANDUM
SUBJECT: Clarification of Policy on Enforcement of Visible
Emission Violations for SIP Sources Meeting Applicable
Mass Emission Standards
FROM: William G. Rosenberg, Assist,a ,t A mi$, j tor
Office of Air and Radiation/#-T/j -.
TO: Regional Administrators, Regions I-X
The purpose of this memorandum is to clarify previous EPA
policy (May 4, 1982, Kathleen Bennett Memorandum) relative to
existing sources in compliance with applicable mass emission
standards but in violation of visible emission standards.
Compliance with a mass emission standard does not exempt a
source from the visible emission standard established in the SIP
for that source. Unless otherwise stated in the SIP, EPA
considers the visible emission and the mass emission standards as
independently enforceable limitations. In other words, a source
must demonstrate compliance with both standards using the
approved test methods (i.e. the SIP or EPA reference methods,
whichever is applicable). Failure to do so may result in EPA or
the State bringing an enforcement action. against the source.
Some situations may exist when a SIP source demonstrates and
documents its compliance with the mass emission standard on a
consistent basis using the approved test method and provides the
required data. to indicate that it has taken every step to achieve
compliance, but continues to exceed the opacity standard. In
these special cases, and only if the State agency and Regional
Office agree that no further improvements can be made in the
control and process equipment for that source, the requlating
agency may choose to revise the visible emission standard in the
SIP. Pending EPA approval of any SIP revision, the existing
visible emission standard will remain in effect and continue to
be Federally enforceable.

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cc: John Seitz, Director, OAQPS
John Calcagni, Director, AQMD
Air Management Division Directors,
Regions I, III and IX
Air and Waste Management Division Director,
Region II
Air, Pesticides and Toxics Management Division Directors,
Regions IV and VI
Air and Radiation Division Director,
Region V
Air and Toxics Division Directors,
Regions, VII, VIII and X

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L . -
,DeT4? V1 ) l . -r
t UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON. D.C. 20460
JUL I 9 1991
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: Clarification of Policy on Enforcement of Visible
Emission Violations for SIP Sources Meeting Applicable
Mass Emission Standards
FROM: Michael S. Alushin 1 ’ 1 ’L_
Associate Enforcer ent Counsel
Air Enforcement Division
TO: Raymond B. Ludwiszewski
Acting Assistant Administrator
for Enforcement
Attached you will find a policy clarification recently
issued by the Office of Air and Radiation (OAR) concerning the
enforcement of SIP visible emissions standards when the regulated
source is in compliance with the applicable mass emission limit.
In such cases, EPA will regard the opacity and mass standards as
independently enforceable.
The attached June 24, 1991 clarification supersedes the
May 4, 1982 Kathleen Bennett memorandum on the same topic.
Please remove the Bennett memorandum (Part E, Document #13) from
your copies of the Clean A r Act Compliance/Enforcement Policy
Compendium and insert a copy of the attached memorandum in its
place.
Attachment
cc: Edward E. Reich
Deputy Assistant Administrator
Office of Enforcement
Scott C. Fulton
Director of Civil EnfOrcement
Office of Enforcement
Alan W. Eckert
Associate General Counsel
Air and Radiation Division
John C. Cruden, Chief
Environmental Enforcement Section
Pri ,u,4o ,, R cycIed Paper

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S?4p
UNITED STATES ENVIRONMENTAL PROTECTION A 9 ENCY ,...
_____ WASHINGTON. D.C. 20460 I ‘ I
fr—
M4Y A i OFFICE OF
“ I O AIR. NOISE AND RADIATION
SUBJECT: Guidanøe on Policy for Enforcement of VE Violations
Against Sources Which are Meeting an Applicable Mass
Emission Standard
FROM: Kathleen M. Bennett/
Assistant Administrator for Air, Noise and Radiation
TO: Regional Administrators, Regions I—X
The following guidance presents EPA policy for enforcement of
VE violations against sources which are meeting applicable mass
emission standards.
A Headquarters guidance memorandum issued on June 2, 198].
states that where a power plant is in violation of a visible
emission limit, but concurrently achieved the mass emission
requirements, a revision of the visible emission limit for that
source may be an appropriate regulatory response and this might
justify giving lower priority to enforcing the VE limit in the
interim while the limit is being revised. The June 2nd guidance
was initially written to address oil—fired power plants, but has
been expanded to include other stationary sources which are
subject to both mass emission and visible emission standards.
Regional response to that memo requested clarification concerning
what criteria should be used in determining when this guidance is
applicable. The policy presented below supersedes the previous
guidance issued on this subject .
Please note that this guidance is not intended to address
whether or not VE requirements are an independent, enforceable
part of a SIP. We believe they should be and, absent something in
the SIP to the contrary, we believe they are. In addition, we are
not suggesting enforcement action against VE violations be taken
only when accompanied by a fully documented mass violation.
Rather, there are circumstances as identified below where VE is
basically a surrogate for mass emissions and consequently it would
be a waste of scarce resources to proceed with a VE enforcement
action when we believe mass standards are being met .
4/

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Most visible emission standards were developed as a practical
andeconomic means for determining whether emission control
equipment, necessary for a source to meet a mass emission limit,
is continuously maintained and properly operated. n instances
where_no_mass_emission limit is applicable, such asfugitive
process emission sources, or where accurate emission testing is
not possible, visible emission standards are the vehicle for
directly regulating particulate emissions and are not subject to
the guidance provided in this memo.
It is our polic not to pursue visible emission violations
where we believe it is probable that the source is in compliance
with the mass standard . If a source has documented its compliance
with the mass standard, we should evaluate the case to determine
if there is reason to believe that there have been any changes in
operating conditions or in the performance of the control system
to suggest that the prior determination is not an accurate
representation of its current compliance status with respect to
the mass standard . If there have been no such changes, the policy
stated in this memorandum would be effective. If there have been
any significant changes, further action might be appropriate.
Only after these areas have been investigated should
consideration be given to revising the visible emislion standard .
Of course, it will be necessary to consider the effect of any
relaxation of visible emission limits on attainment and
maintenance of the ambient standards where VE was relied upon in
the State’s control strategy evaluation . Where appropriate, this
option should be discussed with the State agency as an acceptable
means of resolving the violation. However, the State may have
reasons for not wanting to change the standard and it is
appropriately the State’s decision to make . In any case, under
this condition, pursuit of an enforcement action by EPA would not
normally be a :ustified use of resources.
If you have any questions or comments about this issue or
application of this policy, please feel free to call Richard
Wilson at 755—2977 or Edward Reich at 382—2807.

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14

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Procedures for Review and Federal Register Publication
of Delayed Compliance Orders Under Section 113(d)
of the Clean Air Act
(04/26/83)
File at Part E, Document #14

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f UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 204S0
26 APR 1983
OFFICE OF
AIR. NOIU AND RADIATION
MEMORANDUM
SUBJECT: Procedures for Review and Federal Register
Publication of Delayed Compliance Orders Under
Section 113(d) of the Clean Air Act
FROM: Kathleen N. Bennett, Assistant Adininistrai
for Air, Noise and Radiation
Courtney M. Price
Acting Associate Administz’ator
and General Counsel
TO: Regional Administrators, Regions I—X
Regional Counsels, Regions I—X
Uncertainty exists with respect to who in the Regional
Offices and at Headquarters must review and concur in delayed
compliance orders (DCO5), both those issued by EPA and those
issued by the States. Questions have also arisen on what must
be contained in a DCO rulemaking package, the appropriate
n nnber of copies, and to whom they should be mailed at
Headquarters. To resolve these uncertainties, this memorandi.un
establishes procedures to be followed by all Regional Offices
when reviewing DCOS and submitting them to Headquarters for
Federal Register publication.
Proposed DCO5
DCO5 proposed to be issued by EPA under Section 113(d) (1)
of the Clean Air Act do not require Headquarters concurrence
(Attachment 1). The proposed DCO rulemaking package should
be sent directly from the EPA Regional Office to the Federal
Register Officer at Headquarters (PM—223) for printing in
the Federal Register . The March 10, 1978 m.morandmL
(Attachment 2) describes the requirements for proposal regarding
the number of copies, certifications, and content. The only
additional requirement is to include a completed printing
request form *2340—15 with the package. (Also included as
Attachment 3 is a July 27, 1978 memorandum on substantive
requirements of DCO’s that remains generally applicable).

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—2—
Similarly, all DCO5 issued by States to major stationary
sources under Section 113(d) (1) should be reviewed, as required
by Section 113(d)(2), by Regional Air Program Divisions and
Regional Counsel’s Offices to assure that these orders meet
the statutory requirements under the Clean Air Act. If a Regional
Office wishes to approve a State—issued Section 113(d)(l) DCO,
Headquarters concurrence in the proposal is not required. If the
Region is recommending disapproval, the advice of the Associate
General Counsel for Air, Noise and Radiation should be sought.
As with EPA—issued DCO5, the DCO rulemaking package should be
sent directly from the EPA Regional Office to the Federal
Register Officer at Headquarters for printing.
As discussed in Kathleen Bennett’s memorandum of
July 20, 1982 to all Regional Air Directors, all proposed
innovative technology DCOs under Section l]3(d)(4) and coal
conversion orders under Section l13(d)(5) remain subject to
Stationary Source Compliance Division (SSCD) review for
national consistency prior to publication. These orders
should be sent to the Director, SSCD (EN—34l). SSCD will .transmit
the approved DCO packages to the Federal Register Of ficer for
publication.
Final DCOs
The- review of final DCOs will follow the same pattern as
that followed for proposed DCO8. Since they require the
Administrator’s signature, the Federal Register Officer will
be responsible for forwarding the package to the Administrator’s
Office. Once signed, the Administrator’s Office will transmit
the package back to the Federal Register Officer to assure
publication. For those DCOS that require Headquarters office
concurrence, the reviewing office will be responsible for
working with the Federal Register Officer to obtain the
Administrator’s signature.
Questions of National Significance
This memorandum describes the general mechanism for
processing DCO8. It does not alter the responsibility of
Regional Offices to identify significant policy or legal issues
posed by any DCO and to seek the advice of SSCD or the Associate
General Counsel for Air, Noise and Radiation with respect to such
issues. In cases of doubt as to whether a DCO poses such an
issue, the views of these offices should be sought.

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-3—
Should you have any questions on this memorandum, please
call Ed Reich at 382—2807.
Attachments
cc: Air and Waste Management Division Directors
Regions II—IV, VI—VIII and X
Air Management Division Directors
Regional I, V. and IX

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Attachment Ii

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•
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
ugust 7, 1978
O FICt O CJ RCLMCNT
MEMORANDUM
Subject: Procedures for Proposal and Promulgation of
Delayed Compliance Orders
From: Director
Division of Stationary Source Enforcement
To: Enforcement Division Directors
Regions I—X
The July 27, 1978, memorandum from the Assistant
Administrator for Enforcement entitled ‘Enforcement Under
the Clean Air Act Amendments — Orders Under Sections 113(a)
and 113(d),’ summarizes EPA policy on the use of administra-
tive orders as enforcement actions. Appendix A to that
memorandum sets forth criteria for federal issuance of, and
federal action on State, delayed compliance orders (DCOB)
under Section 113(d) of the Clean Air Act. Currently, all
Federal Register packages regarding DCOs are reviewed
v thln the Division of Stationary Source. Enforcement (DSSE)
before transmittal to the Agency’s Federal Register Officer
for publication. Effective August 8, 1978, direct transmit-
tal of Federal Register documents regarding typical Section
1]3(d)(l) DCOs to the Federal Register Officer (PM—212) is
to be implemented in the seine manner as ‘normal’ SIP revision
documents. DSSE will no longer review these documents
before publication; rather, any DSSE comments will be
transmitted to the Regional Office during the 30—day comment
period provided in the informal proposed rulemaking procedure.
A new 40 CFR Part 65, establishing procedural regula-
tions for, and a format for codification of, DCO actions, iB
currently undergoing ‘red border’ review by the Assistant
Administrators and is expected to be promulgated the week of
August 21. Attached for your use are sample Federal Register
preambles and amendatory language for final rulemaking
actions on DCOs for which necessary proposal action has been
completed. These samples address final rulemaking D O
actions which occur both before and after promulgation of
Part 65. By memoranda of March 10 and May 9, 1978,

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—2—
sample Federal Register documents for proposed federal DCO
actions were sent to you. With the exception of signature
by the Administrator (rather than the Regional Administrator),
the requirements for proposal regarding the number of
copies, certification, etc., are applicable to final Federal
Register DCO documents as well. These requirements are set
forth in the memorandum of March 10, 1978, entitled ‘Proce-
dures for Federal Register Publication of Proposed Final
Agency Action on Administrative Orders Under Section 113(d)
of the Cle. Ai Aut.
All DCO actions, proposed and final, involving orders
under Sections 113(d) (3) and (4) remain subject to DSS ,
review for national consistency prior to publication. —,
My staff will provide assistance in the development of
these orders and on unique issues involved in federal action
on Section 113(d) (1) orders, and their transmittal will be
under procedures for ‘special’ action. With regard to
DCOs, ‘special actions’ will require only OE/DSSE concurrence
and will normally be accomplished within 5 days of DSSE
receipt. Supporting materials for Section 113(d) (3) and (4)
orders must be included in these packages, which are to be
sent directly to DSSE. DSSE will forward approved ‘special’
D O packages directly to the Federal Register officer for
publication. tiowever, typicaT i 1on li3(d)(1) orders will
not be.xevieved by DSSE prior to their proposal publication
in the Federal Register and will be considered •normal’
action. This procedure should minimize delay in the imple-
mentation of this program. Please call Chuck Hungerford at
FTS 755—2570 if you should have any questions on this
matter.
Attachments
cc: James Parker, PM—212
Federal Register Officer
Michael James, 0CC
Section 113(d) (5) orders continue to be processed
in accordance with earlier guidance which Regional Offices
have been implementing.

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Attachment $2

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•
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
10 MAR1978
MEMORANDUM FICCGF £NPO CcMNT
Subject: Procedures for Federal Register Publication of
Proposed and Final Agency Action on Administrative
Orders under Section 113(d) of the Clean Air Act
To: Enfo:cement flivl5ion DirectorB
Regions I—X
From: Deputy Assistant Administrator
for General Enforcement
As indicated in Marvin Durning’s january 16, 1978,
memorandum on ‘Federal Issuance and Approval of Delayed
Compliance Orders’, A issuance of DCOS and EPA approval or
disapproval of State—’ orders for major sources must
follow informal rulemaking. Informal rulemaking must also be
followed when EPA disapproves State orders for sources other
than major sources.
The Regional Offices viii be responsible for collecting
and preparing rulemaking materials, and for maintaining
files supporting the final rulemaking action. The Office of
General Counsel has advised that a docket number must be
assigned, and a file maintained, by the Region for each
rulemaking action it initiates involving the issuance or
review of an order under Section 113(d). The file must
contain all the information considere, by the Agency in the
course of the rulemaking action. However, since the docket
must be made available to the public, it should not contain
option memoranda or other internal policymaking documents.
The docket should be organized chronologically with an
attached up—to—date index.
Procedures for publication of DCO Federal Register
notices will generally parallel those for processing
All references to a State also pertain to political
subdivisions of a State which are authorized to issue orders
permitting a source to delay compliance with the SIP.

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—2-
‘normal’ SIP revisions as set forth in the Office of Air
Quality Planning and Standards Guideline l.2—005A (Revised 2
9/76). These procedures, as modified, are summarized below.J
I. Proposed Rulemaking
A. After a Region receives a copy of a State—issued
order requiring EPA action under Section 113(d)(2), or
after a source consents to a DCO drafted by a Region,
the Region should immediately prepare a proposed
rulemaking package. This package must contain:
1) — Federal Register Notice of Proposed Rulemaking .
Sample Federal Register proposal notices for
both federal and State orders are attached. As
indicated by these samples, the entire federal
order is recited, and the State order is summarized,
in the respective notices. The package must
include an original and five copies of this
notice. Two of the copies must include the
statement: ‘CERTIFIED TO BE A TRUE COPY OF
THE ORIGINAL’ at the bottom of the signature
page. The notice must be double—spaced with
pages numbered at the bottom. The Regional Office
may consolidate several State or federal orders
into one Federal Register notice.
Receipt of State orders may be routinely noticed
without prior extensive Regional review or an
indication of EPA’S proposed action. However, if
it is apparent that the order can or cannot be
approved by EPA as a DCO, the notice should be in
the form of a ‘Proposed Approval or Disapproval’
rather than a ‘Notice of Receipt’. Reasons for any
proposed action should be briefly summarized
in the ‘Supplementary Information’ portion of
the notice.
The sample notice for State orders may also be
altered to recite the entire order under ‘Supple-
mentary Information’. Where this is done, the
V The following procedures do not apply to orders
issued by the Administrator to coal conversion sources
ui dcr Sectio’ 113(d) (5) of the.J ct. Guidance on 5113(d)(5)
iill be issued separdtely.

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—3—
summary of the order under this provision may be
omitted.
2) — Cover Memorandum
The cover memorandum, from the Regional Administra-
tor to the Federal Register Officer, Office
of Administration, should request Federal Register
publication of the notice. It should note that
it is a ‘normal action involving proposed rulemaking
on either a State order subject to EPA review
under Section 113(d)(2), or a proposed federal
order under Section 113(d) of the Act. The
package should include an original and three
copies of this memorandum.
3) — Attachments
Three copies of the attachments should be included
in a proposed rulemaking package. These should
include:
i) Any available documentation which is needed
to supplement the order. This documentation
would include any material necessary to
correct deficiencies on the face of the order
(e.g., documentation of the findings required
by Section 113(d) of the Act when these
findings are àot specifically recited in the
order); and
ii) For State orders, a copy of the order (if it
is not recited in the Federal Register
notice).
B. The Federal Register notice and cover memorandum must
be signed by the egiona1 Ad ainistrator.
C. During the initial phase of the DCC program, proposed
rulemaking packages (with the appropriate number of
copies) must be transmitted to the Director, Division
of Stationary Source Enforcement (DSSE). After a
quick review for consistency with Agency interpretation
of Section 113(d), DSSE will handcarry the package to
the Federal 1 egister Officer. (DSSE will not review
Regional Office findings or determinations of fact.)
One copy will be forwarded to EPA’S Public Information
Reference Unit.

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—4—
D. Within three to five days, t1 e notice vi i ]. be published
in the Federal Register .
II. Final Rulemaking
A. After evaluating any public comment, evaluating a State
order and/or conducting any necessary public hearing on
a federal order, the Region should prepare a final
rulemaking package. This package must contain the
following:
1) — Federal Register Notice of Final Rulemaking .
Sample Federal Register notices for final EPA
action on both federal and State orders will be
forwarded to the Regions in the near future.
Generally, rules applicable to Federal Register
proposal notices also apply to the final notice,
except that the final must be prepared for the
Administrator’s signature.
2) — Action Memorandum
The action memorandum (from the Regional Admin-
istrator to the Administrator through the Federal
Register Officer) must include the date the
proposal was published in the Federal Register , a
UflOt 3flalU action designation, ai 1ii 1ndication
that the action concerns either a. State order
subject to EPA review under Section 113(d)(2) or a
federal order to be issued under Section 113(d).
It must also state that the Regional Administrator
has determined that the subject order does (or
does not) satisfy the provisions of Section 113(d),
and that the Region has sufficient documentation
to support the final action. The original and
three copies of this memorandum should be included
in the package.
3) — Attachments
Three copies of attachments should be included ira
a final rulemaking package. These should include:
i) The same material, updated as necessary.
which was included in the proposal package,
and
ii) For federal orders already prepared and
consented. to..by the source, the original
order signed by the source. In the future

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—5-
this attachment need only be a consent
form signed by the source which includes the
source’s acknowledgment that EPA’s final
issuance of the order will be in the form of
a final rulemaking action after infbrmal
rulemaking requirements have been satisfied.
B. The action memorandum must be signed by the Regional
Administrator.
C. Final rulemaking packages for federal DCO’s may be
transmitted directly by the Regional Offices to the
Federal fl ister Officer if the order is substantially
unchanged trom that proposed. In addition, packages
for final Agency action on State orders may be trans-
mitted directly to the Federal Register Office if
the initial Federal Register notice proposed either
approval or disapproval of the order and that deter-
mination remains unchanged. In all other cases, during
the initial phase of the DCO program, rulemaking
packages for final actions must be forwarded by the
Regional Office to DSSE. DSSE will handcarry the
packages to the Federal Register Officer after a brief
review for consistency with Agency interpretation of
Section 113(d).
D. The package and any federal order will be forwarded to
the Administrator for signature.
E. The action will be published in the Federal Register .
Upon request by the Regional Office and within the
limits of DSSE’s resources and other priorities, DSSE will
review draft proposed federal DCO5 and evaluations of State
orders before the proposed rulemaking package is prepared.
This informal review should help to ensure expeditious
publication of the Federal Register notice.
When final guidance on DCO’s is issued by DSSE and a
Region gains experience with the DCO program, the requirement
for DSSE review will be waived and DCOS will be handled in
a manner analogous to especial action’/normal action SIP
revisions. In the case of ‘special actions’, however, only
Office of Enforcement concurrence will be required and the
review period will be shortened to five work-i-mg days from
the date of receipt.

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Attachment $3

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— —. • “ I b I S I C . I I JI ? %.PtF L ,7
WASHINGTON. D.C. 20460
27 JUL1978
OFFICE Or £NFO C MENT
MEMORANDUM
Subject: Enforcement Under Clean Air Act Amendments ——
Orders Under Section 113(a) and 113(d)
From: Assistant Administrator for Enforcement
To: Regional Administrators
Regional Enforcement Directors
I. Introduction
My April 11, 1978 memorandum entitled, ‘Enforcement
Against Major Source Violators of the Air and Water Acts,’
summarized our enforcement policy against major source
violators of the Clean Air Act (and Clean Water Act).
It stated essentially that major air sources which have
not taken the steps necessary to bring themselves into
compliance must have enforcement action taken against them
and that, essentially, such enforcement action would have to
be either an administrative, delayed compliance order under
Section 113(d) or a civil and/or criminal action. My
memorandum of April 11, 1978, entitled ’Civil. Penalty
Policy, stated our penalty policy for use in civil enforce-’
inent court actions under Section 113.
This memorandum supplements the above memoranda of
April 11, 1978, and summarizes our policy on use o admini-
strative orders as enforcement actions, including both
administrative orders under Section 113(a) and the newly
authorized administrative order (referred to herein as a
‘delayed compliance order’) under Section 113(d).
II. Previous Guidance Superseded or Incorporated
For several months, EPA circulated for comment a
‘Second Draft: Strategy Governing Enforcement of State
Implementation Plans Against Stationary Sources under the
Clean Air Act, as Amended in 1977.’ On January 16, 1978,

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I sent to the Regional. Administrators a memorandum entitled:
‘Federal Issuance and Approval of Delayed Compliance Orders
Under Section 113(d) of the Clean Air Act, as Amended in
1977.’ This memorandum provided guidance on delayed compli-
ance orders under Section 113(d). This was followed by a
memorandum from the Deputy Assistant Administrator for
General Enforcement dated March 10, 1978, entitled: ‘Proce-
dures for Federal Register Publication of Proposed and Final
Agency Action on Administrative Orders under Section 113(d)
of the Clean Air Act.’ This memorandum provided guidance on
the mechanics of issuing delayed compliance orders. Subse-
quently, on May 9, 1978, the Director of the Division of
Stationary Source Enforcement issued a memorandum entitled:
‘ Federal Register Notices Proposing Approval, Disapproval,
or Issuance of Administrative Orders under Section 113(d) of
the Clean Air Act’. This memorandum supplemented earlier
guidance on the procedures to be followed by EPA in acting
on delayed compliance orders.
This memorandum supersedes the earlier drafts entitled
‘Strategy Governing Enforcement of State Implementation
Plans against Stationary Sources under the Clean Air Act, as
Amended in 1977’ and incorporates the other memoranda
referenced in the immediately preceding paragraph.
III. Issuance of Administrative Enforcement Orders under
Section 113(a) of the Clean Air Act and Similar
State Authorities
Section 113(a)(1) and (1) provide-for EPA issuance
of administrative orders to violators of a number of Clean
Air Act requirements, including State Implementation Plan
(SIP) requirements. Prior to the Clean Air Act Amendments
of 1977, Setion 113(a) orders were issued by EPA to require
compliance within a reasonable time with SIP provisions
for which the dates tar compliance and, in some casts, the
date for attainment of national Btandards had passed. A
number çf State and local enforcement officials had similar
authority to issue administrative orders requiring SIP
compliance.
Although the 1977 Amendments did not change the
relevant Section 113(a) language, two new provisions
were added to the Act which narrowly limit the situations in
which Section 113(a) may be used to obtain compliance by
violators of SIP requirements. First, new Section 110(i) of
the Act prohibits any action, including issuance of an order
by the Administrator or the State, which modifies any
stationary source requirement of an applicable SIP,

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except in accordance with specific Clean Air Act authorities
and these authorities do not include Section 113(a).
Second, new Section 113(d) of the Act sets forth specific
new procedures and standards, for issuance of administrative
orders which extend the time for SIP compliance. ‘Section
110(i) permits modification of SIP provisions in accordance
with Section 113(d).
These flew provisions preclude EPA’s use of Section
113(a) to establish schedules which extend the time for SIP
compliance. Section 113(a) will now be used by EPA to
require SIP compliance by stationary sources only where the
compliance can reasonably be required essentially immediately.
Since a reasonable time for compliance must be specified
under Section 113(a), EPA orders issued under that subsection
may provide for compliance within up to 30 days. Such an
order does not have the effect of modifying the SIP require-
ment, however, and a source subject to such an order is not
insulated from other enforcement or from the imposition of
sanctions (including penalties).
State authorities which, like Section 113(a), permit
issuance of administrative orders in accordance with proce-
dures and standards which are not consistent with Section
113(d) are similarly precluded by the 1977 Amendments, at
least insofar as such orders purport to modify an applicable
stationary source SIP requirement. Section 110(i) would
permit modification of the SIP by a State order only if that
ordet can satisfy the requirements of Section 119 for a
primary nonferrous smelter order, of Section 110(f) for an
emergency suspension, of Section 118 for exemptions for
certain federal facilities, of Section 110 for SIP proinulga—
tion or revision, or of Section 113(d) for delayed compliance
orders. Unless a violator is issued a State order which
either requires compliance immediately (i.e., within 30
days) or satisfies the requirements of the provisions listed
in Section 110(i), EPA will consider the violator to be
in need of further enforcement action to establish an
appropriate enforceable schedule for compliance and, in
appropriate cases, to impose sanctions.
IV. Issuance and Approval of Delayed Compliance Orders
under Section 113(d) of the Act
A. Definition:
Although the term ‘delayed compliance order’ does
not appear in Section 113 of the Act, it is used here to
distinguish State and federal Section 113(d) orders

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—4—
from other compliance orders issued under Section 113 or
similar State authorities. Section 302(o) of the Act
defines a delayed compliance orderN as an order issued by
the State or by the Administrator to an existing stationary
source, postponing the date required under an applicable.
implementation plan for compliance by such source with any
requirement of such planu. The fact that Section 113(d)
permits such a delay in the SIP compliance date distinguishes
it from Section 113(a) and similar State authorities which
would permit issuance of an order only for essentially
immediate compliance with the plan’s requirement. The
criteria which must be met for lawful issuance and approval
of delayed compliance orders are set forth in Section 113(d)
of the Act and are discussed in detail in Appendix A.
Briefly, they include the followings
(1) The source must be currently unable to comply;
(2) Notice and opportunity for a public hearing must
be provided;
(3) The order must include a schedule for compliance;
(4) The order-must--include -reasonable and practicable
interim controls;
(5) The order must include reasonable requirements for
monitoring and reporting;
(6) The order must require final compliance as expedi-
tiously as practicable but no later than July 1, 1979,
or three years after the date for final compliance
specified in the SIP, whichever is later; and
(7) If the order is to a major source, it must notify
the source of its possible liability for noncompliance
penalties under Section 120 of the Act.
B. Choosing Appropriate Cases for Delayed Compliance
Orders:
Where a source does not have an egregious history of
noncompliance or recalcitrance, the administrative delayed

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compliance order process will normally be used by EPA, and
may be used by the States, to establish a compliance schedule,
provided, of course, that the source can otherwise qualify
for a delayed compliance order. Reliance on delayed coinpli—
ance orders in such cases will permit use of the potentially
less time—consuming administrative, rather than judicial,
process to impose schedules and interim requirements. (To
keep the administrative burden at a minimum, public notice,
hearings, and federal rulemaking may be accomplished
for several delayed compliance orders at one time.)
This will allow more r sources to be devoted to problem
sources for which litiyation is appropriate. However,
issuance of a delayed compliance order must be recognized to
be a benefit to the source which will be granted only in
appropriate situations.
Since the final ‘ ompliance date in a delayed compliance
order based on an existing SIP is generally limited to
July 1, 1979, delayed ompliance orders will progressively
become less and less available as an option. Therefore, a
top priority in the flat onal enforcement strategy is
to develop schedules ar I issue delayed compliance orders to
sources which are apprc nate candidates for such orders.
The issuance of de eyed complianc, orders by either the
States or EPA is discre onary. In exercising its discretion,
EPA will consider any p t compliance efforts and any prior
State or federal enforce ent actions involving the source.
If, based on these and c er relevant factors,. EPA determines
that the source is one :h an egregious history of noncom-
pliance, recalcitrance, environmental harm and/or that
court supervision is liki .y to be required in order to
assure expeditious compL nce, the source will be considered
an appropriate candidate or civil or criminal action
and no federal delayed cc pliance order will be issued.
Consequently, there will e no category of cases involving a
federally issued delayed :ompliance order and a federal
court action relating to he pre—delayed compliance order
period. EPA will continue to urge the States to adopt a
similar approach in exercising their discretion. However,
EPA approval or disapproval of a State delayed compliance
order will be based on the statutory criteria of Section
113(d). (See IV.D., ‘EPA Approval of State Delayed Compli-
ance Orders’, below.)
C. The Appropriate Nethod for Initiation of the Delayed
Compliance Order Process:
If EPA and/or the State determine that a source is
an appropriate candidate for a delayed compliance order
(i.e., that the source is probably eligible for a delayed

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compliance order under the Act and that the case is not
appropriate for civil penalties), the source should be
notified immediately.
In most cases where EP ,is enforcing, issuance of
a Notice of Violation (NOV)— 1 is the first step in the
enforcement process. Where the source appears to be an
appropriate candidate for a delayed compliance order, the
NOV or State notice shquld inform the source that it may
submit a schedule (which must reflect compliance as expedi-
tiously as practicable, include appropriate interim measures,
and otherwise Batisfy Section 113(d)). Whether or not State
notice is required, or may be provided in some manner other
than a written notice, is a question of State law.
The notice should provide that if, after review of
the source’s proposed schedule, the State or EPA determines
that the source is eligible and an appropriate candidate
for a DCO and that the proposed schedule is acceptable,
public notice and opportunity for a public hearing will
be provided. The notice to the source should establish a
specific deadline for the source to submit an appropriate
schedule and should indicate that if no acceptable schedule
is submitted by that deadline, EPA or the State will commence
an action for injunctive relief and civil penalties based on
the underlying SIP violation. Reference should also be made
to the statutory authority for criminal sanctions in
cases of. knowing violation.
The NOV or State notice should point out that issuance
of a delayed compliance order is discretionary and would
provide substantial benefits by insulating a source from
Although providing an opportunity to confer is not
statutorily required prior to EPA’S issuance of a delayed
compliance order, a conference will probably be useful in
the majority of cases. Under S1l3(a) (1), an NOV (i.e., 30
days notice) is required prior to issuance of an order by
EPA uødex- either 1113(a) or (6) where that order is based
on a SIP violation. The State and the source may waive
their rights to receive an NOV. In accordance with Wisconsin’s
Environmental Decade, Inc., v. Wisconsin Power and Light
Com an et al , 7 ERC 2022 (U.S. Dist. Ct., Western Dist. of
Wiscons2n, June 6, 1975) and EPA’s interpretative guidance
following that case, issuance of an NOV would be required in
any case where EPA finds that a person is in violation of a
SIP. This is also a prerequisite to EPA’s initiation of
judicial action based on such a violation.

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3udicial action and civil or criminal penalties based
on violations of the underlying requirement which are
ongoing while the delayed compliance order is being met. The
notice should conclude that, for these reasons, a delayed
compliance order will not be issued unless the source
indicates in writing (by signature of appropriate persons
authorized to agree for the source) that it will agree to
comply with the delayed compliance order. Source consent
will be required for all federal delayed compliance orders
and i ,reconunended for State delayed compliance orders as
well.—’ However, a source’s agreement to comply is not a
precondition to EPA approval of a State delayed compliance
order. (See Section IV.D., EPA Approval of State Delayed
Compliance Orders’, below.) In effect, only sources which
have not already established a history of egregious recalci-
trance should be given the opportunity to seek a delayed
compliance order. Further, if a source does not cooperate
early in the delayed compliance order process, enforcement
discretion should be exercised so as to refuse to issue a
delayed compliance order. In due course, court action will
be undertaken against uncooperative sources seeking compliance
and civil penalties under State and/or federal law for
each day of violation after August 7, 1977, the date of
enacbuent of the Clean Air Act M endments.
D. EPA Approval of State Delayed Compliance Orders:
-. While State procedures for initiation of the delayed
compliance order process may vary, Section 113(6) requires
notice and opportunity for a public hearing in all cases.
States should provide EPA with a copy of any proposed State
delayed compliance order prior to any public hearing on the
order. As soon as possible, EPA should notify the state in
writing of any questions it might have on the appropriateness
of issuing a delayed compliance order or on the adequacy of the
proposed delayed compliance order’s, terms. Where the proposed
/ EPA.w ll issue federal delayed compliance orders only
to soux ces which consent to their terms.. The form of the
consent may be similar to consent provisions embodied in
Section 113(a) administrative consent orders issued by EPA
prior to the 1977 amendments to the Act. There need not be
a specific waiver of the right to challenge the delayed
compliance order.

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State delayed compliance order presents issues which could
lead to disapproval by EPA, EPA representatives should
submit written comments to that effect and, within the
limits of available resources, appear at the State hearing
on the proposed delayed compliance order and comment for the
record on its adequacy.
Once the State issues a delayed compliance order, it
should notify EPA by sending a copy of the final order
to the ap opriate Regional Office Enforcement Division
Director.—’ EPA will act as quickly as possible, but,
in any case, EPA must approve or disapprove a State delayed
compliance order to a major source within 90 days of receipt
of the order and notice of its issuance. Upon EPA approval,
the State delayed ccmpl Lance order becomes effective and
enforceable by EPA and citizens as well as the State. A
State delayed compliance order to a minor source is effective
under Section 113(d) upon issuance. However, it ceases to
be effective under Section 113(d) if EPA disapproves upon a
determination that it was not issued in accordance with the
requirements of the Clean Air Act.
In accordance with Section 113(d) (9) of the Act, EPA
will vigorously pursue appropriate actions, including
seeking penalties, in any case where a federal delayed
compliance order has been violated. Where the delayed
compliance order involved is an EPA approved State or6er,
Delayed compliance orders under 1113(6) of the Act
submitted by a local agency for EPA approval must be submitted
either (1) through the appropriate State agency or (2) in
accordance with procedures established by the State which
allow direct submittal to EPA by the local agency. Section
121 of the Clean Air Act requires the States to provide ‘a
satisfactory process of consultation with general purpose
local governments, designated organizations of elected
officials of local governments and any Federal land manager
having apthority over Federal land to which the State plan
applies”. ‘.This consultation process will apply to all
1113(d) orders issued after August 7, 1978, and must be
provided in accordance with regulations to be promulgated by
EPA. Until August 7, 1978, both EPA and the States should
consult with appropriate local air pollution control agencies
wherever possible prior to issuance of any 5113(d) order
and should attempt to provide actual notice of any proposed
3113(6) orders to appropriate local officials.

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—9—
EPA will, consult first with the State to determine whether
the State or EPA, or both together, will take action but EPA
must assure itself that prompt, vigorous and appropriate
action is taken.
If a State issues a delayed compliance order which
satisfies the criteria set forth in Section 113(d), EPA
will not disapprove the State order based on those policy
considerations (see Section IV.B., above) which govern EPA’S
exercise of enforcement ‘discretion in determining whether
judicial action, rather than a delayed compliance order,
should be pursued. However, under Section 113(d)(lO) of the
Act, a delayed compliance order does not insulate a source
from initiation of an action to collect civil or criminal
penalties for violations which occurred during periods in
which the order was not in effect (i.e., the period of
violation prior to the delayed compliance order period).
Under the Act, it is clear that EPA may pursue judicial
action to obtain penalties for such an earlier period of
violation even where a State delayed compliance order has
been approved. EPA will generally pursue an action for
penalties covering the pre—delayed compliance order period
where the State has exercised its discretion differently
than EPA would have by issuing a delayed compliance order to
a source which EPA (utilizing the criteria set forth in
Section IV.B,, above) has determined to be an appropriate
candidate for judicial action,
EPA will evaluate State delayed compliance orders for
approval or disapproval in accordance wi the criteria
set forth in Section 113(d) of the Act. —‘ Those criteria
are discussed more fully in Appendix A and are outlined on
p. 4 above.
Delayed compliance orders issued by EPA must, of
course, meet the same statutory requirements. Delayed
compliance orders issued under Section 113(d) (3) to sources
intending to comply by replacement, complete change in
process, or shutdown are not covered herein but will be
addressed in separate guidance. Delayed compliance orders
may be issued by the Administrator, but not by the States,
under 81l3(d)(4) (relating to innovative technology) and
51l3(d)(5) (relating to coal conversions). These will
also be treated in separate guidance.

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—10—
E. Effect of Procedural Delays on Delayed Compliance
Order Increments of Progress and Interim Require-
ments:
Appendix B summarizes the procedures for EPA issuance
and approval of delayed compliance orders. Since rulemaking
is required, some delay can be expected. However, the effect
of this delay can be minimized. Under State law, a State
may require the source to begin immediately to meet incremen
of progress and interim requirements prior to EPA approval
of the delayed compliance order In fact, this may be
necessary in any case where final compliance cannot be
achieved well before the applicable final compliance deadlin
for an approvable delayed compliance order. In order
to avoid more stringent enforcement action and possible
liability for judicial penalties, a source which is proceedi
in good faith should be willing to begin its compliance
efforts immediately and the State may enforce the delayed
compliance order immediately under its independent State
enforcement authority. A State delayed compliance order tc
a major source will not, however, become effective under
Section 113(d) of the Clean Air Act until EPA approves the
State order by final promulgation in 40 CFR Part 65. This
means that the State delayed compliance order will not
insulate a major source from other enforcement (8113(d)(10))
nor will it become part of tife SIP for the purposes of
Sections 110, 304, and 307 of the.Act(S113(d)(11))
until EPA approves it. -
Similarly, EPA will require sources for which federal
delayed compliance orders are to be issued, to meet appro-
priate increments and interim requirements while informal
rulemaking procedures are being followed. Again, many
sources may not be eligible for delayed compliance orders
unless they agree to begin steps toward compliance early
eflough to avoid continued violation after the deadline set
in accordance with Section 113(d)(l)(D).
F. EPA Disapproval of a State Delayed Compliance Order:
Ordinarily, deficiencies in State delayed compliance
ordet will be attributable to the newness of the delayed
compliance order program and unfamiliarity with the delayed
compliance order requirements. This should not be a long
term problem; EPA will work with the States to allow adejuat
opportunity to correct oversights and minor problems without

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disapproval becoming necessary. Many existing State orders
can be supplemented readily to meet the requirements of
Section 113(d). EPA is aware that many States are already
making commendable efforts to do this.
However, there may be some cases where EPA disapproval
is necessary. Where EPA disapproves a State delayed compliance
order for a major source, EPA will issue a federal delayed
compliance order (if, the source is eligible and an appropriate
candidate for a delayed compliance order) or initiate
judicial action, in accordance with Agency enforcement
priorities. If EPA should disapprove a State delayed
compliance order to a minor source, EPA must simultaneously
issue its own delayed compliance order, assuming the source
can meet the statutory eligibility requirements of Section
113(d).
In rare cases, EPA may receive for approval a State
delayed compliance order based on violations for which EPA
has already filed or begun to process a judicial action.
EPA’S filing of a judicial action will constitute rejection
of the State delayed compliance order. Where this occurs,
the State will be notified of the reasons the State delayed
compliance order cannot be approved and will be formally
notified, immediately after EPA’s receipt of the proposed
delayed compliance order, that EPA is taking or plans to
take judicial action • Notice of the disapproval of the
State delayed compliance order will also be published in the
Federal Register , but the disapproval will be effective upon
notice to the State.
V. Relation of Section 113(a) or (d) Orders to Noncompliance
Penalties under Section 120 of the Clean Air Act
A. Applicability of Non—Compliance Penalties under Section
120 of the Act:
The Division of Stationary Source Enforcement is
working with other EPA headquarters offices and regional
representatives on development of regulations implementing
Sec io n 120 of the Act. Early drafts will be circulated
widely for comment as soon as they are available.
Generally, there is no exemption from Section 120
noncompliance penalties for sources subject to. delayed

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—12—
compliance schedules by consent decrees, or other administra-
tively or judicially imposed compliance plans including even
certain delayed compliance orders with schedules extending
beyond July 1, 1979. When the Section 120 noncompliance
penalty provision becomes effective (in mid—1979) .- -’ EPA
or the delegated State must assess a noncompliance penalty
against any major source which is not in compliance with a
SIP requirement or any other requirement for which penalties
must be assessed under Section 120(a)(2)(A). The penalty
amount will be based on the economic advantage derived from
noncompliance after mid—1979.
With respect to violations of existing emission
limitations, the Clean Air Act Amendments did not clearly
indicate whether the effective date for noncompliance
penalty liability under Section 120 of the Act is July 1,
1979 or August 7, 1979. Both dates are referred to in the
definition of period of covered noncomplianceu in Section
120(d)(3)(C). For purposes of determining an appropriate
civil penalty, EPA will assw e that the administrative
penalty will be assessed beginning August 7, 1979. Until
the regulations implementing Section 120 have been, subject
to public comment and promulgated by the Administrator, no
final determination can be made, however, with respect to
the applicable date for purposes of Section 120.
With respect to any emission limitation or other
requirement approved or promulgated by the Administrator
after August 7, 1977, which is either more stringent than
those in effect at that time or which establishes a require-
ment where none existed before, Section 120(g) of the Act
provides that the effective date for noncompliance penalties
will be the date that full compliance is required with such
limitation or requirement (though not later than three years
from such approval or promulgation, nor earlier than the
effectiv& date that noncompliance penalties begin with
respect to violations of existing limitations).

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—13—
Section 120(a)(2)(B) and (C) provide for exgipptions
from the noncompliance penalty in certain cases.—’
However, unless one of these limited exemptions is granted,
the noncompliance penalty will apply even where a compliance
schedule has been imposed in a State or federal enforcement
action, if the source’s violation of the derlying SIP
provision continues past August 7,1979. —‘
The exemptions provided in Section 120(a)(2)(B) and
(C) are:
a) a source converting to coal under a compliance
date extension or $113(dH5) order;
b) a source using innovative technology under a
1113(d) (4) order;
c) a source issued a delayed compliance order based
on an inability to comply which results from
reasons entirely beyond the source’s control (see
djscussion of inabilityto comp1y in Appendix A);
d) conditions which would authorize a temporary
emergency suspension under section 110(f) or
(g); and
e) at the Administrator’s discretion, a source
whose instance of noncompliance is de minimis in
nature and duration.
Section 120(g) provides that a violating source
newly subject to an emission limit and a violating source
subject to an emission limit more stringent than that in
effect prior to August 7, 1977, must pay noncompliance
penalties beginning either on July 1, 1979, or the date they
are reqbired to be in compliance with the new emission
limit, whichever is later, but not later than three years
after approval or promulgation of the new limit. The
application of this three years language to sources
covered by SIP revisions under 1172 will be discussed
in separate guidance.

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APPENDIX A
Criteria for Approval of State Delayed Orders and Issuance of
Federal Delayed Compliance Orders under Section 113(d) of the
Clean Air Act
(1) Inability to comply : The delayed compliance order
(DCO) must include a finding that the source is unable to
comply with the SIP requirement involved.
Discussion: Under the Act, a source is not eligible for
a State or federal DCO if the delay is Bought simply
for convenience or for economic advantages which would
accrue from delayed compliance (1977 Senate Report at
p. 46). If the source truly needs additional time to
install necessary controls, make appropriate process changes,
etc., the time needed to comply may be provided in a DCO in
accordance with the limitations described in item (6) below.
For purposes of this criterion of eligibility for a DCO, a
source is eligible if it is not able to comply immediately
at the time the DCO is being considered, regardless of its
past history. The source’s present inability to comply need
not be for reasons entirely beyond the source’s control to
qualify it for DCO eligibility. (Past compliance efforts are
relevant to the exercise of discretion to issue a DCO, even
though not relevant in determining technical eligiblity.)
Care should be taken in making the determination of inability.
to comply. Although the standard is as stated above
for purposes of determining eligibility for a DCO under
8113(d), a much more stringent standard must be met for a
major source to obtain an exemption from mandatory administra-
tive noncompliance penalties under 1120(a)(2)(B)(iv). To
obtain Buch an exemption, a source must be subject to an
administrative order based on its inability to comply and
that inability must result from reasons entirely beyoiid
the control of the owner or operator of such source or of
any entity controlling, controlled by, or under common
control with the owner or operator of such sourceu . The
legislative history of this provision suggests that it
should be read very narrowly. At the time of applying for a
DCO, sources may press to obtain findings that their inability
to ccmpfy ‘is for reasons entirely beyond their control,
because of the protection from Section 120 penalties
such findings may afford them. However, since the standard
for eligibility for a DCO appears on its face to be less
restrictive than that for exemption from 5120 penalties, it
would be wise at this stage to avoid making any formal
determination on the question of the reasons for the source’s

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inability to comply and to make it clear that those reasons
were not relevant, ndr were they considered, in determining
eligibility for a DCO. (Detailed explanation of the exemp-
tions from administrative noncompliance penalties will be
included in the preamble and regulations implementing
Section 120 of the Act.)
(2) Notice and opportunity for public hearing : The order
must have been issued after notice to the public of th
content of the proposed order and opportunity for public
hearing.
Discussion: Generally, thirty days is considered adequate
notice under both State and federal law. The form of notice
(newspaper, State Register , etc.) is generally prescribed by
State law. EPA will, at a minimum, give public notice of
its proposed DCOs in the Federal Register . (Actual notice
to the State of proposed DCOs will also be given.) In
evaluating the approvability of State DCOB, EPA will as a
minimum require that the notice be adequate under State law
and that persons living in the vicinity of the source have
had adequate opportunity to comment on the proposed State
order. Thirty days notice will be considered adequate and
will be required for EPA approval of a State DCO unless the
State has obtained prior EPA approval of some other procedure
consistent with 40 CFR 151.4(e).
(3) Compliance schedule : The order must contain a schedule
and timetable for compliance, including increments of
progress.
Discussion: Section 302(p) of the Act defines ‘schedule and
timetable of compliance’ as ‘a schedule of required measures
including an enforceable sequence of actions or operations
leadingto compliance with an emission limitation, other
limitation, prohibition or standard’. Each increment of
progress must be required to be met as expeditiously as
practicable. As a minimum, the increments of progress
described in 40 CFR 151.1(q) must be included or must have
already bern achieved. If an increment has already been
achievec , the order or supporting materials supplied to EPA
must attest to this fact.
(4) Interim controls : The order must contain requirements
for use of the best practicable system or systemB of emission

-------
reduction (taking into accountthe requirement with which
the source must ultim te1y comply) for the period the order
is in effect and for compliance with reasonable and practi-
cable interim requirements including (a) those necessary to
avoid an imminent and substantial endangerment to human
health, and (b) a requirement to meet the SIP, insofar as
the source is able.
Discussion: As a minimum, the order must include a finding
that (a) the best practicable system of interim emission
reduction has been required or, in rare cases, that no
system of interim emissioh reduction is practicable in the
case at hand, and (b) that the source remains subject to
enforcement of emergency provisions designed to prevent
imminent and substantial endangerment to human health (under
8303 of the Clean Air Act and any similar State authority).
Generally, a source should be required to meet an interim
emission limitation based, at a minimum, on its present
emission rate. Improved operation and maintenance procedures,
temporary switches to less polluting fuels, and similar
specific requirements should also be considered. It may be
appropriate to require that the source conduct ambient air
quality monitoring and periodically reduce emissions,
or even periodically shut down, when air quality is expected
to contravene health related standards. A case by case
determination will be necessary to support a finding on the
reasonableness and practicability of interim control require-
ments. Ambient air quality and density of population in the
area should be considered in determining what controls are
reasonable. Cost and the length of delay n compliance
allo ied by the DCO are relevant both to the reasonableness
and practicability of the interim control requirements.
(5) Monitoring and reportij g : The order must include a
requirement for reasonable emission monitoring and reporting.
Discussion: If the DCO will remain in effect for any
substantial period of time, it will generally be reasonable
to require continuous emission monitoring wherever technology
exists for meeting such a requirement. The continuous
monitoring of other process parameters may be appropriate in
addition, to or instead of continuous emission monitoring
where t ch1 ology is less advanced. Monitoring should
normally be required for the period the DCO will be in
effect. However, if EPA or the State determines that a
monitoring requirement is not reasonable in a particular
case, a finding to this effect must be made and included
either in the UCO itself or in supporting documentation.

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Where the SIP already requires continuous monitoring, the
DCO need not address continuous monitoring after the final
compliance date in the DCO. Where EPA intends to require
continuous monitoring after the DCO’s final compliance date
and no independent SIP requirement exists, this may be
included in the DCO but the authority of Section 114 and
Section 113(a) of the Clean Air Act must be relied upon for
this requirement. Whether States must also rely on their
own separate reporting requirement authorities is a matter
of State law. Reports must be required at times and in
sufficient detail to enable the authority issuing the DCO to
determine whether interim requirements, increments of
progress, and final compliance have been achieved in a
timely way.
(6) Final compliance : The order must provide for final
compliance as expeditiously as practicable but no later than
July 1, 1979, or three years after the date for final
compliance specified in the SIP, whichever is later.
Discussion: Generally, the July 1, 1979, date will be
controlling since it will be more than three years after the
SIP compliance date. However, where the attainment dateu
is later than July 1, 1976, as in areas which were subject
to two year extensions under 5110(e) of the Act, the SIP
compliance date may be as late as mid—1977 and a DCO could
extend to mid_l980.* Where an attainment date is later in
* In the case of particulate matter requirements for
the State of Ohio, the immediately effective final compliance
date of April 15, 1974 has been extended to the attainment
date of April 15, 1977 for some sources, even though an
extension for these sources was not formally approved by the
State or EPA. The special exception for these sources is
based on the unique circumstances concerning the particulate
matter standards in Ohio. The EPA—promulgated particulate
matter plan for Ohio was challenged in the United States
Court of Appeals for the Sixth Circuit. As part of that
case, EPA represented to the Court that the April 15, 1977
attainment date in the plan was based on a determination
that many Ohio utilities would need a full three years from
the 1974 promulgation date to comply with plan requirements.
In some cases, sources relied on these representations and
timely applied for State variances deferring compliance
until April 15, 1977, but did not receive variances because
of State inaction. For these sources, the final compliance
date ‘specified in (the] plan’ as that phrase is used in
Section 113(d) (1) (D), can be considered to be April 15, 1977
for particulate matter requirements.

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—5—
time than a SIP compliance date, the three year time frame
permitted for final compliance in a DCO runs from the
compliance date. (Note also that 5113(6) (3), S13(d)(4),
and S113(d)(5) specify different deadlines for compliance
in DCOs issued under their terms. However, all S113(d)
orders must provide for compliance as expeditiously as
practicable and Congress clearly intended that violators
should not be given a ‘free ride’ up to the absolute deadlines
provided by 5113(6)).)
(7) Notice of possible liability for noncompliance penalties :
If the order is to a major source, it must notify the
source that, unless exempted under Section 120(a)(2)(B) or
(C) of the Act, it will receive a notice of noncompliance
and noncompliance penalties will be assessed and collected
under Section 120 i the event the source fails to comply by
July 1, 1979, or such later date as is provided in accordance
with Section 120(b) (3).
Discussion: ‘A notice of noncompliance’ is a term of art
under Section 120 of the Act. Once such a notice is issued,
the source would have 45 days to submit certain financial
data for purposes of assessment of an administrative non-
compliance penalty. Until the noncompliance penalty program
is implemented under regulations promulgated by EPA, no
‘notice of noncompliance’ need be included in a DCO.
However, the DCO must notify the source that it will receive
such a notice and vii]. be liable for noncompliance penalties
if it does not ccmp1 iby mid—1979 and is not entitled to an
exemption or delay in the applicability of Section 120 of
the Act (or a State program thereunder).

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APPENDIX B
Summary of P.rocedures for Issuance and Approval of DCOs
In issuing its own DCOs, EPA will follow informal rulemaking
procedures. Under informal rulemaking procedures, EPA must
publish, in the Federal Register , notice of its Proposed DCO,
soliciting public comment and offering opportunity for a
public hearing. This notice may be after or simultaneous
with the actual notice o the State required by Section
113(d) (1) of the Act. A thirty day comment period is
generally considered reasonable and is required if notice to
the State is simultaneous to Federal Register notice. After
this comment period (and any public hearing), the final
order must be published in the Federal Register and may, for
good cause, be made immediately effective.
Informal rulemaking will also be employed for EPA’s action
on State DCOs to major sources and for EPA disapproval of
State DCOs to minor sources. Note, however, that EPA is
not required to provide an opportunity for public hearing on
a State DCO. If the State does not provide opportunity for
public hearing prior to issuing its order, EPA will not
approve the State DCO. Final EPA action on a State DCO is
required within 90 days of receipt of the order and notice
of its issuance by the regional Enforcement Division Director.
EPA will strive to act within this time frame in all cases.
The Division of Stationary Source Enforcement (DSSE) will -
establish a new Part 65 of Title 40 of the Code of Federal
Regulations. EPA—issued 1 COs (except $ll3(d (5) DCOs to
coal conversion sources)—’ and EPA approvals and disapprovals
of State DCOs will be promulgated in this Part. EPA
regional offices will prepare the Federal Register documents
for proposal and promulgation in accordance with guidance
issued by DSSE. These documents (and necessary copies)
will be forwarded, along with copies of a State DCO on which
EPA is taking action, to DSSE for processing. Once DSSE has
SectiOn 113(d) (5) DCOs may be issued only by EPA.
They will be promulgated in existing 40 CFR Part 55, Energy
Related Authority.

-------
—2—
reviewed the documentg for national consistency, they will
be handcarried to EPA’S Federal Register Officer for
forwarding to the Federal Register (if a proposal) or to the
Administrator (if a final action). (After a regional office
gains experience in the DCO process, the requirement for
DSSE review will be waived and DCOs wi]]. be handled in a
manner analogous to ‘special action ’/normal action’ SIP
revisions. In the case of ‘special actions, however, only
Office of Enforcement concurrence will be required and the
review period will be shortened to five working days from
the date of receipt.)
EPA will provide whatever assistance it can to States in
developing approvable State DCOs. In the early stages of
the DCO program and upon request by the regional office,
DSSE will also review and provide assistance on preliminary
drafts of State and federal DCOs to the extent resources
and other priorities permit.

-------
Se jo1e .F A No4u
TITLE 40 — Protection of the Environment
CHAPTER 1 — ENVIRONMENTAL PROTECTION AGENCY
PART 65 — DELAYED COMPLIANCE ORDERS
Delayed Compliance Order for [ Source], [ Location] .
AGENCY: Environmental Protection Agency
ACTION: Final Rule
SUMMARY: The Administrator of EPA hereby issues a DeLayed
Compliance Order to the [ name of source] . The Order
requires the company to bring air emissions from its [ type
of prQcess ] at ( locationj into compliance with certain
regulations contained in the federally—approved [ name of
state ] State Implementation Plan (SIP). [ name of source ]
compliance with the Order will preclude suits under the
federal enforcement and citizen suit provisions of the Clean
Air Act for violation(s) of the SIP regulations covered by
the Order during the period the Order is in effect.
DATES: This rule takes effect on [ date of publication in
the FEDERAL REGISTER] .
FOR FURTHER INFORMATION CONTACT:
[ Include the name, address and telephone number of the
contact person. Generally, this should be the person in

-------
the Regional Office with the greatest knowledge of the
Order].
ADDRESSES: The Delayed Compliance Order, supporting material,
and any comments received in response to a prior
FEDERAL REGISTER notice proposing issuance of the
Order are available for public inspection and copying
during normal business hours at:
[ Include the address and appropriate room
number of the Regional Office]
[ If appropriate, also include the following sentence:
• The record of a public hearing concerning the proposed
order held on ( date of hearing ] at [ location of hearing )
is also available for public inspection and copying
during normal business hours at the above address].
SUPPLEMENTARY INFORMATION:
On [ date proposal notice appeared in the Federal Register) ,
the Regional Administrator of EPA’S Region [ relevant number ]
Of f ice published in the FEDERAL REGISTER, [ Federal Register
citation) , a noti i é ting out the provisions of a proposed
delayed compliance order for ( name of source) . The notice
asked for public comments and offered the opportunity to
request a public hearing on the proposed Order. [ Indicate
whether or not any public comments or requests for a public

-------
hearing were received in response to the proposal notice.
If comments were received by the Regional Office, summarize
the substance of the comments and indicate why or why not,
and how, the proposed Order was amended in consideration of
the comments. If the Regional Office received requests for
a public hearing, indicate why or why not a public hearing
was held. If a public hearing was held, note the date of
notice in the Federal Register announcing the hearing, the
time and place the hearing was held, and summarize the
substance of the comments submitted at the hearing. Explain
why or why not, and how, the proposed Order was amended in
consideration of the comments.]
• Therefore, [ or, if comments have been received, In
consideration of the comments received on the proposed
Order,] a delayed compliance order effective this date is
issued to ( name of source ] by the Administrator of EPA
pursuant to the authority of Section 113(d) [ appropriate
subsection ) of the Clean Air Act, 42 U.S.C. 7413(d)(_).
The Order placeB [ name of source ] on a schedule to bring its
[ type of process ] at [ location ] into compliance as expedi-
tiously as practicable with [ citation to the regulation
covered by the order] , a part of the federally—approved
[ name of State ) State Implementation Plan. The Order also
imposes [ include as appropriate. . . interim requirements
which meet Sections 113(d)(1)’(C) and 113(d) (7) of the Act,

-------
and emission monitoring and reporting requirements. If any
of the three elements are absent, include a finding that
their inclusion in the Order would be unreasonable]. If the
conditions of the Order are met, it will permit ( name of
source ] to delay compliance with the SIP regulations covered
by the Order until ( date for compliance set by the Order ]
The company is unable to .immediately comply with these
regulations.
(lithe notice will be published before 40 CFR Part 65 is
promulgated, the following two paragraphs must be included :
Compliance with the order by [ name of source ] will preclude
federal enforcement action under Section 113 of the Act for
violations of the SIP regulations covered by the Order during
the period the Order is in effect. Citizen suits under
Section 304 of the Act are similarily precluded. If the
Administrator determines that ( name of source ] is in violation
of a requirement contained in the Order, one or more of the
actions required by Section 113(d) (9) of the Act will be
initiated. Publication of this notice of final rulemaking
—constitutes final Agency action for the purposes of judicial
review under Section 307(b) of the Act.
The provisions of the Order will be summarized, as set forth
below, in 40 CFR Part 65. The provisions of 40 CFR Part 65 will
be promulgated by EPA soon, and will contain the procedures

-------
for EPA’S issuance, approval, and disapproval of orders
under Section 113(d) of the Act. In addition, Part 65 will
contain sections summarizing the orders issued, approved,
and disapproved by EPA. A prior notice proposing regulations
for 40 CFR Part 65, published at 40 FR 149876 (April 2,
1975), viii be withdrawn, and replaced by a notice
promulgating these new regulations.)
EPA has determined that the Order shall be effective
upon publication of this notice because of the need to
immediately place ( name of source ] on a schedule for compli-
ance with the applicable requirement(s) of the [ name of
State ] State Implementation Plan.
(Authority: 42 U.S.C. 7413(6), 7601)
Dated: ________________ ______________________________________
Douglas M. Costle
Administrator

-------
If the notice will be published after 40 CFR Part 65 is
promulgated, or if a prior final notice issuing an Order to
a source in the particular State has been previously published,
the ainendatory language should read as follows:
_7
(I
In consideration of the foregoing, Chapter 1 of Title 40 of
‘ the Code of Federal Regulations is amended as follows:
Part 65 — DELAYED COMPLIANCE ORDERS
1. By amending 565.1 to read as follows:
565.1 Federal delayed compliance orders issued
under Section 113(d) (1), (3),, and (4) of the Act.
a * * a *
SIP reg— Final
Date of gulation ccmplianc
Source Location Order No. FR proposal involved date
* * a
I It II 11 II I [ I
1 Fill in appropriate subsection as supplied by
40 CFR Part 65 or the May 9, 1978, memorandum entitled
Federal Register Notices Proposing Approval, Disapproval,
or Issuance of Administrative Orders Under Section 113(d) of
the Clean Air Act.

-------
If the notice will be published before 40 CFR Part 65 is
promulgated, and if it is the first time an order is issued
in 40 CFR Part 65 under a particular State, the amendatory
language should read as follows:
In consideration of the foregoing, Chapter 1. of Title 40 of
the Code of Federal Regulations is amended as follows:
PART 65 — DELAYED COMPLIANCE ORDERS
1. By adding S65.( 31 to read as follows:
Subpart — ( name of statel
565. [ Federal delayed compliance orders issued under.
Section 113(d)(l), (3), and (4) of the Act .
The delayed compliance orders referenced below have been
issued by the Administrator in accordance with Section
Fill in appropriate subsection as supplied by
40 CFR Part 65 or the May 9, 1978, memorandum entitled
Federal Register Notices Proposing Approval, Disapproval,
or Issuance of Administrative Orders Under Section 113(d) of
the Clean Air Act’.
2 The Subpart for each State in 40 CFR Part 65 is the
same alphabetical number as that assigned to each State in
40 CFR Part 52.

-------
113(d) of the Act and with this Part. With regard to
each order, the Administrator has made all the deterinj a—
tions and findings which are necessary for issuance of
the order under Section 113(d) of the Act.
Source
Location
Order
No.
Date of
FR proposal
SIP reg—
ulation
involved
Final
complianc
date
I
II
I
I
I C I
I

-------
¼ ’ J fl.J.
(F !)
TITLE 40 — Protection of the Environment
CHAPTER 1 — ENVIRONMENTAL PROTECTION AGENCY
PART 65 — DELAYED COMPLIANCE ORDERS
( Approval, Disaporoval ] of a Delayed Compliance
Order Issued by [ name of issuing authority ]
to [ name of source )
AGENCY: Environmental Protection Agency
ACTION: Final Rule
SUMMARY: The Administrator of EPA hereby ( approves, dis-
approves ] a Delayed Compliance Order issued by [ name of
issuing authority ) to the (name of source]. The Order
requires the company to bring air emissions from its [ type
of process ] at [ location ] into compliance with certain
regulations contained in the federally—approved [ name of
state ] State Implementation Plan (SIP). [ Insert the
following sentence if the Ordez is approved: Because of the
Administrator’s approval, ( name of source ] compliance with
the Order will preclude suits under the federal enforcement
and citizen suit provisions of the Clean Air Act for viola-
tion(s) of the SIP regulations covered by the Order during
the period the Order is in effect.
DATES: This rule takes effect on [ date of publication in
the FEDERAL REGISTER] .

-------
For further information contact:
(Include the name, address and telephone number of the
contact person. Generally, this should be the person in
the Regional Office with the greatest knowledge of the
Order].
ADDRESSES: A copy of the Delayed Compliance Order, any
supporting material, and any comments received in
response to a prior FEDER.AL REGISTER notice proposing
( approval, disapproval ] of the Order are available for
public inspection and copying during normal business
h*ur8 at:
(Include the address and appropriate room
number of the Regional Office]
SUPPLEMENTARY INFORMATION:
On ( date proposal notice appeared in the Federal Register] ,
the Regional Administrator of EPA’S Region ( relevant number ]
Office published in the FEDERAL REGISTER, ( Federal Register
citation] , a notice proposing [ approval, disapproval ] of a
delayed ccmpliance order issued by ( name of issuing authority ]
to the [ name of source) . The notice asked for public
c ments by ( date the public comment period expired ] on
EPA’S proposed ( approval, disapproval ] of the Order.
[ Indicate whether or not any public comments were received

-------
in response to the proposal notice. If comments were
received by the Regional Office, summarize the substance of
the comments and indicate why or why not the proposed action
was changed in consideration of the comments].
Insert the following paragraph if the Order is approved:
Therefore, [ or, if comments have been received, In
consideration of the comments received on EPA’s proposed
action,] the delayed compliance order issued to [ name of
source ] is approved by the Administrator of EPA pursuant to
the authority of Section 113(d) (2) of the Clean Air Act,
42 U.S.C. 7413(d)(2). The Order places ( name of source ) on
a echedule to bring its [ type of rocess ] at [ location ] into
compliance as expeditiously as practicable with ( citation to
the regulation covered by the order] , a part of the federally—
approved ( name of State ) State Implementation Plan. The
Order also imposes [ include as appropriate. . . interim
requirements which meet Sections 113(d) (1) (C) and 113(d) (7)
of the Act, and emission monitoring and reporting requirements.
If any of the three elements are absent, include a finding
that their inclusion in the Order would be unreasonable].
If the conditions of the Order are met, it will permit ( name
of source ] to delay. compliance with the SIP regulations
covered by the Order until [ date for compliance set by the
Order]. The company is unable to immediately comply with
these regulations.

-------
Insert the following language if the Order is disapproved:
Therefore, (or, if comments have been received, in
consideration of the comments received on EPA’S proposed
action,) the delayed ccmpliance order issued to [ name of
source ] is disapproved by the Administrator of EPA pursuant
to the authority of Section 113(d) (2) of the Clean Air Act,
42 U.S.C. 74l3(d)(2). (Specifically explain the basis for
the dissapproval). Because of the Administrator’s dis-
approval, the Order is not effective under Section 113(d) of
the Clean Air Act.
[ If the notice will be published before 40 CFR Part.65 is
pr nulgated, the following two paragraphs must be included:
(The entire first paragraph should be included if the
Order is approved. If the Order is disapproved, only the
last sentense in the paragraph should be included in the
notice.)
Because the Order has been approved by EPA, compliance
with its terms will preclude federal enforcement action
under Section 113 of the Act for violations of the SIP
regulations covered by the Order during the period the
Order is in effect. Citizen suits under Section 304 of the
Act are similarily precluded. If the Administrator deter-
mines that [ name of source ] is in violation of a requirement

-------
contained in the Order, one or more of the actions required
by Section 113(d) (9) of the Act will be initiated. Publica-
tion of this notice of final rulemaking constitutes final
Agency action for the purposes of judicial review under
Section 307(b) of the Act.
The provisions of the Order viii be summarized, as set
forth below, in 40 CFR Part 65. The provisions of 40 CFR
Part 65 will be promulgated by EPA soon, and will contain
the procedures for EPA’S issuance, approval, and disapproval
of orders under Section 113(d) of the Act. In addition,
Part 65 will contain sections summarizing the orders issued,
approved, and disapproved by EPA. A prior notice proposing
regulations for 40 CFR Part 65, published at 40 FR 149876
(April 2, 1975), will be withdrawn, and replaced by a notice
promulgating these new regulations.)
Insert the following language if appropriate:
EPA has determined that its ( approval, disapproval ) of
the Order shall be effective upon publication of this notice
because of the need to immediately place [ name of source ) on
a schedule which is effective under the Clean Air Act for
compliance with the applicable requirement(s) of the [ name
of State ] State Implementation Plan.
(Authority: 42 U.S.C. 7413(d), 7601)
Dated: ________________ ____________________________________
Douglas M. Costle
Administrator

-------
If a notice approving an order will be published after
40 CFR Part 65 is promulgated, or if a prior final notice
-
approving an Order for a source in the particular State has
been previously published, the amendatory language should
read as follows:
In consideration of the foregoing, Chapter 1 of Title 40 of
the Code of Federal Regulations is amended as follows:
Parti65 — DELAYED COMPLIANCE ORDERS
1. By amending S65.t to read as follows:
S65.L EPA Approval of State delayed compliance orders
issued to major stationary sources.
* * * *
SIP regu— Final
lation(s) Date of compliance
Source Location Order No. involved FR proposal date
* * *
I )( It It I I 3 I I
Fill in appropriate subsection as supplied by
40 CFR Part 65 or the May 9, 1978, memorandum entitled
‘ Federal Register Notices Proposing Approval, Disapproval,
or Issuance of Administrative Orders Under Section 113(d) of
the Clean Air Act’.

-------
If a notice disapproving an order will be published after
40 CFR Part 65 is promulgated, or if a prior final not .ce
disapproving an order for a source in the particular State
has been previously published, the amendatory language
should read as follows:
In consideration of the foregoing, Chapter 1 of Title 40 of
the Code of Federal Regulations is amended as follows:
PART 65 — DELAYED COMPLIANCE ORDERS
1. By amending S65.t to read as follows:
565. [ EPA disapproval of State delayed compliance
orders.
* * * * *
SIP regu— Final
lation(s) Date of compliance
Source Location Order No. involved . oopt4.m date
c..
* * *
t II I I I C II II ______I
1 Fill in appropriate subsection as supplied by
40 CFR Part 65 or the May 9, 1978, memorandum entitled
Federal Register Notices Proposing Approval, Disapproval,
or Issuance of Administrative Orders Under Section 113(d) of
the Clean Air Acta.

-------
If a notice approving an order will be published before 40
CFR Part 65 is published, and if this is the first time an
Order is approved for a particular State, the amendatory
language should read as follows:
In consideration of the foregoing, Chapter 1 of Title 40 of
the Code of Federal Regulations is amended as follows:
PART 65 — DELAYED COMPLIANCE ORDERS
1. By adding S65.I to read as follows:
Subpart ( — ( name of state ]
565. [ ] EPA Approval of State delayed compli-
ance orders issued to major stationary sources .
The State orders identified below have been
approved by the Administrator in accordance with
Section 113(d) (2) of the Act and with this Part.
Fill in appropriate subsection as supplied by
40 CFR Part 65 or the May 9, 1978, memorandum entitled
•Federal Notices Proposing Approval, Disapproval,
or Issuance of Administrative Orders Under Section 113(d) of
the Clean Air Acts.
2 The Subpart for each State in 40 CFR Part 65 is the
same alphabetical number as that assigned to each State in
40 CFR Part 52.

-------
With regard to each order, the Administrator has
made all the determinations and findings which are
/
ne sary for approval of the order sander Section
113(d) of the Act.
regu— Final
lation(s) Date of compliance
Source involved dopt eø date
______ ( II ] ( I
Location
C ______IL______

-------
If a notice disapproving an order will be published before
40 CFR Part 65 is promulgated, and if this is the first time
an order is disapproved for a particular State, the amendatory
language shoulu read as follows:
In consideration of the foregoing, Chapter 1 of Title 40 of
the Code of Federal Regulations is amended as follows:
Part 65 — DELAYED COMPLIANCE ORDERS
1. By adding S65.( to read as follows:
Subpart — [ name of state)
EPA Disapproval of state delayed compliance orders .
The State orders identified below have been dis-
approved by the Administrator in accordance with
Fill in appropriate subsection as supplied by
40 CFR Part 65 or the May 9, 1978, memorandum entitled
pederal Register Notices Proposing Approval, Disapproval,
or Issuance of Administrative Orders Under Section 113(d) of
the Clean Air Act.
2 The Subpart for each State in 40 CFR Part 65 is the
sante alphabetical number as that assigned to each State in
40 CFR Part 52.

-------
Section 113(d) (2) of the Act and with this Part.
With regard to each order, the Administrator has
determined that it does not satisfy the applicable
requirements of Section 113(d) of the Act.
SIP regu— Final
lation(s) Date of compliance
Source Location Order No. involved . Adrptjgn data
I _________I I I I I I I [ I C _________I

-------
ENVIRONMENTAL PROTECTION
AGENCY
(40 CFR Part 65]
(Docket No. ___
STATE AND FEDERAL ADMINISTRATIVE ORDERS
PERMITTING A DELAY IN COMPLIANCE WITH
STATE IMPLEMENTATION PLAN REQUI REMENTS
Proposed Delayed Compliance Order
for [ source], [ location ]
AGENCY: Environmental Protection Agency
ACTION: iWithdrawal of notice of proposed rulemaking
SUMMARY: The purpose of this notice is to withdraw a prior
FEDERAL REGISTER notice proposing a Delayed Compliance
Order for ( name of source ] at [ location] . This action is
being- taken because ( name of source ] is no longer in
violation of the ( name of State ] State Implementation
Plan provisions covered by the proposed Order.
DATE: This withdrawal is immediately effective.
FOR FURTHER INFORMATION CONTACT:
[ Include the name of the person in the Regional
Office with the greatest knowledge of the order]
*optj ona l

-------
SUPPLEMENTARY INFORMATION:
A FEDERAL REGISTER notice published at _____ FR _____
( date ] solicited public comments and offered the opportunity
to request a public hearing on a proposed Delayed Compliance
Order to be issued by EPA to ( source ] at [ location]. ( Name
of source ] has subsequently achieved compliance with the
( name of State ] State Implementation Plan regulations
covered by the Order. (Indicate how compliance was demon-
strated ie source test).
In consideration of the foregoing, the proposal published
in the FEDERAL REGISTER C PR ) on ( date ] entitled
Proposed Delayed Compliance Order for [ source), ( location ] U ,
is hereby withdrawn.
Dateds ____________ _____ _____________________________
(Name)
Regional Administrator
Region ( ]

-------
15

-------
EPA’S Authority to Issue Delayed Compliance Orders
After December 31, 1982
(08/22/83)
File at Part E, Document #15

-------
?‘
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D C. 20460
4 L
AUG 22 933 FFICEOF
AIR. NOISE AND RADIATION
SUBJECT: EPA’s Authority to Issue Section 113(d) (1) and
(d)(4) DCOs after December 31 1982
FROM: Director g .%rlIm
Stationary Source Compliance Division
Office of Air Quality.. Planning and Standards
TO: Director, Air Management Division
Regions I, V and IX
Director, Air and Waste Management Division
Regions II-IV, VI-Vill and X
Attached is a memorandum from 0CC that addresses the
question of EPA’s authority to issue DCOs after December 31 , 1982.
It concludes that EPA may continue to issue Section 113(d) (1)
and (d)(4) DCOs, and approve those submitted by States. [ The
attached memorandum does not address EPA’s authority:to issue
orders under Section (d)(3) or (d)(5).J In issuing any DCO or
approving a State DCO, the Region is still responsible for assuring
that the requirements of the Clean Air Act for the issuance of a
DCO are met and that the order is supported in the Regional
files by technical documentation.
This memorandum does not a fecc the procedures for processing
a DCC which were recently outlined in an April.26, 1983 memorandum
to the Regional Administrators and Regional Counsels. As the April
memorandum says, DCOs do not require concurrence by SSCD except
for those issued under Section 113(d) (4) and (d)(5). SSCD will,
however, assist in answering any procedural questions that may
arise or advising the Regions on any policy issues.
Attachment
CC: Regional Counsels
Regions I-X
Air Branch Chiefs
Regions I-X
Air Compliance Branch Chiefs
Regions II, V, VII, IX

-------
• 4P 4
I ‘g’
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY OjEC a,,. E
WASHINGTON, D.C. 20460
E33JtL21 1II 5O
JUL I 9 I 3
Or’.cc a,
GCNCRAI.. COUNSCI.
MEMORANDUM
SUBJECT: EPA’s Authority to Issue DCOs after
December 31, 1982
FROM: William F. Pedersen, Jr
Associate General Counsel
Air, Noise and Radiation Division (LE-132A)
TO: Michael S. Alushin
Associate Enforcement Counsel
Air Enforcement Division
This memorandum responds to your request for advice
whether the Clean Air Act authorizes the issuance of delayed
compliance orders (“DCOs”) under Section 113(d)(l) and (4)
after December 31, 1982. It concludes that, given statutory
silence, EPA may reasonably continu e issuing such orders *1.
DISCUSS I ON
Section 113 of the Clean Air Act provides no express
time limit to EPA’s authority to issue DCOs. The absence of
a stated time limit suggests that EPA’s authority is not
limited in time. Concededly, other considerations--primarily
ones relating to statutory context and legislative history--
suggest a contrary conclusion. These considerations are not
so persuasive, however, as to compel such a conclusion. EPA
may reasonably assume that it may exercise its authority
to issue DCOs, which is discretionary, in a manner calculated
to further the goals of the Clean Air Act.
*1 As used here, the term “issue” includes EPA’s authority
to approve or object to state-issued orders submitted as
DCOs. This memorandum does not address EPA’s authority to
issue orders under Section 113(d)(3) or (5).
The conclusion of this memorandum that EPA may continue
to issue DCOs is applicable to all criteria pollutants
including those pollutants for which states may demonstrate
compliance by 1987.

-------
716

-------
Decision in United States v. Kaiser Steel Corp. ,
No. CV—82—2623—IH (C.D. Cal. Feb. 8, 1984)
(03/27/84)
File at Part E, Document 16

-------
S74,
‘ ‘.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
,
L
OFF,r€ OF
144R 2 7 I
COMPUANCE MOruTORIP .G
MEMORANDUM
SUBJECT: Decision in United States v. Kaiser Steel
Corporation , No. CV—82—2623 IH (C.D. Cal.
FROM: Michael S. Alushin
Associate Enforcement Counsel
Air Enforcement Division
Edward E. Reich, Director c
Stationary Source Compliance Division
TO: Regional Counsels, Regions I—X
Directors, Air Management Divisions, -
Regions I, III, V and IX
Directors, Air and Waste Management Divisions
Regions II, IV, VI—Vill and X
The purpose of this memorandum is to apprise you of the
recent decision in the Kaiser case. This decision may affect
the case development of other opacity cases where the facts are
similar. This memorandum also contains suggested guidance to
deal with similar fact patterns.
On January 26, 1984. Judge Hill of the U.S. District Court
for the Central District of California ruled from the Bench to
assess a civil penalty of $825,000 against Kaiser Steel Corpora-
tion and impose injunctive relief requiring the Corporation’s
one remaining blast furnace to achieve and demonstrate compli-
ance with the applicable requirements if and when operations are
resumed. The United States as the prevailing party will also
receive the ordinary costs of litigating this case provided for
under Rule 54 of the Federal Rules of Civil Procedure. A copy
of the Judgment entered on February 8, 1984 and relevant portions
of the transcript are attached.

-------
—2—
The complaint in this action was filed on May 26, 1982 and
alleged violations of the California State Implementation Plan
requirement for visible emissions at Kaiser’s blast furnace cast
houses located in Fontana, California. 1 ! The Judge assessed a
civil penalty of $825,000 for 33 individual violations by Kaiser
of the California SIP. In assessing the maximum civil penalty
under the Clean Air Act the Judge found that “ [ ajil in all, the
evidence indicates to me cavalier conduct on the part of defen-
dant for which it must pay the price.”
Summary of Decision
The government argued that the appropriate manner in which
to prove a violation of Rule 50—A was to aggregate 2 ! the 15 second
readings to dei ermine if opacities of equal to or greater than
20% were present for more than 3 minutes in an hour. In so
arguing it was the government’s contention that 40 CFR 52.12(c),
1, Rule 50—A, the visible emission standard to which Kaiser was
subject in this case, is a time exemption standard that prohibits
emissions of 20% or greater opacity for more than 3 minutes in any
hour. No test method was prescribed for in the California SIP.
/ The terms “aggregate” or “aggregation” as used in this memorandum
refer to a way of analyzing opacity readings made at the plant to
determine compliance with the time exemption standard. Momentary
visible emission readings are made and recorded at 15 second inter-
vals by a trained field observer. The first step of data analysis
is to identify all readings that exceed the allowable opacity limit
(i.e., Rule 50—A, opacity equal to or greater than 20% occuring
within an hour). The second step is to count the number of
individual readings that exceed the allowable opacity limitation
in the SIP. The third step is to multiply the number of readings
that exceed the allowable opacity limit by 15—seconds, the time
period representing each reading, (i.e., 13 readings exceed
standard X 15—seconds = 3 minutes, 15 seconds). The last step is
to compare the amount of time in which the actual opacities
exceeded the allowable standard and the time exemption period in
the SIP. Unde.r.=the time exemption period in the Kaiser case
(i.e., 3 minutes in any hour), the casthouses were alleged to be
in violation if opacity of equal to or greater than 20% exceeded
the time exemption period of 3 minutes in any hour.
The term “averaging” is used in this memorandum in reference to
the data analysis procedures prescribed in Method 9 Section 2.5
(40 CFR Part 60, Appendix A, Method 9 — Visual Determination of
the opacity of Emissions From Stationary Sources). opacity is
determined by an average of 24 consecutive observations recorded
t 15—second intervals. The average is computed by summing the
opacity of the 24 observations and dividing by 24.

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—3—
portion of the regulations applicable for federal enforcement
of SIPS without test methods, required the use of only the “ appro-
priate ” procedures within a Part 60 test method. The government
further argued that, in this case, only the certification and field
procedures of Method 9 were “appropriate” because the data analysis
procedure in Method 9 of six minute averaging was incompatible
with a time exemption standard of Rule 50—A which limited opacity
levels to less than 20% except for three minutes in an hour.
Judge Hill strictly construed the provisions of the regulation
at 40 CFR 52.12(c). He found that 40 CFR 52.12 directed EPA to use
a test method in Part 60 when no method was included in the SIP,
and in this case that meant Method 9. He concluded that all pro—
c dures of Method g,3/ including the data analysis requirements,
must be complied with in order to establish a violation under this
test method. The’-Judge noted that this case was “...different
froni Donner Hanna , where the government did not bring itself and
agreed that it didn’t bring itself within the literal require-
ments of Method 9, asserting instead a power to disregard Method
9 and prove violations in some other way.” Given his construction
of Method 9, he found that a violation of Rule 50—A could be esta-
blished only if all procedures of Method 9 were followed.
The Judge ruled that the emissions at the Kaiser blast furnace
;thouse were continuous because they lasted for more than six
‘ites in duration. The Judge also ruled that the Preamble to the
F - eral Register publication which in part discussed the inapplica-
bility of Method 9 to intermittent emissions with a time exemption
standard was not binding on the government as an authoritative
interpretation of existing law and regulations, but even if it
were it would not be persuasive here because the Kaiser emissions
were continuous in duration. 4 !
The government recomputed its visible emission observation
sheets using six minute averaging and was able to show that 33 of
the 41 Method 9 observations were greater than 27.5% opacity.
3/ Method 9 is chiefly composed of 3 main sections — certification
proceedures for visible emission observers, field procedures for
viewing emissions and the data reduction or averaging procedures.
4, The 1974 preamble to Method 9 states: “EPA recognizes that
certain types of opacity violations that are intermittent in
nature require a different approach in applying the opacity
standards then this revision to Method 9.”

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—4—
Judge Hill rejected the government’s arguments that the potential
maximum positive error of 7.5% should not be automatically sub—
stracted from the opacity readings, given that Method 9 specifi-
cally states that the accuracy of the method must be taken into
account when determining possible violations of appliable opacity
standards and the potential maximum positive error is the only
accuracy benchmark listed.
The Judge further concluded, based on his prior rulings of
strictly construing 40 CFR 52.12(c) and Method 9, that admissions
by Kaiser and expert testimony about inability to comply were
incompetent evidence 5 ! for purposes of proving a violation, but
could be used as corroborative evidence of an alleged violation
otherwise provable-under Method 9. Expert testimony and admis-
sions, according to Judge Hill, could not be used to prove that
Kaiser continuously violated the SIP.
The defendant raised the affirmative defense of technological
and economic infeasibility. The government successfully argued
based on the precedent of the Friends of the Earth v. Potomac
Electric Power Co. , 419 F. Supp. 528 ‘(D.D.C. 1976) and the Supreme
urt decision in Union Electric Co. v. EPA , 427 u.s. 246 (1976)
at these were not tota-1- defenses to a civil action brought under
e Clean Air Act. The Judge made an alternative holding and
nding that even if these were total defenses the burden is on
1 e defendant and it had not carried the burden by a preponderance
of evidence.
In considering the penalty portion of the case the Judge
ruled that each blast furnace casthouse wa a separate source of
emissions each subject to a maximum of $25,000 per day of viola-
tion. He based his rulings on the language of Rule 50—A which
applies to “...any single source...” and Section 113(b)(2) which
authorizes a civil penalty for any person who violates “...any
requirement of art implementation plan... .“
The government requested costs of 1i 1 .igation pursuar t to
Section 113(b). Judge Hill found this provision of the statute
to be absolutely unintelligible as a basis for awarding costs to
the government “I would not and I could not, use such an irra-
tional and unintelligible sentence as the basis for sanctioning
or punishing anybody.”
5/ “Incompetent evidence” refers to the legal relevance of the
evidence in terms of admissability.

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—5—
Interim Guidance Procedure
This guidance on the use of Method 9 should be followed for
those cases involving the enforcement of a visible emission time
exemption standard in a SIP which does not contain a specific
test method and where, for federal enforcement purposes, Method 9
is used based on the direction of 40 CFR 52.12(c). This guidance
isriôt ’ intended to suggest that the government should abandon the
positions argued in the Kaiser•_case. Its purpose is to preserve
the ability to prevail on alternative grounds should a judge in
another case follow the saute analysis as Judge Hill. A technical
guideline on alternative opacity data reduction procedures for
use with time exemption opacity rules is being developed by the
O fice of Air and Radiation and when published will supercede
this interim guidarLce.
Visible emission observers should not reduce the data they
collect in the field. They should forward the standard visible
emission observation sheets to the appropriate officials in the
Region. An observer should be instructed to record opacities for
at least one hour, or in the alternative, to record opacities for
a complete cycle of the emissive operation being ob3erved, such
as a casting operation at a blast furnace casthouse.
The attorneys and technical personnel reviewing the visible
ission observation sheets should first aggregate all the 15
.- cond opacity readings that equal or exceed the allowable levels
to determine compliance with the time, exemption period in the SIP.
Where the 15 second opacity readings show a violation when aggre-
gated, all 6 minute blocks of 24 consecutive observations con-
taining such readings should be averaged as prescribed under
Method 9. The strongest case possible for sustaining a viola-
tion, given the Ccnner Hanna and Kaiser decisions, would be when
both the aggregation and averaging of the data show a violation.
This period would consist of any 24 consecutive observations that
contain opacities, when averaged or aggregated, would exceed the
opacity level in the standard. A set of observations may contain
ne or more data gaps or interferences for which no opacity is
recorded. In the Kaiser case the attorneys gave a 0% opacity
value to those 15—second opacity blocks that had no opacity
record because of interference obstructing a clear line of sight.
Using a 0% opacity in the averaging of the set of observations is
very supportable given that the bias is in favor of the source
being observed. Additionally the data gap could be filled by a
statistical procedure such as regrouping of data or substitution
of a derived value (outlier test), but such proof may require the
use of an expert or lay expert in’ statistics to testify about the
validity of such practices.

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—6—
The Regional legal and technical personnel should be aware
E the potential evidentiary problems associated with litigating
an opacity case with facts like the Kaiser case when opacity
readings do not show a violation of the applicable standard by
both the averaging and aggregating data reduction techniques.
For this reason, we recommend that the Region review the visible
emission observations of each case presenting a factual situa—
tion similar to Kaiser to determine whether the violation can
be proved by both the aggregating and averaging data reduction
procedures.
Attorneys in opacity cases should not concede the issue of
whether 7.5% error should be subtracted from each 6 minute aver-
age. The attorneys, if the facts’warrant such action, should
provide in the form of an exhibit to be followed by testimony
of an opacity expert the analysis of the Method 9 data base,
thus demonstrating the range of potential maximum positive and
negative errors. 6 !
The Agency is currently working to evaluate the need for
test methods for time exemption standards, but in the interim
it is essential that a vigorous enforcement effort continue to
ensure compliance with visible emission standards. This memo
is not intended to set out a complete guideline or provide
answers .to &ll potential questions raised by the Kaiser deci—
‘ion but rather to bring some of the more pertinent points to
he attention of other EPA staff involved in similar cases.
If you have any questions regarding the Kaiser case or
this interim guidance, please contact Richard Ostrov of the Air
Enforcement Division of the Office of Enforcement and Compli-
ance Monitoring at 382—2868.
6, The government’s expert witness on opacity, in the Kaiser
case, testified based on his work with the Method 9 data base,
that at a 99% confidence level the positive bias of a 6 minute
average was 7.5%, ar published, but the negative bias was even
greater (13%). Further, he stated that at the 95% confidence
level the positive bias was 5%, as published, but again the
negative bias was, at 9.4%, greater. Finally, he testified
that the confidence level at 51%, or at a civil standard of
proof, was —.6%. In other words, the expert witness testified
that there is a net negative bias inherent in Method 9. The
type of testing presented by the expert along with an exhibit
demonstrating the analysis is perhaps the best way of presenting
this factual issue.

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17

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Achieving VOC Compliance from Department of Defense
Contractor Facilities
(04/24/85)
File at Part E, Document #17

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24 1965
MEMORANDUM
SUBJECT: Achieving VOC Compliance from Department of Defense
Contractor Facilities
FROM: Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Air and Waste Management Division Directors
Regions II and VI
Air Management Division Directors
Regions I, III, V, and IX
Pair, Pesticides, and Toxics Management Division Director
Region IV
Air and Toxics Division Directors
Regions VII, VIII, and X
This memorandum is to inform you of the results of a recent
meeting between my staff, OECM’s Air Enforcement Division,
EPA’s Office of Federal Activities and the Environmental Policy
Directorate, Department of Defense. The meeting was held in
response to questions from several Regions about enforcing
VOC emission limitations at stationary sources producing
goods or services under contract with the Department of
Defense (DOD). The questions centered on the issue of responsi-
bility, and DOD’S position concerning the accountability of
its contractors for compliance with VOC regulations in a SIP.
We also wanted to elucidate DOD’s role and responsibility as
a Federal agency for compliance with applicable environmental
requirements.
A number of interesting clarifications were disclosed at
this meeting. These warrant discussion because they play a
vital role in the position we will recommend in dealing with
air violations at facilities which have contracts with DOD.
First, in order to better understand DOD and contractor
relationships, certain terminology needs to be defined.

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—2—
There are at least three different types of DOD facilities
subject to environmental requirements:
0 Government Owned Government Operated (GOGO) facilities.
0 Government Owned Contractor Operated (GOCO) facilities.
0 Contractor Owned Contractor Operated (COCO) facilities.
The GOGO facility is the traditional Federal facility such
as an air force base where the government owns and operates
all the regulated activity. The GOCO facility is one that
is owned by DOD but all or portions of it are operated by
private contractor(s). The COCO facility is a non—government
owned, privately operated facility that provides goods or
services to DOD under contract. Many thousands of sources
fall into the COCO category since DOD estimates they do
business” with a majority of the manufacturing facilities
in the country.
Given these terms, I believe it has been the contractors
operating government owned facilities (GOCO) thathave raised
with States and Regions pleas of alleged immunity based on con-
tracts with DOD. It is these facilities that are the focus of
this memorandum. Attachment I is a nonexclusive list of Air
Force and Navy GOCO facilities of potential concern. It was
supplied by the Office of Federal Activities. A similar list
of Army GOCO facilities will be forwarded under separate cover.
The main findings of our meeting are:
o The standard contract DOD has with contractors includes a
clause requiring compliance with Mall environmental lawsM
or language to that effect. This negates the so—called
immunity these sources claim they have. Regions and
States should seek out this contract language should the
need warrant.
o Responsibility for compliance with environmental require-
ments lies with the contractor and the regulatory agencies.
DOD does not actively seek to find violations of the
Menvironinental lawM language in their contracts, even
though all GOCO facilities have a DOD representative
on site. This individual would become involved and
actively seek to resolve any environmental problem once
brought to his or her attention.
o DOD closely monitors activity to resolve environmental
problems once a formal Federal or State action (such as a
NOV) is initiated. This involvement by DOD has been mostly
focused on violations at GOGO facilities. In the future,
DOD will monitor formal actions initiated by EPA or the
State at GOCO facilities.

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—3—
° DOD and OFA, through their Headquarters staff or Regional
Federal Facility Coordinators (See Attachment II), are
available to assist EPA in any problems it faces in re-
solving environmental problems at DOD facilities, inclurl—
ing those operated by contractors. A good rule of thunb
is that DOD will support the regulatory agency when a
violation is clearly documented and a formal action is
initiated.
As a result of this meeting, SSCD recommends a Region or
State, upon a finding of violation at a DOD contractor facility
(GOCO), issue a Notice of Violation (or equivalent) to the opera-
tor of the facility as would be done with any other stationary
source, with copies to the DOD representative at the facility,
and the Regional Federal Facility Coordinator. Receipt of these
copies should trigger interest and involvement by OFA and DOD to
assist in resolving the violation in a timely manner. Simulta-
neous with any DOD and OFA involvement, the issuing regulatory
agency should follow up with the operator to whom the NOV was
issued in the usual manner to resolve the noncompliance problem.
This memorandum has been concurred in by the Office of
Federal Activities and OECM’s Air Enforcement Division. If
you have any questions about the meeting or the recommended
approach, please call me or John Rasnic (FTS—382—2826).
Edward E. Reich
cc: Air Program Branch Chiefs
Regions I—X
Air Compliance Rranch Chiefs
Regions II, III, V and IX
VOC Compliance Workgroup Members
Michael Alushin,
Associate Enforcement Counsel for Air
Gerald Emison, Director
Office of Air Ouality Planning and Standards
Allan Hirsch, Director
Office of Federal Activities
Federal Facility Coordinators
Regions I—X

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Air Force Plant _________
1. AFP PJKS
Waterton, CO
2. AFP #3
Tulsa, OK
3. AFP #4
Ft. Worth, TX
4. AFP #6
Marietta, GA
5. AFP #19
San Diego, CA
*5 AFP #36
Evendale, OH
*7 AFP #38
Porter, NY
AFP #42
Palmdale, CA
9. AFP #44
Tucson, AZ
10. AFP #59
Johnson City, NY
*11 AFP #70
Sacramento, CA
12. AFP #78
Lampo Junction, UT
13. AFP #85
Columbus, OH
*Sale is pending.
ramela Duncan, HO IJSAF/RDCMI 697—1715, 27 Mar 85
Attactm nt I-i
AIRFORCE INDUSTRIAL FACILITIES
Contractor Major Workload
Martin Marietta Titan components, electronic
systems, space hardware
McDonnell Douglas & F-l5 components, F-4 DLM
Rockwell
General Dynamics F-l6 aircraft production,
F—lu spares
Lockheed C—l30, C—141 and C-5 spares,
C-141 stretch, C-5 wit%g mod,
Jet Star
General Dynamics F—Ui spares, space systems
components, Navy electronics
General Electric J—79, and TF-39 engines and
spares
Bell Aerospace Laser R&D and production,
hydrazine systems, Minuteman.
components
Ráckwell, Lockheed, Space shuttle, B—i, F-5 aid
Northrop, McDonnell A-4 assembly, mod & operations,
Douglas flight test operations
Hughes Aircraft Maverick, Phoenix, Tow and
Roland missile production,
other missile R&D
General Electric Flight controls & other
avi oni Cs
Aerojet Titan, Minuteman III,
Peacekeeper
Thiokol Minuteman, (Trident), Genie,
SRAM Rocket Motor Production
Peacekeeper
Rockwell InternatIonal B—lB

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AttachiTent I—2
List of Industrial Plants
by DOD Number
Plant and Location DOD* e Statue
Naval Shipyard, Long Beach, CA 31. COGO Active
Naval. Shipyard, Hunters Point, San Francisco, CA 48 GOCO Leased
Naval Shipyard, Mare Island, Vallejo, CA 52 GOGO Active
Naval Weapons Station, Concord, CA 53 GOGO Active
Naval Weapons Support Center, Crane, IN 105 GOGO Active
Naval Avionics Center, Indianapolis, IN 112 GOGO Active
Naval Ordnance Station, Louisville, XY 133 GOGO Active
Naval Ordnance Station, Indian Head, MD 155 GOGO Active
Naval Industrial Reserve Ordnance Plant, Pittsfield, MA 167 GOCO Active
Naval. Industrial Reserve Ordnance Plant, Minneapolis, MN 194 JOCO Active
Naval Industrial Reserve Ordnance Plant, Saint Paul, MN 196- GOCO Active
Naval Shipyard, Portsmouth, NH 218 GOGO Active
Naval Industrial Reserve Ordnance Plant, Rochester, NY 265 COCO Active
Naval Industrial Reserve Ordnance Plant, Magna, UT 316 GOCO Active
Naval Shipyard, Philadelphia, PA 371 GOGO Active
- ‘al Shipyard, a’ ar1estoi , Sc 378 COGO Active
I. Weapons Industrial Reserve Plant, Dallas, TX 387 -GOCO Active
1 Weapons Industrial Reserve Plant, McGregor, TX 399 GOCO Active
ri val Shipyard, Norfolk, Portsmouth, VA 409 GOGO Active
Naval Weapons Station, Yorktown, VA 412 GOGO Active
Naval Shipyard, Puget Sound, Bremerton, WA 413 COCa Active
Naval Undersea Warfare D gineering Station, eyport, WA 415 GOGO Active
Naval. Industrial Reserve Ordnance Plant, Pomona, CA 451 GOCO Active
Naval Weapons Industrial Reserve Plant, Bloomfield, CT 463 GOCO Active
Naval Weapons Industrial Reserve Plant, Bethpage, NY 464 GOCO Active
Naval Weapons Industrial Reserve Plant, Calverton,- NY 466 GOCO Active
Naval Industrial Reserve Ordnance Plant, Sacramento, CA 467 JOCO Active

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AttachnEnt 1-3
List of Industrial Plants
by DoD Number (Cont’)
Plant and Location _ DOD* Type Status
Naval Weapons Industrial Reserve Plant, Bedford, MA 468 GOCO Active
Naval Weapons Industrial Reserve Plant, Bristol, TN 469 GOCO Active
Naval Industrial Reserve Ordnance Plant, Sunnyvale, CA 484 I7OCO Active
Naval Weapons Station, Earle, NJ 486 GOGO Active
Drydock and Repair Facility, San Juan, PR 493 GOCO Leased
Naval Mr Rework Facility, Alameda, CA 494 GOGO Active
Naval Air Rework Facility, Jacksonville, FL 495 GOGO Active
Naval Mr Rework Facility, Norfolk, VA 4 .96 GOGO Active
Naval Air Rework Facility, Pensacola, FL 497 GOGO Active
Naval Shipyard, Pearl Harbor, HI 498 GOGO Active
Naval Air Rework Facility, O erry Point, NC 499 GOGO Active
Naval AIR Rework Facility, North Island, San Diego, CA 501 GOGO Active
Naval Ship Repair Facility, San Diego, CA Ø3 GOCO Leasec
Naval Weapons Station, ø arleston, SC 505 GOGO Active
Naval Weapons Station. Seal Beach, CA 507 GOGO Active
Naval Industrial Reserve Ordnance Plant, Cumberland, MD 526 GOCO Active
Naval. Weapons Industrial Reserve Plant, South Bristol, ME 529 GOCO Inact3
N -‘U Weapons Industrial. Reserve Plant, ‘Ibledo, OH AF27 GOCO Active

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AttachrT nt II
EXHIBIT IV—2
REGIONAL FEDERAL FACILITIES COORDINATORS
REGION I REGION VI
George Mollineau Jim Highland
FTS 223—5498 FTS 729—6659
REGION II REGION VII
Drew Lahman Glen Yeager
PTS 264—8678 PTS 757—2823
REGION III REGION VIII
Fran Muihern Elmer Chenault
FTS 597—1168 FTS 564—3853
REGION IV REGION IX
Art Linton Mike Montoe
FTS 257—3776 FTS 454—7539
REGION V REGION X
Bill Franz Clark Smith
FTS 353—2038 FTS 399—1266
IV-4

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18

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Penalty Computations Under
Section 113 Civil Penalty Settlement
Policy and Section 120 of the Clean Air Act
(06/25/85)
File at Part E, Document #18

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
I I WASHINGTON. D.C 20460
S.
JUN 2 5 1985
MEMORAN DUN
SUBJECT: Penalty Computations under Section 113 Civil
Penalty Settlement Policy and Section .120 of
the Clean Air Act.
FROM: Michael S.
Associate Enforce nse l
for Air Enforcement (LE—134—A)
Edward Reich, Director
Stationary Source Compli e Division (EN—341)
TO: Addressees
Recent questions regarding penalty computations under
EPA’S generic civil penalty policy make it appropriate to
supplement the memorandum dated May 15, 1985 regarding the
relation between the Section 120 computer model and the BEN
generic penalty computation model.
The Section 120 model was developed to implement Section
120 of the Clean Air Act. Section 120 requires EPA to compute
and collect the amount of the economic benefit associated
with delaying or avoiding compliance with applicable legal
requirements, thereby recouping the benefit associated with
such delay or avoidance thus neutralizing any economic incentive
to delay.
The BEN model was developed as part of EPA’s civil
penalty settlement policy. As used for stationary sources
under the Clean Air Act, that policy implements EPA’S authority
under Section 113 to settle penalties for noncompliance. The
model’s function is to provide a generic administrative tool
to help EPA to evaluate, in cases of violations, what portion
of the total penalty authorized by Section 113 EPA will
collect in settlement.
EPA’S election to base the Section 113 computation in
part on consideration of economic benefit does not alter the
fact that what is recovered is a portion or all of a penalty
that is authorized to be collected without specific reference to
economic benefit. A Section 113 penalty therefore may not

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—2—
exceed statutory limits notwithstanding that the economic
benefit may exceed those limits. Likewise, a Section 120
assessment may as a statutory matter be imposed regardless of
the fact that EPA, in a separate penalty proceeding under Section
113 involving the same violation, may employ the civil penalty
policy’s BEN model.
The Section 120 model contains features absent from the
BEN model. The BEN model is therefore not interchangeable
with the Section 120 model in a Section 120 proceeding.
Addressees:
Regional Counsel
Regions I-X
Air and Waste Management Division Directors
Regions IX and VI
Air Management Division Directors
Regions I, III, V, and IX
Air, Pesticides and Toxics Management
Division Director, Region IV
Air and Toxics Management Division Directors
Regions VII, VIII and X
Regional Counsel Air Enforcement
Contacts

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19

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Guidance on Complying with the Notification Requirements in
Section 113(a)(l) and 113(a)(4) of the Clean Mr ct
(06/28/85)
File at Part E, Document *19

-------
Sr .,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
1?4
OFFICE OF E%FORCFMF\ I
AF OCOMPLI %(
MO%ITOR I%G
MEMORANDUM
SUBJECT: Guidance on Complying with the Notification
Requirements on Section 113(a)(1) and 113(a)(4)
of the Clean Air Ac
FPOM: Courtney M. Price i2
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Regional Counsels
Regions I—X
Air Management Division Directors
Regions I, III, V 1 IX
Air & Waste Management Division. Directors
Regions II and VI
Air, Pesticides & Toxics Management Division Director
Region IV
Air & Toxics Division Directors
Regions VII, VIII and X
This memorandum provides you with guidance on implementing
the notification provisions contained in Sections 113(a)(1) and
1l3(a)(4) of the Clean Air Act. It is intended to emphasize the
requirement of Section 113(a)(4) to issue, in the case of corpo-
rations, a copy of the notification to the ‘appropriate corporate
officers.’ The guidance recommends procedures for issuing notices
of violation under Section 113(a)(1) and for implementing the
copying provision in Section 113(a)(4).
The notice provisions in Section 113 are general in nature,
giving EPA a great deal of latitude. This guidance is, therefore,
not intended to set inflexible standards, but rather to suggest
practices that might encourage expeditious resolution of viola-
tions and to suggest practices that might avoid challenges to
enforcement actions based on alleged notice deficiencies.
Thus, although the recommendations are based upon an analysis
of existing law in this area, the specific procedures suggested

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are not necessarily compelled by the Act or judicial decisions.
By recommending specific procedures this guidance is not meant
to imply the existence of jurisdictional or due process limita-
tions on EPA’S enforcement authority. This guidance does not
address issues regarding EPA’S enforcement discretion once an
NOV has been issued.
Summary
This guidance recommends that the notification requirements
of Section 113(a)(l) be met by the issuance of a written notice
of violation (NOV), and that the NOV be sent to the highest
ranking officer or employee at the violating facility known to
EPA. It recommends that the notice copying requirement of Section
113(a)(4) be met by sending copies of the NOV to specified corpo-
rate officers, or in the case of a foreign corporation (i.e.,
one not incorporated in the state), by sending the notice to the
registered agent of record and preferably also to appropriate
officers in the corporate headquarters. The guidance clarifies
that issuance of an NOV should not be delayed because of difficul-
ties in implementing the Section 1l3(a)(4) copying procedures.
The guidance recommends tHat the NOV specify the State implemen-
tation plan (SIP) provision(s) violated, advise the source of
the opportunity to confer with EPA, describe the emission points
in violation, and Indicate by a ‘cc.’ notation that copies of
the NO’rwere -sent to the State, and, in the case of a corporation,
to appropriate officers.
I. Effect of the Notice
A. Section ]13(a)(l) Notice
Section 1l3(a)(l) of the Clean Air Act (CAA or the Act),
42 U.S.C. S7410(a)(l), requires EPA to notify, any person found
by the Admii istrator to be in violation of a SIP. Specifically,
Section 1l3(a)(l) provides:
Whenever, on the basis of any information available
to him, the Administrator finds that any person is
in violation of any requirement of an applicable
implementation plan, the Administrator shall notify
the person in violation of the plan and the State in
which the plan applies of such finding. [ emphasis added]
EPA has interpreted the mandatory requirement to give notice
as triggered only after a discretionary finding has been made by
the Administrator that a violation exists. The courts have upheld
the Agency’s interpretation, city of Seabrook v. Costle , 659
F.2d 1371, 1374 (5th Cir. 1981) [ obligation to make a finding not
mandatory]; see, Wisconsin Environmental Decade, Inc . v. Wisconsin
Power and Li ht Co. , 395 F.Supp. 313, 317—320 (W.D. Wis, 1975);
West Penn Power Co . v. Train , 522 F.2d 302 (3d Cir. 1975); united
—2—

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States v. Lehigh Portland Cement Co. , C.A. No. 84—3030, slip
opinion at 6 n.4 (N.D. Iowa December 12, 1984) [ Order Denying
Defendant’s Motion to Dismiss] (Attachment 1); United States v
Chevron , C.A. No. EP—80—CA—265, slip opinon at 3 (W.D. Tex.
June 10, 1983) [ Order Denying Defendant’s Motion to Dismiss or
for Abstention) (Attachment 2).
Notification under Section 113(a)(l) is referenced in Sec-
tion 113(b)(2), which provides in relevant part that:
The Administrator shall in the case of any person
which is the owner or operator of a major stationary
source, and may, in the case of any other person,
commence a civil action . . . whenever such person ——
• S
(2) violates any requirement of an applicable imple-
mentation plan . . • (B) more than 30 days after
having been notified by the Administrator under sub-
section (a)(l ) that such person is violating such
requirement [ .) [ emphasis added]
Notice is also referenced in Sections 113(a) and 113(d)
(relating to the issuance of administrative orders), and Section
113(c)(1)(A) (relating to the initiation of a criminal action).
Issuance of a notice and the lapse of 30 days is not, however,
always required prior tothe Initiation of an action to address
SIP violations. See 42 U.S.C. S7603 (Emergency Powers]; see
also , 42 U.S.C. S7413(b)(3) (Section 112(e) (NESHAPs) and Section
111(e) (NSPS) violations].
B. Section 113(a)(4) Notice
Section 113(a)(4) of the Clean Air Act, 42 U.S.C. S7413(a)(4),
requires in the case of a corporate violator that copies of the
Section 113(a)(l) notice ‘be issued to appropriate corporate
officers.’ The issue of whether the 113(a)(4) notice copying
requirement is a jurisdictional prerequisite to a Section 113(b)(2)
civil action was raised by the defendant in United States v.
Lehigh Portland Cement Co., supra (Attachment 1). In Lehigh the
defendant sought a dismissal arguing that EPA’s NOV was insufficient
in that it wa served only on the plant manager who, defendant
argued, is not an ‘appropriate corporate off icer ’ within the
meaning of Section 113(a)(4). In support of its argument defen-
dant cited 40 C.F.R S122.22, ‘Signatories to CWA NPDES Permit
Applications,’ which defines the term ‘responsible corporate
officers’ in part as a president, secretary or treasurer.
The Court in Lehi h found the CWA regulation inapposite, and
denied defendant’s Motion to Dismiss holding that a plant manager
is an appropriate corporate officer within the meaning of Section
113(a)(4). In addition the Court stated in dicta that the
—3-

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Section 113(a)(4) notice copying requirement was not a jurisdic-
tional prerequisite to a civil action pursuant to Section 113(b)(2).
II. Recommended NOV Procedures
A. Written Notice
There is case law supporting the position that the
Section 113(a)(l) notice requirement can be met where a source
has received substantial or constructive notice from EPA of a
violation. Nevertheless, as a general practice the Regions
should issue written notices. Moreover, when read together,
Sections 113(a)(l) and 113(a)(4) imply that the notification
should be issued in writing in the case of corporate sources in
order to comply with the copying requirement in Section 113(a)(4). 1 /
While substantial or constructive notice may be sufficient, writ-
ten notice clearly establishes the authority to proceed adminis-
tratively and provides evidence of when the 30—day period provided
for in Sections 113(a)(1) and 113(b)(2) begins to run. This gui-
dance, therefore, recommends that all notices be given in writing
in the form of an NOV.
B. Contents of the NOV
The Act requires the Administrator to notify the violator
and the State of a finding of violation of any requirement of a
SIP. What a finding consists of and what degree of specificity
might be required in the notice is unclear, / but the the lan-
guage of the Act suggests that at a minimum EPA should identify
J Written notice of a violation Is not explicitly required by
Section 113(a)(1). Cf. , Sections 126(a)(1) (Interstate pollution
abatement], 161(b)(l)(B) (State notice to redesignate PSD areas].
EPA has promulgated regulations at 40 C.F.R S54.3(b), that
specify in detail the contents required for citizen suit notices.
Specifically, the regulations require that the notice include:
sufficient information to permit the recipient (i.e.,
the Administrator, the State and the alleged violator]
to identify the specific standard, limitation, or
order which has allegedly been violated, the activity
alleged to be in violation, the person or persons
responsibile for the alleged violation, the location
of the alleged violation, the date or dates of such
violation, and the full name and address of the person
giving the notice.
It is recommended that this provision be used as guidance in
drafting NOVs. This degree of detail is, however, not required
for EPA notices, but applies only to citizen suit notices. This
—4—

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the violated provision(s) of the SIP. The legislative history
on Section 113(a)(1) is no more specific.
Some indication of what should be contained in an NOV can be
gleaned from the purpose of the Section 113 notice requirement.
The Third Circuit Court of Appeals discussing this issue stated
that the notice requirement is intended to make the recipient
aware that the ‘definitive’ regulations are not being met and to
trigger the statutory mechanism for informal accommodation which
precedes any formal enforcement measures. west Penn Power Co .
v. Train , 522 D.2d 302, 311 (3d Cir. 1975). Thus, in addition to
citing the SIP provision violated, the NOV should afford the
source an opportunity to confer if an administrative order
is contemplated. ,/
In addition, it is recommended that the notice describe the
emission points in violation of the SIP standard. Such informa-
tion might assist the source in responding to the NOV and coming
into compliance expeditiously. The notice need not, however,
describe the violation with specificity. Requiring a complex
(footnote 2 continued)
is due to the unique purposes citizen suit notices are intended
to serve. Specifically, Congress intended the citizen suit
provision of the Clean Air Act to provide a limited waiver of
sovereign immunity. Moreover, since citizen suits might force
EPA to act, the notice requirement was intended to be strictly
construed in order to ensure the opportunity of Agency resolution
prior to the commencement of litigation. NRDC v. Train , 510 F.2d
692 700, 724 (D.C. Cir. 1974), as modified (1975); People of the
State of Calfornia v. Dept. of EHe Navy , 431 F.Supp. 1271, 1278
(N.D. Cal. 1977); City of Highland Park v. Train , 519 F.2d 681,
690 (7th Cir. 1975); NRDC v. Callaway , 524 F.2d 79, 84 n.4 (2d
Cir. 1975).
3 The Act does not require that an opportunity to confer be
iiven before th& Agency can initiate an enforcement action pursuant
to Section 1l3(b)(2). An opportunity to confer is only required
under Section 113(a)(4) before an administrative order can take
effect. A statement in the NOV offering an opportunity to confer
fulfills the Section 113(a)(4) prerequisite, even if the admini-
strative order is not issued until after a conference takes
place. Nor is the opportunity to confer restricted to the 30—
day period after the notice has been given. Holding the confe-
rence earlier rather than later is, however, to the advantage of
EPA since such meetings often facilitate EPA’S ability to obtain
information as well as early resolution of the violation. Some
Regions include a statement in their NOVs limiting the opportunity
to confer to a specified number of days, e.g. 10 days of receipt
of the NOV.
—5—

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notice would only cause delays in enforcement in contravention
of the Congressional intent to expedite enforcement. 4 /
Finally, in the case of corporate violators, the notice
should name the corporate officers who are sent copies of the
NOV. This might promote expeditious correction of the violations.
It would also help document compliance with Section 113(a)(4).
( See discussion below.)
C. Persons Who Should Receive the Notice
Section 113(a)(l) requires that notice be given to any
‘person found to be in violation of a SIP. The term person is
defined broadly in Section 302(e) of the CAA as including uan
individual, corporation, partnership, association, State, munici-
pality, political subdivision of a State, and any agency,
department, or instrumentality of the United States and any
officer, agent or employee thereof . 42 U.S.C. S7602(e) (empha-
sis added].
The wording of the Act, .. 11 refore, implies that a Section
113(a)(l) notice is technically sufficient if it is given to any
known officer, agent or employee of the source. See, U.S . v.
Lehigh Portland Cement Co.., supra (Attachment 1). This is impor-
tant since, as a practical matter, it may be difficult for EPA
to identify the senior executive officer of a source with speci-
ficity. It is recommended, however, that NOV5 be issued to the
highest ranking officer, agent, or employee at the violating
facility known to EPA. This will increase the likelihood of the
violation being corrected by the source expeditiously.
4/ By analogy to the citizen suit notice provision it appears
that the courts take a pragmatic approach in ascertaining the
sufficiency of a notice. Baughman v. Bradford Coal Co. , 471
F.Supp. 488, 490 (W.D. Pa. 1977), aff’d 592 F.2d 215; People of
the State of California v. Dept. of the Navy, supra; see Metro-
politan Washington Coalition for Clean Air v. District of Columbia ,
373 F.2d 1089 (D.C. Cir. 1975), rev’d on other grounds 511 F.2d
809 (D.C. Cir. 1975); Susquehanna Valley Alliance v. Three Mile
Island , 619 F.2d 231 (3d Cor. 1980), cert. denied 449 U.S. 1096
(1981); NRDC v. Callaway, supra; but see City of Highland Park
v. Train, supfa; Massachusetts v. U.S. Veterans Administration ,
541 F.2d 119 (1st Cir. 1976). The Court in South Carolina Wild-
life Federation v. Alexander , 457 F.Supp. 118 (D.S.C. 1978),
indicated that deficiencies in the notice that did not interfere
with the purposes of the notice requirement would not bar a
citizen suit. 457 F.Supp. at 123. Similarly, in People of the
State of California v. Department of the Navy , 431 F.Supp. at
1278, the Court upheld a deficient citizen suit notice since the
recipients were effectively informed of the violations alleged,
the standards violated, the locations of the violations, etc.
—6—

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Similarily, although the requirement in Section 113(a)(4) to
issue copies of the notice to appropriate corporate officers is
not a jurisdictional prerequisite to a civil action, care should
be taken to comply-with this requirement. Regions should be able
to identify the corporate officers through formal (e.g. Section
114) or informal contacts with the source, by contacting the
State environmental agency, by checking corporate directories, or
by calling or writing to the State office responsible for corpo-
rate registrations. (The State corporate registration office is
typically identif.ied in the State corporate code.) In cases in-
volving domestic corporations Regions are urged to send copies
of the NOV to the corporate president, to any vice—president
identified as responsible for environmental matters, to the
general counsel of the corporation, and, in cases where the
plant manager is the highest corporate officer, to the registered
agent. In the case of a foreign corporation (i.e. one not incor-
porated in the State), a copy of the NOV should be sent to the
registered agent of record at the State corporate registration
office, and to any other corporate officers you can identify as
suggested above. The original NOV should show a UCCU for all
persons copied.
Although the Court in United States v. Lehigh Portland Cement
Co., supra , held that the notice copying requirement in Section
113(a)(4) was satisfied in that case by giving the NOV to the
plant manager, following the additional steps recommended above
may assist in expediting a corporation’s response o the NOV.
For the same reason the copies of the NOV should ideally be
issued to the corporate officers at the same time the NOV is
given to the source. Regions should not-, however, delay issuing
the NOV if you cannot readily identify the appropriate corporate
officers.
D. Row to send the Notice
Section 113(a)(1) provides that, once the Administrator makes
a finding t?tat a violation exists, EPA shall give notice to the
person in violation of the plan and to the state. In addition,
Section 113(a)(4) requires the Administrator to issue copies of
the notice to appropriate corporate officers. The Act does not,
however, specify a procedure for issuing the notice. 5 / Neverthe-
less, we reco1 nend that NOVS be sent by Certified Mall Return
/ Compare Section 113(a)(2) of the Act which requires p Ib1-tc
notice when the Administrator makes a finding that a State has
failed to effectively enforce a SIP. Similarily Section 115(a)
requires that the Administrator give States ‘formal’ notices of
SIP deficiencies to correct international air pollution. The
absence of a public or formal notice requirement in Sections
113(a)(1) and 1l3(a)(4) of the Act is, therefore, apparently not
the result of omission. Nor is personal service of process such
-7—

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Receipt Requested, to help establish evidence that the notice
was given.
III. Conclusion
Please call Rachel Ropp (FTS) 382—2859 for any explanations
of this guidance, to discuss issues raised, or if you want addi-
tional information or examples.
Attachments
(footnote 5 continued)
as is provided for in Rule 4, Fed.R.Civ.P., required for a notice
to comply with Sections l13(a)(l) and 113(a)(4) of the Act. Rule
4 service of the complaint would be required in any event if the
Agency initiated a civil action.
—8—

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ATTACHMENT I

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F i 1 i 8 t5 3 °
IN THE UNITED STATES DISTRICT cotM R ftPIDS NDQTRS OFfiCE
FOR THE NORTHERN DISTRICT OF IOW DISTRICT 01 IOWA
CENTRAL DIVISION DEC 121984
WaUA 1AX.Chrk
UNITED STATES OF AMERICA, ) u
A
Plaintiff, ) NO. C 84—3 O
)
vs. ) ORDER
LEHIGH PORTLAND CEMENT ) RE’cE,VEn
COMPANY, )
I . ’
Defendant. )

This matter comes before the Court on defendant’s 9 c ’4 0
dismiss. Ahearing was held on August 9, 1984, in Fort Dodge,
Iowa. After carefully considering the briefs and arguments of
both parties, this Court denies defendant s motion to dismiss.
This action involves the implementation of the Clean Air Act.
Under this Act, a state is to adopt a State Implementation Plan
(SIP) which would require the state to satisfy the Act’s National
Ambient Air Quality Standards (NAAQS). The Act provides for both
federal and state enforcement of the SIPs. This action arises
from the federal enforcement of the Iowa SIP.
Defendant is a cement manufacturing company with its
corporate headquarters in Allentown, Pennsylvania. One of its
thirteen plants is located in Mason City, Iowa and is the plant
which is the subject of this suit. On March 16, 1983, plaintiff
notified the Iowa Department of Environmental Quality and the
plant manager of defendant’s Mason City plant of violations of SIP
fugitive dust regulations. Plaintiff brought this action on

-------
April 4, 1984. Previous to plaintiff’s notice, the Iowa
Department of Environmental Quality had given notice to defendant
of SIP fugitiv, dust regulations violations arid on March 5, 1984,
the Department and defendant entered into a consent order
concerning the violations.
Defendant’s motion to dismiss is directed at plaintiff’s
first claim for relief (111113—17 of plaintiff’s Complaint), which
allege fugitive dust violations. Defendant stated in a letter to
this Court dated August 27, 1984 that it does not contend that
plaintiff’s second claim for relief (111118—19 of its Complaint),
which alleges violation of new source performance standards, is
subject to dismissal.
In its motion to dismiss, defendant presents three arguments.
First, defendant claims that the copy of a notice of violation to
appropriate corporate officers, required by 42 U.S.C. §7413(a)(4),
is a condition precedent to the bringing of an action under 42
U.S.C. 7413(b)(2), and the notice given by plaintiff was
defective and constituted insufficient process and insufficient
service of process on defendant. Second, defendant claims that
the doctrine of abstention applies, and the Court therefore lacks
jurisdiction. Finally, defendant argues that the Iowa Department
of Environmental Quality’s consent order precludes plaintiff from
bringing this action—because of issue and claim preclusion.
Defendant also originally argued that plaintiff lacked standing to
bring this action, but conceded this argument at the hearing.
2

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I.
In support of its argument that plaintiff failed to give
defendant adequate notice, defendant relies on 42 U.S.C.
§74l3Ca)(4), which states that when there is a corporate violator,
a copy of the notice of violation shall be issued to appropriate
corporate officers • Defendant argues that because only defendant’
Mason City plant manager received notice, and the plant manager is
not a corporate officer, plaintiff failed to sufficiently serve
defendant notice. In support of its argument, defendant also
cites a regulation of plaintiff’s 1 that defines “responsible
corporate officers” as including only president, vice—president,
secretary and treasurer, and prior case law, which has found the
failure to give notice of violation a jurisdictional defect in
private citizen actions brought under the Clean Air Act.
In response to defendant’s argument, plaintiff first states
that it complied with the statute by giving notice to the plant
manager because there is only a requirement for the EPA to “notif T
the person in violation” which is found in §7413(a), 2 and “person”
140 C.F.R. §122.22.
242 U.S.C. §7413(a)(l) states: “Whenever, on the basis of
any information available to him, the Administrator finds that any
person is in violation of any requirement of an applicable imple-
mentation plan, the Administrator shall notify the person in
violation of the plan and the State in which the plan applies of
such finding. If such violation extends beyond the 30th day after
the date of the Administrator’s notification, the A iinistrator
may issue an order requiring such person to comply with the
requirements of such plan or he may bring a civil action in
accordance with subsection (b).
3

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may be any officer, agent, or employee thereof. 3 According to
plaintiff, subparagraph (a)(4), the section that states a copy of
the notice of violation shell be issued to a corporate officer, is
not jurisdictional because §7413(b), which sets out the enforcement
procedures, states that the EPA may bring suit against a “pers ”
more than thirty days after being notified under (a)(l) and makes
no mention of (a)(4). Secondly, plaintiff claims that even if
(a)(4) is a jurisdictional requirement, it has met the requirement
of issuing notice to appropriate corporate officers when it gave
notice to the Mason City plant manager because the ordinary
meaning of a corporate officer includes a plant manager. Thirdly,
plaintiff argues that if the Court does not accept the position
that a plant manager is a corporate officer, plaintiff satisfied
the (a)(4) requirement by issuing a notice of violation to the
defendant’ a corporate headquarters in Pennsylvania on August 21,
1984 (twelve days ifter this Court held a hearing on this matter),
since no prejudice resulted. Finally, plaintiff argues that the
cases defendant relies upon in arguing that there was a defective
notice are inapplicable because they deal with a different section
which involves citizen’s suits in which no notice of any kind was
given.
It ib evident from the arguments presented by both parties
that—several questions arise when considering the sufficiency of
the notice to the defendant. A major question is whether a plant
manager is an “appropriate corporate officer” under §7413(a) (4).
42 U.S.C. §7602(e).
4

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If this Court were to find that a plant manager is en “appropriate
cbrporate officer,” plaintiff would have satisfied the notice
requirements of §7413, since defendant’s plant manager did receive
a notice of violation. In determining this question, the Court
could find no statutory language nor legislative history which
excluded a plant manager from the category of “appropriate
corporate officers.” The Court further notes that the general
definition of a (corporate) officer would include a plant manager
because an officer is one who holds an office of authority or
trust. Websters New Collegiate Dictionary (1979). As the head of
the Mason City plant, defendant’s manager certainly held a
position of authority or trust. With regard to the EPA regulation,
which definition of “responsible corporate officer’!- fails to
include plant managers, this Court is unpersuaded such a
definition applies here or should exclude a plant manager. First,
it was not formulated by Congress but rather by the EPA to be
applied to the National Pollutant Discharge Elimination System
Program pursuant to the Clean Water Act, which is unrelated to the
statutory section in question here. Moreover, its definition is
more limited because it defines “responsible” corporate officers
as opposed to “appropriate” corporate officers. Although the
Court thiiics that plaintiff might have been more cautious in
issuing a copy of the notice to the ‘ Tappropriate corporate
officers,” its service of notice to defendant’s Mason City plant
manager was sufficient because t e plant manager was an “appropriat
corporate officer.” By finding that plaintiff issued a copy of
the notice of violation to an “appropriate corporate officer,”
.5

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there is no need to determine the other questions raised by
parties relating to the sufficiency of notice, because they a-e
premised on the assumption that the Mason City plant manager as
not a corporate officer.h
II.
In its argument that the Court should abstain from hearing
this case, the defendant finds the factual situation before this.
Court to be similar to that of other cases in which courts have
abstained. In rejecting defendant’s claim, plaintiff relies on
the applicable statutory sections, the statute’s legislative
history, and case law..
In its reading of the statute, which gives both federal and
state courts jurisdiction to enforce provisions of a state SIP,
this Court finds no limitation on the EPA (or any other federal
government agencies) in bringing an action when there is or was
already a parallel state proceeding. This Court notes as
indicative of Congress’ intent to avoid any bars on federal
agencies in bringing an action the repeal of a statutory section
4 klthough this Court does not need to decide if the
§74l3(a)(4) requirement of issuing a copy of a notice of violation
to the appropriate corporate officers is a jurisdictiqn3l require-
ment, it notes that in United States v. Chevron , No. -8O—CA-265
(W.D.Tex. June 10, 198i), the Court found that the osily requirement
for bringing an action under §7413 were Cl) notice to the alleged
violator, and (2) a lapse of thirty days. Accordingly, under
Chevron , which appears to be the only case to address the §7413
jurisdictional requirements, the (a)(4) requirement is not
jurisdictional.
6

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which stated that federal enforcement was perm’tted only when
violations resulted from a state’s failure to take responsible
grounds to enforce its standards. Air Quality Act of 1967,
81 Stat. 453, 493. The case law also supports plaintiff’s
position. In United States v. Chevron , No. B -8O—CA-265
(W.D.TeX. June 10, l98 ), the District Court o’ the Western
District of Texas ruled against defendant’s motion to abstain from
hearing the case due to the pendency in state coirt of a prior
lawsuit involving similar issues. The Court fouitd that since
there did not exist a situation where (1) a constitutional issue
might be mooted or placed in a different posture ty a state court
decision as to the applicable state law, (2) a fed ral court’s
exercise of jurisdiction would substantially interf re with the
state’s eff?rt to enforce a system of purely state r!gulation, or
(3) a federal coürtis asked to refrain from state cr minal
proceedings, nuisance actions antecedent to criminal p ceedings
or state suits to collect taxes, the court would not abs sin.
This Court, when considering the above factors, cannot f rid that
it should abstain either.
Moreover, this Court finds the case which the defen lant
relies upon, United States v. Cargill, Inc. , 508 F.! ipp. 734
a
(D.Del. 1981), to be distinguishable. In Cargill , the WA sued
under the Clean Wat A t to have a corporation enjoin d from
further violation of a wastewater discharge permit an A to impose
civil penalties for past violations. The defendant roved to have
the court dismiss, abate or stay the action or to abstain from
assuming Jurisdiction over the action because of a still pending
7

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suit filed by the State Department of Natural Resources and
Environmental Control in the s’ats court seeking identical relief.
The district court found that .he doctrine of abstention did not
apply. However, it did allow for a stay. The court, which gave
several reasons for the stay, nted the most important reason to
be that the federal action had !aused the defendant to halt
construction efforts to prevent water pollution, the principal
goal of the Clean Water Act. Si;’ce the district court in Cargill
found that the abstention did no’ apply, the case does not support
defendant’s position in arguing t’tat this Court should abstain.
Furthermore, in terms of granting a stay, this Court agrees with
plaintiff that the most important easori for such a stay under
Cargill , the prevention of polluti .i, would not be thwarted by
this action, since the EPA seeks to augment and not disrupt
defendant’ s fugitive dust control me sures.
II’.
In arguing that the doctrines of is .ie and claim preclusion
apply, defendant states that it had begur negotiations with the
State prior to receiving any notice from the EPA and the consent
order between the defendant and the State was only entered into
after the EPA was given notice of an op.ortunity to request a
public hearing or make a public commen 4 . According to defendant,
since the EPA had this chance to argu’ for compliance with its owr
regulations, the doctrines of issue nd claim preclusion apply,
and plaintiff is therefore barred f’ m bringing this action,
8

-------
which, if allowed, might unfairly lead to double penalties being
imposed on defenda.it.
This Court finds defendant’s argument to be similar to its
argument concernin abstention in that it is another attempt to
bar this federal ation. As a result, many of the reasons given
by the Court in re eating defendant’ s argument for abstention are
also applicable her!. Again, this Court can find no statutory
support for defendart’s position in a statute that clearly
contemplates enforce nent on the federal level as well as the state
level. This Court a .so finds the major cases defendant cites
distinguishable from the case before us. In United States v. ITT
Rayonier, Inc. , where the Ninth Circuit Court of Appeals ruled
that the EPA was barr.ei un4er the doctrines of issue and claim
preclusion from bringirl; an enforcement action pursuant to the
Clean Water Act, the pr€iious action ended with a decision
rendered by a state supre’te court • In the case before this Court,
however, there was no prev. us state court action, but rather a
consent decree issued by a s ate agency. Moreover, since no
penalties were assessed by te state, defendant is not subject to
double penalties.
IT IS THEREFORE ORDERE that defendant’s motion for dismissal
be denie4,
DecemberJ , 1984.
• !
Donald E. O’Brien, Judge
UNITED STATES DISTRICT COURT
9

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ATTACHEMENT II

-------
IN THE UNITED STATES DI Tt bT COURT
FOR THE WESTERN DISTRICT OF TEXAS
UNITED STATES OF AMERICa, )
Plaintiff, )
) / c.
v. ) EP-80—CA-265 • .•
) ‘I
CHEVRON U.S. A., INC. )
Defendant. )
ORDER DENYING DEFENDANT’ S MOTION TO DISMISS COMPT INT
This is a civil action for injunctive relief and civil
penalties pursuant to Section 113(b) of the Federal Clean Air
Act, 42 U.S.C. 5 74l3( J). The suit was filed by Attorneys
of the United States Department of Justice . .n the narne of
the United States of America as Plaintiff. Defendant now
moves to dismiss the cornpla nt, contending that only the
Administrator of the Environmental Protection Agency is
authorized by the statute to bring this action.
The language of Section 7413(b) literally provides that
the drninistrator shall cou nence a civil action for injunctive
rel:ef or civil penalties when the law or regulations have
beei violated. The Plaintiff contends thatthe United States,
acting through its Department of Justice, and in cooperation
with th Administrator of the Environr ental Protection Agency,
i also authorized to bring a ci.vil action. The parties have
:ited only three cases dealing with this question, and they
are divided iii result. In United States v. Associated Electric
Coo e:atives. Inc. , 503 F.Supp. 92 (E.D. 1o. 1980), the case
If/s
SEP 221983
YAGNER.

-------
relied upon by the Defendant, the court held that the statute
did not empower the Attorney General to bring a civil action
on behalf Qf.or in the name of the United States. The other
two cases)upon which the Plaintiff rclies, held that the
tnited States may bring an action uncior 42 U.S.C. S 7413(b).
United States v. Packaging Corooration of America , ? o. G81-289
CA 7 (W.D. Mich. 19S2) (unreported opinion); United States v.
Texaco , 16 ERC 1142 (N.D. Iii. 1980).
Section 7605 mandates that the Administrator of the
Environmental Protecti i Agency and the Attorney General work
together in the enforcement of the Clean Air Act. It appears
to adopt and ratify a Memorandurt of Understanding between the
Attorney General and the Environmental Protection Agency,
dated. June 13, 1977,.which provides in substance that the
Department of Justice will control civil litigation brought co
enforce the provisions of the Act. The Affidavit of Courtney
Price, Special Counsel for Enforcement of the Environn’.ental
Protection Agency, establishes that the Administrator of the
Environmental Protection Agency requested the Department of
Justice to file the cornplaint in the instant case, and that
the two agencies have cooperated at all stages of the pro-
ceeding. It is, therefore, unlikely that the interests of the
Environmental Protection Agency will be compromised by any
action taken by the Department of Justice, a fear expressed by
the District Court in United States v. Associated Electrical
Coooerativ s, Inc., supra . at 94. Furthermore, the Defendant
9

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has failed to show any prejudice arising from the filing of
the suit in the name of.the United States of America rather than
the Administrator of the Environmental Protection Agency.
The United States is generally entitled to maintain actions
to effectuate its programs and policies even in the absence of
specific statutory authority or pecuniary interest. In re Debs
158 U.S. 564, 536 (1894); United States v. LeMav , 322 F.2d 100,
103 (5th Cir. 1963); United States v. Arlington County. Va. ,
326 F.2d 929. 932 (4th Cir. 1964). 4othing in Section 7.413(b)
explicitly precludes the United Scace from bringing this suit
in its own name to enforce the Clean Air Ace. The Defendant’s
motion to dismiss the complaint should be denied.
It is therefore ORDERED that the Defendant’s motion to
dismiss the complaint in the above-styled and rn mbered cause
be, and it is hereby, DENIED.
SIGNED AND ENTE1IED thi y 2 S::teme:.l9
3

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20

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Particulate Matter Interim Enforcement Policy
(06/28/85)
File at Part E, Document *20

-------
MEMORANDUM
SUBJECT:
FROM:
TO:
i
U ITEI) STATES ENVIRO MF!4TAI. I’ROTKCTJ()N 1 GENC’
WASIII?tTON, D.C. 20460
.q
JUNZ8 19li
OFFICE OF
AIR AND RADIATION
Particulate Matter Interim Enforcement Policy
Charles L. Elkins
Acting Assistant Administrat
for Air and Radiation
Air and Waste Management Division Directors
Regions I! and V I
Air Management Division Directors
Regions I, III, V, and IX
Air, Pesticides, and Toxics Management Division Director
Region IV
Air and Tozice Division Directors
Regions VII, VIII,- and X
I recently had the opportunity to review with OAQPS staff
the status of the PN 1 rulemaking action. In that context, we
discussed the interim enforcement policy as articulated in the
April 2, 1985 Federal Register at page 13139, a copy of which
is attached. That policy is clear and straightforward. It
states that as a matter of both law and equity, existing TSP—
based emissions limitations remain fully enforceable and should
be vigorously enforced. I understand that the program is
proceeding on this basis and I want to assure you of my full
support for this policy.
Attachment

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—— ‘:i it 9 r.ti I riit’t r ,iI P ’ ‘
to irnptemeiitalion ol the tIM ,.
iud, rds. Throuj hmut this
wever. EPA has attempted to
ir the possibility that the
u)d conclude after considering
menI that Pert D is
appropriate for implementing those
primary standards.
By contrast, the expected sccondary
TSP standard might not impose more
stringent control requirements in any
area. If this is the case. section 110
would govern the implementation of that
standard under only the first of the two
interpretations described above: Part D
would govern under the second
interpretation. EPA has decided that.
rather than select one interpretation for
purpose. of this proposal, it will
summarize the policy and the regulatory
consequences of app1yl g Part 0 and
section 110. respectIvely, to a revised
TSP secondary standard, and solicit
comment on these two a llernatlves.
0. Solicitation of Comment
EPA recognizes that one important
consequence of implementing the PM 1 .
primary standards under section 11015
that the Agency would be unable to u.s
such implementation tools as the section
173(4) construction ban, which would be
available under th. alternative
approaches desonbed earlier. Also, one
consequence of appl)lflg Part Dlo the
- edTSP.econdarystandaMtsthat
I that vu exceeding that standard
6 be required to meet Part D ’s strict
T. LAD. and statewide compliance
requirements even when they have
already attained the health..based
primary PM. standard. Furtlisrthoru. for
the reasons explained at length In the
discussion of PSD lnaements (see
Section V.14. of this notice), the choice
of section 110 to Implement both the
pnniary and - c 1SI7 NAAQS could
relieve new and modified particulate
matter sources of the requirement to
demonstrate protection of the P 50
increments for Class U and I n areas.
EPA solicits coaliffient on Its legal
analysts and concl-. ’o’ . and whether It
has properly concluded that these
consequence. would result from
selection of different alternative
schemes for Implementing the revised
standards and whether these
consequences should affect the
Agency. choice of a legal pathway.
IV. Slate buplemeatatlon Plan
Transition Program
A. Genem!
This portion of the preamble sets forth
EPAs proposed policy (or actions that
States must lake to meet the planning
— i’• • r t. 1 1(1 t.
prel.,uraI liii nhiiI Mat irni siufl ul
appropriate SIP revisions for e’iiit lng
sources. The next portion of this
preumble focuses on the S 1P pro; ram fur
the precunstructlon review of new
st’urces. including the PSD permit
program.
B. Primary NAAQS
1. Transition Policy
Because the existing control strategies
serve to reduce ambient levels of both
TSP and PM 1 .. States must not
dismantle existing particulate matter
control programs until they can
demonstrate that the existing SIP’s can
be altered without jeopardizing timely
attainment or maintenance of the
primary PM 1 . NAAQS (or the revised
secondary NAAQSJ. AU requirements of
existing SiP’s will remain In effect until
SIP revisions modifying existing
emission limitations are approved by the
Agent”. fSee Section 110 (I ). 42 U.S.C.
section 7410(i).) The existing limitations
will remain fully enforceable for
purposes of Federal and State
enforcement end citizen stilts. The
Agency will work cioseiy with Stats and
Local agencies to assure a vigorous
enforcement program throughout the
transition period.
This policy is not only In conformance
with the Clean Air Act but also is
appropriate for environmental and
equitable reasons. Compliance dates
particulate sources have long shins
passed. Further delays In compliance
based merely ona possibility of af tww
change In ambient standards would
adversely affect air quality and could ha
unfair to sources that have compiled.
Moreover, It Is unlikely that many
sources could demonstrate with
certainty that the current level of
required control goes well beyond thg
level that would be required at the most
stringent combination of ambient levels
contained in the proposal.
2. AmbIent Data Bus
In esta 1 ng the PM.. SW
development policy, a malor ‘ - m Is
the lack of ambient PM 1 , data with
which to ascertain the extent of NAAQS
violations or to develop an att&iII Ilt
and maintenance strategy. This section
discusses the scarcity of ambient PM..
data and the background of procedures
for using TSP data where PM 1 . data are
not available. The program for SIP
development discussed In the next
section has been especially tailored to
account for the lack of ambient PM.
data.
Ambient samplers with Inlets
designed to collect PM 1 . have recently
1. , lB ..•; v .1 iii’ I’n : ‘i
use. LI . i !ia Liei 1i opi . . ‘g
thirtu.nune P1 l , 0 s;iiipkrs siui.e mid.
1983. These 39 sa pkrs. tuigelhi’r with
any samplers th.it State or lu aI usr
pollution cunt;ol agencies or industry
may have in operation. wi’l not provide
sufficient ambient PM 1 , data to allow
States to comprehensively evaluate the
PM 1 . attainment status for all areas. To
make such a determination. States will
have to use all available ambient data.
This includes TSP data as well as data
and statistical relationships derived
from EPA’s “Inhalable particulate” (IP)
network.
In 1979 EPA began operating ambient
samplers in the IP network which
consisted of ambient air monitoring
stations containing high volume
sampler, (hl.vole) colloca ted with
dichotomous samplers having Inlets
designed to measure particles nominally
15 mIcrometers and less (PM 1 .) and fine
particulates (less than 2.5 mIcrometers).
The stations In the network were
located In urban and suburban areas
throughout the U.S. to reflect maximum
concentration and population exposure
due to urban and industrial sources, and
also in nouwban aieu to provide
Information on background levels. The
39 ambIent samplers measuring PM 1 .
noted above were added to existing
stations In thi, network.
Analysis of data from the IPutworic,
• Including nina Pti&. samplers operated
since early 1 2I reveals that the PM..
jirthm of TSP varies widely. It would,
therefore. not be a 5 ,r riate to
establish. . iogl . nationwide conversion
factor to simply convert ambient TSP
values to - “ PM.. values. EPA has
used the IP a.tu urk data, bowever, to
develop. stattstfr.i approach far
estimating from ambient TSP data the
probability that PM.. NAAQS are being
violated In the am represented by the
ambient a tpIer . Thu probability has
been tanned the “nonattalm’ ..nt
. .bob*l1ty.
Pro dare . for using statistical
probabilities In the abuse of ambient
PM.. data are explained In. draft
doc emt . MW.. SIP PluparnUon
Guid.hrm. A companion document.
Pr. aduresfortatimoting Probability of
lionottamment of a PM 1. NAAQS Using
Total Suspended Particulate or
IniraFoble Pwticulot. Data (referred to
herein as the “probability guideline”)
explains in detail the method. for
estImating PM 1 . levels using ambient
PM.. data, or for estimating the
prob biiity of PM,. nonatteininent using
TSP data. EPA solicits comments on
both documents. The probability
guideline also contains guidance on

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21

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Impact of Intermittent Source Operations on
Clean Air Act Penalty Calculations
(07/02/85)
File at Part E, Document #21

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
it —2 85
MEMORANDUM
SUBJECT: Impact of Intermittent Source Operations on Clean
Air Act Penalty Calculations
FROM: Michael S. Alushin ) 1 .4 ,,
Associate Enforcement Counsel
Air Enforcement Division
Edward E. Reich, Director
Stationary Source Compliance Division
TO: Addressees
A regional Air Director recently asked us to outline: 1)
how SS113 and 120 penalty calculations of a source’s economic
benefit of delay in compliance are affected by intermittent,
e.g. , seasonal, operations; and 2) whether these provisions
differ in their penalty treatment of intermittent operators.
Although ff113 and 120 are very similar, they do differ
somewhat in their penalty treatment of intermittent operators.
SECTION 120
Neither the text of S120 nor its implementing regulations
provides specific guidance on the question. However, it is
important to bear in mind that the purpose of §120 is to
recoup the economic benefit a source enjoys by the act of
unlawfully delaying its compliance with applicable law. The
focus of the remedy is the time it takes the source to achieve
compliance, aot the periods within that time when the source
is operating. Therefore, the time boundaries that mark the
statute’s Uperiod of covered noncompliance, Section
120(d)(3)(C)(ii) of the Act, 42 U.S.C. S7420(d)(3)(C)(ii),
are the source’s receipt of the NON and its achievement of
compliance. Section 120 measures the economic benefit
attributable to the delay, not to the status of operations.
Accordingly, EPA’S Responses to Comments on the Final
§120 Rulemaking notified sources that:

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—2—
EPA...calculates noncompliance penalties for the
entire period from receipt of a notice of
noncompliance until the source actually achieves
final compliance...whether the source operates
for the full 12 months [ of a hypothetical year of
noncompliance] or some lesser period.
The full text of the two pertinent sets of comments and
responses is set out below.
Comment : Some sources operate only intermittently.
will the penalty be limited to periods during
which the source is actually operating?
Response : EPA will calculate noncompliance
penalties for the entire period from receipt of a
notice of noncompliance until the source actually
achieves final compliance. By failing to make
necessary expenditures to install pollution
controls, the source achieves an economic benefit.
This benefit is enjoyed until these expenditures
are made, whether the source operates for the full
12 months or some lesser period. There may, of
course, be a reduction in the amount of O&M penalty
reflecting the source’s intermittent operation.
45 Fed. Reg . 59102 (July 28, 1980).
Comment : The model should take account of fact
[ sic] that source (sic] may shut down temporarily
and should recognize that no O&M expenditures are
being avoided in that period.
Response : The model only seeks to recover O&M
expen es which were actually avoided. (Temporary]
(p]eriods of shutdown would presumably reduce the
amount of those expenses and hence reduce the penalty.
EPA Public Docket No. EN—79-01, File No. V—A—i—c, at 19
(microfiche).
SECTION 113
In accordance with the general Clean Air Act Civil
Penalty Policy, EPA determines the minimum acceptable
settlement penalty amount in each case by calculating the
economic savings from noncompliance and by making other
additions and subtractions for a variety of other relevant
factors. The question raised relates primarily to the economic
savings calculation.

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—3.-
Economic Benefit Component
As with the S120 calculation described above, the 5113
economic benefit calculation focuses on the delay of expenditures
needed for compliance. BEN requires inputs for the date of
earliest provable violation and the date of compliance. This
is natural, since the computer program is determining the
value to the polluter of delaying its expenditure for pollution
controls for the amount of time elapsed between those two
dates. It follows logically that the operational status of
the source during this period is irrelevant. In other words,
the amount of money saved is not dependent on whether the
source is operating.
- The exception to the rule just stated is the same as for
S1 ’ we-w-LU not try to recover pollution control operating
and maintenance expenses for a period of shutdown, because
during that period no 0&M expenditures are being avoided.
Gravity Component
Please note that the gravity component of the 5113 penalty
does contain one factor where an intermittent operation is
excused for its period of hibernation. In calculating. the
amount for ‘length of time of violation’ (page 10 of the
September 12, 1984 policy), onlymonths of actual o .peration
in violation should be counted. This is because this gravity
factor relates to harm from the emissions themselves.
Penalty May Not Exceed 5113 Recovery Limit
There is one more, overarching consideration. Under
§113(b) of the Act, EPA has authority to seek up to $25,00fl
per day of violation. EPA interprets this to mean that the
Agency can recover penalties for each day during which we
have good reason to believe a violation exists, even if we do
not have evidence proving violations on each day of the
period. However, for sources which can prove that they were
not operatinq for a significant period of time, the number of
days of violation may be relatively small. Therefore, it is
theoretically possible for the statutory maximum penalty to
be smaller than the settlement amount derived from the Civil
penalty Policy. In such a case under §113, the Agency would
be willing to settle the case for the statutory maximum, as is
stated in the Policy. When such facts are present, using
5120 instead would increase the amount of the economic benefit
that the Government could recover.

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—4—
PROCEDURE
We suggest using the following procedure to calculate
the O&M component of either a S113(b) or S120 penalty for
intermittent operators. First, run the appropriate computer
model with capital costs set at $0, and O&M costs set at
their estimated value under conditions of continuous operations.
Second, multiply the resulting penalty estimate by the percentage
of covered noncompliance time the source actually operated.
This procedure provides, for the O&M portion of the penalty,
a dollar figure which reflects the source’s intermittent
operation. (Please note that the capital component of the
penalty is calculated by setting the O&M costs at $0, i.e. ,
the reverse of the first step of the above procedure.)
Please call Laurence Groner, Esq., of the Air Enforcement
Division, at FTS 382—2820, if you have any legal questions on
this issue, or Howard Wright, of SSCD, at FTS 382—2831, in
connection with technical questions.
Addresses:
Regional Counsels
Regions I X
Air Management Division Directors
Regions I, III, V, and IX
Air and Waste Management Division Directors
Regions II and VI
Air, Pesticides & Toxics Management Division Director
Region IV
Air and Toxics Management Division Directors
Regions VII, VIII and X
Regional Counsel Air Enforcement Contacts
Regions l—X

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22

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Issues #3(e) & #5 of the VOC Issue Resolution Process:
Establishing Proof of VOC Emissions Violations and
Bubbles in Consent Decrees Resolving Civil Actions Under
S 113(b) of the Clean Air Act
(01/17/86)
File at Part E, Document #22

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
JAN 171986
OFFICE OF E IFORCEME’iT
AND COMPLIA?.CE
MONITOR I%G
MEMORANDUM
SUBJECT: Issues #3(e) and #5 of the VOC Issue Resolution
Process: Establishing Proof of VOC Emissions
Violations, and Bubbles in Consent Decrees
Resolving Civil Actions Under Section 113(b)
of the Clean Air Adt

FROM: Courtney M. Price a?
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Regional Counsels
Regions I—X
Air Management Division Directors
Region I, III, V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxic Management Division
Directors,
Region IV and VI
Air and Toxics Division Directors
Regions VII, VIII and X
In the attached memoranda, I am answering two questions
that you identified as important issues -in our Clean Air Act
enforcement effort to reduce emissions of volatile organic
compounds (“VOC”). Specifically, this guidance responds to
issues #3(e), and #5 of the nineteen issues listed in a
May 20, 1985 memorandum titled “Results of May 3 VOC
meeting.”
The issues addressed by this guidance concern how to
establish proof of voc emission violations (issue #3(e)) and
the relationship between pending or potential bubble appli-
cations and consent decrees (issue 5). The main theme of
the guidance on issue #3(e) is to encourage the use of Section
114 of the Clean Air Act to obtain information where data is
not otherwise available to prove violations under the appli-
cable test method. The principle point of the guidance on
issue #5 is to emphasize that the current SIP governs until
any irr ‘nents are fedc 1.l r effectivc

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—2—
This guidance is part of an Agency-wide effort to address
VOC enforcement issues and should be considered in conjunction
with the responses to the other VOC issues, which will be dis-
tributed by the responsible EPA offices as they are developed.
One major comment regarding issue 3(e) was repeated by
several commentors during the second round of review and is
worth mentioning briefly here. The comments suggested that
rather than attempting to fix recordkeeping problems through
§114 requests, EPA should work towards incorporating better
recordkeeping requirements in the state implementation plans.
For example, EPA could issue SIP deficiency notices where
the SIP does not provide for recordkeeping requirements
adequate to determine if the source is in compliance with
the SIP.
Our response to issue 3(e) is designed to deal with
those interim problems concerning recordkeeping which arise
prior to the resolution of the more fundamental concern of
poorly drafted SIP recordkeeping requirements. The issue
of how to improve the SIP’S S being addressed by the Control
Programs Development Division. The attached guidance is
intended to advise you of the tools available to obtain
better evidence of violations, and my office’s policy con-
cerning the use of those tools, until such time as they may
become unnecessary because of corrective SIP revisions.
I appreciate the efforts of the Regions in commenting
on the various drafts of the two following docum nts and
hope that you find them helpful in resolving some of the
issues concerning VOC enforcement.
Attachments

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ISSUE NUMBER 3(e) : How are VOC emissions to be calculated
over a chosen averaging time when a company is not required
to, or does not, maintain records directly pertinent to that
unit of time?
RESPONSE : This issue is presented when the period for asses-
sing compliance under the SIP with the VOC emission limitation
(e.g., a source must meet a percent VOC limitation over a 24
hour period or instantaneously) does not correspond to the
records maintained by the source (e.g., records of VOC usage
are kept by the source only on a monthly basis). The issue
is also presented in other contexts. For example, a SIP may
require line—by—line compliance while the source records are
maintained only on a plant wide basis. The issue is important
because compliance determinations for many types of VOC sources
rely upon the records of VOC usage kept by the individual
company.
Where the SIP itself requires records to be maintained
that correspond to the SIP emission limitations, corrective
action can be taken under Section 113 of the Clean hir Act
to require the source to keep the proper records. This action
can consist of the issuance of an administrative order under
Section 113(a), or the initiation of a judicial action under
113(b). The remainder of this memorandum addresses the situa-
tion where the SIP does not contain such a record keeping
requirement.
There a e four recommended techniques available to
determine source compliance with VOC SIP emission limitations
in the absence of a SIP record keeping requirement for source
records which correspond to the SIP emission limitations.
These four different techniques are primarily useful in four
different contexts.
The first technique consists of the use of mathematical
algorithms. A description of two different types of available
algorithms is attached (attachment 1). Both apply various
mathematical computations to monthly or yearly data to pro-
duce a figure representing the minimum number of days that
a source had to be out of compliance with the SIP emission
limit. This calculation is statistically based and does not
identify the particular days that a source was in violation.
Use of the algorithms may be helpful in settlement discus-
sions with the source and in determining a settlement penalty.
Use of the results of the algorithms in a different
context, to prove violations at a trial or hearing, presents
several issues. Defendants can be expected to argue that the
Government may prove violations only through the use of the
appropriate test method, which would be the method specified

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—2—
in the federally-approved SIP, or if there is none, the
appropriate EPA test method in 40 CFR Part 60 (see 40 CFR
§52.12(c)). To overcome this point, the Government would
have to argue that violations can also be proven through
expert opinion testimony under the Federal Rules of Evidence,
Rule 702 (Testimony by Experts), 703 (Basis of Opinion
Testimony by Experts), arid 704 (Opinion on Ultimate Issue).
In order to use the results of the algorithms as evidence
of violations at a trial, the Government should be prepared
to prove the statistical validity of the algorithms through
expert testimony, and to show through the opinion of an
expert, based upon the results of the algorithms, that the
source had to be in violation for a given number of days.
The Government would not be able to prove precisely which
days a company was out of compliance nor which lines (or
how many lines) were out of compliance. The Government
would be able to show, based on the source’s total VOC
output and the restrictions provided in SIP, that at least
one of the lines at the source was out of compliance for a
certain minimum period of time. Sole reliance on algorithms
has the negative effect of calculating violations on an
averaging basis in what may be the absence of any SIP
provision authorizing averaging.
Because of these potential issues of proof and the
effect of averaging out some violations by using algorithms,
steps should be taken to obtain the data necessary to.calcu-
late emissions under the applicable test method. Thus, the
second recommended technique to determine source VOC compli-
ance is to use Section 114 of the Clean Air Act to request
currently existing source records which can be used to
develop the data necessary to make compliance determinations
under the applicable test method. Items such as sales slips,
invoices, production records, solvent orders, etc., may be
available and useful in developing the necessary data for
the test method calculations. Once a case has been filed
discovery can also be used to supplement the information
obtained under Section 114.
The third recommended technique to determine source VOC
current and future compliance is the issuance of a request
under Section 114 requiring the source to prospectively keep
the necessary records. This technique is the most straight-
forward of the three and the one that should generally be
pursued. It may be the only option in the case where sources
have not kept records in a form which can be used, directly
or indirectly, to determine compliance under the applicable
test method. It may also be the only realistic option where
the use of existing records to develop the necessary data for
the test method calculations would be unduly ti.me—consuming
and burdensome for the Agency.

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—3—
Under the authority of Section 114, EPA may require a
source to establish and maintain records reasonably required
to determine compliance with the SIP (Section l] .4(a)(l)(A)
and (B)). By issuing such a request, EPA would impose an
obligation on a source to keep and maintain those records
which are necessary to calculate compliance determinations
un.ler the applicable test method. The requested record
keeping shouLd be in a format consistent with the SIP emis-
sion requirements. Thus, if the SIP requires compliance on
a line—by—line basis and on a 24 hour average, the records
should be kept on the basis of individual lines using no
more than 24 hour averaging. Also, the required measurements
as to VOC content should be consistent with applicable EPA
test methods. For example, EPA should require in the
Section 114 request that data on the VOC content of a
particular coating or ink is produced through a measuring
process identical to EPA’s method 24 or 24 A in 40 C.F.R.
60 App. A.
As a fourth technique. Section 114 may also be used to
require a source to sample emissions in accordance with the
methods prescribed by EPA (Section 114(a)(1)(D)). Thus,
Section 114 may be used to require a source to conduct an
emissions test in accordance with the applicable test
methods. This type of Section 114 request would probably
be the most appropriate where compliance determinations are
made on the basis of emissions testing as opposed to an
analysis of the VOC content of the individual coatings -
used. In certain-situations where it is unclear whether
the coating or ink supplier is using proper test methods,
EPA may want to require the user of those coatings to run
tests for VOC content using EPA’S approved test methods.
tn conclusion, algorithms exist and are available to
estimate the minimum number of days a company was out of
compliance with SIP VQC emission limitations in the absence
of company records which are necessary to make compliance
determinations under the applicable test method. The results
of the algorithms are primarily useful for purposes of settle-
ment discussions or for identifying sources which should be
required to submit information under §114. While this guid-
ance does not preclude using algorithms and expert opinion
testimony to prove violations at a trial, the Government
should be prepared to prove at least some days of violation
through the applicable test method in the event that expert
Opinion evidence is rejected by the judge. The records
necessary to develop this proof under the applicable test
method can be sought through a Section 114 request f or
information where the company has data which can be used

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-4—
to develop the necessary records. Such records can also
be developed on a prospective basis through a requirement
imposed under the authority of Section 114 requiring the
source to maintain the necessary records. Finally, Section
114 can also be used to require source testing of emissions.
Future litigation reports based upon VOC SIP emission
limitation violations should 1 if at all possible, either
contain proof of violations using the applicable test method
covering at least part of the period of time the source is
alleged to be in violation of the emission limitation or
should contain a cause of action based upon a source’s failure
to comply with a previous request issued under Section 114
for source records or testing. Prior to the referral of a
report, the authority granted EPA under Section 114 should
be used, where necessary, to obtain the data needed to esta-
blish some days of violation under the applicable test method.
Through the use of Section 114, the Government should either
have the evidence needed to prove specific violations, or,
if a source fails to comply with the Section 114 request, a
basis to proceed under Section 1,13(b)(4) for violation of
Section 114. Litigation reports relying solely upon
algorithms to evidence violations are appropriate only if,
after diligent effort to obtain more detailed data, stati-
stical proof through the use of algorithms remains the only
available technique.
If you have any questions concerning this guidance,
please contact Burton Gray at FTS 3S2—2868.
r
Courtney M. Price
Assistant Administrator
JAN I 7

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ISSUE NUMBER 5 : How Can EPA Include A Bubble In The Context
Of A Consent Decree?
RESPONSE : EPA cannot endorse a consent decree which contains
a schedule for compliance with a bubble until EPA has prornul—
gated final approval of the particular bubble as a SIP revi-
sion (or until the bubble has been approved by the State if
the bubble is granted under a generic bubble provision).
This position is supported by existing Agency policy (“Guidance
for Drafting Judicial Consent Decrees” issued on October 19,
1983), Section 113 of the Clean Air Act and case law.
A consent decree must require final compliance with
the currently applicable SIP. The Agency’s “Guidance For
Drafting Judicial Consent Decrees,” states that consent
decrees must require final compliance with applicable sta-
tutes or regulations. Other than interim standards, a
decree should not set a standard less stringent than that
required by applicable law or regulation, because a decree
is not a substitute for regulatory or statutory change.
(See page 11 of the Guidance.)
Section 1l3(b)(2) of the Act, 42 U.S.C. 7413(b)(2),
provides EPA with the authority to initiate civil actions
to obtain injunctive relief to correct source violations
of the SIP. A settlement of such an action must include a
requirement to comply with the SIP provisions that formed
- the basis of the request for injunctive relief. The settle-
ment cannot require final compliance with a provision not
yet a part of the federally approved SIP.
Case law also supports the proposition that the SIP may
only be changed through certain specific procedures and that
absent those procedures, no change can be effected to the
original SIP emission levels. Train v. Natural Resources
Defense Council , 421 U.s. 60 (1975). The SIP, as approved
through a formal mechanism by EPA, sets the official emission
limits and remains the federally enforceable limit until
changed. Ohio Environmental Council v. U.S. District Court,
Southern District of Ohio, Eastern Division , 565 F.2d 393
(6th Cir. 1977).
A decree may contain a general provision recognizing
that either party may petition the court to modify the decree
if the relevant regulation is modified, as would be the case
with a bubble. The following language is an example of such
a reopener clause where EPA approval of the individual bubble
is required.

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—2—
If EPA promulgates final approval of a revision to the
applicable regulations under the State Implementation
Plan, either party may, after the effective date of the
revision, petition the Court .f or a modification of this
decree.
If a federally approved generic procedure is applicable, the
reopener clause should be modified to reflect the particular
generic procedures.
If a SIP revision that affects a decree’s compliance
schedule is finally approved, decree language, as indicated
above, may permit the source to petition the court for a
modification of the schedule. A source is relieved from its
obligation to meet the existing schedule only upon final ap-
proval by EPA, or by the state if under a federally approved
generic bubble regulation, of the SIP revision and only upon
a modification of the decree. The consent decree may not
contain a clause which would automatically incorporate any
future bubble.
It is important to note in the above context that consent
decree compliance schedules must be as expeditious as practi-
cable in terms of implementing a control strategy to achieve
compliance with the existing SIP and may not add in extra
time to provide fo .final EPA, act-ion- on a request, for a SIP
revision. The “Guidance for Drafting Judicial Consent Decrees”
states on page 12 that, “The decree should specify timetables
or schedules for achieving compliance requiring the greatest
degree of remedial action as quickly as possible.” The con-
cept of expeditiousness was taken from §113(d)(l) (applicable
to compliance schedules in Delayed Compliance Orders) which
was added to the Clean Air Act by. the Amendments of 1977.
The principle was incorporated into Agency guidance issued
shortly after the 1977 amendments pertaining to compliance
schedules in judicial consent decrees, e.g., “Enforcement
Against Major Source Violators of Air and Water Acts” — April
11, 1978 (see pg. 4), and “Section 113(d) (12) of the Clean
Air Act” — August 9, 1978 (see pg. 2).
If you have any questions concerning this guidance please
contact Burton Gray of AED at FTS 382—2868.
/ /
1 ‘— \ -- ‘
“ —Li-.- - J ).\. iA-i
Courtney ‘M. Price
Assistant Administrator
J N 7

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23

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Responses tO Two VOC Questions Raised by the Regional Offices
(01/31/86)
File at Part E, Document #23

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHf IGTON, D.C. 2 6O

a431 I9 6
OFFiCE OF
AIR AND &ADIATION
ME MORANDUF4
SUBJECT: Responses to Two VOC Questions Raised by the
Regional Offices
FROM: Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Air Management Division Directors
Regions 1, lIt, V and IX
Air and Waste Management Division Director
Region It
Air, Pesticides, and Toxics Management Division
Directors
Region IV and Vt
Air and Toxics Division Directors
Regions v ii, v ii i and X
Attached to this memorandum are responses to two issues
identified by the Regional Offices and DOJ through the VOC
Compliance Workgroup. As you may know, nineteen VOC issues
were being presented as current impediments to Regional and
State efforts in returning VOC violators to compliance. In
the process of preparing these responses, it became evident
that they could not all be issued under one cover. Some
required briefings for the AA for OAR and OECM while others,
like the attached two, dealt with Internal, essentially
administrative issues and this justified a response from
SSCD.
On June 27, 1985, the first draft of the attached two
responses, as well as draft responses to many of the other
nineteen issues, were circulated for comment. On August 21
and 22, 1985 various Regional and’ Headquarters representatives
met to discuss these first drafts. A second draft of these
issues was circulated on December 12. The attached responses
incorporates the various comments received.

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—2—
r appreciate your efforts in àommenting on the various
drafts of these two issues, as well as the others. With this
memorandum and OECM’s memorandum of January 17, 1986 entitled
“Issues $3(e) and #5 of the VOC Issue Resolution Process:
Establishing Proof of VOC Emissions Violations, and Bubbles
in Consent Decrees Resolving Civil Actions under Section 113(b)
of the Clean AirAct, ” four issues have now been addressed.
We expect an additional five issues to be addressed by final
guidance within the next two weeks and are working to expedite
the remaining responses.
If you have any questions, please call Steve Hitte at
382—2829.
Edward E. Reich
Attachments
cc: VOC Compliance Workgroup
Regional Counsels, Regions I—X

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Issue : At the present time all Class Al and A2 VOC sources
in the New York City (NYC) Metropolitan AQCR have
been identified and verified, and those which are
out of compliance have been placed on the signif i—
cant violator list. Region II would like to have
all Class B VOC sources which have an ER? > 50 TPY
and are out of compliance, placed on the significant
violator list. By doing this the Region would be
able to more accurately reflect its continuing
enforcement effort in the NYC Metropolitan area,
currently non—attainment for VOCs.
Response :
As noted in the Agency Operating Guidance for F? 1986—1987,
SSCD will be developing a strategy that addresses Class B VOC
violators in ozone non—attainment areas where control of such
sources is essential to attainment. This strategy will
becomeoperational in FY1987 (see attached for initial think-
ing on the elements of this strategy). One issue to be
considered’is the poèsihility of expanding the significant
violator definition in F? 1987 to include selected Class B
sources.
r z
Edwa E Reich, Director -
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
IIAN 3

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G. Class B VOC Sources
Develop general and area-specific strategies for dealing with
Class B VOC sources. Elements of the strategies would have
to include:
(1) identificatiOn of which source categories with
substantial numbers of Class B sources are significant
contributors to nonattainment in the areas of concern
(2) analysis of relative amounts of reductions likely to
be obtainable from such source categories, to determine
the most cost—effective areas of focus, nationally
and in each geographic area
(3) identification of the status of regulation of such
source categories in areas where they are important
and additional regulatory actions possible
(4) inventorying Class B sources (or at least the larger
Class B sources) in the source categories of concern
to each area
(5) determining compliance status o Class B sourcee of
concern in each, area
(6) initiation o appropriate enforcement actions to
resolve violations
From a national perspective 1 strategy development would have
to consider:
(1) compliance determination approaches for large numbers
of small sources
(2) expansion of ‘It and a” and significant violator concepts
to selected Class B VOC sources
(3) mechanisms for obtaining compliance less resource—
intensive than traditional approaches
(4) penalty policies and methods of assessment
(5) public and industry education programs to enhance
voluntary compliance
(6) ‘mechanisms for handling compliance data and any
necessary modifications to CDS guidance

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—2—
To begin to address the Class B VOC problem;
(1) SSCD has convuitted to develop diaring FY 1986 a strategy
(or strategies) for dealing with Class B VOC sources in
areas where their control is important for attainment
(2) The F? 1986 grants allocation targets $1 million for States
to develop and refine Class B VOC inventories
(3) The draft F? 1987 budget contemplates expanded efforts to
address Class B sources, as well, as implementation of a
Reasonable Efforts P-ogram

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Issue : It has become apparent. that EPA. is taking a tougher
enforcement stance on the round II CTG’s than was
evident in round I !4otice of this change came
through the August 17, 1984 Liliquist letter which
was an attachment to the October 2, 1984 memorandum
on coordinating key issues in VOC cases from Micheal
Alushin, Associate Enforcement Counsel. Although
Region III generally supports this change in policy,
we are extremely concerne.d about the method and tim —
ing of disseminating this policy.
This tougher stance on compliance represents a signi—
icant shift in policy. The novel distribution
approach of attaching it to a memorandum which
appears to have been intended f r limited distribu-
tion lea”es much to be desired. States have been
negotiating schedules over the past year which
reflect EPA’s more laissezfaire enforcement posture
taken on the round I CTG’s. This change in policy is
coming to them (and us) about one year late. As a
result, it will disrupt the processing of orders
and SIP’s negotiated by States under our previous
enforcement posture and strain EPA/State relations.
Region til suggests that Headquarters reassess its
method of policy distribution. If EPA is to ensure
the timeliness and appropn.ateness of State enforce-
ment activities, we must inform the States of the
rules of the game ma ti!tfelyand appropriate manner.
Response :
Traditionally, it is SSCD’s approach to issue guidance or
policy documents to the Regional Offices with ongoing staff
support to respond to questions or provide clarification.
Subsequently, it is incumbent upon the Regional Office to
disseminate this information to its States in any manner it
choses.
In the VOC area, a Regional— eadquarters compliance
workgroup was established to be a focal point for VOC issues
and subsequent policy r guidance. SSCD chairs this workgroup
and has distributed numerous VOC articles and policy memoranda
through the workgroup members. The August 17, 1984 Liliquist
letter cited in the issue was distributed to the Air Branch
Chiefs on August 29, 1984, withcopies to the Workgroup members
(see attached).

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—2—
In order to assu .that all SSCD policy and guidance
memoranda are being seen by the Regional Office staff, SSCD
will institute a process of listing quarterly all policy and
guidance memorandum that have been issued. This list will be
sent to the Air Branch or Compliance branch Chiefs. Where a
memorandum on this list has not been seen by the Region, a
request can be made for a copy. It will be incumbent upon the
Region to assure that appropriate memoranda are distributed
to the States and locals. The process of providing this
listing will, commence at the end of the first quarter FY 1986.
Edward E. Reich, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards

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24

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Responses to Four VOC Issues Raised by the
Regional Offices and DOJ
(02/28/86)
File at Part E, Document t24

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tD S74p
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711

28 FEB 1986
MEMORANDUM
SUBJECT: Responses to Four VOC Issues Raised by the Regional
Offices and Department of Justice
FROM: Gerald A. E’nison, ir
Office of Standards
TO: Air Management Division Directors
Regions I, III, V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors
Reqion IV and VI
Air and Tôxics Division Directors
Regions VII, VIII and X
In. the attachments, I am transmitting responses to four
VOC issues identified by the Regional Offices and DOJ through
the VOC Compliance Workgroup. As you may know, absence of
policy addressing these VOC issues was being presented as an
impediment to Regional and State efforts In returning VOC
violators to compliance.
On June 27, 1985, the first draft of the attached responses,
as well as draft responses to many other VOC issues, were
circulated for comment. On August 21 and 22, various Regional
and Headquarters representatives met to discuss these first
drafts. A second draft of each issue was circulated to the
Regional Offices under two separate memoranda, dated October 25
and December 12. The attached responses incorporate the
various comments received.

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—2—
Under previous correspondence issued January 31, 1986
from SSCD and January 17, 1986 from OECM, four other responses
have been transmitted to you. Therefore, eight issues have
been addressed to date. Many of the remaining proposed
responses raise significant policy issues which need to he
addressed. We are working to expedite these responses and to
assure any necessary coordination with the work of the Ozone
Task Force.
I appreciate the efforts of the Regions in commenting on
the various drafts of the attached four issues and hope that
you find them helpful in resolving some of the issues concern-
ing VOC enforcement.
Attachments
cc: VOC Compliance Workgroup
RegionalCounsel, Regions I—X.

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Issue
what is the Agency’s enforcement response for sources
subject to pending bubbles, specifically for bubbles in areas
lacking an approved attainment demonstration?
Response
The 3urie 28, 1984 guidance on “timely and appropriate”
enforcement response for significant air violators addressed
the situation of timely enforcement for sources subject to
SIP revisions. The guidance states that EPA will routinely
issue NOVs, if not already issued, 120 days following the
violation (or shortly after) if the violation is not resolved
in accordance with the guidance. Follow up to the NOV is
warranted unless EPA determines, in consultation with the
State, that continued deferral to the State activity will
produce timely compliance.
Where the State .activity. is a SIP revision (bubbles are
SIP revisions), the revision must, by day 120, at least have
been scheduled for a State hearing and EPA staff—level review
shows it likely to be approved. Where the SIP revision is
unlikely to be approved, EPA is obligated under the “timely
and appropriate” guidance to issue a NOV on day 120 and
follow up with its own enforcement action as appropriate.
Sources subject to SIP revisions in areas that are
classified as attainment are not subject to the “timely arid
appropriate” guidance unless a specific State—EPA agreement
.addresses such sources. However, sucheources remain subject
to enforcement by EPA. The criteria for deferral outlined In
the “timely. and appropriate” guidance may be useful for
addressing such situations even though the tirnelines may not
be applicable.
Gerald A. Emison, Director
Office of Air Quality Planning and Standards
2 8 FES
Date Signed

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2
Issue : Are there any site—specific RACT limits
being set?
Response: Site-specific RACT determinations are required
for > 100 TIyr stationary sources not covered by a CIG where
(1) sources are located in urbanized areas that did not attain
by 1982 and (2) for urbanized areas that have requested an
extension until 1987. In addition, case—by-case RACT determina-
tions are allowable where the CTG suggested limit has been
found to be technologically or economically infeasible. These
case—by—case RACT determinations must be approved by EPA as
source—specific SIP revisions.
Site-specific RACT determinations have beenAfor a number
of > 100 T/yr stationary source categories not covered by
CTG’s. Examples of this are Region IV RACT determinations
for aluminum foil plants, woodworking plants, etc. Region I
reportedly is making RACT determinations for a large number of
sources. For example, more than 30 site—specific non—C.TG
RACT determinations, in’ the State of Massachusetts will be
submitted as SIP revisions to EPA in the near future. Also,
a number of case-by-case RACT determinations have been made
for CIG site—specific sources In Massachusetts in the past.
Case-by-case RACT determinations are allowable under EPA
policy for.both CTG and non-CTG source categories where
appropriate.
The V ’O ’CR ’ACT Clearinghous e Is available and should be
used for ensuring Regional consistency in RACT determinations
for similar site-specific source categories.
4.E n,Dir tor
Office of Air Quality Planning and Standards
28 FEC ls

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3
Issue
What baseline year. should be used for determining VOC
percent emissions reductions as per State SIP regulations?
Response
• There is no oneparticular year that can be considered
to be the baseline year for compliance purposes for all source
categories. The baseline year is generally considered to be
the effective date of the emission control regulation for the
source category.
0 The SIP itself, however, should be checked to determine
if it contains language affecting baseline year determinations.
It is possible that in approving the SIP either EPA or the State
commented on this issue, thus providing guidance to. sources.
If there is no contrary guidance in the SIP, the general rule
stated above should take effect.
0 The stated issue and response relate to individual source.
compliance rather than to a SIP planning baseline or emissions
trading issue. SIP baselines are defined in current policy and
the issue of baselines relative to trading is covered in the
various Agency policy documents on trading.
°The issue is only applicable to ‘percent reduction”
types of regulation . A regulation based strictly on “.VOC
content” (e.g., lbs VOC/gal coating or percent solvent reguià—
tions, etc.) or add—on control equipment percent requirements,
would not require a baseline date as compliance would be based
only ona comparison against.the SIP emission limits.
0 The ‘percent reduction’ requirement applies to the emis-
sion rate as expressed in terms of VOC content, not to total VOC
emissions. That is, the percent reduction applies against the
pre—control coatings/inks formulations, not to the emissions
in mass per unit of time This is consistent with the intent
of the CTG’s. The pre—control coatings/inks formulations used
as the baseline in determining percent reductions must be repre-
sentative of the coatings/inks in use at the time the regulation
became effective.
r
Gerald
A. Emison, Director
Office
of Air Quality
Planning
and
Standards
2 F;
Date Signed

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4
ISSUE
Is an exemption for use of incinerators in non—ozone
season appropriate? Row can we justify suing sources for
failure to utilize controls during non—ozone season jfl SIPs
where there is no exemption?
RESPONSE
The origin of the policy on seasonal controls began when
EPA issued guidance on July 28, 1976 which authorized proce-
dures for the approval of SIP revisions allowing seasonal
operation of certain gas—fired afterburners. Such revisions
could be accomplished without a detailed, time—consuming
analysis of air quality impact so long as the seasonal shutdown
period was consistent with that delineated in a staff study
( Oxidant Air Quality and Meteorology, February 6, 1976) and if
the existing air quality showed no past violations in the months
during which the afterburners were shut down.
On December 1, 1980, in a memorandum to the Regional Offices
titled NRevised Seasonal Afterburner PolicyR (attachment 1), EPA
further stated that any plan revision which provided for after-
burner shutdown in the period of November through March outside
of southern California and the Gulf Coast should be proposed for
approval.
It is important to note that the policy applies to gas—fired
afterburners installed to control emissions of volatile organic
compounds (VOCs) for the purpose of reducing ambient ozone con—
c ntrations. Itdoes not applytoTflareslwhich do not use natural
gas as an auxiliary fuel), VOCs vented to boilers, afterburners
operated principally for odo.r control, -or afterburners operated to
control toxic or hazardous substances. It is also important to
note that the policy on seasonal control of afterburners can only
be implemented through the SIP process. The EPA does not have a
general exemption regarding seasonal controls of VOC gas—fired
afterburners.
A second category of sources to which seasonal controls can
be applied through the SIP process are cutback asphalt facilities.
In some SIPs, control of these facilities is required only during
the summer months.
In 1984, EPA, through the Office of Air and Radiation con—
sidered whether to expand the categories of sources to which such
seasonal policies could apply. (‘Seasonal Volatile Organic
Compound(VOC) Controland Phillips Petroleum,’ dated September
21, 1984 (attachment 2)) The decision was made not to expand
the scope of the policy primarily because:
— Only a relatively small additional cost savings could
be expected from any expansion of the policy.

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— Exposure to toxic emissions might increase.
— Pursuing such an initiative could disrupt VOC control
efforts at a time of uncertain implementation.
— Scarce resources might have to be diverted from current
programs to prepare the necessary administrative actions.
— The control flexibility in the program already available
might be jeopardized since Section 302(K) of the Clean
Air Act, passed subsequent to EPA’s seasonal afterburner
policy, requires controls on a ‘continuous basis.’
It was for the above reasons that the recommendation was made
to implement the existing policy as’presently written.
Thus, the policy concerning seasonal control of afterburners
can be implemented only if a State submits, and EPA approves, a SIP
provision providing for seasonaloperation. In the absence of such,
a provision, sources are obligated under State and federal law to
continuously operate afterburners as necessary to meet applicable
emission limits. EPA expects sources to meet their legal obliga-
tions, and is directed by Sections 113 and 120 of the Clean Air Act
to take corrective enforcement action if a source fails to do so.
The justification for enforcing SIP requirements providing for the
continuous operation of afterburners rests with this directive in
the Clean Air Act. SIP standards are Initially’ developed by. the
States and can be more stringent than required— by the Clean Air Act
and EPA. policy. Once federally effective, the SIP requirements are
to be met by sources and enforced by the States and EPA.
Gerald A. Einison, Director
Office of Air Quality Planning
and Standards
28 FED 1986
Date Signed

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PU—i 72—80-1 2-1 -‘133
UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
0*11: OE 0 1980
SUIJICT: Revised Seasonal Afterburner
FROM: Walter C. Barber, Di
Office of Air Quality P1
TO: Director, Air and Hazardous Materials Division
Regions I-X
On July 28, 1976, the Agency issued its policy on the “Seasonal
Operation of Natural Gas—Fired Afterburners.” This policy authorized
the approval of SIP revisions without a detailed, time-consuming analysis
of air quality Impact If the seasonal shutdown period was consistent
with that delineated tn a staff study (“Oxidant Air Quality and
Meteorology,” February 6, 1976) and if existing air quality showed no
past violations In the months during which the afterburners were shut
down. Because of the nation’s continuing need to conserve energy
resources and because of the revision to the national ambient air
quality standard for ozone, we have reconsidered a portion of this
policy.
An analysis of available ambient air quality data concluded that
• exceedances_.of: the revised national ambient air quality standard -for—-
ozone do not occur in the November through March period, except for
areas of southern California and the Gulf Coast. As a result of this
analysis, It is appropriate at this time to modify the “seasonal after-
burner policy 0 to state that any plan revisions which provide for after-
burner shutdown in the period of November through March outsIde of
southern California and the Gulf Coast should be proposed for approval.
All other portions of the original policy remain unchanged, namely:
(1) The policy applies to gas—fired afterburners Installed to
control emissions of volatile organic compounds (VOCs) for
the purpose o reducing ambient ozone concentrations. It
does not apply to flares (which do not use natural gas as an
aux1lTi r fuel) 1 VOCs vented to boilers, afterburners operated
principally for odor control, or afterburners operated to
control toxic or hazardous substances; and
‘rds (MO-lO)
PA F... T32O. (I .,. 3-7k!

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(2) A policy to seasonally control afterburners can only be
1mplei iented through the SIP process. The attached staff
report, supported by air quality data, should be adequate
technical support for approving a SIP revision allowing, for
seasonal shutdown of afterburners in a given location.
It Is reco ended that you notify the State agencies in your
Region that EPA supports a policy which permits sources to shut off
afterburners during the months of November through March except for
areas of southern California and the Gulf Coast. Should you have any
questions in this regard, please contact Mr. Richard G. Rhoads, Director,
Control Programs Development Division, Office of Air Quality Planning
and Standards at FTS 629—5251.
Attachment
cc: Chief. Air Programs Branch, Regions I-X

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MCRANDUM
SUBJ ?: Seasonal Volatile Organic Compound (VOC) Control
r L ps’i eum
)QS Dfl A. Cannon...
FROM: .Toseph A. Cannon, Assistant Administrator
for Air and Radiation (AMR—443)
TO: Milton Russell, Assistant Administrator
for Policy, Planning, and Evaluation (PM—219)
This is with regard to your eemorandua of June 15, 1984. discussing
seasonal VOC control and the Phillips Petroleum Federal Register notice.
Your memorandum suggests that expanding seasonal VOC control beyond the
existing afterburner policy offers significant promise as a control
cost-savings initiative. You also, expressed concern that the Office of
Ai and Radiation (OAR) vu attempting to revoke the existing seasonal
afterburner exemption in the Phillips Petroleum package. I w uld like- to
address these two issues separately.
S SCNAL CONTROL
We can understand your perspective regarding expanded seasonal VOC
control since intuitively it is quite appealing to not control pollutants
if they clearly are not causing an air pollution problem. Rowever, such
a seemingly simple approach has a number of potential pitfalls which need
to be considered prior to pursuing such an initiative. The Office of Air
Quality Planning and Standards’ (OAQPS’) review of your recommendations
has reachód the following conclusions: -
-. Substantial control flexibility already exists under the current
policy in the area of greatest payoff; hence, only relatively
small additional cost savings can be expected from an expansion.
— cposure to toxic emissions may increase.
— The basis for no further control in several listing decisions under
Section 112 may be undermined.
— Puisuing such an initiative at this time may disrupt VOC control
efforts at a time of un:er ain transition to implem ntatiofl.

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—2-
— Resources in State, local, Regional, and Headquarters Offices may
need to be diverted away from current programs to prepare the
necessary administrative actions.
— The substantial control flexibility already available under the
current policy say be jeopardized.
Our basis for these conclusions is discussed below,
No Major Payoff Can Be cpected
The VOC emissions can be reduced through incineration, other add-on
controls, or low—solvent technology. While a few individual sources may still
realize significant savings through an expanded seasonal VOC control policy,
the bulk of the savings available has been addressed through the existing
seasonal afterburner exemption. The consultant study prepared by your
staff confirms our initial conclusions regarding the limited potential
for cost savings from expanding this policy. The following is taken from
that analysis:
Twenty—three (23) RACT source categories were
examined to determine whether any of them could be
major beneficiarieS from an extended seasonal control
policy. This ewJ mf nation indicates that most sources
within these categories are unlikely to have major
savings directly attr.butable to discontinuance of
e .sting VOC control measures under such a policy
extension due to the following reasons:
— They employ cont ol measures which are integral
to the process equiçnent (e.g., submerged fill
pipes, floating roofs, etc.) and which cannot be
disabled.
— MC ? consists of switches to inherently low
polluting processes (e.g., substitution of
solvent-based to low— or no—solvent coatings).
Such sources are unlikely to switch back because
(a) there is little financial incentive to do
so, (b) the quality of product using low or
no solvent coatings is acceptable, and Cc) there
Will be costs associated with a changeover.
— Several sources have no add—on or ether controls
and, therefore, are unable to benefit from an
extended SCP because they currently use bubbles
as an effective method of complying with MC?.
This attests to the success of the bubble policy.
— Many sources that can benefit from a seasonal
control policy already do so since they are
equipped with natural gas fired incinerators.
These are exei’ pt from wtn’:ertime operitio:i under

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—3—
the current SCP. However, it should be noted
that not all incinerators are able to use the
current exemption from natual gas fired incinerators
because: (a) some incinerators have dual. fuel
capability and may, therefore, be ineligible for
exemption in certain jurisdictions, (b) some
sources seem to be unaware of the exemption, Cc)
other sources have integrated their incineritor
into the general process and/or winter space
heating system so that the recovered heat from
the incinerator is now indispenaible, and Cd) as
is their prerogative under Section 116 of the
Clean Air Act, several State and local agencies
do not provide exemptions for natural gas fired
afterburners on a routine basis.
For many sources, savings due to recovery of
VOCs are sufficiently high so that they have
no incentive to disable controls.
Major beneficiaries from any shutdown of controls
resulting from an extended seasonal control. policy
will be those sources that use (or will use) end—of—
pipe control devices for RACT and can neither use,
sale nor burn recovered (i.e., collected) VOC5.
Based Qn this observation, the categories most likely
to benefit are: graphic arts (especially flexography)
and papet coating.
With regard to flexograph.ic and paper coaters, only those who install
incinerators without heat recovery could realistically expect to benefit
from the policy (very few have), and they have already been addressed
through the existing policy.
Toxic missions May Increase
The st visible adverse, impact to the public will be the potential
increase in toxic emissions. The Agency has maintained that significant
reductions in toxic emissions will accrue through VOC contrOl for ozone.
The majority of the chemicals being studied for toxicity as air pollutants
are VOC. Table I illustrates that 29 of the 37 substances under assess-
ment exist as VOC. Further, in some cases, it is not the primary constitu-
ent of the VOC but simply one of many constituents. For example, gasoline
vapor is a major source of benzene. Also, coatings are formulated with
solvents composed of many compounds which can and are changed. Hence it
is not a simple task to determine whether a particular source has an
adverse toxics impact or whether in the future it will continue to have
an adverse impact. Given this complexity, toxic emissions stay likely
be emitted from sources in increased quantities if the policy is expanded
indiscriminately. Even if this were not true, the perception of its
possiblity would require ze er reporting .equirements and/or technical
support before the Agency c 1d responsibly take such a general tep.

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Basis for Section 112 Decisions Will be Undermined
Decisionr regarding controlling or not controlling toxic chemicals under
Section 112 often hinge on the incremental environmental impact of additional
control requirements. The baseline considers the existing SIP and whether
there is a SIP requirement to provide some control. Expansion of seasonal
afterburners viii undermine this basis • M an smample, bulk terminals are a
significant source of gasoline vapor and benzene emissions. Lifetime risk of
cancer due to high exposure to gasoline in the vicinity of uncàntrolled terminals
has a plausible upper 0 bound of 1.2 I 10—3. This is the highest—risk source
category in the gasoline marketing chain for benzene and gasoline vapors.
while the Agency has yet to decide to control bulk terminals for benzene, the
existence of SIP requirements obviously mitigates the risk. This analysis
using the SIP baseline would be suspect if the Agency announced expansion of
the seasonal VOC policy allowing exemption periods for VOC. This. same problem
will reoccur in a number of listing decisions presently being made.
Disruption of Present VOC Control Efforts
The lees quantifiable but potentially greater adverse impact is the. additional
disruption such a policy may cause State agencies. States presently feel
overwhelmed by the demands the VOC program has placed on them. To, add an
additional requirement to an already complex regulatory program may adversely
affect- SIP approvals and compliance.
Further, most of these regulations are to b implemented soon. Final
compliance dates have either, passed or will pass, in 1985. To provide sourceS
i th a potential new vehicle to argue that compliance requirements should be
deferred may undermine the present Agency initiatives to move away -from planning
and into implementation. This Initiative runs the risk of ’being the straw that
breaks the proverbial camel’s back.
Diversion of Resources
The administrative burden of preparing an expanded seasonal VOC policy is
not inconsequential. Rulemaking which could be as extensive as that which is’
presently underway for the emission trading policy will be necessary to formally
promulgate the policy. Following issuance of the policy, States will have to
undergo individual rulámaking activity to provide for seasonal controls in
their plans. Subsequently, individual Federal rulemaking will be required to
incorporate the State rules into the Federal SIP. Therefore, even presuming no
litigation, a significant fraction of what we, the States and local agencies
are presently expending in the SIP planning exercises may have to be expanded
on adopting and implementing this initiative • This can only be accomplished by
diverting activity away from areas where environmental improvement is being
accomplished (e.g., inspections, compliance activity, Group III CTG adoption).
Gnce the policy is issued, processing SIP revisions is a nondiscretionary thaty.
Significant allocations of resources will’ be necessary to address what is a
major administrative task.

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—5—
while the administrative burden is not insurmountable, it is real
and could adversely affect compliance. It will take an investment on the
part of States and EPA to surmount these administrative demands. The
available resources are limited. Given the lack of identified benefits,
it does not seem to be worth the effort.
Jeopardizing the Present Policy
Proposing an expansion of the seasonal VOC policy for notice and
comment is not without risk. As it OV stands the present policy provides
significant flexibility to those who most can use it-—users of gas-fired
afterburners • Reopening the policy introduces the risk of a challenge to
the entire policy. The present exemption for gas—fired afterburners was
adopted as a narrow exercise of administrative discretion. The primary
basis for approval was the natural gas supply shortage which existed in
the mid—i 970’s • The energy availability situation has changed significantly
since, that time. Kence, this basis may no longer be available if this
policy were reopened. Moreover, efforts were made in the initial policy
to distinguish this from intermittent control systems previously used by
sulfur dioxide sources. Since this polióy was initially issued, the
Clean Air Act Amendments of 1977 added Sections 123 and 302(k) to expressly
require continuous controls. Whi] e neither development necessarily
invalidates the present policy, both result in additional complexities.
As your staff noted, there are those who would like to see the present
po.icy rescinded. By opening the’ issues, you M7 provide them a vehicle
to accomplieh the very opposite goal you seek.
For these reasons, I recommend we continue to implement the existing
policy on seasonal control as it ia’presently vritten. For all its
warts, the present policy works. It provides significant flexibility for
those who can most use it, has been accepted, and can continue to be
I mplemented without significant additional rulemaking or resource burdens.
The most prudent course of action appears to be to leave the policy alone.
PHILLIPS PETROLEUM
The Office of Air and Radiation (OAR) had no intention of revoking
the existing seasonal afterburner policy in the notice. The original
wording of this Federal Register notice explained in some detail why the
seasonal afterburner policy, did not apply in this instance, and did not
place the policy into its statutory context, even though the original
wording provided an adequate basis for disapproving this particular
application. Given the Office of Management and Budget’s COMB’S) tendency
to ask for a statutory basis for EPA disapprovals when a policy is cited,
I think it is prudent’to modify the disapproval language to reflect the
statute rather than explain why the afterburner policy does not apply in
hopes of avoiding extensive interplay with 0MB on this package.
I do not believe it has any precedentia]. value for any future
exempt4ons ‘.the Agency might .ish to pursue since we would have to take
notice and comment on any policy change to expand the use of seasonal
controls. it is not clear what you mean by narrowing our basis for
disapproval since there is no policy’ to ever approve such, an action.

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Further, given the b.nzene/gasoline vapor toxicity ie.ue diacus ed above,
using this action as a vehicle to announce consideration of expanding the
seasonal VOC policy aeetns ill advised. Based on the discussion above, I
have concurred on the disapproval package and have forwarded it to 0MB.
Attachment
cc Indur Gokiany, RRS
Michael Lsvin, RRS
William Pedersen, OGC
‘ d Reich, OAQPS
Gerald ison , OAQPS
Darryl Tyler, OAQPS
Barbara Bankoff, OAR
Paul Stolpoan, OAR

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Table 1
37 Potentially Toxic Substances Under EPA Assessment
A. Substances that exist in the ambient air primarily as particles (8)
Beryllium Maleic Anhydride
Cadmium Manganese
Coke oven emissions Nickel
Dioxin (2, 3, 7, 8—TC Q)* Polychiorinated Biphenyls*
B. Substances that exist in ‘ ambient air primarily as volatile
organic compounds (29)
Acetaidehyde Formaldehyde
Acrolei n Hexachlorocyclopentadi ene
Acrylonitrile Methyl Chloroform
Allyl Chloride Methylene Chloride
Benzyl Chloride Nitrobenzene
Carbon Tetrachioride Nitrosomorpholine
1eroeiizene Perchioree thylene
lorofor .Phenol
Chieroprene Phosgene
Cresol Propylene Oxide
p-Dichlorobenzene Toulene
Dimethyl Nitrosainine Trichioroethylene
Epichlorohydrin Vinylidene Chloride
Ethylene Di chloride Xylene
Ethylene Oxide
* Although these organic compounds can eicist in the ambient air as either
particles or gases, these substances will be considered particles for
the purposes of this analysis.

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25

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Guidance: Enforcement pp1ications of Continuous Emissions
Monitoring System Data
(04/22/86)
File at Part E, Document *25

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ctV S74
UNITED STATES ENVIRONMENTAL r ROTECTION AGENCY
WASHINGrON, D.C. 20460
l( PRO1 ’
APR 2 2 1986
MEMORANDUM
SUBJECT: Guidance: Enforcement Applications of Continuous
Emission Monitoring System Data
FROM: Edward E. Reich, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Michael S. Alushin
Associate Enforcement Counsel
Air Enforcement Division
TO: Addressees
I. Purpose and Application
The purpose of this guidance is to increase the use of
continuous emission monitoring system (“CEMS”) data in the
gency’s compliance and enforcement program.1/ EPA intends
in this way to strengthen its efforts to ensure-that sources
comply with applicable law on a continuous basis and to
enforce against those that do not.
This document addresses the following three enforcement
applications for CEMS data:
1) the governing regulation specifies CEMS as the
official compliance test method (“Compliance
Method”), e.g. , the Reference Method for the
Standards of Performance for New Stationary
Sources (NSPS);
2) the governing regulation specifies some method
other than CEMS as the Compliance Method; and
1/ “CEMS” as used in this guidance principally means instrumental
or manual continuous emission monitoring systems. Furthermore,
as with any other data, “CEMS” as used in this guidance assumes
that EPA confirms that the specific data, normally available
from the source, are reasonably accurate and precise. This
information includes data such as those acquired during
Performance Tests, Performance Specification Tests, and periodic
calibrations of the CEF1S. For additional information see 6/.

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—2—
3) the governing regulation concerns proper
operation and maintenance, recordkeeping,
and other requirements where no test method
would be specified.
This guidance applies to any Federally—enforceable
re ’ulation or other requirement governing emissions, operations
and maintenance (“O&M”), and monitoring and reporting pro-
cedures for stationary sources of air pollution. It should be
read together with the attached document entitled “Guidance
Concerning EPA’s Use of Continuous Emission Monitoring Data”
(August 12, 1982).2/
‘II. Conclusion
EPA can put CEMS data to a variety of important enforcement
uses, irrespective of whether the legal requirement being
enforced specifies CEMS as the Compliance Method. For example,
EPA can rely on CEMS data alone to issue Findings of Violation
(“FQVs”) and Notices of Violation (“NOVs”).
However, the legal requirement must specify CEMS as the
Compliance Method in order for EPA to rely on CEMS data alone
to refer a case to the Department of Justice (“DOJ”), to
prove a violation of an emission limitation in Federal district
court, or to issue a Notice of Noncompliance (“NON”) under
• §120. The same is true if EPA is to rely on CEMS data alon e
to issue an administrative order respecting emi sions viOlations
• under §113(a).
On technical grounds, CEMS data typically are at least
comparable to Compliance Method and inspection data derived
from equally well—executed and uality—assured monitoring.
CEMS data certainly are more representative of actual continuous
emissions than are some traditional sources, of compliance
data, such as emission factors and engineering calculations.
III. Discussion
A. V here the Governing Regulation Specifies CEMS as the
Compliance Method ——
CEfrIS is the Compliance Method in NSPS Subparts Da (covering
new electric steam generators), P.. 0 and R (covering new non-
ferrous smelters), and in certain SIP provisions, Federally—
2/ The 1982 guidance clarifies, among other things, the cir-
cumstances under which CEMS constitutes the applicable Compliance
Method and the role played by CEMS under State Implementation
Plans (“SIPs”) which do not identify any Compliance 1ethod.

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—3—
enforceable compliance orders and permits. For sources covered
by these provisions, EPA can rely on CEMS data alone to take
all of the following enforcement actions:
1. Devise a priority list for inspections and
other investigative activities;
2. Issue NOVs to SIP sources, or FOVs to non—SIP
sources
3. Document that a violation has continued 30 days
beyond the date of the NOV in SIP cases;
4. Quantify the severity of violatio ns for penalty
calculation purposes, in negotiation or litigation;
5. Issue an administrative order under §113(a);
6. Issue a §120 NON;
7. Formally refer a case to the DOJ for filing as
a civil or criminal action; and
8. Prove a violation in civil or criminal litigation
in Federal district court.
B. Where the Governin.g Regulation Specifies Some
Method Other Than CEMS as the Coin 1iance Method
Here, CEMS data still can be very useful in initiating
and supporting cases alleging emission vio.lations. The
Agency can rely on CEMS data alone to take any of the first
four enforcement actions listed at Section 111(A) above.
For example, EPA can use CEMS data standing alone as the
basis for issuing an NOV or FOV for violation of an emission
limitation.4/ Proof of the existance of-a violation of an
emission limit for purposes of a compliance order or litigation
virtually always must be based on Compliance Method data.
However, issuance of an NOV or FOV requires a less. rigorous
evidentiary showing.
3/ While some Regional Offices do issue FOVs, it should be
noted that EPA has no legal obligation to do so.
4/ The Clean Air Act expressly permits the Administrator to
issue an NOV “on the basis of j y_information_avai1ab1 e to
him ... that any person is in violation of any requirement of
an applicable implementation plan”. 42 Usc §7413(a)(i) .

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— 4. —
If after issuance, the source fails to come into compliance
with the emission regulation, EPA normally must acquire Com-
pliance Method evidence before it takes any of the last four
enforcement actions listed at Section 111(A) above.5/ However,
a second NOV is not necessary under these circumstances,
assuming that there is evidence that a sufficient relationship
e ists between the CEMSdata and the Compliance Method data.
In addition, CEMS data also can be used in support of
emission violation cases to quantify emission levels and to
document that a violation continued 30 days beyond the NOV
issuance date. While EPA is frequently prepared to argue
that any particular day should be considered a day of violation
in the absence of emission data 2. Se, CEMS data should
serve to strengthen the government’s case.
We believe that courts will generally accept non—Compliance
Method CEMS data as an indicator of the magnitude and duration
of emission violations because they represent emissions
comparably to Compliance Method data. 6/ -
5/ However, in most circumstances a Regional Office may rely
on non—Compliance Method CEMS data alone to support a referral
where it constitutes a pre—negotiated settlement agreement,
referred for the single purpose of lodging with the court.
The exception would be in situations where adverse public
comments on the decree may be expected, and that could lead
the government not to request the court to enter the decree.
In such exceptional circumstances, the referral must be based
upon Compliance Method data.
6/ We assume that CEMS and Compliance Method data will be
reliable and comparable to each other. This assumption is
based principally upon three facts. First, the Agency requires
sources to acquire and report reliable data (whether CEMS or
Compliance Method). With respect to CEMS, this is accomplished
by requiring sources to: (a) purchase, install and operate
the CE 1S in accordance with specific locat iori criteria and
performance standards; (h) demonstrate achievement of the
Performance Specifications by comparing the CEMS and the Com-
pliance Method results; (c) implement (at least daily)
calibrations and O&M procedures; and (d) operate the CEr1S
during all Performance Tests. (If doubts remain, EPA can
require additional comparative tests using §114.
Second, the Agency has acquired data from num rouS sources.
Such data document the fact that sources are able to, and
generally do report reliable and comparable data to agencies.
Such documentation includes data acquired: (a) during the
(footnote 6/ continued on page 5)

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—5-.
Finally, of course, CEMS data provide an altogether appro-
priate basis upon which to issue a §114 request for Compliance
Method data.
C. Where No Compliance Method Is Specified by the
Governing Regulation
This Section applies exclusively to requirements which
govern violations of other than emission regulations. Here,
the Agency may rely upon CEMS data alone to enforce directly
various O&M, monitoring, recordiceeping and reporting requirements
set out in NSPS regulations, SIPS, and Federally—enforceable
orders and permits.
For example, Section 60.11(d) of the NSPS regulations
establishes a general “good practices” O&M requirement. This
requirement identifies no specific cornpliancemethod. Rather,
it states that the “determination of whether acceptable...
procedures are being used will be based on information
which may include, but is not limited to, monitoring results ,
opacity observations, review of operating and maintenance
procedures, and inspection of the source.” (Emphasis added.)
Similar language is contained in many SIPs. CENtS data alone
are suff:icient to prove violations of such O&M requirements.
IV. Recommendations
CENtS provides •a very useful and versatile source . of’
enforcement data. EPA can use such data to take many traditional
enforcement actions, often even when CEMS is not specified as
the Compliance Method. Therefore, we encourage Regional Offices
to use CEMS data consistent with the aforementioned paragraphs.
In addition, we encourage Regional Offices to:
A. Make CENtS data acquisition and evaluation a
standard operating procedure;
f ntinuation of footnote 6/)
development of the CENtS Performance Specifications and
(Proposed) Appendix F of Part 60 (Quality Assurance Require-
ments for 502 CEMS); (b) by receipt of hundreds of Perforrnance
Specification Test Results; and (c) while perfor ing quality
assurance and compliance audits of CEMS. (See, e.g. , EPA
publications entitled “Summary of Opacity and Gas CENtS Audit
Programs” (EPA—340/1—84--016, September 1984); and “A Compilation
of SO 2 and NO Continuous Emission Monitor Reliability Information’
(EPA—340/l—83—012, January 1983).)
Third, all certifications of visible emission observers
are based upon quantitative comparisons between observers and
“smoke schools’” opacity CENtS.

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—6—
B. Cite CEMS data as supplementary evidence of violations
in each NOV or §113(a) administrative order issued
whenever the CEMS data substantiate the primary
evidence; and
C. Incorporate CEMS into ongoing enforcement actions
( e.g. , (1) consider requiring chronic violators to
install and use CEr4S; (2) cite CEMS procedural
violations whenever they exist; and (3) cite the
source for failure to properly operate and maintain
its facility, based upon CE 4S data).
Attachment
Addressees
Regional Counsels
Region I - X
Air Management Division Directors
Region I, III, V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division Directors
Region IV and VI
Air and Toxics Division Directors
Region VII, VIII and X
Air Branch Chiefs
Region I — X
Air Compliance Branch Chiefs
Region II, III, IV, V, VI and IX
CEMS Enforcement Workgroup
Jerry Ernison, OAQPS
Jack Farmer, ESED
George Walsh, ESED
Roger Shigehara, ESEI)
Darryl Tyler, CPDD
Rodney Midgett, EMSL/RTP
Darryl von Lehmden, EMSL/RTP
Earl Salo, OGC
Joseph Lees, DOJ
Reed Neuman, DOJ

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26

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Policy on the Availability of LOW Solvent Technology Schedules
in Clean Air Act Enforcement Actions
(08/07/86)
File at Part E, Document *26

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UNITED STATES ENVIRONMENTAL PROTECT ION AGENCY
WASHINGTON, D.C. 20460
“ .4
N . E — 1986
1EMORANDUM
SUBJECT: Policy on the Availability of Low—Solvent Technology
Schedules in Clean Air Act Enforcement Actions
FROM: 3. Craig Potter , / /1
Assistant Administrator , _ . / ‘ (-f
/
for Enfor ent and Compliance Monitoring
TO: Regional Administrators
eqions I—X
th f
low—solvent technology (LST) schedules can be considered as an
available method of compliance in cases brought to abate emis—
sions of volatile organic compounds (VOC). They also asked for
guidance on what oeriod of time should be given in a compliance
schedule. In response, we have determined the foliowing Agency
policy.
Background
In earlier guidance addressing options for VOC control, EPA
encouraged the low solvent (reformulation) approach. Though
compliance dates in the SIPS were generally Oecember 31, 1982,
EPA recognized when the earlier guidance was issued that it
could take longer than December 31, 1982 for sources to develop
and implement complying coatings. Through surveillance and
n crcement activities by the States and EPA in recent years
it became evident that many sources had not made serious efforts
to find complying coatings or, in some instances, efforts
directed toward complying coatings failed to yield desirable
results. Often, sources were not vigorously pursuing the
alternative of installing add—on controls. As a result we now
face extended non—compliance, increased VOC enforcement activity,

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—2—
and a need to issue specific guidance on what is an acceptable
schedule for VOC violator.s where pursuit of LST is being con-
sidered. It must be emphasized that more than five years have
passed since the VOC regulations were first adopted by the
States. With the ozone attainment dates already past in many
areas and less than two years away in extension areas, it is
critically important to assure compliance in an expeditious
manner.
Policy
LST schedules may be used in EPA enforcement actions as
long as the following five conditions are met:
1. The schedule must be expeditious. It can provide no
more than three—months from the date of filing of the
complaint (or equivalent State action in cases where
the State is pursuing the enforcement action) for a
source to demonstrate compliance using complying
coatings.
2. Add—on controls must be nart of the schedule with a
commitment to implementation should the LST program
fail! The add—on control program can extend up to an
additional twelve months. It must begin at the end of
the three o th ( r shorter) $T sched i e have
p en p p iriq
mg studies, ordering control equipmen t-r-commer1cing
installation of control equipment, completing installa-
tion, and demonstrating compliance.
3. Final compliance cannot extend beyond December 1987.
4. Stipulated penalties must be part of ‘the schedule for
failure to meet incremental dates of the add—on control
program.
5. Civil penalties must be obtained. (This requirement is
established by previous policies such as the September 20,
1982 Post—1982 Enforcement Policy and the June 28, 1984
“timely and pprppriate ” guidance or the air p pgrai !
These policies are located at Sections V.R. and 1.1.
respectively in the Clean Air Act Policy Compendium.)
Penalties assessed by EPA must be consistent with the
September 12, 1984 CAA Stationary Source Civil Penalty
Policy, as amended, and penalties assessed by States
must be consistent with the June 26, 1984 guidance by
the F)eputy AdminiStrator entitled “Implementing the
State/Federal Partnership in Enforcement: State/Federal
Enforcement Agreements.” These policies are located at

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—3—
Sections V. ?. of the Clean Air Act Policy Compendium
and Tab GM—41 of the Gener4l Enforcement Policy Compen—
diuin, resoectively.
Schedules resolving State enforcement actions will be
evaluated in light of this policy to determine the appropriate—
ne ss of EPA deferring to the State resolution, A State enforce-
ment resolution should include at least conditions (1), (2), (3)
and (5) of those required in EPA actions.
This policy is effective on the date of this memorandum,
except for the following limited situation. To allow for a
smooth transition, ongoing State settlement negotiations where
greater than three—month LST schedules are being considered
will be accepted as long as the other elements of this policy
for a State enforcement resolution are satisfied. This limited
exception will terminate ninety days from the date of this
guidance.
This policy is applicable to schedules issued pursuant
to Section 113(d). Approvability of those schedules is depen-
dent upon meetinq the requirements of Section 113(d). However,
in making a determination of expeditiousness for a DCO, the
concepts outlined in conditions (1) and (2) of this guidance
should be followed.
If yq have 4fly questi ns on tAi po licy 1 pl 4il y wr
R q on&. ltatson contact in OAQPS’s Stationary Source Compliance
Division or OECM’s kir Enforcement Division,
cc: Air Division Director, Regions I—X
Regional Counsel, Regions I—X

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27

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Penalties Under “Timely and Appropriate” Guidance I 2’
(09/26/86)
File at Part E, Document *27
I
‘ - I

7/

-------
IO ST 4 .
1 TED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
4 t pq 1t
SEP 261988
ovv ci OF
All AI D RADIATiON
MEMORAN DUM
SUBJECT: Penalties under “Timely and Approoriate” Guidance
FROM; Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Air Management Division Directors
Regions I, III, V and IX
Air and Waste Management Division Director
Region LI
Air, Pesticides, and Toxics Management Division
Directors
Region IV and VI
Air and Toxics Division Directors
Regions VII, VIII and X
During the two years since the Ntimely and appropriate”
(T&A) guidance was first implemented, two questions on inter-
pretation of the guidance with respect to penalties have
arisen through the Regional evaluation program and routine
contact between SSCD and the Regional Offices. Below are
these questions and SSCD’s responses.
Question 1: Do penalties have to be addressed for T&A
sources that have come into compliance within
120 days?
Answer; Yes. Section IV o T&A guidance states that
penalties are required as an element of the
resolution of the following classes of violations:
Class A SIP violators, sources which violate
Part D, PSD, and NSPS requirements, NESHAPs
violators, sources which violate State or
Federal administrative or judicial schedules,
and repeat violators. As stated in the guidance,

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—2—
this requirement would not be apnlicable to de
minimus violations or violations arising from
force majeure circumstances.
If a State fails to obtain penalties as required,
an EPA action should be brought. However, an
EPA action for penalties in cases where a source
has come into compliance within 120 days may not
be possible in cases requiring an NOV since the
requisite NOV may not have been issued by that
point. If a particular State repeatedly fails
to exact penalties from sources that come into
compliance within 120 days, EPA should remind
the State of the T&A penalty requirement and
consider issuing an NOV earlier than 120 days to
establish a basis for a later penalties only
action. Resource constraints would likely prevent
EPA referrals in every such case but one or more
EPA example” actions should be initiated in
States where penalties are continually ignored.
This would reaffirm the validity of the policy
and continue to exert some pressure on the State
tp began seeking penalties in its own actions.
Question 2: Do penalties have to be addressed for T&A sources
that become EPA—lead (after 120 days) but come
into compliance via stack test or inspection
(i.e., not through an enforcement action)?
Answer: Yes. Again, Section IV of the T&A guidance
specifies when penalties are required, as pointed
out in the previous answer. It is expected that
EPA would issue an NOV on or shortly after day
120 when it takes over the lead from the State.
Due to the limited availability of administrative
enforcement mechanisms, EPA usually initiates a
civil referral after assuming the lead with the
intent of forcing the source to commit to an
expeditious compliance schedule in the form o a
consent decree with civil penalties for past
violations. Where a source comes into compliance
via a stack test or inspection during the develop—
merit of an enforcement action, EPA should consider
initiatation of a penalties only referral. Such
referrals are in conformance with Agency goals,
and serve to both deter other sources from
delaying compliance and help maintain equity.
We recognize that resource limitations and
competing priorities may preclude bringing an
action in every case, but it should at least be
given serious consideration,

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—3-.
Please contact Kevin Rell of my stai f (3 32—2869) if you
have further questions in this matter.
Edward E. Reich

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28

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Early Compliance anci Stipulated Penalties in
VOC Enforcement Cases
(11/21/86)
File at Part E, Document #28

-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
P 21 g
MEMORANDUM
SUBJECT: Early Compliance And Stipulated Penalties in
VOC Enforcement Cases
FROM: John B. Rasnic, Acting Directo
Stationary Source Compliance ision
Office of Air Quality Planning and S andards
Michael S. Alushin ,#f 1. —
Associate Enforcement Counsel
Air Enforcement Division
TO: Air Management Division Directors
Regions I, III, V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII and X
Regional Counsels
Regions I—X
In an August 7, 1986 policy issued by Craig Potter and
Richard Mays (“Policy on the Availability of LST Schedules In
CAA Enforcement Actions”), EPA disallowed any compliance schedules
in consent decrees which gave the source more than three months
after the filing of the complaint to reach compliance through the
application of low solvent technology. Two issues have arisen
concerning the application of this policy which we hope to answer
below.

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—2—
First, consent decrees may contain a clause providing
for complian e through a uteane other than add-on controls
prior to the compliance date for add-on controls. Such a
clause could read “(Source) agrees to attain final compliance
by (date of add-on controls) through the following schedule
for controls, or by some other means at an earlier date.”
The language should be general in order to keep EPA from commit-
ting itself to a compliance plan other than the add—on control
schedule.
Second, even if the source achieves early compliance through
low solvent technology, EPA will not forgive stipulated penalties
which have been incurred as the result of missed milestones in
the schedule for installing add-on controls. However, we will
not require stipulated penalties for the milestones which come
after the date that the source achieved compliance through low
solvent technology. The rationale for this position is that we
view the add-on schedule to be the “real” one in these cases,
and in order for sources to take that schedule seriously, we
need to collect stipulated penalties until the time compliance
actually occurs. Including a clause allowing complete forgive-
ness of stipulated penalties would encourage sources to continue
to gamble on the possible success of low—solvent technology,
precisely the situation that we hoped to end by issuing the
August 7, 1986 policy.
àc: VOC Workgroup Members

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ED Sr
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON D.C. 20460
& pqO%I
APR 2 2 1986
MEMORANDUM
SU3JECT: Guidance: Enforcement Applications of Continuous
Emission Monitoring System Data
FROM: Edward E. Reich, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Michael S. A].ushin , ‘,i
Associate Enforcement Counsel
Air Enforcement Division
TO: Addressees
I. Purpose and Application
The purpose of this guidance is to increase the use of
continuous emission monitoring system (“CEMS”) data in the
Agency’s compliance and enforcement program.1/ EPA intends
in this way to strengthen its efforts to ensure that sources
comply with applicable law on a continuous basis and to
enforce against those that do not.
This document addresses the following three enforcement
applications for CEMS data:
1) the governing regulation specifies CEMS as the
official compliance test method (“Compliance
Method”), e.a , the Reference Method for the
Standards of Performance for New Stationary
Sources (NSPS);
2) the governing regulation specifies some method
other than CEMS as the Compliance Method; and
1/ “CEMS” as used in this guidance principally means instrumental
or manual continuous emission monitoring systems. Furthermore,
as with any other data, “CEMS” as used in this guidance assumes
that EPA confirms that the specific data, normally available
from the source, are reasonably accurate and precise. This
information includes data such as those acquired during
Performance Tests, Performance Specification Tests, and periodic
calibrations of the CEMS. For additional information see 6/.

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—2—
3) the governing regulation concerns proper
operation arid maintenance, recordkeeping,
and other requirements where no test method
would be specified.
This guidance applies to any Federally—enforceable
ré ulation or other requirement governing emissions, operations
and maintenance (“O&M”), and monitoring and reporting pro-
cedures for stationary sources of air pollution. It should be
read together with the attached document entitled “Guidance
Concerning EPA’S Use of Continuous Emission Monitoring Data”
(August 12, 1982).2/
II. Conclusion
EPA can put CEMS data to a variety of important enforcement
uses, irrespective of whether the legal requirement being
enforced specifies CEMS as the Compliance Method. For example,
EPA cart rely on CEMS data alone to issue Findings of Violation
(“FOVs”) and Notices of Violation (“NOVs”).
However, the legal requirement must specify CEMS as the
Compliance Method in order for EPA to rely on CEMS data alone
to refer a case to the Department of Justice (“DOJ”), to
prove a violation of an emission limitation in Federal district
court, or to issue a Notice of Noncompliance (“NON”) under
§120. The same is true if EPA is to rely on CEMS data alone
to issue an administrative order respecting emissions violations
under §113(a).
On technical grounds, CEMS data typically are at least
comparable to Compliance Method and inspection data derived
from equally well—executed and quality—assured monitoring.
CEMS data certainly are more representative of actual continuous
emissions than are some traditional sources of compliance
data, such as emission factors and engineering calculations.
III. Discussion
A. Where the Governing Regulation Specifies CEMS as the
Compliance Method ——
CEMS is the Compliance Method in NSPS Subparts Da (covering
new electric steam generators), P, 0 and R (covering new non-
ferrous smelters), and in certain SIP provisions, Federally-
2/ The 1982 guidance clarifies, among other things, the cir-
cumstances under which CEMS constitutes the applicable Compliance
Method and the role played by CEMS under State Implementation
Plans (“SIPs”) which do not identify any Compliance Method.

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—3—
enforceable compliance orders and permits. For sources covered
by these provisions, EPA can rely on CEMS data alone to take
all of the following enforcement actions:
1. Devise a priority list for inspections and
other investigative activities;
2. Issue NOVs to SIP sources, or FOVs to non—SIP
sources ;3/
3. Document that a violation has continued 30 days
beyond the date of the NOV in SIP cases;
4. Quantify the severity of violations for penalty
calculation purposes, in negotiation or litigation;
5. Issue an administrative order under §113(a);
6. Issue a §120 NON;
7. Formally refer a case to the DOJ for filing as
a civil or criminal action; and
8. Prove a violation in civil or criminal litigation
in Federal district court.
B. Where the Governing Regulation Specifies Some
Method Other Than CEMS as the Compliance Method
Here, CEMS data still can be very useful in initiating
and supporting cases alleging emission violations. The
Agency can rely on CEMS data alone to take any of the first
four enforcement actions listed at Section 111(A) above.
For example, EPA can use CEMS data standing alone as the
basis for issuing an NOV or FOV for violation of an emission
limitation.4/ Proof of the existance of a violation of an
emission limit for purposes of a compliance order or litigation
virtually always must be based on Compliance Method data.
However, issuance of an NOV or FOV requires a less rigorous
evidentiary showing.
3/ While some Regional Offices do issue FOVs, it should be
noted that EPA has no legal obligation to do so.
4/ The Clean Pir Act expressly permits the Administrator to
issue an NOV “on the basis of any information available to
him ... that any person is in violation of any requirement of
an applicable implementation plan”. 42 usc S7413(a)(1).

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—4—
If after issuance, the source fails to come into compliance
with the emission regulation, EPA normally must acquire Com-
pliance Method evidence before it takes any of the last four
enforcement actions listed at Section 111(A) above.5/ However,
a second NOV is not necessary under these circumstances,
assuming that there is evidence that a sufficient relationship
e 1sts between the CEMSdata and the Compliance Method data.
In addition, CEMS data also can be used in support of
emission violation cases to quantify emission levels and to
document that a violation continued 30 days beyond the NOV
issuance date. While EPA is frequently prepared to argue
that any particular day should be considered a day of violation
in the absence of emission data 2 Se, CEMS data should
serve to strengthen the government’s case.
We believe that courts will generally accept non—Compliance
Method CEMS data as an indicator of the magnitude and duration
of emission violations because they represent emissions
comparably to Compliance Method data.6/
5/ However, in most circumstances a Regional Office may rely
on non—Compliance Method CEMS data alone to support a referral
where it constitutes a pre—negotiated settlement agreement,
referred for the single purpose of lodging with the court.
The exception would be in situations where adverse public
comments on the decree may be expected, and that could lead
the government not to request the court to enter the decree.
In such exceptional circumstances, the referral must be based
upon Compliance Method data.
6/ We assume that CEMS and Compliance Method data will be
reliable and comparable to each other. This assumption is
based principally upon three facts. First, the Agency requires
sources to acquire and report reliable data (whether CE 4S or
Compliance Method). With respect to CEMS, this is accomplished
by requiring sources to: (a) purchase, install and operate
the CEllS in accordance with specific location criteria and
performance standards; (b) demonstrate achievement of the
Performance Specifications by comparing the CEMS and the Com-
pliance Method results; (C) implement (at least daily)
calibrations and O&M procedures; and (d) operate the CEMS
during all Performance Tests. (If doubts remain, EPA can
require additional comparative tests using S114.)
Second, the Agency has acquired data from numerous sources.
Such data document the fact that sources are able to, and
generally do report reliable and comparable data to agencies.
Such documentation includes data acquired: (a) during the
(footnote 6/ continued on page 5)

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29

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pplication of ugust 7, 1986 Policy on LST Schedules
in Consent Decrees
(12/05/86)
File at Part E, Document #29

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IO
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
1 •’ L , 10 it
OffiCE O
DEC — 5 986 All
MFM( R DfJM
SUBJECT: A pplication of August 7, 1986 Policy on LST Schedules
in• Consent Decrees
4 Z
FROM: ,Steve 9itte, Chief.
Reaional Procrams Section
TO: VOC Comoliance Workgroup
I would like to share with you an example of how the Auqus 7
LST policy was apnlie to a recent Region V consent decree. A’
source that coats the inside.of metal drums plans to comply
with the V.OC tP by usina low solvent coatings in combination
with a new application process. The proposed consent decree
s hedule allows more than three months to install and adjust
the new aoplication equipment.
The source has two coating lines which have been in
violation of the standard. EPA issued a notice of violation on
July 29, 1983 and filed the cornnlaint against the source on
August 19, 1985. In July 1986 the source installed paint
heaters and new apolicators on one coating line and conducted
tests which demonstrated that this technology could be used to
aoolv low solvent coatings to the drum interiors. However, it
took more than three months to comnlete the Installation of the
new equipi e.nt and make, the necessary adjustments. The source
has proposed a schedule for installing the oaint heaters and
new applicators on the second coating line which would bring
the seco coating line into compliance by February 28, 1986.
The question presented was whether this proposed schedule
violates the August 7 LST Policy.
r .
i I
f - f l

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-2—
The August 7 LST Policy states that LST schedules can
orovide no more than three months from the date of filing of
the complaint for a source to demonstrate comnliance using
complying coatings. The intent of the policy is to include the
time to make process chances within the three months allowed to
find and use conwlyinc coatinqs. As you will recall, we reaF-
firmed this intent at our recent tlanta meeting.
9owever, given the facts of this case, SSCD and OECM—AET)
management decided that the proposed longer comoliance schedule
would be acceptable, provided that it contains interim milestones
and stioulated penalties for failure to meet them. The decisive
fact which led to this result was that the source had already
demonstrated that the process changes, in cort unction with the
low solvent coatings, would work and would allow the source to
comply with the anplicab].e SI limit.
In thIs case, the source has conclusively demonstrated that
it can comply with the SIP by using LST and a process change
both sooner and at less cost than by installing nollutiort
control eguipment. Under these circumstances, it would be
unreasonable for EPA to insist that the source install inciner —
tors or carbon adsorotion systems instead of installing oaint
heaters and associated new coating anolication equipment. SUC
a nosition would be indefensible at trial.
This result is consistent with the nrimary nuroose of the
LST policy which is to require sources to comply as exoeditiously
as oossible by the use of demonstrated technoloqy.
If you have any cuestions olease call me at 382—2829 or
Tracy Gioson in r)ECM—AEr) at 3 2—2842. Please share this
memorandum with your management and Regional Counsel.
cc: John Rasnic, SCT)
Mike Alushin, OECM—AEt)
Tracy Gipson, OECM-AED

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30

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Clean Air Act Stationary Source Civil Penalty Policy
( O35, 8-7-4 ‘: ‘T.’
Appendix I: Penalty Policy for Violations of Permit
Requirements
Appendix II: Vinyl Chloride Civil Penalty Policy
Appendix III: Asbestos Demolition and Renovation
Penalty Policy
Appendix IV: Volatile Organic Compounds Penalty
Policy
Appendix V: Air Civil Penalty Worksheet
Appendix VI: Volatile Hazardous Air Pollutant Penalty
Policy
File at Part E, Document #30

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OCT 25 1991
MEMORANDUM
SUBJECT: Clean Air Act Stationary so rce Civil Penalty Policy
FROM: William G. Rosenberg IJiI’IV
Assistant AdministratoY th Air and Radiation
Edward E. Reich ‘C
Acting Assistant Administrator for Enforcement
TO: Addressees
Attached is the final revised Clean Air Act Stationary
Source Civil Penalty Policy. This policy is immediately
effective in all civil enforcement actions, administrative and
judicial, in which a penalty offer has not yet been made to the
defendant. Thank you for your comments on the draft policy.
Many Regions commented that some mitigation of the penalty
amount pled in an administrative complaint should be allowed in
appropriate circumstances. The policy now authorizes the gravity
component of the penalty pled in administrative complaints to be
mitigated by up to ten percent for degree of cooperation where
consistent with the discussion of that factor at Section
II.B.4.b. In all cases, administrative or judicial, total
mitigation for degree of cooperation may not exceed thirty
percent.
Many Regions commented that the increases in several of the
gravity component factors (specifically, the size of the
violator, the length of violation, and level of violation
figures) wer not appropriate and could prevent cases from being
pursued administratively because the resulting penalty would be
over the $200,000 statutory cap. The penalty increases proposed
in the draft revision have been retained because it was felt that
an increase in penalty amounts was necessary due to inflation
since 1987.
Several conunenters suggested that the method for calculating
inultipJ,e violations of the same reporting requirement discussed
on page 14 was inappropriate and a separate penalty should be
assessed for each violation. This coiniient was not incorporated
out of concern that this approach would lead to unrealistically
high penalties for notice violations.

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—2—
A section describing the Agency’s policy regarding
apportionment of the penalty among multiple defendants was added
in respo! s to a comment. It is based on the position reflected
in the Asbestos Demolition and Renovation Penalty Policy,
Appendix III.
Most conunenters were supportive of developing a new appendix
for calculating the economic benefit of noncompliance for notice,
recordkeeping, reporting, testing and compliance certification
violations. OAR and OE will be developing such an appendix in
the near future.
One commenter suggested that the adjustment factor for
history of noncompliance should consider violations of all
environmental statutes enforced by the Agency. The policy has
been revised to require the litigation team to investigate and
consider violations of all environmental statutes enforced by the
Agency. Investigation of this multi-media compliance history may
be done through Integrated Data for Enforcement Analysis
developed by OE. OE has trained staff in all ten Regional
Counsel offices on how to use this capability.
A suggestion was made that the policy allow offsets for
penalties paid in state or local enforcement actions and in
citizen suits for the same violations. This comment has been
incorporated and the policy now gives the litigation team
discretion to offset these penalties from the preliminary
deterrence amount.
Several commenters suggested the policy should deal more
specifically with the situation of defendants which are
municipalities or government-owned, contractor-operated
facilities. These are both issues which affect all media and
will be considered by the Office of Enforcement for media—wide
guidance.
This policy replaces the March 25, 1987 revision to the
Clean Air Act Stationary Source Civil Penalty Policy and should
be filed at Part E, Document # 30 of the Clean Air Act
Compliance/Enforcement Policy Compendium. All appendixes to the
policy remain in effect. If you have any questions regarding
this policy, contact Scott Throwe, Stationary Source Compliance
Division of OAR, FTS 398—8699 or (703) 308—8699, or Elise
Hoerath, Air Enforcement Division of OE, FTS or (202) 260-2843.
Attachment
Addressees: Regional Administrators, Regions I - X
Regional Counsels, Regions I - X

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—3—
Air Management Division Director
Region I
Air and Waste Management Division Director
Region II
Air, Toxics and Radiation Management Division
Director
Region III
Air, Pesticides and Toxics Management Division
Director
Region IV
Air and Radiation Division Director
Region V
Air, Pesticides and Toxics Division Director
Region VI
Air and Toxics Division Director
Regions VII, VIII, IX and X
Scott C. Fulton, Director
Office of Civil Enforcement
Michael S. Alushin, Enforcement Counsel
Air Enforcement Division
Frank M. Covington, Director
NEIC
John S. Seitz, Director
Office of Air Quality Planning and Standards
John Rasnic, Director
Stationary Source Compliance Division
Bruce Rothrock, OCAPO
Robert Heiss, OCAPO
Jonathan Libber, OCAPO
John Cruden, Chief
Environmental Enforcement Section
U.S. Department of Justice
Bill Becker, STAPPA-ALAPCO

-------

-------
Q S7
UNITED STATES ENVIRONMENTAL PROTECT QN AGENCY
____ WA5riif iGTON DC 2 46G

4 PQO
JAN I 7 1992
MEMORANDUM
SUBJECT: Clarifications to the October 25, 1991 Clean Air Act
Stationary Source Civil P pa-tty Poliey
FROM: John B. Rasnic,
Stationary Source Compli rtce Divis ft 7’
Office of Air and Radiation
i i /I’!
Michael S. Alushin, Enforcement Counse 1’
Air Enforcement Division (1
Office of Enforcement
TO: Addressees
As a result of the many comments artd suggestions received
during the Administrative Enforcement Training in Chicago on
November 5—6, 1991, we would like to clarify several issues
regarding the October 25, 1991 Clean Air Act Stationary Source
Civil Penalty Policy. In addition to the addressees, we are
. — — —— — —— —, L. . . .. . ... .
L. rL.J L L — — — _—-— Sc A..
attended the training in Chicago.
We wcu1 like to clarify that the toxicity of pollutant and
sensitivity of the environment figures of the gravity component
apply only to violations of emissions standards and to work
practice or technology standards that are servingS as e i ns
standards. In addition, the length of violation figure of the
gravity component is based on the number of actual days of
violation, not calendar months. The number of actual days of
v oLarion snoula. oe counted and divided by thirty to deterinir.e t .e
number of months. Arty portion of a thirty day period snould be
counted as another cnth. In addition, any days over a calendar
year should be counted as another month (i.e., 368 days should be
counted as 13 months)
Several Regions estioned which enforcement forum would be
appropriate where a portion of the violation occurred over twelve
— ..—.-‘— — — —— — — — — — — — — 4
— ._c a .....
determining whether the action may be pursued adxninistrativel ,
EPA may never drop viable causes of action. However, if some
the a. e ed 1ati:r. s rc:ur:ed aver 12 cnths rir:
filing of the complaint, the portion of those violations which
occurred over 12 months prior to filing of the complaint may be

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6
— —
disregarded arid the case may be pursued administraciveiy with the
following qualification. This cart only be done where rto causes of
action are dropped and the resuitin preli inar eter:e ce
(PDA) is at least e A calcu ated w th nt1re—
Vion inc e .
One Region suggested that Headquarters adopt an air-specific
Supplemental Environmental Projects (SE?) policy. Both the
Stationary Source Compliance Division (SSCD) and Air Enforcemenc
Division (AED) will work next year to develop such a policy which
will include examples of appropriate air SEPs. Supplemental
Environmental Projects which are appropriate under the current
Office of Enforcement guidance may be included in consent
agreements and final orders (CAFOs) in administrative actions.
As one Region suggested, this could be• done by conditionally
remitting a portion of art assessed penalty by requiring in the
CPLFO that the defendant pay that portion offset by the SEP unless
all the actions required by the SEP are performed by a certain
date. The burden is always on the defendant to establish that the
SEP has been fully complied with. Actions which the respondent
must take to come into compliance can not be addressed in the CAE’O
but must be addressed through 113(a) administrative compliance
orders or a civil judicial action under 113(b) in accordance with
the October 29, 199]. “Guidance on Choosing the Appropriate Forum
in Clean Air Act Stationary Source Civil Enforcement.”
The penalty policy requires that members of the litigation
team are respcnsible for ensuzing their m nagement agrees with an’t
adjustment to the ?DA. We would like to emphasize that each
member of the litigation team must keep formal documentation of
management concurrence in his or her case file. The dcc ertt ticr .
of management concurrence must include a signature on the penalty
calculation worksheet (or similar document) by the first line
supe:vi cr of the e bers.
Finally, attached are three replacement pages which correct
Example 3. The original example incorrectly left out a length of
violation figure for the work practice violation. The appropriate
length of violation figure should always be assessed for each
violation. -
Several suggestions which were made have not yet been adopted
but are under cansideration. We wjll evaluate the ir letentation
of the revised penalty policy after one yean. To the extent
changes in the policy are warranted, we will reconsider the
t— P i P t i vn
_-.—-.— — ,
Several Regions disagreed with Example 1 in the policy
beca.u.se it orly cal u2.ates the gravity component once even though
the emissions standard applies to each individual boiler and was
violated at several boilers at the same facility. The Regions

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—3—
believed the gravity component should be calculated separately for
each violat.i at each boiler. SSCD and AED have decided to
maintain the csiticr. that in instances where a particular
regulation applies to each individual emissions unit and the
standard is violated at several emissions units, the gravity
component is calculated only once for the entire facility.
The main reason for this is a concern that calculating for each
emissions unit separately would lead to unrealistically high
penalties. Nonetheless, several factors will result in a higher
penalty for these multiple unit violations. The economic benefit
as calculated by BEN should be significantly higher if the
standard is being violated at more than one emissions unit.
The level of violation figure of the gravity component will also
generally be higher if the standard is being violated at more than
one emissions unit. Of course, the violation at each boiler would
be separately alleged in the complaint.
One Region suggested that the policy should allow the
litigation team to mitigate the gravity component by as much as
15% for degree of cooperation anytime the defendant is willing to
settle. The penalty policy still takes the position that EPA
expects every source to negotiate in good faith and come into
compliance expeditiously and doing so does not justify mitigation.
The litigation team still has room to negotiate under the policy.
The penalty plead in the administrative complaint is generally the
unmitigated preliminary deterrence amount. Therefore, any
mitigation justified under the policy may take place during
negotiations to reach a settlement. Also, the penalty plead in
the administrative complaint is to be based on the most aggressive
assumptions supported by the facts available at that time
concerning such factors as length of violation and level of
violation. These factors may be recalculated if defendants
demonstrate that they are inaccurate.
If you. have any questions about these changes, please contact
us or Scott Throwe in SSCD at FTS 678—8699 or (703) 308—8699 or
Elise Hoerath. in AED at FTS 260—2843 or (202) 260—2843.
Att achxnent
Addressees: Regional Administrators, Regions I — X
Regional Counsels, Regions I — X
Air Management Division Director
Region I
Air and waste Management Division Director
Region II

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—4—
Air, Toxics and Radiation Management Division
Director
Region III
Air, Pesticides, and Toxics Management Division
Director
Region IV
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Division Director
Region VI
Air and. Toxics Division Director
Regions VII, vi ii, IX and X
Bruce Rothrock, OCAPO
Robert Heiss, OCAPO
Jonathan Libber, OCAPO
John Cruden, Chief
Environmental Enforcement Section
U.S. Department of Justice
Bill Becker
STAPPA-ALAPC
cc: Scott S. Fulton
Acting Deputy Ass 1st an: Adr inis::a:o:
Off ice of Enforcement
Robert Van Huevelen
Acting Director of Civil Enforcement
jOhfl Seitz, Director
Office of Air Quality Planning and Standards

-------
CLEAN AIR ACT
STATIONARY SOURCE
CIVIL PENALTY POLICY

-------
Table of Contents
I. Introduction..... 1
II. PreliniinaryDeterrenceAmount 4
A. Economic Benefit Component 4
1. Benefit from delayed costs 4
2. Benefit from avoided costs 5
3. Adjusting the economic benefit component 6
a. Economic benefit component involves
insignificant amount 7
b. Compelling public concerns 7
c. Concurrent Section 120 administrative
action 8
B. Gravity Component 8
1. Actual or possible harm .......................l0
a. Level of violation
b. Toxicity of the pollutant
c. Sensitivity of environment
d. Length of time of violation
2. Importance to regulatory scheme .... 12
3. Sizeof violator 14
4. Adjusting the Gravity Component 15
a. Degree of Willfulness or Negligence 16
b. Degree of Cooperation 16
c. History of Noncompliance 17
d. Environmental Damage 19
III. LitigationRisk 19
I V . Abi 11 ty to Pay 2 0
V. Offsetting Penalties Paid to State and Local Governments
or Citizen Groups for the Same Violations 21
VI. Supplemental Environmental Projects 22
VII. Calculating a Penalty in Cases with More Than
One Violation 22

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—ii—
VIII. Apportionment of the Penalty Among Multiple
De eEdants 23
IX. Examples 24
X. Conclusion 31
XI. Appendices
I. Permit Penalty Policy
II. Vinyl Chloride Penalty Policy
III. Asbestos Penalty Policy
IV. VOC Penalty Policy
V. Air Civil Penalty Worksheet
VI. Volatile Hazardous Air Pollutant Penalty Policy
VII. Residential Wood Heaters Penalty Policy
VIII. Stratospheric Ozone Penalty Policy

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CLEAN AIR ACT STATIONARY SOURCE CIVIL PENALTY POLICY
I. INTRODUCTION
Section 113(b) of the Clean Air Act, 42 U.S.C. § 7413(b),
provides the Administrator of EPA with the authority to commence a
civil action against certain violators to recover a civil penalty
of up to $25,000 per day per violation. Since July 8, 1980, EPA
has sought the assessment of civil penalties for Clean Air Act
violations under Section 113(b) based on the considerations listed
in the statute and the guidance provided in the Civil Penalty
Policy issued on that date.
On February 16, 1984, EPA issued the Policyon Civil Penalties
(GM-21) and a Framework for Statute-Specific Approaches to Penalty
Assessments (GM-22). The Policy focuses on the general philosophy
behind the penalty program. The Framework provides guidance to
each program on how to develop medium-specific penalty policies.
The Air Enforcement program followed the Policy and the Framework
in drafting the Clean Air Act Stationary Source Civil Penalty
Policy, which was issued on September 12, 1984, and revised March
25, 1987. This policy amends the March 25, 1987 revision,
incorporating EPA’S further experience in calculating and
negotiating penalties. This guidance document governs only
stationary source violations of the Clean Air Act. All violations
of Title II of the Act are governed by separate guidance.
The Act was amended on November 15, 1990, providing the
Administrator with the authority to issue administrative penalty
orders in Section 113(d), 42 U.S.C. § 7413(d). These penalty
orders may assess penalties of up to $25,000 per day of violation
and are generally authorized in cases where the penalty sought is
not over $200,000 and the first alleged date of violation occurred
no more than 12 months prior to initiation of the administrative
action. In an effort to provide consistent application of the
Agency’s civil penalty authorities, this penalty policy will serve
as the civil penalty guidance used in calculating administrative
penalties under Section 113(d) of the Act and will be used in
calculating a minimum settlement amount in civil judicial cases
brought under.Section 113(b) of the Act.
In calculating the penalty amount which should be sought in an
administrative complaint, the economic benefit of noncompliance and
a gravity component should be calculated under this penalty policy
using the most aggressive assumptions supportable. Pleadings will
always include the full economy benefit component. As a general
rule, the gravity component of the penalty plead in administrative
complaints may not be mitigated. However, the gravity component
portion of the plead penalty may be mitigated by up to ten per cent
solely for degree of cooperation. Any mitigation for this factor
must be justified under Section II.B.4.b. of this Policy. The
total mitigation for good faith efforts to comply for purpose of

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—2—
determining a settlement amount may never exceed thirty per cent.
App1ica .le adjustment factors which aggravate the penalty must be
included in the amount plead in the administrative complaint.
Where key financial or cost figures are not available, for example
those costs involved in calculating the BEN calculation, the
highest figures supportable should be used.
This policy will ensure the penalty plead in the complaint is
never lower than any revised penalty calculated later based on more
detailed information. It will also encourage sources to provide
the litigation team with the more accurate cost or financial
information. The penalty may then be recalculated during
negotiations where justified under this policy to reflect any
appropriate adjustment factors. In administrative cases, where the
penalty is recalculated based upon information received in
negotiations or the prehearing exchange, the administrative
complaint must be amended to reflect the new amount if the case is
going to or expected to go to hearing. This will ensure the
complaint reflects the amount the government is prepared to justify
at the hearing. This pleading policy also fulfills the obligation
of 40 C.F.R. § 22.14(a)(5) that all administrative complaints
include “a statement explaining the reasoning behind the proposed
penalty.”
This policy reflects the factors enumerated in Section 113(e)
that the court (in Section 113(b) actions) and the Administrator
(in Section 113(d) actions) shall take into consideration in the
assessment of any penalty. These factors include: the size of
the business, the economic impact of the penalty on the business,
the violator’s full compliance history and good faith efforts to
comply, the duration of the violation, payment by the violator of
penalties assessed for the same violation, the economic benefit of
noncompliance, the seriousness of the violation and such other
factors as justice may require.
This document is not meant to control the penalty amount
requested in judicial actions to enforce existing consent decrees.’
In judicial cases, the use of this guidance is limited to pre-trial
settlement o f enforcement actions. In a trial, government
attorneys may find it relevant and helpful to introduce a penalty
calculated under this policy, as a point of reference in a demand
for penalties. However, once a case goes to trial, government
attorneys should demand a larger penalty than the minimum
settlement figure as calculated under the policy.
‘ In these actions, EPA will normally seek the penalty amount
dictated by the stipulated penalty provisions of the consent
decree. If a consent decree contains no stipulated penalty
provisions, the case development team should propose penalties
suitable to vindicate the authority of the Court.

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—3—
The general policy applies to most Clean Air Act violations.
There are..., some types of violations, however, that have
characteristics which make the use of the general policy
inappropriate. These are treated in separate guidance, included as
appendices. Appendix ,I covers violations of PSD/NSR permit
requirements. Appendix II deals with the gravity component for
vinyl chloride NESHAP violations. Appendix III covers the economic
benefit and gravity components for asbestos NESHAP demolition and
renovation violations. The general policy applies to violations of
volatile organic compound regulations where the method of
compliance involves installation of control equipment. Separate
guidance is provided for VOC violators which comply through
reformulation (Appendix IV). Appendix VI deals with the gravity
component for volatile hazardous air pollutants violations.
Appendix VII covers violations of the residential wood heaters NSPS
regulations. Violations of the regulations to protect
stratospheric ozone are covered in Appendix VIII. These appendixes
specify how the gravity component and/or economic benefit
components will be calculated for these types of violations.
Adjustment, aggravation or mitigation, of penalties calculated
under any of the appendixes is governed by this general penalty
policy.
This penalty policy contains two components. First, it
describes how to achieve the goal of deterrence through a penalty
that removes the economic benefit of roncompliance and reflects the
gravity of the violation. Second, it discusses adjustment factors
applied so that a fair and equitable penalty will result. The
litigation team 2 should calculate the full economic benefit and
gravity components and then decide whether any of the adjustment
factors applicable to either component are appropriate. The final
penalty obtained should never be lower than the penalty calculated
under this policy taking into account all appropriate adjustment
factors including litigation risk and inability to pay.
All consent agreements should state that penalties paid
pursuant to this penalty pol.cy are not deductible for federal tax
purposes under 28 U.S.C. § 1L2(f).
2 With respect to civil judicial cases, the litigation team
will consist of the Assistant Regional Counsel, the Office of
Enforcement attorney, the Assistant United States Attorney, the
Department of Justice attorney from the Environmental Enforcement
Section, and EPA technical professionals assigned to the case.
With respect to administrative cases, the litigation team will
generally consist of the EPA technical professional and Assistant
Regional Counsel assigned to the case. The recommendation of the
litigation team must be unanimous. If a unanimous position cannot
be reached, the matter should be escalated and a decision made by
EPA and the Department of Justice managers, as required.

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The procedures set out in this document are intended solely
for the gu.idance 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.
This penalty policy is effective immediately with respect to
all cases in which the first penalty offer has not yet been
transmitted to the opposing party.
II. THE PRELIMINARY DETERRENCE AMOUNT
The February 16, 1984, Policy on Civil. Penalties establishes
deterrence as an important goal of penalty assessment. More
specifically, it says that any penalty should, at a minimum , remove
any significant economic benefit resulting from noncompliance. In
addition, it should include an amount beyond recovery of the
economic benefit to reflect the seriousness of the violation. That
portion of the penalty which recovers the economic benefit of
noncompliance is referred to as the “economic benefit component;”
that part of the penalty which reflects the seriousness of the
violation is referred to as the “gravity component.” When
combined, these two components yield the “preliminary deterrence
amount.”
This section provides guidelines for calculating the economic
benefit component and the gravity component. It will also discuss
the limited circumstances which justify adjusting either component.
A. THE ECONOMIC BENEFIT COMPONENT
In order to ensure that penalties recover any significant
economic benefit of noncompliance, it is necessary to have reliable
methods to calculate that benefit. The existence of reliable
methods also strengthens the Agency’s position in both litigation
and negotiation. This section sets out guidelines for coluputing
the economic benefit component. It first addresses costs which are
delayed by noncompliance. Then it addresses costs which are
avoided compl tely by noncompliance. It also identifies issues to
be considered when computing the economic benefit component for
those violations where the benefit of noncompliance results from
factors other than cost savings. The section concludes with a
discussion of the limited circumstances where the economic benefit
component may be mitigated.
1. Benefit from delayed costs
In many instances, the economic advantage to be derived from
noncompliance is the ability to delay making the expenditures
necessary to achieve compliance. For example, a facility which

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fails to install a scrubber will eventually have to spend the money
needed tpi.nstall the scrubber in order to achieve compliance.
But, by deferring these capital costs until EPA or a State takes an
enforcement action, that facility has achieved an economic benefit.
Among the types of violations which may result in savings from
deferred cost are the following:
• Failure to install equipment needed to meet emission
control standards.
• Failure to effect process changes needed to reduce
pollution.
• Failure to test where the test still must be performed.
Failure to install required monitoring equipment.
The economic benefit of delayed compliance should be computed
using the “Methodology for Computing the Economic Benefit of
Noncompliance,” which is Technical Appendix A of the BEN User’s
Manual . This document provides a method for computing the economic
benefit of noncompliance based on a detailed economic analysis.
The method is a refined version of the method used in the previous
Civil Penalty Policy issued July 8, 1980, for the Clean Water Act
and the Clean Air Act. BEN is a computer program available to the
Regions for performing the analysis. Questions concc?rning the BEN
model should be directed to the Program Development and Training
Branch in the Office of Enforcement, FTS 475-6777.
2. Benefit from avoided costs
Many types of violations enable a violator to avoid
permanently certain costs associated with compliance. These
include cost savings for:
Disconnecting or failing to properly operate and maintain
existing pollution control equipment (or other equipment
if.it affects pollution control).
• Failure to employ a sufficient number of adequately
trained staff.
• Failure to establish or follow precautionary methods
required by regulations or permits.
• Removal of pollution equipment resulting in process,
operational, or maintenance savings.
• Failure to conduct a test which is no longer required.

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Disconnecting or failing to properly operate and maintain
-required monitoring equipment.
Operation and maintenance of equipment that the violator
failed to install.
The benefit from avoided costs must also be computed using
methodology in Technical Appendix A of the BEN User’s Manual .
The benefit from delayed and avoided costs is calculated
together, using the BEN computer program, to arrive at an amount
equal to the economic benefit of noncompliance for the period from
the first provable date of violation until the date of compliance.
As rioted above, the BEN model may be used to calculate only
the economic benefit accruing to a violator through delay or
avoidance of the costs of complying with applicable requirements of
the Clean Air Act and its implementing regulations. There are
instances in which the BEN methodology either cannot compute or
will fail to capture the actual economic benefit of noncompliance.
In those instances, it will be appropriate for the Agency to
include in its penalty analysis a calculation of the economic
benefit in a manner other than that provided f or in the BEN
methodology.
In some instances this may include calculating and including
in the economic benefit component profits from illegal activities.
An example would be a source operating without a preconstructiori
review permit under PSD/NSR regulations or without an operating
permit under Title V. In such a case, an additional calculation
would be performed to determine the present value of these illegal
profits which would be added to the BEN calculation for the total
economic benefit component. Care must be taken to account for the
preassessed delayed or avoided costs included in the BEN
calculation when calculating illegal profits. Otherwise, these
costs could be assessed twice. The delayed or avoided costs
already accounted for in the BEN calculation should be subtracted
from any calculation of illegal profits.
3. Adiustina the Economic Benefit Component
As noted above, settling for an amount which does not recover
the economic benefit of noncompliance can encourage people to wait
until EPA or the State begins an enforcement action before
complying. For this reason, it is general Agency policy not to
adjust or mitigate this amount. There are three general
circumstances (described below) in which mitigating the economic
benefit component may be appropriate. However, in any individual
case where the Agency decides to mitigate the economic benefit
component, the litigation team must detail those reasons in the
case file and in any memoranda accompanying the settlement.

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Following are the limited circumstances in which EPA can
mitigate the economic benefit component of the penalty:
a. Economic benefit component involves insignificant
amount
Assessing the economic benefit component and subsequent
negotiations will often represent a substantial commitment of
resources. Such a commitment may not be warranted in cases where
the magnitude of the economic benefit component is not likely to be
significant because it is not likely to have substantial financial
impact on the violator. For this reason, the litigation team has
the discretion not to seek the economic benefit component where it
is less than $5,000. In exercising that discretion, the litigation
team should consider the following factors:
Impact on violator : The likelihood that assessing the
economic benefit component as part of the penalty will
have a noticeable effect on the violator’s competitive
position or overall profits. If no such effect appears
likely, the benefit component should probably not be
pursued.
The size of the gravity component : If the gravity
component is relatively small, it may not provide a
sufficient deterrent, by itself, to achieve the goals of
this policy. In situations like this, the litigation
team should insist on including the economic benefit
component in order to develop an adequate penalty.
b. Compelling public concerns
The Agency recognizes that there may be some instances where
there are compelling public concerns that would not be served by
taking a case to trial. In such instances, it may become necessary
to consider mitigating the economic benefit component. This may be
done only if it is absolutely necessary to preserve the
countervailing public interests. Such settlement might be
appropriate where the following circumstances occur:
The- economic benefit component may be mitigated where
recovery would result in plant closings, bankruptcy, or
other extreme financial burden, and there is an important
public interest in allowing the firm to continue in
business. Alternative payment plans, such as installment
payments with interest, should be fully explored before
resorting to this option. Otherwise, the Agency will
give the perception that shirking one’s environmental
responsibilities is a way to keep a failing enterprise
afloat. This exemption does not apply to situations
where the plant was likely to close anyway, or where

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there is a likelihood of continued harmful noncompliance.
The economic benefit component may also be mitigated in
enforcement actions against nonprofit public entities,
such as municipalities and publicly—owned utilities,
where assessment threatens to disrupt continued provision
of essential public services.
c. Concurrent Section 120 administrative action
EPA will not usually seek to recover the economic benefit of
noncompliance from one violation under both a Section 113(b) civil
judicial action or 113(d) civil administrative action and a Section
120 action. Therefore, if a Section 120 administrative action is
pending or has been concluded against a source for a particular
violation and an administrative or judicial penalty settlement
amount is being calculated for the same violation, the economic
benefit component need not include the period of noncompliance
covered by the Section 120 administrative action.
In these cases, although the Agency will not usually seek
double recovery, the litigation team should not automatically
mitigate the economic benefit component by the amount assessed in
the Section 120 administrative action. The Clean Air Act allows
dual recovery of the economic benefit, and so each case must be
considered on its individual merits. The Agency may mitigate the
economic benefit component in the administrative or judicial action
if the litigation team determines such a settlement is equitable
and justifiable. The litigation team should consider in making
this decision primarily whether the penalty calculated without the
Section 120 noncompliance penalty is a sufficient deterrent.
B. THE GRAVITY COMPONENT
As noted above, the Policy on Civil Penalties specifies that
a penalty, to achieve deterrence, should recover any economic
benefit of noncompliance, and should also include an amount
reflecting the seriousness of the violation. Section 113(e)
instructs co iarts to take into consideration in setting the
appropriate penalty amount several factors including the size of
the business, the duration of the violation, and the seriousness of
the violation. These factors are reflected in the “gravity
component.” This section of the policy establishes an approach to
quantifying the gravity component.
Assigning a dollar figure to represent the gravity of the
violation is a process which must, of necessity, involve the
consideration of a variety of factors and circumstances. Linking
the dollar amount of the gravity component to these objective
factors is a useful way of insuring that violations of
approximately equal seriousness are treated the same way. These

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objective factors are designed to reflect those listed in Section
113(e) o# the Act.
The specific objective factors in this civil penalty policy
designed to measure the seriousness of the violation and reflect
the considerations listed in the Clean Air Act are as follows:
• Actual or possible harm : This factor focuses on whether
(and to what extent) the activity of the defendant
actually resulted or was likely to result in the emission
of a pollutant in violation of the level allowed by an
applicable State Implementation Plan, federal regulation
or permit.
• portance to the regulatorv scheme : This factor focuses
on the importance of the requirement to achieving the
goals of the Clean Air Act and its implementing
regulations. For example, the NSPS regulations require
owners and operators of new sources to conduct emissions
testing and report the results within a certain time
after start-up. If a source owner or operator does not
report the test results, EPA would have no way of knowing
whether that source is complying with NSPS emissions
limits.
• Size of violator : The gravity component should be
increased, in proportion to the size of the violator’s
business.
The assessment of the first gravity component factor listed
above, actual or possible harm arising from a violation, is a
complex matter. For purposes of determining how serious a given
violation is, it is possible to distinguish violations based on
certain considerations, including the following:
• Amount of pollutant : Adjustments based on the amount of
the pollutant emitted are appropriate.
• Sensitivity of the environment : This factor focuses on
where the violation occurred. For example, excessive
emissions in a nonattainment area are usually more
serious than excessive emissions in an attainment area.
• Toxicity of the pollutant : Violations involving toxic
pollutants regulated by a National Emissions Standard for
Hazardous Air Pollutants (NESHAP) or listed under Section
ll2(b)(l) of the Act are more serious and should result
in larger penalties.

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• The 1en th of time a violation continues : Generally, the
longer a violation continues uncorrected, the greater the
risk of harm.
• Size of violator : A corporation’s size is indicated by
its stockholders’ equity or “net worth.” This value,
which is calculated by adding the value of capital stock,
capital surplus, and accumulated retained earnings,
corresponds to the entry for “worth” in the Dun and
Bradstreet reports for publicly traded corporations. The
simpler bookkeeping methods employed by sole
proprietorships and partnerships allow determination of
their size on the basis of net current assets. Net
current assets are calculated by subtracting current
liabilities from current assets.
The following dollar amounts assigned to each factor should be
added together to arrive at the total gravity component:
1. Actual or possible harm
a. Level of violation
Percent Above Standard 3 Dollar Amount
1 — 30% $ 5,000
33. — 60% 10,000
61 — 90% 15,000
91 — 120% 20,000
121 — 150% 25,000
151 — 180% 30,000
181 — 210% 35,000
211 — 240% 40,000
241 — 270% 45,000
271 — 300% 50,000
over 300% 50,000 ÷ $5,000 for each 30% or fraction
of 30% increment above the standard
This factor should be used only for violations of emissions
standards. ordinarily the highest documented level of violation
should be used. If that level, in the opinion of the litigation
team, is not representative of the period of violation, then a more
representative level of violation may be used. This figure should
be assessed for each emissions violation. For example, if a source
which emits particulate matter is subject to both an opacity
standard and a mass emission standard and is in violation of both
standards, this figure should be assessed for both violations.
Compliance S equivalent to 0% above the emission standard.

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b. Toxicity of the pollutant
Violations of NESHAPs emission standards not handled by a
separate appendix and nort—NESHAP emission violations involving
pollutants listed in Section 112(b)(1) of the Clean Air Act
Amendments of 1990’: $15,000 for each hazardous air pollutant for
which there is a violation.
c. Sensitivity of environment (for SIP and NSPS cases
only).
The penalty amount selected should be based on the status of
the air quality control district in question with respect to the
pollutant involved in the violation.
1. Noriattainment Areas
i. Ozone:
Extreme $18,000
Severe 16,000
Serious 14,000
Moderate 12,000
Marginal 10,000
ii. Carbon Monoxide and Particulate Matter:
Serious $14,000
Moderate 12,000
iii. All Other Criteria Pollutants: $10,000
2. Attainment area PSD Class I: $ 10,000
3. Attainment area PSD Class II or III: $ 5,000
d. Length of time of violation
To determine the length of time of violation for purposes of
calculating a penalty under this policy, violations should be
assumed to be-continuous from the first provable date of violation
until the source demonstrates compliance if there have been no
significant process or operational changes. If the source has
affirmative evidence, such as continuous emission monitoring data,
An example of a non-NESHAP violation involving a hazardous
air pollutant would be a violation of a volatile organic compound
(VOC) standard in a State Implementation Plan involving a VOC
contained in the Section l12(b)(1) list of pollutants for which no
NESHAP has yet been promulgated.

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to show that the violation was not continuous, appropriate
adjustment-s should be made. In determining the length of
violation, the litigation team should take full advantage of the
presumption regarding continuous violation in Section 113(e)(2).
This figure should be assessed separately for each violation,
including procedural violations such as monitoring, recordkeeping
and reporting violations. For example, if a source violated an
emissions standard, a testing requirement, and a reporting
requirement, three separate length of violation figures should be
assessed, one for each of the three violations based on how long
each was violated.
Months Dollars
0 — 1 $ 5,000
2— 3 8,000
4 — 6 12,000
7 — 12 15,000
13 — 18 20,000
19 — 24 25,000
25 — 30 30,000
31 — 36 35,000
37 — 42 40,000
43 — 48 45,000
49 — 54 50,000
55 — 60 55,000
2. Importance to the regulatory scheme
The following violations are also very significant in the
regulatory scheme and therefore require the assessment of the
following penalties:
Work Practice Standard Violations:
- failure to perform a work practice requirement:
$].0,000—15,000
(See Appendix III for Asbestos NESHAP violations.)
Reporting and Notification Violations:
— f ai1ure to report or notify: $15,000
— late report or notice: $5,000
— incomplete report or notice: $5,000 - $15,000
(See Appendix III for Asbestos NESHAP violations.)
Recordkeeping Violations:
- failure to keep required records: $15,000
— incomplete records: $5,000 — $15,000

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Testing Violations:
failure to conduct required performance testing or
testing using an improper test method: $15,000
- late performance test or performing a required test
method using an incorrect procedure: $5,000
Permitting Violations:
- failure to obtain an operating permit: $15,000
- failure to pay permit fee: See Section
502(b)(3)(C)(ii) of the Act
Emission Control Equipment Violations:
— failure to operate and maintain control equipment
required by the Clean Air Act, its implementing
regulations or a permit: $15,000
- intermittent or improper operation or maintenance of
control equipment: $5,000-15,000
onitoring Violations:
- failure to install monitoring equipment required by
the Clean Air Act, its implementing regulations or a
permit: $15,000
- late installation of required monitoring equipment:
$5,000
- failure to operate and maintain required monitoring
equipment: $15,000
Violations of Administrative Orders 5 : $15,000
Section 114 Requests for Information Violations:
- failure to respond: $15,000
- incomplete response: $5,000 — $15,000
Compliance Certification Violations:
— failure to submit a certification: $15,000
- late certifications: $5,000
- incomplete certifications: $5,000 — $15,000
Violations of Permit Schedules of Compliance:
— failure to meet interim deadlines: $5,000
- failure to submit progress reports: $15,000
- incomplete progress reports: $5,000 - $15,000
- late progress reports: $5,000
This figure should be assessed even if the violation of the
administrative order is also a violation of another requirement of
the Act, for example a NESHAP or NSPS requirement. In this
situation, the figure for violation of the administrative order is
in addition to appropriate penalties for violating the other
requirement of the Act.

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A penalty range is provided for work practice violations to
allow Regions some discretion depending on the severity of the
violation. Complete disregard of work practice requirements should
be assessed the full $15,000 penalty. Penalty ranges are provided
for incomplete notices, reports, and recordkeeping to allow the
Regions some discretion depending on the seriousness of the
omissions and how critical they are to the regulatory program. If
the source omits information in notices, reports or records which
document the source’s compliance status, this omission should be
treated as a failure to meet the requirement and assessed $15,000.
A late notice, report or test should be considered a failure
to notify, report or test if the notice or report is submitted or
the test is performed after the objective of the requirement is no
longer served. For example, if a source is required to submit a
notice of a test so that EPA may observe the test, a notice
received after the test is performed would be considered a failure
to notify.
Each separate violation under this section should be assessed
the corresponding penalty. For example, a NSPS source may be
required to notify EPA at startup and be subject to a separate
quarterly reporting requirement thereafter. If the source fails to
submit the initial start-up notice and violates the subsequent
reporting requirement, then the source should be assessed $15,000
under this section for each violation. In addition, a length of
violation figure should be assessed for each violation based on how
long each has been violated. Also, a figure reflecting the size of
the violator should be assessed once for the case as a whole. If,
however, the source violates the same reporting requirement over a
period of time, for example by failing to submit quarterly reports
for one year, the source should be assessed one $15,000 penalty
under this section for failure to submit a report. In addition, a
length of violation figure of $15,000 for 12 months of violation
and a size of the violator figure should be assessed.
3. Size of the violator
Net worth (corporations); or net current assets (partnerships
and sold proprietorships):
Under $100,000 $2,000
$100,001 — $1,000,000 5,000
1,000,001 — 5,000,000 10,000
5,000,001— 20,000,000 20,000
20,000,001— 40,000,000 35,000
40,000,001— 70,000,000 50,000
70,000,001 — 100,000,000 70,000
Over 100,000,000 70,000 + $25,000 for every
additional $30,000,000 or
fraction thereof

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— 15
In the case of a company with more than one facility, the size
of the vjglator is determined based on the company’s entire
operation, not just the violating facility. With regard to parent
and subsidiary corporations, only the size of the entity sued
should be considered. Where the size of the violator figure
represents over 50% of the total preliminary deterrence amount, the
litigation team may reduce the size of the violator figure to 50%
of the preliminary deterrence amount.
The process by which the gravity component was computed must
be memorialized in the case file. Combining the economic benefit
component with the gravity component yields the preliminary
deterrence amount.
4. Adjusting the Gravity Component
The second goal of the Policy on Civil Penalties is the
equitable treatment of the regulated community. One important
mechanism for promoting equitable treatment is to include the
economic benefit component discussed above in a civil penalty
assessment. This approach prevents violators from benefitting
economically from their noncompliance relative to parties which
have conplied with environnental requirements.
In addition, in order to promote equity, the system for
penalty assessment must have enough flexibility to account for the
unique facts of each case. Yet it still must produce consistent
enough results to ensure similarly-situated violators are treated
similarly. This is accomplished by identifying many of the
legitimate differences between cases and providing guidelines for
how to adjust the gravity component amount when those facts occur.
The application of these adjustments to the gravity component prior
to the commencement of negotiation yields the initial minimum
settlement amount. During the course of negotiation, the
litigation team may further adjust this figure based on new
information learned during negotiations and discovery to yield the
adjusted minimum settlement 3mount.
The purpose of this section is to establish adjustment factors
which promote flexibility while maintaining national consistency.
It sets guidelines for adjusting the gravity component which
account for some factors that frequently distinguish different
cases. Those factors are: degree of willfulness or negligence,
degree of cooperation, history of noncompliance, and environmental
damage. These adjustment factors apply only to the gravity
component and not to the economic benefit component. Violators
bear the burden of justifying mitigation adjustments they propose.
The gravity component may be mitigated only for degree of

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cooperation as specified in II.B.4.b. The gravity component may be
aggravated -, by as much as 100% for the other factors discussed
below: degree of willfulness or negligence, history of
noncompliance, and environmental damage.
The litigation team is required to base any adjustment of the
gravity component on the factors mentioned and to carefully
document the reasons justifying its application in the particular
case. The entire litigation team must agree to any adjustments to
the preliminary deterrence amount. Members of the litigation team
are responsible for ensuring their management also agrees with any
adjustments to the penalty proposed by the litigation team.
a. Degree of Willfulness or Negligence
This factor may be used only to raise a penalty. The Clean
Air Act is a strict liability statute for civil actions, so that
willfulness, or lack thereof, is irrelevant to the determination of
legal liability. However, this does not render the violator’s
willfulness or negligence irrelevant in assessing an appropriate
penalty. Knowing or willful violations can give rise to criminal
liability, and the lack of any negligence or willfulness would
indicate that no addition to the penalty based on this factor is
appropriate. Between these two extremes, the willfulness or
negligence of the violator should be reflected in the amount of the
penalty.
In assessing the degree of willfulness or negligence, all of
the following points should be considered:
The degree of control the violator had over the events
constituting the violation.
The foreseeability of the events constituting the
violation.
The level of sophistication within the industry in
dealing with compliance issues or the accessibility of
appropriate control technology (if this information is
re dily available). This should be balanced against the
technology-forcing nature of the statute, where
applicable.
The extent to which the violator in fact knew of the
legal requirement which was violated.
b. Degree of Cooperation
The degree of cooperation of the violator in remedying the
violation is an appropriate factor to consider in adjusting the
penalty. In some cases, this factor may justify aggravation of the

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gravity component because the source is not making efforts to come
into compliance and is negotiating with the agency in bad faith or
refusingto negotiate. This factor may justify mitigation of the
gravity component in the circumstances specified below where the
violator institutes comprehensive corrective action after discovery
of the violation. Prompt correction of violations will be
encouraged if the violator clearly sees that it will be financially
disadvantageous to litigate without remedying noncompliance. EPA
expects all sources in violation to come into compliance
expeditiously and to negotiate in good faith. Therefore,
mitigation based on this factor is limited to no more than 30% of
the gravity component and is allowed only in the following three
situations:
1. Prompt reporting of noncompliance
The gravity component may be mitigated when a source promptly
reports its noncompliance to EPA or the state or local air
pollution control agency where there is no legal obligation to do
so.
2. Prompt correction of environmental problems
The gravity component may also be mitigated where a source
makes extraordinary efforts to avoid violating an imminent
requirement or to come into compliance after learning of a
violation. Such efforts may include paying for extra work shifts
or a premium on a contract to have control equipment installed
sooner or shutting down the facility until it is operating in
compliance.
3. Cooperation during pre-filing investigation
Some mitigation may also be appropriate in instances where the
defendant is cooperative during EPA’S pre-filing investigation of
the source’s compliance status or a particular incident.
c. History of Noncompliance
This factor may be used only to raise a penalty. Evidence
that a party has violated an environmental requirement before
clearly indicates that the party was not deterred by a previous
governmental ‘enforcement response. Unless one of the violations
was caused by-factors entirely out of the control of the violator,
the penalty should be increased. The litigation team should check
f or and consider prior violations under all environmental statutes
enforced by the Agency in determining the amount of the adjustment
to be made under this factor.
In determining the size of this adjustment, the litigation
team should consider the following points:
Similarity of the violation in question to prior
violations.

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• Time elapsed since the prior violation.
• The number of prior violations.
• Violator’s response to prior violation(s) with regard to
correcting the previous problem and attempts to avoid
future violations.
• The extent to which the gravity component has already
been increased due to a repeat violation. (For example,
under the Asbestos Demolition and Renovation Penalty
Policy in Appendix III.)
A violation should generally be considered “similar” if a
previous enforcement response should have alerted the party to a
particular type of compliance problem. Some facts indicating a
“similar violation” are:
• Violation of the same permit.
• Violation of the same emissions standard.
• Violation at the same process points of a source.
• Violation of the same statutory or regulatory provision.
• A similar act or omission.
For purposes of this section, a “prior violation” includes any
act or omission resulting in a State, local, or federal enforcement
response (e.g., notice of violation, warning letter, administrative
order, field citation, complaint, consent decree, consent
agreement, or administrative and judicial order) under any
environmental statute enforced by the Agency unless subsequently
dismissed or withdrawn on the grounds that the party was not
liable. It also includes any act or omission for which the
violator has previously been given written notification, however
informal, that the regulating agency believes a violation exists.
In researchir g a defendant’s compliance history, the litigation
team should check to see if the defendant has been listed pursuant
to Section 306 of the Act.
In the case of large corporations with many divisions or
wholly-owned subsidiaries, it is sometimes difficult to determine
whether a prior violation by the parent corporation should trigger
the adjustments described in this section. New ownership often
raises similar problems. In making this determination, the
litigation team should ascertain who in the organization exercised
or had authority to exercise control or oversight responsibility
over the violative conduct. Where the parent corporation exercised
or had authority to exercise control over the violative conduct.

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— 19 —
the parent corporation’s prior violations should be considered part
of the subsidiary or division’s compliance history.
In general, the litigation team should begin with the
assumption that if the same corporation was involved, the
adjustment for history of noncompliance should apply. In addition,
the team should be wary of a party changing operations or shifting
responsibility for compliance to different groups as a way of
avoiding increased penalties. The Agency may find a consistent
pattern of noncompliance by many divisions or subsidiaries of a
corporation even though the facilities are at different geographic
locations. This often reflects, at best, a corporate-wide
indifference to environmental protection. Consequently, the
adjustment for history of noncompliance should apply unless the
violator can demonstrate that the other violating corporate
facilities are under totally independent control.
d. Environmental Damage
Although the gravity component already reflects the amount of
environmental damage a violation causes, the litigation team may
further increase the gravity component based on severe
environmental damage. As calculated, the gravity component takes
into account such factors as the toxicity of the pollutant, the
attainment status of the area of violation, the length of time the
violation continues, and the degree to which the source has
exceeded an emission limit. However, there may be cases where the
environmental damage caused by the violation is so severe that the
gravity component alone is not a sufficient deterrent, for example,
a significant release of a toxic air pollutant in a populated area.
In these cases, aggravation of the gravity component may be
warranted.
III. LITIGATION RISK
The preliminary deterrence amount, both economic benefit and
gravity components, may be mitigated in appropriate circumstances
based on litigation risk. Several types of litigation risk may be
considered. s-For example, regardless of the type of violations a
defendant hascommitted or a particular defendant’s reprehensible
conduct, EPA can never demand more in civil penalties than the
statutory maximum (twenty-five thousand dollars per day per
violation). In calculating the statutory maximum, the litigation
team should assume continuous noncompliance from the first date of
provable violation (taking into account the five year statute of
limitations) to the final date of compliance where appropriate,
fully utilizing the presumption of Section 113(e)(2). When the
penalty policy yields an amount over the statutory maximum, the
litigation team should propose an alternative penalty which must be
concurred on by their respective management just like any other
penalty.

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— 20 —
Other examples of litigation risks would be evidentiary
problems.., or an indication from the court, mediator, or
Administrative Law Judge during settlement negotiations that he or
she is prepared to recommend a penalty below the minimum settlement
amount. Mitigation based on these concerns should consider the
specific facts, equities, evidentiary issues or legal problems
pertaining to a particular case as well as the credibility of
government witnesses.
Adverse legal precedent which the defendant argues is
indistinguishable from the current enforcement action is also a
valid litigation risk. Cases raising legal issues of first
impression should be carefully chosen to present the issue fairly
in a factual context the Agency is prepared to litigate.
consequently in such cases, penalties should generally not be
mitigated due to the risk the court may rule against EPA. If an
issue of first impression is litigated and EPA’S position is upheld
by the court, the mitigation was not justified. If EPA’s position
is not upheld, it is generally better that the issue be decided
than to avoid resolution by accepting a low penalty. Mitigation
based on litigation risk should be carefully documented and
explained in particular detail. In judicial cases this should be
done in coordination with the Department of Justice.
IV. ABILITY TO PAY
The Agency will generally not request penalties that are
clearly beyond the means of the violator. Therefore, EPA should
consider the ability to pay a penalty in adjusting the preliminary
deterrence amount, both gravity component and economic benefit
component. At the same time, it is important that the regulated
community not see the violation of environmental requirements as a
way of aiding a financially-troubled business. EPA reserves the
option, in appropriate circumstances, of seeking a penalty that
might contribute to a company going out of business.
For example, it is unlikely that EPA would reduce a penalty
where a facility refuses to correct a serious violation. The same
could be said for a violator with a long history of previous
violations. That long history would demonstrate that less severe
measures are ineffective.
The litigation team should assess this factor after
commencement of negotiations gnu j . the source raises it as an
issue and only if. the source provides the necessary financial
information to evaluate the source’s claim. The source’s ability
to pay should be determined according to the December 16, 1986
Guidance on Determining a Violator’s Ability to Pay a Civil Penalty
(GM-56) along with any other appropriate means.

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— 21 —
The burden to demonstrate inability to pay, as with the burden
of demqns.trating the presence of any other mitigating
circumstances, rests on the defendant. If the violator fails to
provide sufficient information, then the litigation team should
disregard this factor in adjusting the penalty. The Office of
Enforcement Policy has developed the capability to assist the
Regions in determining a firm’s ability to pay. This is done
through the computer program, ABEL. If ABEL indicates that the
source may have an inability to pay, a more detailed financial
analysis verifying the ABEL results should be done prior to
mitigating the penalty.
Consider delayed payment schedule with interest : When EPA
determines that a violator cannot afford the penalty prescribed by
this policy, the next step is to consider a delayed payment
schedule with interest. Such a schedule might even be contingent
upon an increase in sales or some other indicator of improved
business. EPA’S computer program, ABEL, can calculate a delayed
payment amount for up to five years.
Consider straight penalty reductions as a last recourse : If
this approach is necessary, the reasons for the litigation team’s
conclusion as to the size of the necessary reduction should be
carefully documented in the case file. 6
Consider joinder of a corporate violator’s individual owners :
This is appropriate if joinder is legally possible and justified
under the circumstances. Joinder is not legally possible for SIP
cases unless the prerequisite of Section 113 of the Clean Air Act
has been met -- issuance of an NOV to the person.
Regardless of the Agency’s determination of an appropriate
penalty amount to pursue based on ability to pay considerations,
the violator is always expected to comply with the law.
V. OFFSETTING PENALTIES PAID TO STATE AND LOCAL GOVERNMENTS OR
CITIZEN GROUPS FOR THE SAME VIOLATIONS
Under Section 113(e)(1), the court in a civil judicial action
or the Administrator jfl a civil administrative action must consider
in assessing - a penalty “payment by the violator of penalties
previously assessed for the same violation.” While EPA will not
automatically subtract any penalty amount paid by a source to a
State or local agency in an enforcement action or to a citizen
S If a firm fails to pay the agreed to penalty in a final
administrative or judicial order, then the Agency must follow the
procedures outlined in the February 6, 1990 Manual on Monitoring
and Enforcing Administrative and Judicial Orders for collecting
the penalty amount.

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— 22 —
group in a citizen suit for the same violation that is the basis
for EPAf s—enforcement action, the litigation team may do so if
circumstances suggest that it is appropriate. The litigation team
should consider primarily whether the remaining penalty is a
sufficient deterrent.
VI. SUPPLEMENTAL ENVIRONMENTAL PROJECTS
The February 12, 1991 Policy on the Use of Supplemental
Environmental Projects in EPA Settlements must be followed when
reducing a penalty for such a project in any Clean Air Act
settlement.
VII. CALCULATING A PENALTY IN CkSES WITH MORE THAN ONE TYPE OF
VIOLATION
EPA often takes an enforcement action against a stationary
source f or more than one type of violation of the Clean Air Act.
The economic benefit of noncompliance with all requirements
violated should be calculated. Next, the gravity component factors
under actual or possible harm and importance to the regulatory
scheme which are applicable should be calculated separately for
each violation. The size of the violator factor should be figured
only once for all violations.
For example, consider the case of a plant which makes
laminated particle board. The particle board plant is found to
emit particulates in violation of the SIP particulate emission
limit and the laminating line which laminates the particle board
with a vinyl covering is found to emit volatile organic compounds
in violation of the SIP VOC emission limit. The penalty for the
particulate violation should be calculated figuring the economic
benefit of not complying with that limit (capital cost of
particulate control, etc., determined by running the BEN computer
model), and then the gravity component for this violation should be
calculated using all the factors in the penalty policy. After the
particulate violation penalty is determined, the VOC violation
should be calculated as follows: the economic benefit should be
calculated i additional measures need to be taken to comply with
the VOC limit. In addition, a gravity component should be
calculated for the VOC violation using all the applicable factors
under actual or possible harm and importance to the regulatory
scheme. The size of the violator factor should be figured only
once for both violations.

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— 23 —
Another example would be a case where, pursuant to Section
114, EPA issues a request for information to a source which emits
SO , suct I is a coal-burning boiler. The source does not respond.
Two months later, EPA issues an order under Section 113(a)
requiring the source to comply with the Section 114 letter. The
source does not respond. Three months later, EPA inspects the
source and determines that the source is violating the SIP SO 2
emission limit.
In this case, separate economic benefits should be calculated,
if applicable. Thus, if the source obtained any economic benefit
from not responding to the Section 114 letter or obeying the
Section 113(a) order, that should be calculated. If not, only the
economic benefit from the SO emission violation should be
calculated using the BEN computer model. In determining the
gravity component, the penalty should be calculated as follows:
1. Actual or possible harm
a. level of violation - calculate f or the emission
violation only
b. toxicity of pollutant — applicable to the emission
violation only
c. sensitivity of environment - applicable to the
emission violation only
d. length of time of violation - separately calculate
the time for all three violations. Note the Section 114
violation continues to run even after the Section 113(a)
order is issued until the Section 114 requirements are
satisfied.
2. Importance to regulatory scheme
Section 114 request for information violation -
$15,000
Section 113 administrative order violation - $15,000
3. Size of violator
a. One figure based on the source’s assets.
VIII. APPORTIONMENT OF THE PENALTY AMONG MULTIPLE DEFENDANTS
This policy is intended to yield a minimum settlement penalty
figure for the case as a whole. In many cases, there may be more
than one defendant. In such instances, the Government should
generally take the position of seeking a sum for the case asa
whole, which the defendants allocate among themselves. Civil

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— 24 —
violations of the Clean Air Act are strict liability violations and
it is gen.erally not in the government’s interest to get into
discussions of the relative fault of the individual defendants.
The government should therefore adopt a single settlement figure
for the case and should not reject a settlement consistent with the
bottom line settlement figure because of the way the penalty is
allocated.
Apportionment of the penalty in a multi-defendant case may be
required if one party is willing to settle and others are not. In
such circumstances, the government should take the position that if
certain portions of the penalty are attributable to such party
(such as economic benefit or aggravation due to prior violations),
that party should pay those amounts and a reasonable portion of the
amounts not directly assigned to any single party. If the case is
settled as to one defendant, a penalty not less than the balance of
the settlement figure for the case as a whole must be obtained from
the remaining defendants.
There are limited circumstances where the Government may try
to influence apportionment of the penalty. For example, if one
party has a history of prior violations, the Government may try to
assure that party pays the amount the gravity component has been
aggravated due to the prior violations. Also, if one party is
known to have realized all or most of the economic benefit, that
party may be asked to pay that amount.
IX. EXAMPLES
Example 1
I. Facts:
Company A runs its manufacturing operations with power
produced by its own coal-fired boilers’. The boilers are major
sources of sulfur dioxide. The State Implementation Plan has a
sulfur dioxide emission limitation for each boiler of .68 lbs. per
million B.T.U. The boilers were inspected by EPA on March 19,
1989, and the SO 2 emission rate was 3.15 lbs. per million B.T.U for
each boiler. A NOV was issued for the °2 violations on April 10,
1989. EPA again inspected Company A on June 2, 1989 and found the
‘ Note that a penalty is assessed for the entire facility and
not for each emission unit. In this example, the source has
several boilers. However, the penalty figures are not multiplied
by the number of boilers. The penalty is based on the violations
at the facility as a whole, specifically the amount of pollutant
factor and length of violation factor are assessed once based on
the amount of excess emissions at the facility from all the
boilers.

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— 25 —
SO 2 emission rate to be unchanged. Company A had never installed
any po].].ut-ion control equipment on its boilers, even though
personnel from the state pollution control agency had contacted
Company A and informed it that the company was subject to state air
pollution regulations. The state had issued an administrative
order on September 1, 1988 for SO 2 emission vi.olations at the same
boilers. The order required compliance with applicable
regulations, but Company A had never complied with the state order.
Company A is located in a nonattainment area for sulfur oxides.
Company A has net current assets of $760,000. Company A’s response
to an EPA Section 114 request for information documented the first
provable day of violation of the emission standard as July 1, 1988.
II. Computation of penalty
A. Economic benefit component
EPA used the BEN computer model in the standard mode to
calculate the economic benefit component. The economic benefit
component calculated by the computer model was $243,500.
B. Gravity component
1. Actual or possible harm
a. Amount of pollutant: between 360-390%
above standard - $65,000
b. Toxicity of pollutant: not applicable.
c. Sensitivity of the environment:
nonattainment — $10,000
d. Length of time of violation: Measured
from the date of first provable
violation, July 1, 1988 to the date of
final compliance under a consent decree,
hypothetically December 1, 1991. (If
consent decree or judgment order is filed
at a later date, this element, as well as
elements in the economic benefit
component must be recalculated.) 41 mos.
— $40,000
2. Importance to regulatory scheme.
No applicable violations.

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— 26 —
3. Size of violator: net assets of $760,000 -
$5,000.
$243,500 economic benefit component
+L20.000 gravity component
$363,500 preliminary deterrence amount
C. Adjustment Factors
1. Degree of willfulness/negligence
Because Company A was on notice of its
violations and, moreover, disregarded the
state administrative order to comply with
applicable regulations, the gravity component
in this example should be aggravated by some
percentage based on this factor.
2. Degree of Cooperation
No adjustments were made in the category
because Company A did not meet the criteria.
3. History of noncompliance
The gravity component should be aggravated by
some percentage for this factor because
Company A violated the state order issued for
the same violation.
Initial penalty figure: $353,500 preliminary deterrence
amount plus adjustments for history of noncompliance and degree of
willfulness or negligence.
Example 2:
I. Facts:
company C, located in a serious nonattairunent area for
particulate matter, commenced construction in January 1988. It
began its operations in April 1989. It runs a hot mix asphalt
plant subject to the NSPS regulations at 40 C.F.R. Part 60, Subpart
I. Subpart I requires that emissions of particulates not exceed 90
mg/dscin (.04 gr/dscf) nor exhibit 20% opacity or greater. General
NSPS regulations require that a source owner or operator subject to
a NSPS fulfill certain notification and recordkeeping functions (40
C.F.R. § 60.7), and conduct performance tests and submit a report
of the test results (40 C.F.R. § 60.8).
Company C failed to notify EPA of: the date it commenced
construction within 30 days after such date (February 1988)(40

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— 27 —
C.F.R. § 60.7(a)(l)) the date of anticipated start-up between 30-
60 days prior to such date (March, 1989)(40 C.F.R. § 60.7(a)(2));
or the date of actual start-up within 15 days after such date
(April, 1989) (40 C.F.R. § 60.7(a)(3). Company C was required
under 40 C.F.R. § 60.8(a) to test within 180 days of start-up, or
by October 1989. The company finally conducted the required
performance test in September 1990. The test showed the plant to
be emitting 120 mg/dscin of particu].ates and to exhibit 30% opacity.
Company C did submit the required notices in November 1989 in
response to a letter from EPA informing it that it was subject to
NSPS requirements. It did negotiate with EPA after the complaint
was filed in September 1991, and agreed to a consent decree
requiring compliance by December 1, 1991. company C has assets of
$7,000,000.
II. Computation of penalty
A. Benefit component
The Region determined after calculation that the economic
benefit component was $90,000 for violation of the emissions
standard according to the BEN computer calculation. The litigation
team determined that the economic benefit from the notice and
testing requirement was less than $5,000. Therefore, the
litigation team has discretion not to include this amount in the
penalty consistent with the discussion at II.A.3.a.
B. Gravity component
1. Actual or possible harm
a. Amount of pollutant:
i. mass emission standard:
33% above standard — $10,000
ii. opacity standard:
50% over standard - $10,000
b. Toxicity of pollutant: not applicable
c. Sensitivity of the environment:
serious nonattainment - $14,000
d. Length of time of violation
1) Performance testing: October, 1989 -
September 1990: 12 months - $15,000

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— 28 —
2) Failure to report conunencentent of
construction: February 1988 -
November 1989: 21 months (date of
EPA’s first letter to Company) -
$25, 000
3) Failure to report actual start-up:
April, 1989 - November 1989: 7
months — $15,000
4) Failure to report date of
anticipated startup between 30-60.
days prior to such date: March, 1989
- November 1989: 8 months — $15,000
5) Mass Emission Standard Violation:
September 1990 - December 1991: 15
months — $20,000
6) Opacity Violation: September 1990 -
December 1991: 15 months — $20,000
2. Importance to regulatory scheme:
Failure to notify 40 C.F.R. § 60.7(a)(1) -
$15,000
Failure to notify 40 C.F.R. § 60.7(a)(2) -
$15,000
Failure to notify 40 C.F.R. § 60.7(a)(3) -
$15,000
Failure to conduct required performance test 40
C.F.R. § 60.8(a) — $15,000
3. Size of violator: Net current Assets -
$7,000,000 — $20,000
$ 90,000 economic benefit component
224.000 gravity component
$314 ,00q preliminary deterrence amount
C. - Adjustment factors
1. Degree of willfulness/negligence
No adjustments were made based on willfulness in
this category because there was no evidence that
Company C knew of the requirements prior to
receiving the letter from EPA. Specific evidence
may suggest that the company’s violations were due
to negligence justifying an aggravation of the
penalty on that basis.

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— 29 —
2. Degree of Cooperation
No adjustments were made in this category because
Company C did not meet the criteria.
3. History of noncompliance
The gravity component should be aggravated by an
amount agreed to by the litigation team for this
factor because the source ignored two letters from
EPA informing them of the requirements.
Example 3:
I. Facts
Chemical Inc. operates a mercury cell chior—alkali plant which
produces chlorine gas. The plant is subject to regulations under
the National Emissions Standard for Hazardous Air Pollutants
(NESHAP) for mercury, 40 C.F.R. Part 61, Subpart E. On September
9, 1990, EPA inspectors conducted an inspection of the facility,
and EPA required the source to conduct a stack test pursuant to
Section 114. The stack test showed emissions at a rate of 3000
grams of mercury per 24-hour period. The mercury NESHAP states
that emissions from mercury cell chior—alkali plants shall not
exceed 2300 grams p3r 24—hour period. The facility has been in
operation since June 1989.
In addition under 40 C.F.R. § 61.53, Chemical Inc. either had
to test emissions from the cell room ventilation system within 90
days of the effective date of the NESHAP or follow specified
approved design, maintenance and housekeeping practices. Chemical
Inc. has never tested emissions. Therefore, it has committed
itself to following the housekeeping requirements. At the
inspection, EPA personnel noted the floors of the facility were
badly cracked and mercury droplets were found in several of the
cracks. The inspectors noted that the mercury in the floor cracks
was caused by leaks from the hydrogen seal pots and compressor
seals which .housekeeping practices require be collected and
confined for further processing to collect mercury. Chemical Inc.
will have to install control equipment to come into compliance. A
complaint was filed in June 1991. The equipment was installed and
operational by June 1992. A consent decree was entered and penalty
paid in February 1992. Chemical Inc. has a net corporate worth of
$2,000,000.

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— 30 —
II. Calculation of Penalty
A. Economic Benefit Component
The delay in installing necessary control equipment from June
1989 to June 1992 as calculated using the BEN computer model
resulted in an economic benefit to Chemical Inc. of $35,000.
B. Gravity Component
1. Actual or possible harm
a. Amount of pollutant: 30 % above the
standard — $5,000
b. Toxicity of pollutant : $15,000 f or
violations involving a NESHAP
c. Sensitivity of the environment: not
applicable
d. Length of time of violation: Measured
from first provable date of violation in
September 1990 until June 1992 when the
source will be in compliance. 22 mos. -
$25, 000
2. Importance to regulatory scheme.
Failure to perform work practice requirements -
$15, 000
3. Size of Violator: net worth of $2,000,000 -
$10,000
$35,000 economic benefit component
+70.000 gravity component
$105,000 preliminary deterrence amount
C. Adjustment Factors
1. Degree of willfulness/negligence
It is unlikely Chemical Inc. would not be aware of
the NESHAP requirements. Therefore, an adjustment
should probably be made for this factor.
2. Degree of Cooperation
No adjustments made because Chemical Inc. did not
meet the criteria.

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— 31 —
3. History of Compliance
No adjustments were made because Chemical Inc. had
no prior violations.
X. CONCLUSION
Treating similar situations in a similar fashion is central to
the credibility of EPA’s enforcement effort and to the success of
achieving the goal of equitable treatment. This document has
established several mechanisms to promote such consistency. Yet it
still leaves enough flexibility for tailoring the penalty to
particular circumstances. Perhaps the most important mechanisms
for achieving consistency are the systematic methods for
calculating the benefit component and gravity component of the
penalty. Together, they add up to the preliminary deterrence
amount. The document also sets out guidance on uniform approaches
for applying adjustment factors to arrive at an initial amount
prior to beginning settlement negotiations or an adjusted amount
after negotiations have begun.
Nevertheless, if the Agency is to pronote consistency, it is
essential that each case file contain a complete description of how
each penalty was developed as required by the August 9. 1990
Guidance on Documenting Penalty Calculations and Justifications in
EPA Enforcement Actions . This description should cover how the
preliminary deterrence amount was calculated and any adjustments
made to the preliminary deterrence amount. It should also describe
the facts and reasons which support such adjustments. Only through
such complete documentation can enforcement attorneys, program
staff and their managers learn from each other’s experience and
promote the fairness required by the Policy on Civil Penalties .

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I

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c3c

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Teresa To Patricia SIrougal/R4 USEPA/US©EPA
DeVoe/DC/USEPAJIJS@EPA
08/03/2009 05:32 PM
Please respond to bcc
“epalibnet ” Subject [ epaIibnet Web of Knowledge training webinars

The Library Network has arranged for several Web of Knowledge training webinars during our trial. The
following webiriar will be repeated several times and is appropriate for librarians and end-users.
Topic. Web of Knowledge Overview
Presenter: Liz Pysar, Thomson Reuters
To join GoToWebinar:
1. Open a browser window with the foflowing URL: http:I/www.QoLomeetInc .com
2. In the left sidebar, click “Join a Meeting”
3. When prompted, enter the appropriate Meeting ID (see below)
4. When prompted, enter your name and e-mail address
5. There will be no meeting password
6. Use the double arrow icon in the upper right portion of the screen to minimize or maximize your
GoToWebinar console
7. Call in for the audio 866-299.3188; code 9195419412
Meeting IDs:
Thursday, August 13, 2:00-3:OOpm EDT: 393-468-576
Wednesday, August 19, 11 :OOam-1 2:00pm EDT: 643-045.960
Thursday, August 20, 1 :00-2:OOpm EDT: 923-742-1 37
These webinar details have also been posted on the EPA Desktop Library . Mark your calendars, plan to
attend, and help us spread the word to end-users!
Ten DeVoe, Library Network Coordinator
ASRC Management Services (Contractor)
US EPA Headquarters, Washmgton DC
Tel (202)566-1429
Fax (202) 566-0574
devoe.teres( eøa gov
Mailing address:
US EPA, 1200 Pennsylvania Ave. NW, MC3404T, Washington DC 20460
FEDEX, UPS, COURIER use:
US EPA, EPA West Room 3340, 1301 Constitution Ave. NW, Washington DC 20004

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- Ci
/L’r-ri ii- L k
_9 S7 4
.‘ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WJ\SHINGTON. 0 C 20460

“ ‘ f .3O(J)
MNfl11988
MEMORANDUM
SUBJECT: Supplementation to Page 11 of the Clean Air Act
Stationary Sout ce Civil Penalty Policy
FROM: Michael S. Alushin 1 ’ 1 Z’ 1
Associate Enforcement Cciunsel for Air
John S. Seitz, Director
Stationary Source Compli 7i e Division
TO: Addressees
Pace 11 of the Clean Air Act Stationary Source Civil Penalty
Policy of March 25, 1987 (“Penalty Policy”) counsels using a
firm’s net current .assets to determine the “size of violator.”
This approach works well when applied to partnerships and sole
øroprietorships, but does not always produce the desired result
when applied to corporations.
A corporation’s net current assets do not reliably indicate
its size. The value, aenerated by subtracting current liabilities
from current assets, is often a product of creative accounting as
companies generally do not want to appear to have large amounts of
uncommitted cash. The financial health of a corporation may be
obscured by the accepted accounting practice of entering such items
as stockholders’ dividends and retained earnings as liabilities on
the balance sheet. The unrealiability of net current assets as a
measure of size is compounded when the violating company is owned
by a parent corporation which may be both extracting huge dividends
from the violator and withholding payment on credit purchases.
A more accurate measure of a corporation’s size is
stockholders’ eauity, or “net worth.” Calculated by addinq the
value of capital stock, capLtal surplus, and accumulated retained
earnings, net worth corresponds to the value listed as “worth” in
the Dun & Bradstreet reports For publicly traded corporations.
Using net worth as the measure of a corporation’s size should en-
sure that larger corporations pay proportionately larger pena1t es.

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—2--
The simpler bookkeepLng methods of partnerships and sole
proprietorships are less prone to understate size than those
methods employed by corporations. We recommend that you continue
to estimate the size of this class of violator on the basis of
net current assets.
we have enclosed a corrected page 11 and an explanatory
Page9a for inser ion into yourcGpy’ofthe Penarty PolIcy and
into the reference copy of the Penalty Policy located at Part V 1
Tab “Y” of your Clean Air Act Compliance I Enforcement Gu dance
Manual.—-- Compendium ofOperative Policies.
Plea s? be sure that the correct approach is used in all
cases in which a penalty figure has yet to be communicated to
the defendant.
Attachment
Addressees:
Recional Administrators
Regions I—X
Regional Counsels
Regions t—X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air & Radiation Division Director
Region V
Air, Pesticides, and ToxiCs Management Division Directors
Regions I v and VI
Air and Toxics Division Directors
Regions vii, VIII, and X
Air Branch Chiefs/Team Leaders
Office of Regional Counsel
Regions I—X

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—3—
Jonathan Z. Cannon
Deputy Assistant: Administrator— CivLl
Thomas Gallagher, Director
NEIC
Gerald Emisori, OAQPS
Jonathan Libber, IJEPB
Bruce Rothrock, OCAPO
David Buente, DOJ
Bill Becker, STAPPA-ALAPCO

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-9a-
Size of vioJator : A corporation’s size is indicated by
us stockholders’ equity or “net worth.” This value,
which is calculated by adding the value of capital stock
capital surplus, and accumulated retained earr inas, cor-
responds to the entry for “worth” in the Dun & Bradstreet
reports for publicly traded corporations. The simpler
bookkeeping. methods employed by sole proprietorships
and partnerships allow determination of their. size on
the basis of net current assets. Net current assets
are calculated by subtracting current liabilities
from current assets.

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—11—
To determine the length of time of violatLon, violations
should be assumed to be continuous from the first provable
date of violation untLi the date of the compliance demonstration if
there have been no significant process or operational changes.
If the source has affirmative evidence, such as Continuous
Emission MonitorLng data, to show that the violation was not
continuous, appropriate adjustments should be made.
0—6 mo. .$ 2,000
- 7—12 mo. 4,000
13—18 mo. 7,000
19—24 mo. 10,000
25—30 mo. 14,000
31—36 mo. 18,000
37—42 mc. 23,000
43—48 mo. 28,000
49—54 mo. 34,000
55—60 mc. 42,000
2 Importance to regulatory scheme
The following violations are so important to the regulatory
scheme that additional penalties must ensue:
Monitoring, recOrd keeping and reporting requirement
violations: $15,000
(If there is more than one reporting violation, multiply
the number of violations by $15,000.)
Operation and maintenance practices which result in
violations: $15,000
3. Size of violator
Net worth (corporations); or
net current assets (partnerships and sole proprietorships):
under $100,000: $1,000
$100,001 — $1,000,000: $2,000
$1,000,001 — $5,000,000: $8,000
$5,000,001 — $20,000,000: $12,000
$20,000,000 — $40,000,000. $20,000
$41,000,000— $70,000,000: S40,000
over $70,000,000: $65,000
The process by which the gravity component was computed
must be memoclalLzeo in the case file. Combining the benefit
component wLth t e gravity component yields the preliminary
deterrence amount.

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APPENDIX I
Penalty Policy for Viclations of Certain Clean Air Act
Permit Requirements for the Construction or
Modification of Major Stationary Sources of Air Pollution
I. Introduction
EPA’s Clean Air Act Stationary Source Civil Penalty
Policy applies generally to stationary sources of air pollu-
tion which violate requirements enforceable under Section 113
of the Clean Air Act when such violations are the result of a
failure to make capital expenditures and/or failure to employ
operation and maintenance procedures which are necessary to
achieve compliance. The general policy does nor, however,
specifically address violations of permit requirements related
to the construction or modification of major stationary
sources under the prevention of significant deterioration
(PSD) program and the nonattaininent area new source review
progam.
This docu!oent outlines a penalty policy which applies to
certain permit-related violations of the Clean Air Act and
provides a method of calculating a minimum settlement amount
for such violations. This “Permit Penalty Policy” was origi-
nally issued in February 1981 to deal with a subject area not
covered by the 1980 penalty policy. It ha8 been revised for
inclusion in the 1987 policy to reflect more realistic penalty
amounts. -
As illustrated by the examples, a source may have
violated a new source requirement which makes it subject to
this Permit P na1ty Policy, and, in addition, violated a
regulation subject to the general policy or another appendix.
If this is the case, the Permit Penalty Policy should be used
to find the minimum settlement figure for the permit viola-
tion(s) and the general. policy or applicable appendix should
be used to establish a penalty amount for the other violation(s).
These two figures should be added together to produce an
appropriate overall settlement amount. It is also important
to note that the policy outlined in this document, like the
general stationary source civil penalty policy, is used to
set a minimum settlement figure. Therefore, the penalty
actually negotiated for can always be higher than the figure
derived through use of this Permit Penalty Policy.

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II. The Permit Penalty Policy
The Permit Penalty Policy covers cases involving sources
which begin construction or operation without first obtaining
the required PSD or nonattal.nment new source permit, as well
as those which construct or operate in violation of such
valid permits. Construction proceeding in compliance with an
invalid permit is considered to be, in the context of this
penalty policy, construction without a permit.
In these cases, when the source is operating and has
enjoyed an economic benefit from noncompliance, that benefit
should be calculated as directed in the general stationary
source civil penalty policy. As directed by the general
policy, however, the Regional Office may decide not to cal-
culate the economic benefit if that office decides that the
economic benefit is likely to be below $5,000. The gravity
component is then calculated based on the matrix contained in
this permit penalty policy. Construction in the absence of a
permit or in violation of a permit has been assigned a scale
of dollar values on a matrix. The matrix also provides for
the assessment of an additional penalty for certain specified
violations of substa’ tive permit preconditions or requirements.
The appropriate dollar value for a violation is dependent on
an estimate of the total cost of air pollution control at
those facilities of the source for which the permit is
required. 1 ’ This valuq is then multiplied by the number of
months ofTviolation. 2 1 When there are multiple permit-related
1/ “Total cost of air pollution control” should include, where
r Levant, pollution control equipment costs, design coats,
operation and maintenance costs, differential cost of complying
fuel v. noncomplying fuel, and other costs pertaining to
adequate control of the new source. Total cost is to be
determined by examination of what would have been required as
BACT (for a PSD violation) or LAER (in the case of an Offset
Policy or Part D violation). When construction La done in
phases, the operative amount is the total cost of air pollution
controls for the entire project. If a source has installed
partial control before the enforcement action commenced, that
part of the cost can be subtracted from the total costs.
2/ Month-by-month accrual of penalties was selected for
p irposes of convenience and for consistency with the general
policy. Any fraction of a month in violation is counted as a
full month of violation unless circumstances present a case
for mitigation of this rule.

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violations, a penalty figure is calculated for each violation
and the individual penalty figures are added together to
produce one mthim rn settlement figure. In those cases where
a source subject to a valid permit violates only the require-
merits of Section 173(1) and/or Section 173(3) (requirements
for construction permits in nonattainment areas), the appro-
priate penalty amount is determined by reference only to the
matrix column(s) citing the violation(s).
The economic benefit component and the gravity component
are added together to determine the preliminary deterrence
amount. This initial amount should then be adjusted, using
the general stationary source civil penalty policy factors
which take into consideration individual equitable considera-
tions (Part III of the general policy.) This will yield the
initial penalty figure.
The period of civil penalty liability will, of course,
depend upon the nature and circumstances of the violation.
For example, if a source has begun actual construction without
a required permit or under an invalid permit, the penalty
period begins on the date the source began construction arid
continues either until the source obtains a valid permit,
notifies the State or EPA that it has permanently ceased
construction and the project has been abandoned, or the State
issues a federally enforceable construction permit containing
operating restrictions which keep the source below the new
source review applicability threshold. 3 ’ A temporary cessation
in construction does not toll the running of the penalty period.
The Agency may, however, consider mitigation of the calculated
civil penalty if a source ceases construction within a reason-
able time after being notified of the violtion and does not
res*.ui e construction until a valid permit is issued. If a
source violates a permit condition, the period of penalty
liability for purposes of calculating a settlement figure
begins on the first date the violation can be documented and
will cease when the violation is corrected.
EPA realizes that in certain cases, it is highly unlikely
that the Agency will be able to obtain the full amount of the
initial penalty figure in litigation. This may be due to
applicable precedent, competing public interest considerations,
3 /The period of liability is not be be confused with the
period of continuing violation for Section 113 notice of
violation (NOV) purposes. A source which constructs without
a valid permit is in continuing violation of the Clean Air
Act for NOV purposes until it receives a valid permit or it
dismantles the new construction.

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or the specific facts, equities, or evidentiary issues
pertaining to a particular case. In such a situation it is
unrealistic to expect EPA to obtain a penalty settlement
which it could not achieve through litigation. The liti-
gation team must receive the approval of the Associate
Enforcement Counsel for Air in order to propose settling for
less than the minimum penalty amount from the matrix because
of litigation practicalities.

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—5-
PERMIT PENALTY POLICY MATRIX
MINIMUM SETTLEMENT FIGURES
(per month of violation)
PSD SOURCES
TOTAL COST OF AIR
POLLUTON CONTROL FOR
NEW OR MODIFIED
SOURCE (S THOUSANDS )
less than 50
50-150
150-500
500-1 .500
1.500-5,000
5,000-15,000
15 .000-50 .000
over 50,000
CONSTRUCTION OR
OPERATION WITHOUT
A PERMIT OR IN
VIOLATION OF A
VALID PERMIT
$ 2,000
4,0OO
7,000
11,000
16,000
22,000
29,000
37,000
I NCREMENT
CCEEDED
$ 7,000
11 .000
16,000
18,000
21 .000
25,000
31 .000
39,000
PART D AND OFFSET INTERPRETATIVE RULING SOURCES
TOTAL COST OF AIR
POLLUTION CONTROL
FOR NEW OR MODIFIED
SOURCE (S THOUSANDS )
less than 50
50-1 50
150-500
500-1 ,500
1 .500-5 ,000
5,000-15,000
15,000-50,000
over 50,000
CONS TRUCTI ON
OR OPERATION
WITHOUT A
PERMIT OR
IN VIOLATION
OF A VALID
PERMIT
$ 2,000
4,000
7 ,000
11 ,000
16,000
22,000
29,000
37,000
FAILURE TO
SAT IS F’Y
§173(1) OR
OBTAIN
OFFS ETS
$ 3,000
4,000
6 .000
9,000
11 ,000
13,000
15,000
17,000
VIOLATION OF
SECTION 173(3)
OR CONDiTION 2
$ 2,000
3,000
4,000
4,000
5,000
7 .000
11 ,000
12,000
(Add numbers
when multiple
categories apply)

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-6-
EXAMPLE CASES
The following hypothetical cases illustrate how the matrix is
used to calculate a minimum settlement figure.
PSD SOURCE
I. Facts
On July 1, 1985, an existing major source began construc-
tion of a modification to its plywood manufacturing plant.
The modification will result in a significant net emission
increase of particulate matter. The source had not obtained
or filed for a PSD permit as of the date construction began.
On July 2, 1985, EPA investigators discovered the
construction during a routine inspection of the plywood plant.
The EPA Regional Office determined that the modification was
subject to PSD review and issued a Notice of Violation on
August 1, 1985. The NOV cited the PSD regulations and outlined
possible enforcement alternatives.
The source received the NOV on August 5, 1985, and
coitacted the Regional Office on August 10, 1985. On
August 30, 1985, the Region and the source held a conference
at which the source stated that it had been aware of the need
for PSD review and permitting prior to construction. The
source also stated that it would file an application for a
permit but that it would not cease construction during the
review process.
On October 1 , 1985. the source filed a PSD application.
During the review process the Region discovered that the
source had no plans to install pollution control devices.
The Region also determined that without BACT, the modification’s
particulate emissions would result in an exceedance of the
particulate macter increment in the source’s area of impact.
The source, when informed of the BACT problem, indicated it
would install the necessary controls.
However, throughout the review process the source
continued construction of the modification. On December 1,
1985, the source began operation of the modified source
without the required permit and without controls.
On January 15, 1986, the source was issued a PSD permit.
On February 28, 1986, the source ceased operation of the
plywood plant to connect the pollution control equipnient
called for in the PSD permit. The source resumed operation
on 1arch 15, 1986. in a manner consistent with the PSD permit
conditions.

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-7-
II. Computation of Penalty
A. Benefit Component
The penalty calculation begins with a calculation of the
economic benefit of noncompliance (using the BEN model) for
the period of operation without a permit (December 1 • 1985 -
January 15, 1986). BEN calculated a penalty of $6,400.
B. Gravity Component
This component of the penalty is calculated by initially
assessing the total cost of air pollution control equipment
at the modification. For purposes of this example, assume
BACT costs $140,000.
Next, the PSD Matrix must be consulted and the type and
number of matrix categories determined. In this example the
source (1) began construction without a permit, (2) operated
the plant without a PSD permit and (3) exceeded the growth
increment for particulate matter. Therefore, this source is
subject to both of the columns of dollar values under the
heading “PSD Sources.”
Once the type, n nber and dollar values of the penalty
are determined, these figures are multiplied by the number of
months in violation. The sums are then added together to
produce the matrix penalty amount.
In this example, the source’s period of construction
without a permit runs from July 1, 1985, until operations
began on December 1,1985 (5 months). The period of operation
without a permit runs from the time the source began operation
(December 1, 1985) to the date the source received a permit
(January 15, 1986) (2 months). The source also exceeded the
area growth increment for particulate matter during the
period of operation from December 1, 1985, to February 28,
1986 (3 months). 4 ’
4/ It is important to note that some aspects of the matrix do
n t necessarily track the statutory provisions regarding
violations. For example, there is no Clean Air Act provision
which makes increment exceedance, in and of itself, a violation
by an individual source. (The SIP must protect the increment.
The method used is PSD review with permit conditions such as
BACT, fuel use limitations, etc.) However, as a portion of
the gravity component, considering the seriousness of the
violation if a source operates and thereby violates the
increment due to failure to go through PSD review as required,
an added penalty in appropriate.

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-8-
The matrix penalty figure for this source’s PSD related
violations, based on a $140,000 total coat of control estimate,
La:
- for the 5 month period of construction without a permit,
S x $4,000 — $20,000
- for the 2 month period of operation without a permit,
2 x $4,000 — $8,000
- for the 3 month period of operation during which the
increment was exceeded,
3 x $11,000 — $33,000
- matrix penalty figure —
$20,000 + $8,000 + $33,000— $61,000
This is added to the economic benefit component
$ 6,400 economic benefit
61 ,000 gravity
S67,400 preliminary deterrence
amount.
C. Adjustment Factors
1. Degree of willfulness/negligence
Because the source knew it needed a PSD permit and
commenced construction without applying for a PSD
permit, the gravity component is increased 10%
10% of $61,000 — $6,100
2. Degree of cooperation
No adjustment
3. History of noncompliance
No past history of noncompliance
4. Ability to pay
No adjustment here because the source did not provide
EPA with financial information indicating inability
to pay.

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-9-
Total Penalty
$67,400 preliminary deterrence amount
+ 6,100 adjustment
735OO initial minimum penalty figure
The source paid the U.S. Treasury $73,500.
Section 173 and Offset Policy Sources
I. Pacts
On December 1, 1984, a plywood tnannfacturirig company
began operation of a modification at its plant which is
located in a nonattainiuent area for particulate matter. The
modification is subject to new source review permitting and,
in fact, the source has obtained a valid NSR permit from the
State. The permit specifies 1) that the applicant has demon-
strated that all other major stationary sources owned or
operated by the applicant in the State are in compliance with
the Act, 2) what constitutes required LAER, and 3) what
offsets (internal) 5 ’ would be required to be obtained prior to
start-up or commenEeinent of operation. (These requirements
are found in Section 173 of the Clean Air Act.)
In March of 1985, the Regional Office learned that the
source did not install controls on a certain piece of process
equipment and therefore did not have LAER as specified in
the State permit. On April 1, 1985 the Region issued an NOV
for failure to comply with the terms of the permit by not
installing LAER prior to start-up. At an April 15, 1985,
conference between EPA and the source, the source agreed to
meet the terms of its permit and to demonstrate compliance.
On November 15, 1985. the equipment had been installed and a
performance demonstration showed that the source was in
compliance with the LAER limit specified in the permit.
5/ In light of the Supreme Court decision in Chevron U.S.A.
Ii c. v. NRDC , ___ U.S. • 104 S. Ct. 2778 (1984), a state may
choose to adopt a plant tde definition of source in nonattain-
ment areas. In such instances, sources obtaining internal
offsets may be exempt from nonattaininent new source review
requirements.

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-10-
II. Computation of penalty
A. Benefit Component
The BEN model determined that the economic benefit from
operating without LAER controls from December 1, 1984
until November 15, 1985 was $63,400.
B. Gravity Component
First the cost of the pollution control equipment must
be determined. In this case, LAER costs $110,000.
Since the plant operated from December 1, 1984 until
November 15, 1985 without LAER, the period of violation
is 12 months. The matrix yields a gravity component of
12 x 4,000 $48,000. The other two categories of the
NSR matrix need not be used because there were no viola-
tions in these categories.
The gravity component is added to the economic benefit
corn ponen t
$63,000 economic benefit
+ 48,000 gravity
5111,400 preliminary deterrence amount
C. Adjust.nent factors
1. Degree of willfulness
No adjustment here. At the NOV conference, EPA
learned that the company had had serious, but temporary
economic reverses that prevented it from installing the
control equipment.
2. Degree of cooperation
No adjustments here.
3. History of compliance
No past history of noncompliance.
4. Ability to pay
No adjustment here because the company had reversed
its financial losses and was currently financially
healthy.

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—11—
Total penalty - initial penalty target figure same as
preliminary deterrence amount.
Because the State had intervened in the case and had
gathered the evidence of violation, the U.S. split the
penalty with the State.
The Company paid $55,700 to the U.S. treasury and $55,700
to the State.

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2

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F , ‘ i P 2.

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APPENDIX L I
Vinyl Chloride Civil Penalty Policy
The attached chart shall oe used to determine the gravity
component of the civil penalty settlement a’nount for cases
enforcing the National Emission Standard for Viny]. Chloride. Ic
is to be used in lieu of the scheme for determining the gravity
component set forth in the general Clean Air Act Stationary
Source Civil Penalty Policy.
The settlement penalty for vinyl chloride cases, as for
other Clean Air Act cases, consists of a gravity component and an
economic benefit component. Adjustments for degree of willfulness
or negligence, degree of cooperation/noncooperation, history of
noncompliance, ability to pay, “other unique factors,” and
litigation practicalities should be made, if appropriate, in
accordance with the Stationary Source Civil Penalty Policy.
The gravity component of the penalty reflects the seriousness
of the violation. A separate scheme was developed for vinyl
chloride cases because several of the factors in the general
policy, such as length of time of violation, whether the area is
primary non-attainment, and revel of violation as a percentage
above the standard largely do not apply to vinyl chloride cases.
Also, the hazardous nature of the pollutant and the difficulty in
determining economic benefit are reflected by establishing a
substantial gravity component.
The vinyl chloride gravity component is therefore tied to
the amount of vinyl chloride released in a given incident, which
is used as a measure of the seriousness of each violation. Also,
for relief valve discharges, manual vent valve discharges, and 10
ppm violations, an adjustment factor is to be used to account for
excessive frequency of discharges in a given time, which is a
reflection of poor performance regardless of the amount of vinyl
chloride discharged to the atmosphere. The frequency adjustment
factor differs from the adjustment factor for history of
noncompliance, which reflects violations occurring prior to those
which are the subject of the current enforcement action.
The chart is to be applied as follows: For each violation,
assign a dollar amount based on the type and magnitude of viola-
tion as described in the chart. Relief valve discharges, manual
vent valve discharges and violations of 10 ppm standards should
then be grouped by calendar years. If the n .miber of these vio-
lations is three or more in any calendar year, the total penalty
for that period should be multiplied by the appropriate “frequency
adjustment factor.” The total gravity component for the case is

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-2-
the sum of the penalty numbers for each violation, adjusted where
appropriate to account for e’ccessive frequency. The settlement
penalty for the case as a whole cannot exceed the statutory
maximum of $25,000 per day per violation. Sample calculations
are attached to this policy.
The economic benefit component may be impractical to determine
in vinyl chloride cases, depending on the nature of the violations.
The benefit component should be determined If feasible, e.g. ,
where a pattern of violations indicates a need for specific
technology, equipment, or procedures, or where the defendant has
chosen a ‘fix” to address a series of violations.
This revised policy shall apply to all pending and future
vinyl chloride cases.

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Relief Valve Discharges, Manual Vent Valve Discharges, Violations
of 10 ppm Standards
Emissions’
Pounds of VC released ? enalty
0 - 100 $ 1000
>100 - 2000 2000
>2000 - 5000 5000
>5000 - 7500 10,000
>7500 - 10,000 15,000
over 10,000 25,000
Frequency Adjustment Factors
0 Of Violations in Calendar Year Multiplier
3 1.5
4+ 2
Failure to Report
Size of Release Not Reported (lbs.) Penalty
0-100 $ 2000
100-500 5000
500-1000 10,000
1000-2000 20,000
over 2000 25,000
Graduated scale for late reporting (if not in response to direct
request from State or EPA) - 10-day discharge reports
(as percentage of penalty for failure to report)
Within 2 months (from discharge) 25% of penalty
2-4 months 50% “
4-6 months 75% “
over 6 months 100% “

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Stripping Violations and Reactor Opening Loss Violations
St r i pp i
Magnitude of Violation Penalty
Suspension/Latex Dispersion
400-500 ppm 2000-2500 ppm $ 1000
500-600 2500-3000 2000
600-700 3000-3500 3000
700-800 3500-4000 4000
800—900 4000-4500 5000
900-1200 4500-6000 10000
1200-1400 6000—7000 15000
1400—1600 7000-8000 20000
over 1600 over 8000 25000
Reactor Opening Loss
Penalty $1000/violation (for each reactor)
Failure to Measure
Penalty = Maximum penalty amount for each type of vio].atior
$25000 (stripping)
= $1000 (reactor opening loss)
Failure to Submit Complete Semiannual Report
Penalty $25000
Graduated scale for Late semiannual report (if not in
response to direct request from State to EPA)
Within 2 months $ 6,250
2-4 months 12,500
4-6 months 18,750
Over 6 months 25,000

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Example 1
ABC Chemical Corporation owns i polyvinyl chloride plant
in Louisiana. The United States has filed an enforcement
action alleging relief valve discharge violations, failure to
report relief valve discharges, reactor opening violations,
and stripping violations. The settlement penalty is determined
as follows:
Gravity Component
Relief Valve Discharges Penalty/Discharge
July 6, 1981 446 lbs. $2,000 —
August 15. 1981 1250 lbs. $ 2,000 x 1.5 — $7,500
November 30, 1981 46 lbs. $1 ,000 —
March 17, 1982 127 lbs. $2,000 x 1 $12,000
July 15, 1982 6271 lbs. $10,000 — _______
Subtotal for Relief Valve Discharges
Failure to Report
Failed to report July 6, 1981 discharge
Report August 15, 1981 discharge 1
month late - 25 x $20,000 ______
Subtotal for reporting
Reactor 0peni g Loss Violations
77 reactor opening loss violations
Stripping Violations (Suspension )
January 17, 1982 556 ppm
July 10, 1982 421 ppm
August 19, 1982 494 ppm _______
Subtotal for stripping
Total Gravity Component
$19,500
$5 MOO
5 .000
$10,000
$77 ,000
$2 .000
$1 ,000
$1 ,000
$4,000
$110,500

-------
Benefit Component
None determined
Preliminary deterrence amount $110,500
Ad] ustments
Negligence
Add 30Z of gravity component - emission
violations generally due to
repetition of same cause
+ 30% (110,500) + $ 33,150
1inimurn penalty settlement amount $143,650

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Example 2
Polynesian Polymers, Inc., owns a polyvinyl chloride plant
in Texas. The United States has filed an enforcement action
aLleging relief valve and manual vent valve discharge violations 1
reporting violations, and reactor opening loss violations. The
settlement penalty is determined as follows:
Gravity Component
Relief Valve and Manual Vent Valve Discharges
Penalty/ Discharge
July 6, 1983
July 15, 1983
August 21 , 1983
November 1 , 1983
January 17, 1984
271 lbs.
621 lbs.
710 lbs.
6,221 lbs.
7,721 lbs.
$ 2,000
2,000
2 1000
10,000
15,000
$25 ,000
10,000
x 2 32,000
x 1 = 17,000
x 1.5 12,000
$ 61,000
November. 30, 1984 526 lbs. 2,000
January 14, 1985 2,771 lbs. 5,000
July 19, 1985 4 lbs. 1,000
December 21 , 1985 172 lbs. 2,000
Subtotal for Relief Valve Discharges
Failure to Report
Failed to report Nov. 1 , 1984 discharge
Failed to report Nov. 30, 1984 discharge
Subtotal for reporting
$__35 ,000

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Reactor Opening Loss Violations
214 reactor opening loss violations $214,000
Total. Gravity Component $310,000
Benefit Component
Economic benefit of delay in installing
“clean reactor” technology-deemed
necessary to comply with reactor
opening loss standard (BEN calculation) $100,000
Preliminary deterrence amount $410,000
Adjustments
History of Noncompliance
Add 30% of subtotal for reporting violations;
cited for similar violations at this plant
in action under the Clean Water Act + 10,500
No other adjustments
Minimum penalty settlement amount $420,500

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3

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E ’ Arrp 3

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OS ? 4
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, D.C. 20460
(vt, I
L
MAY I I I992
MEMORANDUM
SUBJECT: Final Revisions to the Asbestos Demolition and
Renovation Civil Penalty Policy Dated August 22, 1989
FROM: Michael S. Alushin , “.d
Enforcement Counsel for Air
Office of Enforcement
John Rasnic, Director &
Stationary Source Comp lance Division
Office of Air Quality Planning and Standards
TO: Addressees
Attached is a copy of the revised Asbestos Demolition and
Renovation Civil Penalty Policy for cases subject to the
requirements of 40 C.F.R. Part 61, Subpart M. This policy
replaces Appendix III to the Clean Air Act Stationary Source
Civil Penalty Policy dated August 22, 1989 and is immediately
effective in all civil enforcement actions, administrative and
judicial, in which a penalty offer has not yet been made to the
defendant.
Major changes from the August 22, 1989 policy include (1)
application of the presumption of continuing violation to penalty
calculations pursuant to Section 113 (e) (2) of the Clean Air Act;
(2) changes to reflect the November 20, 1990 revisions to the
asbestos NESHAP; (3) a factor in the gravity component for the
size of the violator; and (4) changes as to when it is
appropriate to escalate the penalty for a second or subsequent
violation. In addition, we have attempted to clarify sections of
the policy which commenters from the Regions deemed to be
ambiguous.
In the process of revising this policy, we have received
extensive, detailed comments and suggestions for improving the
policy from the Regions. Many of the comments addressed concerns
with application of the policy to new administrative cases. We
have attempted to incorporate as many of the suggestions as
possible into this final policy. As we gain more experience in
applying this penalty in the administrative arena, we may choose
to incorporate some of the comments which were not adopted in

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2
this versl .oii. To that end, we encourage the Regions to share any
prcb1ei s they may encounter in using this policy.
Many Regions conunented that escalation of a violation to a
second or subsequent category within the context of a single
demolition or renovation project could produce inequitable
treatment of similarly situated defendants based solely on
whether EPA had the resources to send an inspector to the site on
multiple occasions. Several commenters also raised concerns that
the escalation could result in penalties quickly reaching or
exceeding the statutory maximum which would prevent these cases
from being brought administratively or would inhibit the Regions’
ability to enter into meaningful settlement negotiations with
defendants. The policy now allows calculation of violations as
second or subsequent violations only if the violation occurs in
the context of a different demolition or renovation project or
where the project was completed in stages or over a long period
of time, which could be tantamount to a different project.
Several coitunenters expressed concern that the addition of a
size of violator component in the gravity calculation would also
raise the penalties for asbestos cases to the point where they
could not be brought in the administrative forum. While addition
of this factor may force some cases to be brought in federal
court, we believe that use of the size of violator component
serves an important deterrence goal, which had been lacking in
the prior policy. We have given the Regions flexibility in
determining the size of violator figure, given relative
culpability of multiple defendants, which may address this
concern in some instances.
Several cou menters raised concerns that the policy required
the Regions to use the entire amount of asbestos found at the
facility for purposes of determining the number of units to use
in calculating the gravity component of the penalty, even where
there was evidence indicating that only part of the job was done
in violation of the NESHAP. The policy clarifies that the
Region may base the number of units upon the amount of asbestos
reasonably related to the violation.
Many of the Regions expressed concern with the concept of
oral notification of a violation by on—site inspectors being
sufficient notice to allow treatment of next violations as second
or subsequent violations or to start the presumption of
continuing violations accruing. We have not adopted the
suggestion that only formal written notice be acceptable because
it could severely inhibit the Regions’ ability to seek penalties
for days of violation after an initial inspection. However, we
acknowledge that in some instances, relying on oral notice may
present significant litigation risks, and therefore leave the

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3
decision whether to include days of violation after oral
ctification to the discretion of the Region and the litigation
teams.
One commenter suggested that the dollar amounts used for
notification violations were too low and provided alternative
figures for certain categories. This comment was not generally
accepted and ran counter to most of the Regions’ concerns that
the policy would now create penalties that will be too high for
purposes of the new administrative forum. At this time, we have
not increased the penalty figures for notice violations.
Although one coininenter suggested that we clarify how the
policy will work in conjunction with the field citation program,
it is impossible to do so until the field citation rules and
guidance are further developed. Since any guidance developed for
the field citation program will necessarily reference the genera] .
Stationary Source Penalty Policy and all of the separate
appendices, we have not included a reference to it here.
If you have any questions regarding this policy, please
contact Scott Throwe of the Stationary Source Compliance Division
at (703) 308—8699 or Kathryn Smith of the Office of Enforcement
at (202) 260—3899.
Attachment
Addressees:
Regional Counsels
Regions I-X
Regional Counsel Air Contacts
Regions I-X
Air and Waste Management Directors
Regions I, II, and IX
Air, Radiation and Toxics Division Director
Region III
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X -

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4
Air Compliance Branch Chiefs
Regions I-X
Alan Eckert
Office of General Counsel
John C. Cruden, Chief
Environmental Enforcement Section
U.S. Department of Justice

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APPENDIX III
ASBESTOS DEMOLITION AND RENOVATION CIVIL PENALTY POLICY
Revised: May 5, 1992
The Clean Air Act Stationary Source Civil Penalty Policy
(“General Penalty Policy”) provides guidance for determining the
amount of civil penalties EPA will seek in pre-trial settlement
of civil judicial actions under Section 113 (b) of the Clean Air
Act (“the Act”). In addition, the General Penalty Policy is used
by the Agency in determining an appropriate penalty in
administrative penalty actions brought under Section 113 (d) (1)
of the Act. Due to certain unique aspects of asbestos demolition
and renovation cases, this Appendix provides separate guidance
for determining the gravity and economic benefit components of
the penalty. Adjustment factors should be treated in accordance
with the General Penalty Policy.
This Appendix is to be used for settlement purposes in civil
judicial cases involving asbestos NESHAP demolition and
renovation violations, but the Agency retains the discretion to
seek the full statutory maximum penalty in all civil judicial
cases which do not settle. In addition, for administrative
penalty cases, the Appendix is to be used in conjunction with the
General Penalty Policy to determine an appropriate penalty to be
pled in the administrative complaint, as well as serving as
guidance for settlement amounts in such cases. If the Region
is referring a civil action under Section 113(b) against a
demolition:or renovation source, it should recommend a minimum
civil penalty settlement amount in the referral. For
administrative penalty cases under Section 113 (d) (1), the Region
will plead the calculated penalty in its complaint. In both
instances, consistent with the General Penalty Policy, the Region
should determine a “preliminary deterrence amount” by assessing
an economic benefit component and a gravity component. This
amount may then be adjusted upward or downward by consideration
of other factors, such as degree of willfulness and/or
negligence, history of noncompliance,-’ ability to pay, and
litigation risk.
The “gravity” component should account for statutory
criteria such as the environmental harm resulting from the
violation, the importance of the requirement to the regulatory
As discussed in the General Penalty Policy, history of
noncompliance takes into account prior violations of all
environmental statutes. In addition, the litigation team should
consider the extent to which the gravity component has already
been increased for prior violations by application of this
Appendix.

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scheme, the duration of the violation, and the size of the
violator. Since asbestos is a hazardous air pollutant, the
penalty policy generates an appropriately high gravity factor
associated with substantive violations (i.e., failure to adhere
to work practices or to prevent visible emissions from waste
disposal). Also, since notification is essential to Agency
enforcement, a notification violation may also warrant a high
gravity component, except for minor violations as set forth in
the chart for notification violations on page 15.
I. GRAVITY COMPONENT
The chart on pages 15—16 sets forth penalty amounts to be
assessed for notification and waste shipment violations as part
of the gravity component of the penalty settlement figure. The
chart on page 17 sets forth a matrix for calculating penalties
for work—practice, emission and other violations of the asbestos
NESHAP.
A. Notice Violations
1. No Notice
The figures in the first line of the Notification and Waste
Shipment Violations chart (pp. 15—16) apply as a general rule to
failure to:notify, including those situations in which
substantive violations occurred and those instances in which EPA
has been unable to determine if substantive violations occurred.
If EPA does not know whether substantive violations
occurred, additional information, such as confirmation of the
amount of asbestos in the facility obtained from owners,
operators, or unsuccessful bidders, may be obtained by using
section 114 requests for information or administrative subpoenas.
If there has been a recent purchase of the facility, there may
have been a pre—sale audit of environmental liabilities that
might prove useful. Failure to respond to such a request should
be assessed an additional penalty in accordance with the General
Penalty Policy. The reduced amounts in the second line of the
chart apply only if the Agency can conclude, from its own
inspection, a State inspection, or other reliable information,
that the source probably achieved compliance with all substantive
requirements.
2. Late. Incomplete or Inaccurate Notice
Where notification is late, incomplete or inaccurate, the
Region should use the figures in the chart, but has discretion to
insert appropriate figures in circumstances not addressed in the
matrix. The important factor is the impact the company’s action
has on the Agency’s ability to monitor substantive compliance.

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B. Work-Practice, Emission and Other Violations
Penalties for work—practice, emissions and other violations
are based on the particular regulatory requirements violated.
The figures on the chart (page 17) are for each day of documented
violations, and each additional day of violation in the case of
continuing violations. The total figure is the sum of the
penalty assigned to a violation of each requirement. Apply the
matrix for each distinct violation of sub-paragraphs of the
regulation that would constitute a separate claim for relief if
applicable (e.g., 61.].45(c)(6)(i), (ii), and (iii)).
The gravity component also depends on the amount of asbestos
involved in the operation, which relates to the potential for
environmental harm associated with improper removal and disposal.
There are three categories based on the amount of asbestos,
expressed in ttunjts,I a unit being the threshold for
applicability of the substantive requirements. 2 If a job
involves friable asbestos on pipes and other facility components,
the amounts of linear feet and square feet should each be
separately converted to units, and the numbers of units should be
added together to arrive at a total. Where the only information
on the amount of asbestos involved in a particular demolition or
renovation is in cubic dimensions (volume), 35 cubic feet is the
applicability limit which is specified in § 61.145(a) (1) (ii).
Where the facility has been reduced to rubble prior to the
inspection, information on the amount of asbestos can be sought
from the notice, the contract for removal or demolition,
unsuccessful bidders, depositions of the owners and operators or
maintenance personnel, or from blueprints if available. The
Region may also make use of § 114 requests and § 307 subpoenas to
gather information regarding the amount of asbestos at the
facility. If the Region is unable to obtain specific information
on the amount of asbestos involved at the site from the source,
the Region should use the maximum unit range for which it has
adequate evidence.
Where there is evidence indicating that only part of a
demolition or renovation project involved improper stripping,
removal, disposal or handling, the Region may calculate the
number of units based upon the amount of asbestos reasonably
related to such improper practice. For example, if improper
2 This applicability threshold is prescribed in
61.145(a) (1) as the combined amount of regulated—asbestos
containing material (RACM) on at least 80 linear meters (260
linear feet) of pipes, or at least 15 square meters (160 square
feet) on other facility components, or at least 1 cubic meter (35
cubic feet) of f facility components.

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removal is observed in one room of a facility, but it is apparent
that the removal activities in the remainder of the facility are
done in full compliance with the NESHAP, the Region may calculate
the number of units for the room, rather than the entire
facility.
C. Gravity Component Adiustments
1. Second and Subseauent Violations
Gravity components are adjusted based on whether the
violation is a first, second, or subsequent (i.e., third, fourth,
fifth, etc.) offense. 3 A “second” or “subsequent” violation
should be determined to have occurred if, after being notified of
a violation by the local agency, State or EPA at a prior
demolition or renovation project, the owner or operator violates
the Asbestos NESHAP regulations during another project, even if
different provisions of the NESHAP are violated. This prior
notification could range from simply an oral or written warning
to the filing•of a judicial enforcement action. Such prior
notification of a violation is sufficient to trigger treatment of
any future violations as second or subsequent violations; there
is no need to have an admission or judicial determination of
liability.
Violations should be treated as second or subsequent
offenses only if the new violations occur at a different time
and/or a different jobsite. Escalation of the penalty to the
second or subsequent category should not occur within the context
of a single demolition or renovation project unless the project
is accomplished in distinct phases or is unusually long in
duration. Escalation of the violation to the second or
subsequent category is required, even if the first violation is
deemed to be “minor”.
A violation of a § 113(a) administrative order (AO) will
generally be considered a “second violation” given the length of
time usually taken before issuing an AO and should be assessed a
separate penalty in accordance with the General Penalty Policy.
If the case involves multiple potential defendants and any
one of them is involved in a second or subsequent offense, the
penalty should be derived based on the second or subsequent
offense. In such instance, the Government should try to get the
prior-offending party to pay the extra penalties attributable to
this factor. (See discussion below on apportionment of the
penalty).
Continuing violations are treated differently than second
or subsequent violations. See, Duration of Violation, below.

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2. Duration of the Violation
The Region should enhance the gravity component of the
penalty according to the chart (p. 17) to reflect the duration of
the violation. Where the Region has evidence of the duration of
a violation or can invoke the benefit of the presumption of
continuing violation pursuant to Section 113(e) (2) of the Act,
the gravity component of the penalty should be increased by the
number of additional days of violation multiplied by the
corresponding number on the chart.
In order for the presumption of continuing noncompliance to
apply, the Act requires that the owner or operator has been
notified of the violation by EPA or a state pollution control
agency and that a prima facie showing can be made that the
conduct or events giving rise to the violation are likely to hav
continued or recurred past the date of notice. When these
requirements have been met, the length of violation should
include the date of notice and each day thereafter until the
violator establishes the date upon which continuous compliance
was achieved.
When there is evidence of an ongoing violation and facts do
not indicate when compliance was achieved, presume the longest
period of noncompliance for which there is any credible evidence
and calculate the duration of the violation based on that date.
This period should include any violations which occurred prior to
the notification date if there is evidence to support such
violations. However, if the violations are based upon the
statutory presumption of continuing violation, only those dates
after notification may be included. When the presumption of
continuing noncompliance can be invoked and there is no evidence
of compliance, the date of completion of the demolition or
renovation should be used as the date of compliance. ( U.S. V.
Tzavah Urban Renewal Corp. , 696 F. Supp. 1013 (D.N.J. 1988))
Where there has been no compliance and the demolition or
renovation activities are ongoing, the penalty should be
calculated as of the date of the referral and revised upon a
completion date or the date upon which correction of the
violation occurs.
Successive violations exist at the same facility when there
is evidence of violations on separate days, but no evidence (or
presumption) that the violations were continuing during the
“ The court in Tzavah held that for purposes of asbestos
NESHAP requirements, a demolition or renovation project has not
been completed until the NESHAP has been complied with and all
asbestos waste has been properly disposed. 696 F. Supp. at 1019.

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intervening days. For example, where there has been more than
one inspection and no evidence of a continuing violation,
violations uncovered at each inspection should be calculated as
separate successive violations. As discussed in Section C (1)
above, successive violations occurring at a single demolition or
renovation project will each be treated as first violations,
unless they are initially treated as second or subsequent
violations based upon a finding of prior violations at a
different jobsite or because they warrant escalation based upon
the fact that the current job is done in distinct phases or is
unusually long in duration. The chart on page 16 reflects that
additional days of violation for which there is inspection
evidence are assessed the full substantive penalty amount while
additional days based upon the presumption of continuing
violation are assessed only ten percent of the substantive
penalty per day.
Since asbestos projects are usually short-lived, any
correction of substantive violations must be prompt to be
effective. Therefore, EPA expects that work practice violations
brought to the attention of an owner or operator will be
corrected promptly, thus ending the presumption of continuing
violation. This correction should not be a mitigating factor,
rather this policy recognizes that the failure to promptly
correct the environmental harm and. the attendant human health
risk implicitly increases the gravity of the violation. In
particularly egregious cases the Region should consider enhancing
the penalty based on the factors set forth in the General Penalty
Policy.
3. Size of the Violator
An increase in the gravity component based upon the size of
the violator’s business should be calculated in accordance with
the General Penalty Policy. Where there are multiple defendants,
the Region has discretion to base the size of the violator
calculation on any one or all of the defendants’ assets. The
Region may choose to use the size of the more culpable defendant
if such determination is warranted by the facts of the case or it
may choose to calculate each defendant’s size separately and
apportion this part of the penalty (see discussion of
apportionment below).
II. ECONOMIC BENEFIT COMPONENT
This component is a measure of the economic benefit accruing
to the operator (usually a contractor), the facility owner, or
both, as a result of noncompliance with the asbestos regulations.
Information on actual economic benefit should be used if
available. It is difficult to determine actual economic benefit,

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but a comparison of unsuccessful bids with the successful bid may
provide an initial point of departure. A comparison of the
operator’s actual expenses with the contract price is another
indicator. In the absence of reliable information regarding a
defendant’s actual expenses, the attached chart provides figures
which may be used as a “rule of thumb” to determine the costs of
stripping, removing, disposing of and handling asbestos in
compliance with § 61.145(c) and §61.150. The figures are based
on rough cost estimates of asbestos removal nationwide. If any
portion of the job is done in compliance, the economic benefit
should be based only on the asbestos improperly handled. It
should be assumed, unless there is convincing evidence to the
contrary, that all stripping, removal, disposal and handling was
done improperly if such improper practices are observed by the
inspector.
III. APPORTIONMENT OF THE PENALTY
This policy is intended to yield a minimum settlement
penalty figure for the case as a whole. In many cases, more than
one contractor and/or the facility owner will be named as
defendants. In such instances, the Government should generally
take the position of seeking a sum for the case as a whole, which
the multiple defendants can allocate among themselves as they
wish. On the other hand, if one party is particularly deserving
of punishment so as to deter future violations, separate
settlements may ensure that the offending party pays the
appropriate penalty.
It is not necessary in applying this penalty policy to
allocate the economic benefit to each of the parties precisely.
The total benefit accruing to the parties should be used for this
compone it. Depending on the circumstances, the economic benefit
may actually be split among the parties in any combination. For
example, if the contractor charges the owner fair market value
for compliance with asbestos removal requirements and fails to
comply, the contractor has derived an economic benefit and the
owner has not. If the contractor underbids because it does not
factor in compliance with asbestos requirements, the facility
owner has realized the full amount of the financial savings. (In
such an instance, the contractor may have also received a benefit
which is harder to quantify — obtaining the contract by virtue of
the low bid.)
There are circumstances in which the Government may try to
influence apportionment of the penalty. For example, if one
party is a second offender, the Government may try to assure that
such party pays the portion of the penalty attributable to the
second offense. If one party is known to have realized all or
most of the economic benefit, that party may be asked to pay for

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that amount. Other circumstances may arise in which one party
appears more culpable than others. We realize, however, that it
may be impractical to dictate allocation of the penalties in
negotiating a settlement with multiple defendants. The
Government should therefore adopt a single t bottom line” sum for
the case and should not reject a settlement which meets the
bottom line because of the way the amount is apportioned.
- Apportionment of the penalty in a multi-defendant case may
be required if one party is willing to settle and others are not.
In such circumstances, the Government should take the position
that if certain portions of the penalty are attributable to such
party (such as economic benefit or second offense), that party
should pay those amounts and a reasonable portion of the amounts
not directly assigned to any single party. However, the
Government should also be flexible enough to mitigate the penalty
for cooperativeness in accordance with the General Penalty
Policy. If a case is settled as to one defendant, a penalty not
less than the balance of the settlement figure for the case as a
whole should be sought from the remaining defendants. This
remainder can be adjusted upward, in accordance with the general
Civil Penalty Policy, if the circumstances warrant it. Of
course, the case can also be. litigated against the remaining
defendants for the maximum attainable penalty. In order to
assure that the full penalty amount can be collected from
separate settlements, it is recommended that the litigation team
use ABEL calculations, tax returns, audited financial statements
and other reliable financial documents for all defendants prior
to making settlement offers.
IV. OTHER CONSIDERATIONS
The policy seeks substantial penalties for substantive
violations and repeat violations. Penalties should generally be
sought for all violations which fit these categories. If a
company knowingly violates the regulations, particularly if the
violations are severe or the company has a prior history of
violations, the Region should consider initiating a criminal
enforcement action.
The best way to prevent future violations of notice and work
practice requirements is to ensure that management procedures and
training programs are in place to maintain compliance. Such
injunctive relief, in the nature of environmental auditing and
compliance certification or internal asbestos control programs,
are desirable provisions to include in consent decrees settling
asbestos violations.

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V. EXAMPLES
Following are two examples of application of this policy 5 .
Example 1 (This example illustrates calculations involving
proof of continuing violations based on the
inferences drawn from the evidence)
XYZ Associates hires America’s Best Demolition Contractors
to demolish a dilapidated abandoned building containing 1300
linear feet of pipe covered with friable asbestos, and 1600
square feet of siding and roofing sprayed with asbestos. Neither
company notifies EPA or State officials prior to commencing
demolition of the building on November 1. Tipped off by a
citizen complaint, EPA inspects the site on November 5 and finds
that the contractor has not been wetting the suspected asbestos
removed from the building, in violation of 40 C.F.R. §
61.145(c)(3). In addition, the contractor has piled dry asbestos
waste material on a plastic sheet in the work area pending its
disposal, in violation of 40 C.FSR § 61.145(c)(6)(i). There is
no evidence of any visible emissions from this pile. During the
inspection, the site supervisor professes complete ignorance of
asbestos NESHAP requirements. An employee tells the inspector
that workers were never told the material on-site contained
asbestos and states t sjnce this job began we’ve just been
scraping the pipe coverings off with our hammers.” The inspector
observes there is no water at the site. The inspector takes
samples and sends them to an EPA approved lab which later
confirms that the material is asbestos. Work is stopped until
the next day when a water tank truck is brought to the facility
for use in wetting during removal and storage.
On November 12 the inspector returns to the site only to
find that the workers are dry stripping the siding and roofing
because the water supply had been exhausted and the tank truck
removed. A worker reports that the water supply had lasted four
days before it ran out at the close of the November 9 work day.
The inspector observes a new pile of dry asbestos containing
debris in tall grass at the back of the property. Unlike the
pile observed inside the facility during the first inspection,
this pile is presumed to have produced visible emissions. At the
time of the second inspection 75% of the asbestos had been
removed from the building 50% of which is deemed to have been
The examples are intended to illustrate application of
the civil penalty policy. For purposes of this policy, any
criminal conduct that may be implied in the examples has been
ignored. Of course, in appropriate cases, prosecution for
criminal violations should be pursued through appropriate
channels.

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improperly removed 6 . After discussion with EPA officials, work
is halted at the site and XYZ Associates hires another contractor
to properly dispose of the asbestos wastes and to remove the
remaining 25% of the asbestos in compliance with the asbestos
NESHAP. The new contractor completes disposal of the illegal
waste pile on November 18.
Neither XYZ Associates nor America’s Best Demolition
Contractors has ever been cited for asbestos violations by EPA or
the State. Both companies have assets of approximately
$5,000,000.00 and have sufficient resources to pay a substantial
penalty.
The defendants committed the following violations: one
violation of the notice provision ( 61.145(b) (1)); one violation
for failure to wet during stripping ( 61.145(c) (3)) and failure
to keep wet until disposal ( 61.145(c) (6) (i)), each detected at
the first inspection and lasting a duration of five days (Nov. 1-
5); a second separate dry stripping violation ( 61.145(c) (3)),
observed at the second inspection and lasting for three days
(Nov. 10—12); an improper disposal violation ( 61.150(b)),
discoveredduring the second inspection, lasting a duration of
nine days (the violation began on November 10 and continued to
November 18 per Tzavah ) and a visible emissions violation
( 61.150(a)) discovered during the second inspection, lasting a
duration of :seven days (Nov. 12-18). Thus, the defendants are
liable for a statutory maximum of $750,000 (29 days of work
practice violations x $25,000 (statutory maximum penalty per day
of each separate substantive violation) + $25,000’ for the
notice violation = $750,000).
The penalty is computed as follows:
Gravity CoinDonent
Notice violation, § 61.145(b)
(first time) $15,000
6 America’s Best completed 75% of the work over a 12 day
period. For 4 of the 12 days (Nov.6—9) there is evidence that
water was used and asbestos properly handled. Assume that equal
amounts of asbestos were removed each day. Thus, 50% of the
asbestos was properly removed (25% by America’s Best, 25% by the
new contractor.
Arguably, for purposes of calculating the statutory
maximum, the notice violation can be construed to have lasted at
least until the EPA has actual notice of the demolition (or
renovation, as the case may be).

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—- First Inspection Violations
Violation of § 61.145(c) (3)
(10 + 5 = 15 units
of asbestos) (1 x $10,000) $10,000
Additional days of violation
($1,000 x 4 days of
violations) $ 4,000
Violation of § 61.145(c) (6) (i)
(1 x $10,000) $10,000
Additional days of violation
($1,000 x 4 days of
violations) $ 4,000
-— Second Inspection Violations
New violation of § 61.145(c) (3)
(1 x $10,000) $10,000
Additional days of violation
($1,000 x 2 days of
violations) $ 2,000
Violation of §61.150(a) $10,000
(1 x $10,000)
Additional days of violation
($1,000 x 6 days of violations) $ 6,000
Violation of § 61.150(b)
(1. x $10,000) $10,000
Additional days of violation
($1,000 x 8 days of
violations) $ 8.000
$109,000
—— Size of Violator $20,000
(size of both defendants
combined)
Total Gravity Component $129,000
Economic Benefit Component
$20/sq. foot x 1600 sq. feet + $32,000
$20/linear foot x 1300 linear feet + 26.000
$58,000

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— 12 —
$58,000 x 50% (% of asbestos
improperly handled) $ 29,000
Preliminary Deterrence Amount $158,000
Adjustment factors - No adjustment
for prompt correction of environ-
mental problem because that is what
the defendant is supposed to do.
Minimum penalty settlement amount $158,000
NOTE: If the statutory maximum had been smaller than this
sum, then the minimum penalty would have to be adjusted
accordingly. Also, for the dry stripping violations, no
additional days were added for the period between the two
inspections because there was no evidence that the dry
stripping had continued in the interim period.
Example 2 (This example illustrates calculations involving
proof of continuing violations based on the
statutory inference drawn from the notice of
violation)
Consolidated Conglomerates, Inc. hires Bert and Ernie’s
Trucking Company to demolish a building which contains 1,000
linear feet of friable asbestos on pipes. Neither party gives
notice to EPA or to the state prior to commencement of
demolition. An EPA inspector acting on a tip, visits the site on
April 1, the first day of the building demolition. During the
inspection he observes workers removing pipe coverings dry.
Further inquiry reveals there is no water available on site. He
also finds a large uncontained pile of what appears to be dry
asbestos—containing waste material at the bottom of an embankment
behind the building. He takes samples and issues an oral notice
of violation citing to 40 C.F.R. § 61.145(c)(3) (dry removal),
61.145(c)(6)(i) (failure to keep wet until disposal), and
61.150(a) (visible emissions) 8 , and gives the job supervisor a
copy of the asbestos NESMAP. Test results confirm the samples
contain a substantial percentage of asbestos.
On April 12, the inspector receives information from a
8 Regardless of whether the inspector observes emissions of
asbestos during a site inspection, where there is circumstantial
evidence (such as uncontained, dry asbestos piles outside), that
supports a conclusion that visible emissions were present, the
Region has discretion to include this violation.

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reliable source that the pile of dry asbestos debris has not been
properly disposed of and there is still no access to water at the
facility. This information supports a new violation of
§61.150(b) (improper disposal). The inspector revisits the site
on April 22 and determines that the waste pile has been removed.
A representative of Consolidated Conglomerates, Inc. gives the
inspector documents showing that actual work at the demolition
site concluded on April 17, but the contractor cannot document
when the debris pile was removed. Thus, there are at least 61
days of violation (17 days of dry removal in violation of §
61.145(c) (3) 22 days of failure to keep wet until disposal in
violation of §61.145(c) (6) (1), 11 days of visible emissions in
violation of §61.150(a) and 11 days of improper disposal in
violation of § 61.150(b)) times $25,000 perday, plus $25,000 for
the notice violation 9 , or a statutory maximum of $1,550,000.
Consolidated Conglomerates is a corporation with assets of
over $100 million and annual sales in excess of $10 million.
Bert and Ernie’s Trucking is a limited partnership of two
brothers who own tow trucks and have less than $25,000 worth of
business each year. This contract was for $50,000. Bert and
Ernie’s was once previously cited by the State Department of
Environmental Quality for violations of asbestos regulations.
As a result, all violations are deemed to be second violations.
The penalty is computed as follows:
Gravity Component
No notice (2nd violation) $ 20,000
Violation of §61.145(c) (3)
(approx. 3.85 units)
(second violation) $ 15,000
Additional days of violation
(per presumption) (16 x $1,500) $ 24,000
Violation of §61.145(c) (6) (1) $ 15,000
(second violation)
Additional days of violation
(per presumption) (21 x $1,500) $ 31,500
Violation of §61.150(a) $ 15,000
See footnote 3.

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— 14 —
(second violation)
Additional days of violation
(per presuinptiort) (10 x $1,500) $ 15,000
Violation of §61.150(b)
(second violation) $ 15,000
Additional days of violation
(per presumption) (10 x $1,500) S 15.000
$ 180.500
Size of Violator $ 2,000
(based on Bert and Ernie’s size only)
Total Gravity Component $182,500
Economic Benefit Component
$20/linear foot x 1,000 linear feet $ 20,000
Preliminary Deterrence Amount $202,500
Adjustment factors - 10% increase for
willfulness $ 18,250
Minimum Settlement Penalty Amount $220.750
NOTE: Since this example assumes there was a proper factual
basis for invoking the statutory presumption of continuing
noncompliance, the duration of the §61.150(a) visible emissions
and § 61.150(b) disposal violation runs to April 21 and the §
61.145(c) (3) dry removal violation runs to April 17, the longest
periods for which noncompliance can be presumed.
Apportionment of the Penalty
The calculation of the gravity component of the penalty in
this case reflects a $5,000 increase in the notice penalty and a
$48,500 increase in the penalty for substantive violations
because it involves a second violation by the contractor.
Ordinarily, the Government should try to get Bert and Ernie’s to
pay at least these additional penalty amounts. However,
Consolidated Conglomerate’s financial size compared to the
contractor’s may dictate that Consolidated pay most of the
penalty.

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— 15 —
Notification and Waste Shipment Record Violations
Notification Violations 1st Violation 2nd Violation Subseguent
No notice $15,000 $20,000 $25,000
No notice but probable $ 5,000 $15,000 $25,000
substantive compliance
Late, Incomplete or Inaccurate notice.
For each notice, select the single largest dollar figure
that applies from the following table. These violations are
assessed a one—time penalty except for waste shipment vehicle
marking which should be assessed a penalty per day of shipment.
Add the dollar figures for each notice or waste shipment
violation:
Notice submitted after asbestos removal $15,000
completed tantamount to no notice.
Notice lacks both job location and asbestos 4,000
removal starting and completion dates.
Notice submitted while asbestos removal is 2,000
in progress.
Notice lacks either job location or asbestos 2,000
removal starting and completion dates.
Failure to update notice when amount of asbestos 2,000
changes by at least 20%
Failure to provide telephone and written notice 2,000
when start date changes
Notice lacks either asbestos removal starting 1,000
or completion dates, but not both.
Amount of asbestos in notice is missing, 500
improperly dimensioned, or for multiple facilities.
Notice lacks any other required information. 200
Notice submitted late, but still 200
prior to asbestos removal starting date.

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— 16 —
Waste Shi ent Violations
Failure to maintain records which 2,000
precludes discovery of waste disposal activity
Failure to maintain records but other 1,000
information regarding waste disposal available
Failure to mark waste transport vehicles 1,000
during loading and unloading (assess for
each day of shipment)

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— 17 —
Work-practice. Emission and Other Violations
Gravity Component
Total amount of Each add. Each add. Each add .
asbestos involved First day of Second day of Subsequent day of
in the operation violation violation violation violation violations violation
< 10 units $ 5,000 $ 500 $15,000 $ 1,500 $25,000 $ 2,500
> 10 units
but  50 units $10,000 $ 1,000 $20,000 $ 2,000 $25,000 $ 2,500
> 50 units $15,000 $ 1,500 $25,000 $ 2,500 $25,000 $ 2,500
Unit = 260 linear feet, 160 square feet or 35 cubic feet — if more than one is involved,
convert each amount to units and add together
Apply matrix separately to each violation of §61.145(a) and each sub-paragraph of
§ 61.145(c) and § 61.150, except §61.150(d) (waste shipment records) which is treated as a
one time violation and § 61.150(c) (vehicle marking) (see chart on pages 15—16); calculate
additional days of violation, when applicable, for each sub-paragraph — add together
Benefit Component
For asbestos on pipes or other facility components:
$20 per linear, square or cubic foot of asbestos for any substantive violation.

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• - ;:\v!R. :: ’7 . ECT ’ . -3ENC’
,y t- p
f’4 f& I0))
NOV 2 8 1 8 £ZL a i
c 3 o ii )
MEMORANDUM
SUBJECT: Proposed Revisions to the Asbestos Demolition and
Renovation Civil Penalty Policy I
. ) ..
FROM: Terrell E. Hunt
Associate Enforcement Counsel
Air Enforcement Division
John S. Seitz, Director
Stationary Source Compli e Division
Office of Air Quality Planning and Standards
TO: Addressees
Attached for your review is a draft revision to the asbestos
demolition and renovation civil penalty policy for cases subject
to the requirements of 40 C.F.R. Part 61, Subpart N. This policy
replaces Appendix III to the Clean Air Act Stationary Source
Civil Penalty Policy, which was most recently revised on
February 5, 1985.
We are preparing changes in response to concerns raised by
the Regions over the last several years. One of those concerns
is that asbestos violators have not been sufficiently deterred by
our enforcement activities. While we hope that the Revised
Asbestos Strategy, dated March 31, 1988, will begin to address
this problem, the increased penalties proposed here would serve
to complement that strategy. We believe that there is a high
percentage of noncompliance in the industry, so penalties must be
high to achieve the desired deterrent effect.
This proposed policy makes changes to the gravity component
calculation, the economic benefit component and general
considerations. The changes to the Feb. 8, 1985 policy are
underlined.

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—2—
We would appreciate your review and comment on the proposed
policy. Please send comments by January 23, 1989 to Charles
Garlow of the Air Enforcement Division, 475-7088, E-mail EPA
2251, Mail Code LE—134A.
Attachment
Addressees:
Regional Counsels
Regions I-X
Air Management Division Directors
Regions I, III, and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Radiation Division Director
Region V
Air and Toxics Division Directors
Regions VII, VIII and X
Jonathan Libber, Chief
Legal Enforcement Policy Branch
Office of Enforcement Policy
David Buente, Chief
Environmental Enforcement Section
Department of Justice
Robert Van Heuvelen, Assistant Chief
Environmental Enforcement Section
Department of Justice
Air Branch Chiefs/Team Leaders
Office of Regional Counsel
Regions I—X
Air Compliance Branch Chiefs
Air Divisions
Regions I-X

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DRAFT
APPENDIX III
Asbestos Demolition and Renovation Civil Penalty Policy
The Clean Air Act Stationary Source Civil Penalty Policy
provides guidance for determining the amount of civil penalties
EPA will seek in pre—trial settlement of enforcement actions
under Title I of the Act. Due to certain unique aspects of
asbestos demolition and renovation cases, separate guidance
is provided here for determining the gravity and economic
benefit components of the penalty. Adjustment factors should
be treated in accordance with the general stationary source
penalty policy.
If the Region is referring a civil action under Section
113(b) against a demolition or renovation source, it should
recommend a civil penalty settlement amount. Consistent with
the general penalty policy, the Region should determine a
“preliminary deterrence amount” by assessing an economic
benefit component and a gravity component. This amount may
then be adjusted upward or downward by consideration of other
factors, such as degree of willfulness and/or negligence,
history of noncompliance, ability to pay, and litigation
practicalities. Since there is a wide variation in the size
of demolition contractors, ability to pay may be an important
adjustment factor in some instances.
The “gravity” component should account for factors such
as the environmental harm resulting from the violation, the
importance of the requirement to the regulatory scheme, and
the size of the violator. Since asbestos is a hazardous air
pollutant, the gravity factor associated with substantive
violations (i.e., failure to adhere to work practices or to
prevent visible emissions from waste disposal) should be
high. Also, since notification is essential to Agency
enforcement, a notification violation should also warrant a
high gravity component.
Gravity Component
The attached chart sets forth the gravity component of
the penalty settlement figure for notification violations and
for violations of substantive requirements for control of
asbestos emissions. The figures in the first line of the
chart apply as a general rule to failure to notify, including
those situations in which substantive violations occurred and
those instances in which EPA has been unable to determine if
substantive violations occurred. Additional information may
be obtained by using Section 114 requests for information.
Failure to respond to such a request should be assessed an
additional $10,000 penalty . The reduced amounts in the
second line of the chart apply only if the Agency can conclude,
from its own inspection, a State inspection, or other reliable
information, that the source complied with substantive
requirements.

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—2—
Where notification is made late, the Region has discretion
to seek a lesser penalty. The penalty should reflect the
degree to which the Region’s ability to evaluate substantive
compliance has been hampered. If notification is late but
still allows sufficient opportunity to monitor the entire
project, little or no penalty is warranted. If notification
is given so late as to preclude any evaluation of substantive
compliance, the Region should determine a penalty as if no
notice were given.
Regions should exercise discretion in penalizing a timely
notification which is incomplete. A notification can be so
insufficient as to be tantamount to no notice, in which case
the Region should determine the penalty as if there were no
notice. Again, the important factor is the impact the company’s
action has on our ability to monitor substantive compliance.
Penalties for substantive violations are based on the
particular regulatory requirements violated. The figure is
the sum of the penalty assigned to a violation of each
requirement: removal, 40 C.F.R. §61.147(a); careful handling,
§61.147(b); wetting, §61.147(c); taking out in sections,
§61.147(d); keeping wet, §61.147(e) ; collection, packaging,
and transporting of asbestos—containing waste material,
§61.152(b); and disposal of wastes at an acceptable site,
§61.152(a). The figure also depends on the amount of asbestos
involved in the operation, which relates to the potential for
environmental harm associated with improper removal and
disposal. There are three categories based on the amount of
asbestos, expressed in “units,” a unit being the threshold
for applicability of the substantive requirements. If a job
involves friable asbestos on pipes and other facility components,
the amounts of linear feet and square feet should each be
separately converted to units, and the numbers of units
should be added together to arrive at a total. Where the
only information on the amount of asbestos involved in a
particular demolition or renovation is in cubic dimensions
(volume), the amount can be converted to square dimensions by
dividing the volume by the estimated thickness of the asbestos
material. In the absence of a known or estimated thickness,
assume that the thickness is two inches or 1/15 (.066) meters .
Gravity components are adjusted based on whether the
violation is a first, second, or subsequent offense. By
“second” or “subsequent” offense, we mean that the company
has violated the regulations after previously being notified
by the State or EPA of asbestos NESHAP violations. This
prior notification could range from simply a warning letter to
the filing of a judicial enforcement action. A “second”
violation could even occur at the same job as the first one
if, after being notified of violations by the State or EPA
and having an opportunity to correct such violations, the

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—3—
company continues to violate the regulations. If the company
violates an administrative order (AO), that should be considered
both a “second offense” and a $15,000 additional penalty for
violation of the AO, if that violation of the AO is considered
a separate count in the complaint . If the case involves
multiple potential defendants and any one of them is involved
in a second or subsequent offense, the penalty should be
derived based on the second or subsequent offense. In such
instance, the Government should try to get the prior—offending
party to pay the extra penalties attributable to this factor.
(See discussion below on apportionment of the penalty.)
The Region should consider enhancing the gravity component
in situations where the duration of the violation increases
the potential harm. This would be particularly appropriate
where the source allows asbestos waste material to stay on
site without any effort to collect and dispose it for a
significant period of time.
Benefit Component
This component is a measure of the economic benefit
accruing to the contractor, the facility owner, or both, as a
result of noncompliance with the asbestos regulations.
Information on actual economic benefit should be used if
available. The attached chart provides figures which may be
used as a “rule of thumb” to determine the costs of removing
and disposing of asbestos in compliance with 561.147 and 561.152,
where actual information is difficult to obtain or is suspect.
The figures are based on rough cost estimates which the
Office of Air Quality Planning and Standards has developed in
considering revisions to the asbestos standard. These estimates
are within a range of numbers that OAQPS has considered in
determining the economic impact of the asbestos demolition
and renovation requirements. Also, if any party ultimately
pays to have all or part of the job done in compliance,
actual expenditures can be used to offset the benefit of
noncompliance.
Apportionment of the Penalty
This policy is intended to yield a minimum settlement
penalty figure for the case as a whole. In some cases, more
than one contractor and/or the facility owner will be named
as defendants. In such instances, the Government should
generally take the position of seeking a sum for the case as a
whole, which the multiple defendants can allocate among
themselves as they wish.
It is not necessary in applying this penalty policy to
allocate the economic benefit between the parties precisely.
The total benefit accruing to the parties should be used for
this component. Depending on the circumstances, the economic

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—4—
benefit may actually split among the parties in any combination.
For example, if the contractor charges for compliance with
asbestos removal requirements and fails to comply, the contractor
has derived a savings and the owner has not. If the contractor
underbids because it does not factor in compliance with
asbestos requirements, the facility owner has realized the
full amount of the financial savings. (In such an instance,
the contractor may have also received a benefit which is
harder to quantify — obtaining the contract by virtue of the
low bid.)
There are circumstances in which the Government may try
to influence apportionment of the penalty. For example, if
one party is a second offender, the Government may try to
assure that such party pay the portion of the penalty attri-
butable to the second offense. If one party is known to have
realized all or most of the economic benefit, that party may
be asked to pay for that amount. Other circumstances may
arise in which one party appears more culpable than others.
We realize, however, that it may be impractical to dictate
allocation of the penalties in negotiating a settlement with
multiple defendants. The Government should therefore adopt a
single “bottom line” sum for the case and should not reject a
settlement which meets the bottom line because of the way the
amount is apportioned.
Apportionment of the penalty in a multi—defendant case
may be required if one party is willing to settle and others
are not. In such circumstances, the Government should take
the position that if certain portions of the penalty are
attributable to such party (such as economic benefit or second
offense), that party should pay those amounts and a reasonable
portion of the amounts not directly assigned to any single
party. However, the Government should also be flexible
enough to mitigate the penalty somewhat to account for the
party’s relative cooperativeness. If a case is settled as to
one defendant, a penalty not less than the balance of the
settlement figure for the case as a whole should be sought
from the remaining defendants. This remainder can be adjusted
upward, in accordance with the general Civil Penalty Policy,
if the circumstances warrant it. Of course, the case can
also be litigated against the remaining defendants for the
maximum attainable penalty.
Other Considerations
We expect that each Region may want to develop its own
strategy (some have already done so) for targeting enforcement
action against violators of the asbestos demolition and
renovation requirements. The policy is intended to give

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—5—
Regions flexibility to incorporate, as part of a coherent
strategy, a practice of addressing first—time notice violations
where there is at least probable compliance with substantive
requirements through findings of violation or administrative
orders.
On the other hand, the policy penalizes substantive
violations and repeat violations in a significant way.
Penalties should generally be sought for all violations which
fit these categories. If a company knowingly violates the
regulations, particularly if the violations are severe or the
company has a prior history of violations, the Region should
consider initiating a criminal enforcement action.
Since asbestos prolects are usually short—lived, any
correction of substantive violations must be prompt to be
effective. Therefore, it is assumed that work practice
violations brought to the attention of an owner or operator
will be corrected promptly. This correction should not be a
mitigating factor, rather the failure to promptly correct
the environmental harm should be considered an aggravating
factor.
The best way to prevent future violations of notice and
work practice requirements is to ensure that management
procedures and training programs are in place to maintain
compliance. Such injunctive relief, in the nature of environ-
mental auditing, is a desirable provision to include in
consent decrees settling asbestos violations.
Examples
Following are two examples of application of this policy.
Example 1
XYZ Associates hires America’s Best Demolition Contractors
to demolish a building containing 1300 linear feet of pipe
covered with friable asbestos, and 1600 square feet of
siding and roofing sprayed with asbestos. Neither company
notifies EPA or State officials prior to commencing demolition
of the building. Tipped off by a citizen complaint, EPA
inspects the site and finds that the contractor has not been
wetting the asbestos removed from the building, in violation
of 40 C.F.R. S61.147(c). In addition, the contractor has left a
pile of dry asbestos waste material on site, in violation of
40 C.F.R. S61.147(e)(l ) and the inspector observes visible
emissions in violation of S61.152(b). The contractor has
also not deposited the waste in an acceptable disposal site,
in violation of §61.152(a). At the time of the inspection
75% of the asbestos has already been removed from the building

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—6—
and handled improperly. After discussion with EPA officials,
XYZ Associates hires another contractor to properly dispose
of the asbestos wastes and to remove the remaining 25% of the
asbestos in compliance with the asbestos NESHAP.
Neither XYZ Associates nor America’s Best Demolition
Contractors has ever been cited for asbestos violations by
EPA or the State. Both parties have sufficient resources to
pay a substantial penalty.
The defendants were in violation of these four sections
of the NESHAP for 20 days, so the statutory maximum penalty
is 4 sections x 20 days x $25,000/day/violation = $2,000,000 .
The penalty is computed as follows:
Gravity Component
No notice (first time) $10,000
Violations of S61.147(c)
S61.147(e)(1 ) , S61.].52(b), and
§61.152(a) (10 + 5 = 15 units of
asbestos ( 4 x 10,000) +40,000
$50,000 $ 50,000
Economic Benefit
$20/sq. foot x 1600 sq. feet + $32,000
$20/linear foot x 1300 linear feet + 26,000
$58,000 $ 58,000
Offset by actual expenditure by xYz
to remove 25% of asbestos in compli-
ance with NESHAP (25% x $58,000) — 14,500
Preliminary deterrence amount $ 93,500
Adjustment factors — No adjustment
for prompt correction of environ-
mental problem because that is what
the defendant is supposed to do .
Minimum penalty settlement amount $ 93,500
NOTE: If the statutory maximum had been smaller than
this sum, then the minimum penalty would have to be
adjusted accordingly .

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—7—
Example 2
Consolidated Conglomerates, Inc., hires Bert and Ernie’s
Trucking Company to demolish a building which contains 1,000
linear feet of friable asbestos on pipes. Neither party
gives notice to EPA or to the State prior to commencement of
demolition. An EPA inspector, acting on a tip, visits the
site after the building has been totally demolished. He
finds a large pile of dry asbestos—containing waste material
on site. The inspector learns that the demolition had been
completed at least three weeks before he inspected the site.
Thus, there are at least 21 days of violation times two
violations (S61.l52(a) and S61.147(e)(1)) times $25,000 per
day, or a statutory maximum of $1,050,000 .
Consolidated Conglomerates is a corporation with assets
of over $100 million and annual sales in excess of $10 million.
Bert and Ernie’s Trucking is a limited partnership of two
brothers who own two trucks and have less than $250,000 worth
of business each year. This contract was for $50,000. Bert
and Ernie’s was once previously cited by the State Department
of Environmental Quality for violations of asbestos regulations.
The penalty is computed as follows:
Gravity Component
No notice (2nd violation) $25,000
Violation of S61.152(a); circum— $30,000
stantial evidence of violation of
S6l.l47(e)(l) (app. 3.85 units)
— 2nd violation
No provable violation of S6l.l52(b)
since no visible emissions were
reported .
Aggravation of hazard due to duration $ 7,500
of disposal violation — + 25% of
substantive violations (25% x $30,000 ) _______
$62,500
Benefit Component
$20/linear foot x 1,000 linear feet $ 20,000
Preliminary deterrence amount $ 82,500
No adjustment factors
Minimum settlement penalty amount $ 82,500

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—8—
Apportionment of the Penalty
The penalty in this case has been increased by $35,000
( $15,000 increase in notice penalty and $20,000 increase in
substantive violations penalty ) because it involves a second
violation by the contractor. Ordinarily, the Government
should try to get Bert and Ernie’s to pay at least that
amount of the penalty. However, Consolidated Conglomerate’s
financial size compared to the contractor’s will probably
dictate that Consolidated pay most of the penalty.

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Asbestos Demolition/Renovation Penalty Policy
Gravity Coir onent
Notification 1st Violation 2nd Violation Subsequent
Nz notice $l0— 12,000 $20—25,000 $25,000
No notice but probable $0—5,000 $10—15,000 $25,000
substantive colTpliance
Late notice — discretion — if tantamount to no notice, use above table
Incomplete notice — discretion — if tantamount to no notice, use above table
Substantive Violations
tal amount of asbestos
involved in the operation 1st Violation 2nd Violation Subsequent
< 10 units $5,000 $15,000 $25,000
> 10 units but < 50 units $10,000 $20,000 $25,000
) 50 units $15,000 $25,000 $25,000
unit = 260 linear feet or 160 square feet — if both are involved, convert each
amount to units and add together
Apply matrix separately to violation of each subsection of §61.147, §61.152(b),
and §61.152(a)
— add together
Enhance if duration of offense aggravates hazard — e.g., failure to dispose
of asbestos — containing wastes.
Benefit Component
For asbestos on pipes or other facility components :
$15 per linear or square foot of asbestos for wetting of friable asbestos and
packaging of wastes — §61.147, S61.152(b)
$ 5 per linear or square foot of asbestos for transporting and disposal of wastes
— — §61.152(b), §61.152(a)
per linear or square foot for both

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4

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__ J __

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APPENDIX IV
CLEAN AIR ACT PENALTY POLICY AS APPLIED TO
STATIONARY SOURCES OF VOI4IILE ORGANIC COMPOUNDS
WHERE REFORMULATION TO LOW SOLVENT TECHNOLOGY
IS THE APPLICABLE METHOD OF COMPLIANCE
Introduction
This addendtun provides guidance for calculating the civil
penalties EPA will require in pre—trial settlement of district
court enforcement actions, pursuant to Title I of the Clean Air
Act (CM), against sources of volatile organic compounds (VOC’s)
in violation of State Implementation Plan emission limitations,
where low solvent technology (LST) is an acceptable control
strategy for achieving compliance. If compliance using LST is
the control strategy chosen by the source and if it can be im-
pleinented expeditiously, the penalty analysis methodology set
forth in this appendix must be used. If compliance using LST
is not the compliance strategy chosen by the source, or if LST
cannot be accomplished expeditiously or is not available, the
penalty must be calculated according to the general Clean Air
Act Stationary Source Civil Penalty Policy , (hereinafter CM
Penalty Policy) , based on the costs of add-on controls.
A separate policy for arriving at a penalty figure in VOC
cases where LST is an acceptable control strategy is necessary
because penalties calculated pursuant to the general CM Penalty
Policy in such instances are insufficient to deter violations. t /
The general CM Penalty Policy focuses upon recapturing
1, Penalties must be high enough to have the desired specific
— and general deterrent effects. They must, also be, to the
extent possible, objective in order to ensure fairness. The
general CM Pentlty Policy , relying on the cost of pollution
control equipment, does not provide such penalties in the case
of VOC sources using LST. Indeed VOC penalties have been much
smaller than the penalties collected in other CM cases. A
sample of VOC sources, with total sales in the $10,000,000
range, have had civil penalties ranging from $2,000 to $45,000.
By comparison, a company cited for TSP violations, with sales
in 1983 of $4,656,000, will be asked to pay a minim of $75,000
in penalties.

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the economic savings of non-compliance based upon the typically
substantial capital expenditures and operation and maintenance
costs of the necessary pollution control equipment. The capital
costs of implementing LST are by comparison relatively small, and
in many cases LST actually results in a net economic savinga. 2 /
This guidance, therefore, sets forth an objective methodology
for arriving at a substantial cash penalty figure in cases not
requiring the expenses associated with add-on technology. Specif-
ically, in all VOC cases including those where a source may
choose to come into compliance using LST as a control option,
Regions must base their pre-negotiation penalty calculations for
the Economic Benefit Component on the cost of add-on controls.
Once negotiations begin, the Region may recalculate the penalty
figure using the alternative methodology in this Appendix where
applicable based on information to be supplied by the source.
The Economic Benefit Component will be re-calculated based on the
cost of LST as a control option. An additional penalty component
(hereinafter referred to as the Production Component) must there-
after be calculated by multiplying the dollar amount of sales
on the non-complying lines as reported by the source, by the
average return on sales for the industry, to be supplied by
NEIC. The average return on sales is the norm for the industry
for net profits after taxes divided by total sales. Industry-
specific average return on sales multipliers are available from
the Information Services Office at NEIC in Denver, FTS 776-5124
(contact Charlene Swibas). NEIC will require the following
information from the Region to calculate the average return on
sales multiplier for an individual source: (1) type of VOC
source, (2) total assets or n ber of employees, and (3) dollar
amount of sales produced on the non-complying lines by year. In
this regard, EPA should advise sources that it is to their benefit
2, Although substantial capital expenditures are required for VOC
— sources using add-on technology to come into compliance, sour-
ces having the option of using low solvent or water-based techno-
logy derive economic savings by coming into compliance.
For example, reformulation to LST generally involves only minor
mechanical and process modifications costing less than $10,000.
( See note 4 infra.) These small outlays are recaptured by subse-
qü ñt cost savings. For example, water-based coatings are usually
less expensive. Similarly, high solid emulsion-LSTs, although
perhaps more expensive on a voltune basis, are more efficient
when properly applied, requiring fewer coatings. Reduced VOC
emissions result in further indirect savings in the form of
lower employee health problems and absenteism, reduction in the
cost and amount of OSHA-required ventilation, and lower fire insu-
rance rates. Finally, the vast majority of VOC sources having
LST as a readily available option for compliance make only small
investments in R&D, expenditures which are, moreover, fully tax
deductible.
—2-

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to supply EPA with detailed information such as a plant specific
breakdown of assets rather than company-wide reports, and line-
by-line sales figures. This will help ensure that the penalty
is limited to sales from production on their non-complying
lines as opposed to their total sales. When ver’ifiable line-by-
line production information is not available, the Regions must
base their estimates on sources’ total sales as reported in
company books and annual reports. In addition, the Production
Component figure may be adjusted to reflect the source’s actual
return on sales where this figure can be established from reliable
information.
The total of the Production and Economic Benefit Components
should be compared to the penalty that would have been imposed were
the source coming into compliance using add-on controls. In no
event should the total of the Economic Benefit and Production
Components exceed the penalty amount based solely on the cost of
add-on controls.
This policy may be used in all situations involving LST as an
acceptable compliance option, including those where the source is
granted an expeditious schedule to continue development of LST,
but may ultimately have to comply using add-on controls. In
those situations where the source will comply through a combination
of LST and add-on controls, the penalty may be adjusted in accordance
with this Appendix only to the extent the two compliance options
and the source’s financial data are segregable on a line-by-line
basis.
No other adjustments to the Economic Benefit and Production
Components may be made other than as contemplated in the general
CAA Penalty Policy . These adjustments are described in
Section II.A.3. of the general policy. In addition, in all cases
the Gravity Component should be estimated in accordance with the
general CAA Penalty Policy . This policy is based upon the principles
established by the CAA Penalty Policy and general Agency policies.
The Production Component formula produces penalties which
automatically account for the size of the source and correlate
with the emissions volume from non-complying lines. Moreover,
attaching a source’s after tax net profits on noncomplying produc-
tion helps to ensure a meaningful penalty without impinging on
employee salaries, necessary operating costs, or tax deductions
for good faith pollution control expenditures such as R & D on
LST.
—3—

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Removing the profitability of non-complying production is
particularly appropriate in cases where LST is an acceptable con-
trol strategy due to the ease with which many such sources could
have come into compliance, as well as the competitive advantage
some VOC sources obtain from non-compliance. For example, many
paper coating concerns have continued to use high solvent coatings
due to the versatility such solutions afford in meeting customer
preferences such as color brightness. Such VOC sources are,
thus, probably able to capture a larger share of the market due
to their noncompliance. Similarly, metal furniture coaters have
had high solid emulsion-LSTs available for many years. Many
sources have, however, delayed the minimal costs and process
changes necessary to come into compliance, perhaps enabling these
businesses, in the short run, to offer their products at a slightly
reduced price. 3 /
What follows is the specific methodology to be applied in
calculating civil penalty settlement amounts in actions against
sources of VOC where LST is an acceptable control strategy.
3/ Use of high solid emulsion-LST requires installation of a
— $5-i ,000 emulsion heater, retraining of emp].oyess to apply
the thicker etnufsion, and installation of a larger or more effi-
cient metal washing system to prevent pitting. As is noted
above, however, these costs are in the long run recaptured by
the economic savings associated iith high solid emulsion-LST.
( See note 2 supra.)
-4-

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Alternative Methodology for Calculating VOC Penalties Where LST
is the Applicable Method of Compliance
ECONOMIC BENEFIT COMPONENT*
+
PRODUCTION COMPONENT
total sales from production on non-complying lines
x industry norm return on sales
Compare this figure to the penalty based on the
cost of add-on controls as the control option. Use the
lower of the two figures.
+
Settlement Adjustments to Production Conipônent**
substitute the source’s actual return on sales
for the average industry return on sales
+
GRAVITY COMPONENT*
+
Settlement Adjustments to Gravity Component*
ADJUSTED MINIMUM PENALTY FIGURE
* See, Clean Air Act Civil Penalt ’ Policy for the procedures to
F Ilow in making these calculations. Note, however, that
the CAA Penalty Policy permits Regions in their discretion not
to seek to recover the Benefit Component when it is likely to be
less than $5,000. This Appendix contemplates including the
Economic Benefit Component along with the Production Component
even where the Economic Benefit is estimated to be less than
$5,000. If the ombinatlon of both the Economic Benefit and
Production Components is estimated to be less than $5 OOO, it is
not necessary for the case development team to include either
one in the minimum settlement penalty amount.
** Note that the considerations described in Section II.A.3 of
the general policy may also be applied in adjusting the Production
Component, as well as the Economic Benefit Component.
-5—

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5

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4 p

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APPENDIX V
Air Civil Penalty Worksheet
A. Benefit Component:
(enter from computer calculation)
B. Gravity Component:
1. Actual or possible harm
a. Amount above standard: _______
b. Toxicity of pollutant: _______
c. Sensitivity of environment _______
d. Length of time of violation _______
2. Importance to regulatory scheme: _______
3. Size of violator:
Total gravity component:
Preliminary deterrence amount:
(s .mi of benefit and gravity components)
C. Flexibility-Adjustment Factors:
. Degree of willfulness or negligence:
total gravity component x any
augmentation percentage
2. Degree of cooperation:
total gravity component x any mitigation
percentage
3. History of noncompliance:
total gravity component x any
augmentation percentage
4. Ability to pay:
any mitigation amount

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-2-
5. Other unique factors:
total gravity component x any mitigation
or augmentation percentage
All augmentation (+) and mitigation (-)
amounts added: (if negative, cannot
exceed total gravity component)
D. Initial Minimi.mi Settlement Amount:
Preliminary Deterrence Amount + or -
Sun of Flexibility Adjustment Factors:

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cardinBir
6

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E A

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 4
ATLANTA FEDERAL CENTER
61 FORSYTH STREET SW
ATLANTA, GEORGIA 30303-8909
otc 071998
SUBJECT Request for Clarification on Use of Appendix VI Volatile Hazardous
Air Pollutant Civil Penalty Policy
FROM Nancy L Tommelleo, Chief , i’r
Office of Air, Toxics & General Law Legal Support
Environmental Accountability Division
TO Maiio Jorquera. Chief
Stationary Source Branch
Air Enforcement Division
Office of Regulatory Enforcement (2242A)
This memorandum requests clarification of the appropriate use of the civil penalty policy
governing volatile hazardous air pollutants which is Appendix Vito the October 25, 1991,
Clean Air Act Stationary Source Civil Penalty Policy. Appendix V I, which was added March 2,
1988, predates the 1991 version of the Stationary Source Civil Penalty Policy, and expressly
provides for its use in determining the gravity component of the civil penalty settlement amount
for cases enforcing the National Emission Standard for Equipment Leaks (Fugitive Emission
Sources) at 40 C.F R. Part 61, Subpart V. However, Region 4 has pending Clean Air Act cases
which involve violations of National Emission Standards for Hazardous Air Pollutants
(NESHAPs) at 40 C.F R. Part 63, promulgated in 1994, which are not expressly covered under
Appendix VI. We seek clarification on whether Appendix VI is appropriate for use in cases
involving violations under 40 C.F.R. Part 63.
It has been Regional policy that whenever an appendix to the Clean Air Act Stationary
Source Civil Penalty Policy does not expressly provide for coverage for a particular violation,
then the general provisions of the Stationary Source Civil Penalty Policy are applicable. This
issue was raised by Regional legal and program staff with Charlie Garlow of your staff Mr
Garlow orally opined that Appendix VI may be appropriate for use in certain circumstances in 40
C F R Part 63 cases. While Region 4 does not take issue with that opinion, we request a written
clarification to ensure consistency in our settlement of these cases.
If you have any further questions or concerns, please contact Angelia Souder Blackwell of
my staff at (404) 562-9527.
4EAD
MEMORANDUM
R.cyclsdiRscycIabls • Pnrfled will Vegetable Oil Based Inks on 100% Recycled Paper (40% Poslconsumer)

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new appendix added 03/02/88
APPENDIX VI
Volatile Razardous Air Pollutant Civil Penalty Policy
This policy shall be used to determine the gravity component
of the civil penalty settlement amount for cases enforcing the
National Emission standard for Equipment Leaks (Fugitive Emission
Sources), 40 CSFSR. Part 61, Subpart V, which applies to volatile
hazardous air pollutants (VHAP) and the general reporting require-
ments of Subpart A. It is to be used in lieu of the scheme for
determining the gravity component set forth in the general Clean
Air Act Stationary Source Civil Penalty Policy. It is intended
as a supplement to the Vinyl Chloride Civil Penalty Policy for
vinyl chloride cases. In those vinyl chloride cases in which the
vinyl chloride and VEAP civil penalty policies are inconsistent
(such as the $25,000 penalty for failure to timely submit a
complete semi—annual report under the vinyl chloride policy versus
the $15,000 penalty for the same violation under the VHAP policy)
the vinyl chloride penalty policy should be applied.
The preliminary deterrence amount for VRAP cases, as for
other stationary source cases, consists of a gravity component
and a benefit component. Adjustments for degree of willfulness
or negligence, degree of cooperation, history of noncompliance,
ability to pay, litigation practicalities, and “other unique
factors” should be made, if appropriate, in accordance with the
Stationary Source Civil Penalty Policy. Additionally, adjustments
may be considered because a company’s VHAP/VOC emissions or
potential emissions are more serious in a nonattainment area for
ozone. Reporting penalties could be adjusted depending on the
number of VHAP sources, that is, whether a plant has few or
numerous valves and pumps.
The gravity component of the penalty reflects the seriousness
of the violation. A separate scheme has been developed for VHAP
cases partly because the economic benefit component may be
difficult to determine, although if the economic benefit can be
calculated, it should be. In addition, several factors in the
general policy, such as the level of violation as a percentage
above the standard, do not directly apply to VHAP cases. The
hazardous nature of VHAPS is reflected in establishing a substantial
gravity component.

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—2—
The attached chart addresses six major types of requirements
in the VHAP standard:
1.) Reporting . A source is required to submit initial and
semiannual reports which include, among other things, a listing of
equipment in VNAP service, records of leaks from certain pieces of
equipment and repairs of leaks, and results of performance tests.
2) Monitoring, inspection, and testing . The standard
includes four types of such requirements: annual testing, such
as testing from certain requirements, under S61.242—2(e)(3);
monthly monitoring, such as monitoring of valves under S61.242—
7(a); weekly inspection, such as visual inspection of a pump
under 561.242—2(a)(2); and daily checking, such as checking a
sensor on a compressor seal system under S61.242—3(e)(l).
3) Repair of leaks . The standard generally requires that
a source, upon detection of a leak from regulated equipment, make
a first attempt at repair within 5 calendar days of detection and
complete the repair as soon as practicable but not later than 15
calendar days after detection. Since violations of these require-
ments appear to present the greatest potential for emissions
of VHAP5, the associated penalties are substantial.
4) Equipment standards . Certain pieces of equipment must
comply with requirements that specify that they be equipped with
certain devices, sometimes as an alternative to another standard.
For example, a compressor must be equipped with a seal system
that includes a barrier fluid system and that prevents leakage of
process fluid to the atmosphere, with certain exceptions, in
accordance with S61.242—3(a). One allowable alternative is that
the compressor be equipped with a closed—vent system capable of
capturing and transporting any leakage to a control device, in
accordance with S61.242—3(h). Another example is open—ended
valves which must be capped or otherwise secured.
5) Recordkeeping . A source must keep records of a number
of items, including leaks and attempts to repair leaks, design
parameters of certain equipment, and dates of startups and
shutdowns of closed—vent systems and control devices.
6) Marking equipment — Equipment in VHAP service must be
tagged and leaking equipment must be separately or additionally
tagged.

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—3—
The chart assigns a gravity component for each violation.
For equipment standards, noncompliance with respect to each piece
of affected equipment (e.g., pump, compressor, etc.) constitutes
a separate violation for purposes of this policy. For monitoring,
inspection, and testing provisions, noncompliance with respect to
each requirement (e.g., monthly monitoring of pumps, monthly
monitoring of valves) constitutes a separate violation. Do not
count each pump or valve as a separate violation if not monitored.
The gravity component for the case as a whole is the sum of the
numbers associated with all the violations in the case.
Type of Volation Penalty
REPORTING
Initial Report
Failure to submit initial report $25,000
for new or existing source
I ate submission of initial report $500/day up to $25,000
On—time but incomplete initial $25,000 x % of infor—
report. Estimate percentage of mation missing
information missing. If missing
information submitted without
prompting $400/day, up to the
figure calculated above
Semi-annual Reports
Failure to submit semiannual report $15,000 per report
t 1 ate submission of semiannual report $150/day up to
(If submitted only in response to 15,000 per report
prompting by EPA or delegated
agency, regard as failure to submit
report I
On—time but incomplete semiannual report — $15,000 x % of infor—
estimate percentage of information mation missing
missing. If missing information
submitted without prompting by the
government $125/day up to the figure
calculated above.

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—4—
Type of Violation Penalty
Non— response
Failure to respond to prompting $25,000
(written requests) regarding reports
MONITORING, INSPECTION, AND TESTING
Annual requirement $10,000 + $250/day up
to $25,000 total
Monthly requirement $5,000 + $250/day (up
to $7500 total for
missed month)
Weekly requirement $500 + $150/day up to
$1500 total for
missed week
Daily requirement $100/day for each day
missed for first
10 daily inspections
missed.
$500/day for each daily
inspection missed
thereafter.
For any monitoring,
inspection or testing
timely performed, but
performed incorrectly,
assess 50% of the
above penalties
REPAIR OF LEAXS
Failure to make f’irst attempt $5000/day up to $25,000
at repair within specified time per leak
Failure to complete repair within $5000/day up to $25,000
specified time per leak
Violations of alternative standards $5000/day up to $25,000
for valves in VHAP service
pursuant to 40 CFR 561.243

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—5—
Type of Violation Penalty
EQUI PMENT STANDARDS
Failure to equip with required device $15,000 per item inade-
quately equipped
RECOROKEEP ING
Failure to keep records in logs $25,000 per semiannual
pursuant to 40 C.F.R. S61.246 period
for period associated with
semiannual report
tncomplete records — estimate per— $25,000 per semiannual
centage of information missing period x % of infor-
mation (nissing
FAILURE TO MARK (TAG) EQUIPMENT
Mark equipment in VHAP service $100/day per piece of
equipment up to
$5,000
Mark leaking equipment $500/day per piece of
equipment up to
$5,000

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c nar
7

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O 4-f2(7. i

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o
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, 0 C. 20460
- .1
4 L pg 1 ’ SEP I 89
MEMORANDUM
SUBJECT: Final Penalty Policy for New Residential W96c5 Heaters,
FROM:
Associate Enforcement Counsel
Mr Enforcement Divisi
John S. Seitz,
Stationary Source Compi nce Division
TO: Addressees
Attached please find the final penalty policy to be used in
enforcing the New Source Performance Standards (NSPS) for , .
residential wood heaters set forth at 40 C.F.R. Part 6O,Sub rt
Under the NSPS, wood heaters manufactured after,the’ ,
applicable dates must meet certain particulate matter emission
standards. Thus, manufacturers must design and prodb ce fuel..-
efficient appliances. Because we are regulating mass- tô çe -,,, :
consumer items, this program will be managed at Headqu ij ers” -’
through the Federal Programs Section of the Stationary Sourc’
Compliance Division and OECM-Air. For this reason, the penalty
policy was developed by OECM and SSCD. Please file this policy
as Appendix VII to the Clean Air Act Stationary Source Civil
Penalty Policy, Part E, document #30 of the Policy Compendium.
Attachment
Addressees:
Gerald Emison, Director
Office of Air Quality Planning and Standards
Edward E. Reich
Acting Assistant Administrator
for Civil Enforcement

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—2—
Alan W. Eckert
Associate General Counsel
Mr and Radiation Division
Linda Lay, Chief
Federal Programs Section
Stationary Source Compliance Division
Mr and Waste Management Division Director
Region II
Mr Management Division Directors
Regions I, III, IX
Air and Radiation Division Director
Region V
Mr , Pesticides and Toxics Management Division Directors
Regions IV and VI
Mr and Toxics Division Directors
Regions VII, VIII and IX
Regional Counsels
Regions I - X
Mr Branch Chiefs/Team Leaders
Office of Regional Counsel
Regions I - X
David Buente, Chief
Environmental Enforcement Section
Department of Justice
Bob Van Heuvelen, Assistant Chief
Environmental Enforcement Section
Department of Justice

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SEP
CLEAN AIR ACT STATIONARY SOURCE PENALTY POLICY
APPENDIX VI
RESIDENTIAL WOOD HEATERS
40 C.F.R. PART 60, SUBPART AAA
The Clean Air Act Stationary Source Civil Penalty Policy
(“the CAA penalty policy” or “the general penalty policy”)
provides the basis for determining the minimum civil penalty U.s.
EPA will accept in settlement of enforcement actions taken
pursuant to Title I of the Clean Air Act. The CAA penalty
policy provides guidance to pre-trial settlement of initial
enforcement actions in district courts.
The New Source Performance Standard for Residential Wood
Heaters, 40 C.F.R. Part 60, Subpart AAA, warrants a penalty
scheme related to the CAA penalty policy, but adjusted to reflect
certain unique features of the wood heater industry. Unlike
other NSPS programs, for example, the wood heater 1 st ndard
regulates a mass-produced consumer product marketed nationally
and is directed at manufacturers as well as retailers and
distributors. In addition, management of the wood stove
enforcement program will be centralized at Headquarters rather
than delegated to the Regions.
This appendix should be used in c rtjunction with the general
penalty policy to determine the preliminary deterrence amount,
which is the sum of the economic benef it 2 accruing from
noncompliance and the gravity component reflecting the
seriousness of the violation. 3 This appendix retains in full the
concept of adjusting the gravity component to provide equitable
treatment of the regulated community. The penalty adjustments
may be based upon consideration of the violator’s: (1) degree
of willfulness or negligence, (2) degree of cooperation,
including prompt reporting of noncompliance and prompt correction
For the purpose of this penalty policy, the following
terms will be used interchangeably and regarded as synonymous:
“residential wood heater,tt “residential wood stove,” “wood
heater,” “wood stove.”
2, The economic benefit gained by a violator due to delayed
or avoided costs will be determined using the BEN computer
model. In certain instances, the government may settle a case
for an amount less than the calculated economic benefit after
evaluating the factors mentioned in the general penalty policy.
In determi4 ing of the amount of civil penalty, Section
113 of the CAA lists three considerations, inter qua : (1) size
of the business, (2) economic impact of the penalty on the
business, and (3) seriousness of the violation.

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—2—
of environmental problems, (3) history of noncompliance, (4)
ability to pay, and (5) other unique factors.
The wood stove penalty policy details most of the violations
articulated in the regulations and assesses a basic penalty for
each. Of the factors set forth in the general penalty policy
only the size of the violator matrix and the adjustment factors
are retained completely. The matrix for length of tine of
violation has been revised. All other factors are inapplicable
to the wood stove penalty policy.
Every gravity component calculation will be based on a case—
by-case examination of the facts underlying the enforcement
action. In developing the penalty values for these violations,
we evaluated the relative importance of each respective
requirement to the regulatory scheme. In certain instances, u.s.
EPA may find that a deviation from a requirement is tantamount to
a complete violation arid hold the violator liable for the full
amount of the assessed penalty. -In other instances, however,
U.S. EPA may believe that the deviation is minor and therefore
assess a reduced penalty. As an example, consider the
§60.538(b) violation, offering for sale a stove without a
permanent label. If the stove has no label at all, the full
penalty will be levied. If, on the other hand, the permanent
label is merely deficient, not conforming to the requirements
under §60.536(a)(l)(2), then the penalty amount assessed will
likely be less than the full amount. The following violations
fall into this “none/deficient” category:
parameter quality assurance program
emission test QA program
permanent label
maintain record of certification test
maintain record of parameter QA program
maintain record of emission test QA program
maintain record of sales
maintain/produce sealed stove
apply for small manufacturer exemption
report number of exempted stoves manufactured
maintain record of production
report biennially on certified model lines
maintain record of exempted stoves
maintain record of used stoves
maintain records for five years
operation of stove without permanent label
offer for sale a stove w/o permanent label
offer for sale a stove w/o temporary label
offer for sale a stove w/o owner’s manual
— 60.533(o)(2)
— 60.533(O)(3)
— 60.536(a)(1),(2)
— 60.537(a)(l),(2)
— 60.537(a)(l),(3)
— 60.537(a)(l),(4)
— 60.537(a)(l),(5)
— 60.537(C)
— 60.537(e)(l),(4)
— 60.537(e)(2)
— 60.537(e)(3)
— 60.537(f)
— 60.537(g)
— 60.537(h)
— 60.537(i)
— 60.538(a)
— 60.538(b)
— 60.538(d)(l),(2)
— 60.538(d)(l)(ii)
For the other violations contained in pages 3 to 6 of this
penalty policy, U.S. EPA intends to assess the full amount.

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—3
CALCUL T ION OF GRAVITY COMPONENT
SIZE OF THE VIOLATOR (calculate once per violator)
Net worth of corporation or
net current assets of partnership :
60.530(c) ( 2)
Sale of Oregon exempted stove after July 1,
1992
60. 530(c) ( 3)
Failure to notify of any modification to
Oregon certification
60.533(n)
Failure to perform certification testing
60. 533 (0) (2)
Failure to conduct adequate parameter QA
inspection
$5,000 per model
line and $500
per unit
$500 per unit
$5,000 per model
line and $500
per unit
$500 per unit
not tested as
required
Under $100,000
$100,001 — $1,000,000
$1,000,001 — $5,000,000
$5,000,001 — $20,000,000
$20,000,001 — $40,000,000
$41,000,001 — $70,000,000
Over $70,000,000
$1,000
2,000
8,000
12,000
20,000
40,000
65000
LENGTH OF TIME OF VIOLATION (calculate for each violation)
0 to 6 months $ 500
7 to 12 months 1,000
13 to 18 months 1,500
over 19 months 2,000
VIOLATIONS OF 40 C.FIIR PART 60. SUBPARTAAA

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—4—
60. 533 (0) (3)
Failure to conduct emission test QA program $500 per unit
not tested as
required
60.536(a)(l), (2)
Failure to have permanent label on stove $2,000 per model
manufactured after July 1, 1988 (related to line and $2 per
60.538(b), but we can bring both in an unit
enforcement action)
60.536(i), (j)
Failure to have temporary label on a stove $1,000 per model
with a permanent label line and $2 per
unit
60.536(k)
(please see 60.538(d)(l)(ii))
60.537(a)(1), (2)
Failure to maintain record of certification $100 per model
test line
60.537(a)(1), (3)
Failure to maintain record of parameter QA $1,000 per model
program line
60.537(a)(1), (4)
Failure to maintain record of emission test $1,000 per model
QA program line
60.537(a)(1), (5)
Failure to maintain record of sales $1,000
60. 537(c)
Failure to maintain or produce sealed stove $750 per sealed
stove required
60.537(e)(1), (4)
Failure to apply for small manufacturer’s $250
exemption
60. 537(e) ( 2)
Failure to report number of exempted heaters $500
manufactured between 7/1/88 and 6/30/89
60 .537(e) ( 3)
Failure to maintain wood heater production $1,000
records for 7/1/87 to 7/1/89

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—5—
60.537(f)
Failure to report biennially on certified $100 per model
model line line
60.537(g)
Failure to maintain record of R&D exempted $500
stoves
60.537(h)
Failure to maintain record of used stoves $500
60.537(i)
Failure to maintain records for five years $500
60.538(a)
operation of affected facility without a $500 per unit
permanent label
60.538(b)
Offer for sale a stove without certification $2,000 per model
test or perittanent label line and $2 per
unit
60.538(c)
Offer for domestic sale of export stove $1,000 per unit
Sale of stove without a permanent label after $1,000 per unit
July 1, 1990
60.538(d)(l)(i), (2)
Offer for sale a stove with a permanent label $1,000 per model
but not temporary label line and $2 per
unit
60.538(d)(l) (ii)
Offer for sale a stove with a permanent label $500 per unit
but no owner’s manual (encompasseS 60.536(k))
60.538(d) (1) (iii)
Offer for sale a stove with a permanent label $1,000 per model
but without a catalyst warranty line and $2 per
unit
60.538(e)
Sale of stove after notice of certification $5,000 per unit
revocation
60. 538 Cf )
Installation or operation of stove $2,000 per unit
inconsistent with label or owner’s manual

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—6—
60.538(g)
Operation of stove with deactivated or $2,000 per unit
removed catalyst
60.538(h)
Operation of altered stove $5,000 per unit
60.538(i)
Alteration or removal of permanent label $1,000 per unit

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—7—
EXAIIPLE
An inspector files a violation report against Blockbuster
Manufacturing, which produces the Blue Flame and Heat Jet model
lines. The report, dated November 8, 1988, states that the
temporary label on the Blue Flame model line is deficient and
that the company failed to conduct certification testinq on the
Heat Jet model line. In addition, the Heat Jet model line lacks
permanent and temporary labels as well as owner’s manuals. Blue
Flame production since July 1, 1988 totalled 464 units with sales
of 223 units, while Heat Jet production since July 1, 1988
totalled 108 units with sales of 36 units. Blockbuster’s net
worth is estimated at $800,000.
The initial assessment of Blockbuster’s violations indicates
the following violations by model line:
Blue Flame
- attaching deficient temporary- label
- selling unit with deficient temporary label
Heat Jet
- failure to conduct certification testing
— failure to attach permanent label
- selling unit without permanent label
(NOTE: the temporary label and owner’s manuals violations are
inapplicable for the Meat Jet model line because the units were
not permanently labeled)
U.S. EPA issues a Finding of Violation to Blockbuster which
includes both the Blue Flame and Heat Jet violations In
addition, an Administrative Order is issued to correct these
violations. Blockbuster does correct all the Blue Flame
violations by the stated deadline, but does not take any action
toward correcting the Heat Jet violations. When contacted by EPA
personnel after the deadline, Blockbuster says it feels no
obligation to correct the Heat Jet violations. At this point,
EPA decides to bring a civil action against Blockbuster
concerning the Heat Jet model line only.
The preliminary deterrence amount is calculated by adding
the economic benefit and gravity components. The ecOnOmiC
benefit component is subdivided into two categories: capital
investments, or one-time costs, and annual expenses. For this
example, current capital investments are $9,000 for a full test
series and $4,000 for model line labels and manuals. Current
annual expenses include $3,067 for emissions and parameter
inspection quality assurance and $1,400 for research and
development. EPA personnel run the BEN]. model assuming
compliance in April 1989 and the payment of penalty in March
1989. The BEN]. model shows an economiC benefit of $3,252. A

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—8—
copy of the BEN ]. printout is attached for reference. The gravity
component of $66,788 is calculated as shown below:
Basic Per Length Size of
Violation Rate Unit of Txne Violator
No certification test $5,000 5500(108) 5500 $2,000
60.533(n)
Not attaching per!na- 2,000 2(108) 500
nent label
60.536(a)(1), (2)
Selling unit without 2,000 2(36) 500
permanent label
60.538(b)
In light of Blockbuster’s lack of cooperation in correcting
the Heat Jet violations, EPA decides to increase the gravity
component by 25%. The gravity component becomes $66,788(1.25) =
$83,485. The bottom line amount for the purposes of settlement
is $3,252 (the economic benefit) + $83,485 (the adjusted gravity
component) = $86,737.

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8

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UNFTED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON, D.C. 20460
NOV 2
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: New Amended Penalty Policy for Production or
Importation in Violation of 40 C.F.R. Part 82 of
Substances that Deplete the Stratospheric Ozone
FROM: Michael S. A].ushin 4 41 s- __--
Associate Enforcement Counsel
Air Enforcement Division
John B. Rasnic, Acting Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Addressees
Attached please find the newly amended penalty policy the
Agency will use to assess penalties for production or importation
of controlled substances in amounts exceeding production or
consumption allowances held in accordance with the rule to
protect the stratospheric ozone, 40 C.F.R. Part 82 (“the Rule”).
This policy amends and supersedes the earlier version dated
April 2, 1990. Please file the attached document in Part E of
your Policy Compendium as Appendix VIII to Document #30, the
Clean Air Act Stationary Source Civil Penalty Policy.
The major amendment to the policy involves a restructuring
of the integrity of the regulation factors assessed against those
violators who fail to cure their violations in the same control
period in which their wrongful activities occurred. Our offices
determined that the Agency could provide such violators with an
incentive to obtain allowances in a later control period, thereby
encouraging violators to avert the potential environmental harm
that would otherwise result from their illegal activities.
Penalty assessment in such circumstances is discussed on page
four of the policy and illustrated in examples one through three.
In an attewpt to clarify points not fully explained in the
prior version, we have expanded discussion throughout the policy.
We particularly draw your attention to the general clarification
that the Rule applies to all controlled substances (not just
chiorofluorocarbons (CFCs] and halons), and the discussion on
pages four and five of adjustments to the calculated penalty
Pru,jid on R : ed .P.2p r

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amount. You should also note that we have’raised the economic
benefit rule of thumb from $0.30 to $1.50 for each kilogram of
calculated level, so that that figure more closely approximates
the cost of an allowance on the market.
Attachment
Addressees:
John S. Seitz, Director
Office of Air Quality Planning and Standards
James M. Strock
Assistant Administrator
Office of Enforcement
Alan W. Eckert
Associate General Counsel
Air and Radiation Division
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions III, IX
Air and Radiation Division Director
Region V
Air, Pesticides and Toxics Management Division
Directors
Regions I, IV and VI
Air and Toxics Division Directors
Regions VII, VIII and X
Regional Counsels
Regions I - X
Air Branch Chiefs/Team Leaders
Office of Regional Counsel
Regions I - X
Air Division Branch Chiefs
Regions I - X
Robert Van Heuvelen, Acting Chief
Environmental Enforcement Section
U.S. Department of Justice

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APPENDIX VIII
CLEAN AIR ACT CIVIL PENALTY POLICY APPLICABLE TO
PERSONS WHO MANUFACTURE OR IMPORT CONTROLLED SUBSTANCES
IN AMOUNTS EXCEEDING ALLOWANCES PROPERLY HELD UNDER
40 C.F.R. PART 82: PROTECTION OF THE STRATOSPHERIC OZONE
Introduction
This appendix provides guidance for calculating the civil
penalties EPA will require in pre-tria settlement of district
court enforcement actions, purs an o Title I of the Clean Air
Act (“CAA”), against persons who manufacture or import controlled
substances in amounts exceeding allowances properly held under 40
C.F.R. Part 82, Protection of the Stratospheric Ozone (“the
Rule”). 1 Settlement of violations of the recordkeeping and
reporting provisions of the Rule need not, for purposes of
penalty assessment, be treated differently from any other CAA
recordkeeping and reporting violation. See Clean Air Act
Stationary Source Civil Penalty Policy, p. 11.
The Rule designates bulk quantities of the chemicals named
in Appendix A as “controlled substances” on the basis of the
demonstrated capacity of these chemicals to attack and destroy
ozone in the stratosphere. Manufacturers and importers of the
controlled substances who responded to EPA’S request for baseline
data are apportioned yearly production and consumption allowances
which limit the amounts of controlled substances that person or
corporate entity may introduce for use into the United States
during a twelve month control period. 2
1 The Rule was promulgated in accordance with the Agency’s
authority under CAA Part B--Ozone Protection, 42 U.S.C. 150-
159 (“Part B”), and with the Montreal Protocol (an agreement
signed by most industrial nations in 1987), to protect the
stratospheric ozone layer, a thin blanket of triatomic oxygen
fifteen miles above the surface of the earth that blocks harmful
ultraviolet radiation emitted by the sun. Section 113 of the CAA
ref erences Part B, expressly providing that the 113(b) civil and
the 113(c) criminal remedies are available for violations of
regulations promulgated under that Part.
2 EPA restricted production and consumption of five
chiorofluorocarbons (CFC5) to 1986 levels beginning July 1, 1989.
Additional restrictions on production and consumption of CFC5,
and and other controlled substances were in development at this
writing.

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To assist EPA in monitoring compliance with production and
consumption I imits, the Rule requires manufacturers of controlled
substances to keep daily records and submit quarterly reports to
EPA. Importers must submit information to EPA regarding the
quantity of controlled substances brought into the United States
and the country of their origin.
Production and consumption allowances may be traded, but
such transactions are invalid if not reported to EPA. If Agency
records indicate that the seller of allowances holds a sufficient
quantity unexpended, EPA will issue a notice of no objection, and
enter the transfer in its records. If EPA initially does not
object to an allowance trade, but later finds reason to
disapprove, the Agency will rescind the earlier transfer and
correct its records. For the purposes of the Rule, ownership of
the allowances that were the subject of the rescinded transfer
never shifted from the seller to the buyer.
The Penalty for Excess Amounts
The Rule states that each kilogram of controlled substances
manufactured or imported in excess of allowances is a separate
violation. 3 Each excess kilogram, therefore, creates potential
liability in the violator for a penalty of up to the statutory
maximum of $25,000. To promote judicial economy and to conserve
Agency resources, EPA will be willing to accept substantially
less in settlement.
The relative amount of stratospheric ozone that will be
destroyed by a given quantity of a controlled substance is called
that substance’s ozone depletion weight, and varies from chemical
to chemical. 4 Allowances are allocated on the basis of a
calculated level, i.e., the total ozone depletion effect of all
controlled substances produced and imported, a value that is
expressed in kilograms. The holder of allowances is free to
produce or import any combination of controlled substances during
the control period so long as the calculated level of its
activity does not exceed the calculated level of the allowances
it holds. When the Rule states that each kilogram in excess of
allowances is a separate violation, the reference is to kilograms
in the sense of a calculated level. Therefore, the statutory
maximum penalty is $25,000 per kilogram of calculated level
manufactured or imported in excess of properly held allowances.
40 C.F.R. 82.4(a) and (b).
The ozone depletion weights for the controlled substances
can be found in Appendix A of 40 C.F.R. Part 82.

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Calculating a Penalty
In accordance with the general practice EPA follows when
calculating all Clean Air Act civil penalties, penalties assessed
for manufacturing or importing excess quantities of controlled
substances will be the sum of an economic benefit component and a
gravity component.
Economic Benefit
Determining the actual economic benefit accruing to the
violator will be difficult, if not impossible. Some allowance
holders produce a variety of controlled substances at different
locations across the country. Rather than attempt to distinguish
what amount of which chemical produced at each of several
continuously operating facilities was responsible for how many
kilograms of excess calculated level, EPA will instead rely on an
economic benefit rule of thumb. On the basis of financial
information currently available, EPA will assume an economic
benefit (profit margin) of $1.50 per kilogram of calculated level
for both the manufacture and importation of controlled
substances. EPA may supplant this amount by reference to price
lists appearing in industry journals or to any other source which
the Agency believes is a reliable indicator. Because the
Agency’s economic benefit rule of thumb is subject to change, in
situations where the Region is applying this penalty policy,
Regional staff should consult with EPA Headquarters before
attempting to assess the violator’s economic benefit of
noncompliance.
The violator’s economic benefit may be offset by amounts
paid for allowances purchased during the same control period to
cure excess production or imports, as ich purchases clearly
lessen the economic benefit of noncompliance.
The economic benefit component may be omitted entirely if an
allowance—apportioned violator agrees in the next control period
to a reduction of its current allowances in amounts equal to the
calculated level of its earlier violations. [ he economic benefitf
component will not be assessed against vio1ato who are not
apportioned allowances iri icicViolators obtain in the next
control period and hold unexpended allowances in amounts equal to
the calculated level of their earlier violations The Montreal
Protocol does not permit member nations to meet their national
limits by applying allowances left unexpended in one control
period to negate excess quantities of controlled substances
manufactured or imported in any other control period. EPA,
however, can acknowledge the financial impact on importers of a
reduction of current allowances and adjust the penalty assessment
accordingly in order to provide importers with an incentive to

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consent to injunctive relief mandating such reductions. In this
way, EPA can_help avert the potential environmental harm
resulting from the violator’s actions.
Gravity
Even if the violator demonstrates that its purchase of
additional allowances or its voluntary reduction of current
allowances eliminates its economic benefit, it still must pay the
gravity component of the penalty. The gravity component is the
measure of the seriousness of the violation. Accordingly, this
component is linked both to the integrity of the regulatory
system and to the ozone-depleting effect of the violator’s
actions. The Rule states that each kilogram of controlled
substance manufactured or imported in excess of allowances is a
separate violation.
To protect the integrity of the Rule, EPA will assess a
penalty of $15,000 against all violators. An additional $0.50
for each kilogram of calculated level manufactured or imported in
excess of allowances held at the time of manufacture or
importation will be assessed against first time violators, or
$1.00 for each kilogram against repeat offenders.
So that the penalty will reflect the seriousness of the
environmental harm resulting from the violations and to provide
violators with an incentive to cure their violation compj.etely,
EPA will assess a penalty of S1 7 g iolators who leave
any amount of their violations, no matter how small, uncured.
EPA will assess an additional penalty of $.50 for each kilogram
of calculated level left uncured at the end of the control period
in question. In the event that the violator expeditiously and
fully cures its violations in the next control period following
its violations, EPA will assess this integrity of the regulation
factor at $5,000, instead of $15,000, and the kilograms of
calculated level left uncured will be assessed at $0.10 for each
kilogram.
A violator can cure the potential environmental harm by
purchasing allowances, by chemically transforming the controlled
substances into other substances not regulated by the Rule, by
proper exportation, or by any combination of these means. In
keeping with the matrix provided by the general stationary source
civil penalty policy, p. 11, EPA will assess an additional amount
to scale the penalty to the size of the violator.
Adjustments to the gravity component must be made in
accordance with the provisions of the general stationary source
civil penalty policy, pp. 12—18, taking into account such factors
as degree of willfulness or negligence, degree of cooperation,
and history of noncompliance. EPA construes these adjustment
factors strictly, with a bias toward upward adjustment. Downward

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adjustment s. ...to the gravity component will be effected only in
rare instances where the defendant manifests extreme cooperation
by agreeing to perform environmentally beneficial actions not
required by law that are directly related to repairing the
environmental harm potentially resulting from its violations.
Mitigating Penalty Amounts
Application of this policy significantly compromises the
penalty amount EPA is authorized to pursue under both the CAA and
the Rule. Penalty amounts calculated in accordance with this
policy represent the minimum penalty that EPA can accept in
settlement of cases of this nature. Reductions from this amount
are acceptable only on the basis of the violator’s demonstrated
inability to pay the full amount (substantiated by the ABEL
computer model) or other unique factors. A proposed penalty
reduction, accompanied by a justification memorandum, must be
submitted to the Associate Enforcement Counsel for Air for his
approval.
Examples of Penalty Calculations
Following are four examples of application of this policy.
Adjustments to the gravity component are made in accordance with
the general stationary source civil penalty policy.
Example 1
Due to inadequate communications between its seven
facilities for the production of controlled substances, Chemical
Co. overshoots its production and consumption allowances of
147,000,000 kg of calculated level by 250,000 kg before ceasing
all production on May 20. On June 5, Chemical Co. manages to
purchase 200,000 kg of calculated level in additional allowances
at a cost of $200,000.
Assuming that Chemical Co. does nothing more to cure its
violations, the penalty is computed as follows:

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Economic Benefit ComDonent
Profit on sale of wrongfully produced
controlled substances (250,000 kg at S1.50/kg*) $375,000
Offset by actual expenditure of $200,000
to purchase additional allowances - 200.000
$175,000
Gravity Component
Integrity of Regulation $15,000
250,000 kg of calculated level
wrongfully produced (at $0.5/kg) 125,000
Integrity of Regulation
(amounts left uncured) 15,000
50,000 kg of calculated level left uncured
at close of control period (at $0.5/kg) 25,000
Size of violator (worth in excess
of $70,000,000) +65.000
$245,000
Preliminary deterrence amount
Economic Benefit Component $175,000
Gravity Component +245.000
$410,000
Adjustment factors
20% upward adjustment to the gravity
component to reflect defendant’s negligence +$49,000
Minimum penalty settlement amount
$459,000
* The economic benefit rule of thumb is subject to change.
Regional offices using this guidance should consult with Head-
quarters to insure that they use the appropriate number.

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If, in the next control period prior to settlement, Chemical
Co. obtains and holds unexpended sufficient consumption allow-
ances to a 7ert the environmental harm potentially resulting from
the uncured portion of its wrongful production, the penalty would-
be calculated as follows:
Economic Benefit Component
Because Chemical Co. has obtained
consumption allowances in an amount
equal to the total amount of its vio-
lations, there were no costs averted,
and there is no remaining economic
benefit. $0
Gravity Component
Integrity of Regulation $15,000
250,000 kg of calculated level
wrongfully produced (at $0.5/kg) 125,000
Integrity of Regulation
(amounts left uncured, but environmental
harm averted) 5,000
50,000 kg of calculated level left uncured,
but environmental harm averted (at $0.1/kg) 5,000
Size of violator (worth in excess
of $70,000,000) +65.000
$215,000
Preliminary deterrence amount
Economic Benefit Component $0
Gravity Component $2 15.000
$215,000
Adjustment factors
20% upward adjustment to the gravity
component to reflect defendant’s negligence +$43,000
Minimum ena1tv settlement amount
$258,000

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Example 2
Commodities, Inc., which does not normally deal in
chloroflurocarbons (CFCs), works toward buying up the unexpended
consumption allowances it needs to permit its purchase of
1,000,000 kg of calculated level of a controlled substance from a
seller in Country A at a price of $1,500,000. The shipment of
cheap CFCs is off loaded at the American port of entry while
Commodities, Inc. is still negotiating with Company Z to buy the
last block of 300,000 kg of calculated level of allowances. In
Country B, a major industrial accident virtually destroys that
country’s largest producer of CFCs, suddenly creating a huge
demand in that country for Commodities, Inc.’s CFCs.
Commodities, Inc. immediately breaks off negotiations with
Company Z and exports its entire stock of 1,000,000 kg of
calculated level to Country B for a selling price of $3 million.
Commodities, Inc. provides proof to the EPA of its export and
receives consumption allowances in the amount of 1,000,000 kg of
calculated level, which it then sells on the bullish CFC market
at $2.00 per kilogram of calculated level.
During settlement negotiations with EPA, Commodities, Inc.
introduces records showing that it purchased 700,000 kg of
calculated level of consumption allowances for $0.75 per kilogram
and argues that this amount should be used to calculate its
economic benefit.
The penalty is computed as follows (for the purposes of this
exercise, we assume that Commodities, Inc. bore none of the
shipping expenses):
Economic Benefit Component
Cost averted by not purchasing
allowances (300,000 kg at $1.50/kg*) $450,000
Profit on export sale of wrongfully imported
controlled substances (300,000 kg at $1.50/kg) 450,000
Profit on sale of wrongfully obtained
consumption rights (300,000 kg at $2.00/kg) +600,000
$1,500,000
* The economic benefit rule of thumb is subject to change.
Regional offices using this guidance should consult with Head-
quarters to insure that they use the appropriate number.

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In computing Commodities, Inc.’s economic benefit, EPA would
not use $.D.- 5/kg as the cost averted by not purchasing allowances
because Company Z, apparently, was unwilling to sell at the price
Commodities, Inc. was offering. EPA would not use Commodities,
Inc.’s later selling price, $2.00/kg, because that amount does
not necessarily reflect the market rate at the time Commodities,
Inc. was attempting to buy. In the absence of a more reliable
figure, EPA will use the $1.50/kg rule of thumb. The profit on
the sale of wrongfully imported controlled substances is simply
the difference between the selling price and the defendant’s
purchase price ($3.00/kg — $1.50/kg = $1.50/kg) as there were no
allowance costs for these 300,000 kilograms. The profit on the
sale of the wrongfully obtained consumption allowances is the
full selling price because the defendant never properly held
consumption allowances for those 300,000 kilograms.
Gravity Component
Integrity of Regulation $15,000
300,000 kg of calculated level
wrongfully i nported (at $0.5/kg) 150,000
Integrity of Regulation
(amounts left uncured) 15,000
300,000 kg of calculated level left uncured
at close of control period (at $0.5/kg) 150,000
Reporting violation - one incorrect report
See general CAA penalty policy at 11.
(Although Commodities, Inc. did export
1,000,000 kg of calculated level of a
controlled substance, only 700,000 kg of
that amount had entered the country legally.
Therefore, Commodities, Inc.’s transfer
request could not properly claim ownership of
the entire 1,000,000 kg of calculated level.) 15,000
Size of violator (worth between $20-40 million) +20.000
$365,000
Preliminary Deterrence Amount
Economic Benefit Component $1,500,000
Gravity Component +365.000
$1,865, 000

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Adjustment Factors
Degree of willfulness or negligence
(20% of the gravity component) +$73,000
Minimum settlement penalty amount
$1,938,000
If, in the next control period prior to settlement,
Commodities, Inc. had obtained and held unexpended the 300,000
kilograms of calculated level of consumption allowances necessary
to avert the potential environmental harm resulting from its
wrongful importation, the penalty would be calculated as follows:
Economic Benefit Component
Profit on export sale of wrongfully imported
controlled substances (300,000 kg at $1.50/kg) 450,000
Profit on sale of wrongfully obtained
consumption rights (300,000 kg at $2.00/kg) +600.000
$1,050,000
Gravity Comnonent
Integrity of Regulation $15,000
300,000 kg of calculated level
wrongfully imported (at $0.5/kg) 150,000
Integrity of Regulation
(amounts left uncured, but environmental
harm averted) 5,000
300,000 kg of calculated level left uncured,
but environmental harm averted (at $0.1/kg) 30,000
Reporting violation - one incorrect report 15,000
Size of violator (worth between $20-40 million) +20,000
$235,000
Preliminary Deterrence Amount
Economic Benefit Component $1,050,000
Gravity Component +235.000
$1,285,000

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Adiustment Factors
Degree of willfulness or negligence
(20% of the gravity component) +$47,000
Minimum settlement oenaltv amount
$1, 332, 000
Exam 1e 3
During the fourth quarter of the control period, Importers
International contracts to sell 40,000 kg of calculated level of
consumption allowances to CFCs, Inc., a producer and importer of
CFCs, at S1.25/kg, despite the fact that Importers International
has recently exhausted all of its 250,000 kg allowance.
Importers International submits a transfer request to EPA for
which the Agency issues a no objection notice. (EPA’S
determination is based on information contained in Importers
International’s previous quarterly report.) Upon receipt of
EPA’s notice of no objection, CFCs, Inc. purchases the allowances
from Importers International for $50,000 and imports 40,000 kg of
calculated level of controlled substances. EPA discovers during
its review of Importers International’s fourth quarter report
that the company did not hold unexpended allowances at the time
of the trade, rescinds the transfer, and notifies both parties to
the transaction.
Importers International’s action appears to be a fraudulent
transfer in knowing violation of consumption limitations, and
this matter should be referred to OE’s Office of Criminal
Enforcement. Importers International is probably subject to
fines and imprisonment under 113(c) of the Clean Air Act, 18
U.S.C. 1001 (supplying false information to the federal
government), and possibly 18 U.S.C. 1341 (fraudulent use of the
mails) .
EPA’S election to pursue a criminal enforcement action
must hinge on its evaluation of the strength of the evidence of
knowing violation and also of the adequacy of available civil
relief. Where a defendant exceeds its production or consumption
allowances and submits inaccurate information in a transfer
request, EPA may find it difficult to show a knowing violation,
but large civil penalties are available. If the defendant stays
within the limits of its allowances but transfers allowances it
does not hold, the available civil relief would be based on a
single reporting violation, but EPA can more likely demonstrate
that the violation was knowing. It is important also to remember
that buyers of large amounts of allowances will be aware of the
financial risk associated with wrongful production or importation
and will purchase only from reputable sellers.

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CFCS, Inc., which purchased Importers International’s
purported allowances at risk, held other consumption allowances
at the-t±ine it imported the 40,000 kg of calculated level. These
other consumption allowances, in part, offset that import. After
analyzing CFCs, Inc.’s final quarter reports, EPA determines that
CFCs, Inc. is liable for the importation of only 15,000 kg of
calculated level of controlled substances for which it did not
hold proper consumption allowances. After receiving notification
from EPA, CFCs, Inc. agrees to reduce its current-year production
and consumption allowances by that amount.
The penalty for CFC, Inc. is computed as follows:
Economic Benefit Component 6
Profit on sale of wrongfully produced
CFCs (15,000 kg at $1.50/kg*) $22,500
Offset by reduction of current-year
allowances by 15,000 kg of calculated level — 22.500
0
Gravity Component
Integrity of Regulation $15,000
15,000 kg of calculated level
wrongfully imported (at $0.5/kg) 7,500
Integrity of Regulation
(amounts left uncured, but environmental
harm averted) 5,000
15,000 kg of calculated level left uncured,
but environmental harm averted(at $0.10/kg) 1,500
size of violator (worth more that $70 million) +65,000
$94,000
* The economic benefit rule of thumb is subject to change.
Regional offices using this guidance should consult with Head-
quarters to insure that they use the appropriate number.
6 CFCs, Inc.’s economic benefit would not be offset by the
amount it paid to Importers International for the purported
allowances. Only those transactions which result in a transfer
of valid consumption allowances to the violator can be counted
against its economic benefit.

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Preliminary Deterrence Amount
Economic Benefit Component so
Gravity Component +94.000
$94,000
Adiustment Factors
No adjustment of gravity 0
Minimum Settlement Penalty Amount
$94,000
Example 4
Small Brokerage Co., an import broker located in a minor
port city, imports 200 kg of calculated level of CFC-1l3 for
Company X, a manufacturer of airplane parts. Company X intends
to use the CFC-ll3 to degrease precision metal parts prior to
assembly. Neither company holds consumption allowances. EPA
discovers the violation during its review of the computer
printout of Customs Entry Summary forms provided to EPA by the
U.S. Census Bureau.
Upon receipt of a Section 114 letter from EPA requesting
more information about its imports of controlled substances,
Small Brokerage Co. contacts EPA to explain that neither it nor
Company X was aware of the Rule’s prohibition on importing
controlled substances without consumption allowances. Small
Brokerage Co. fully responds to the Section 114 request, but
points out that its imports were in one liter canisters, and
asserts exemption under the “one-gallon rule of thumb.”
The one—gallon rule of thumb exempts from regulation imports
of controlled substances in containers of one gallon or smaller
only if the eventual use of the container is not known and cannot
be determined with reasonable efforts. ( g GUIDANCE FOR THE
STRATOSPHERIC OZONE PROTECTION PROGRAM , pp. 4-5.) Here, EPA
investigates the process Company X uses to degrease small metal
parts and determines that Company X pours CFC-113 from the one
liter canister into a basin containing the parts to be cleaned.
Therefore, the eventual use of the imported canister is known,
and the canister is not part of a “use system.” EPA informs
Small Brokerage Co. that its imports are subject to regulation.
Before the end of the control period, Small Brokerage Co. obtains
from another company a sufficient amount of unexpended
consumption allowances to cure its violations.

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The penalty is calculated as follows:
Economic Benefit Component
Because Small Brokerage Co. obtained
consumption allowances in an amount
equal to the total amount of its vio-
lations, there were no costs averted,
and there was no economic benefit. $0
Gravity Component
Integrity of Regulation $15,000
200 kg of calculated level wrongfully
imported (at $0.5/kg) 100
Size of violator (worth between $100,001
and $1,000,000) S2.000
$17,100
Preliminary Deterrence Amount
Economic Benefit Component $0
Gravity Component S17.000
$17,000
Adjustment Factors
Degree of willfulness or negligence
(20% of the gravity component) +$3,400
Minimum Penalty Amount
$20,400

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APPENDIX IX
CLEAN AIR ACT CIVIL PENALTY POLICY APPLICABLE TO PERSONS WHO
PERFORM SERVICE FOR CONSIDERATION ON A MOTOR VEHICLE AIR
CONDITIONER INVOLVING ThE REFRIGERANT OR WHO SELL SMALL
CONTAINERS OF REFRIGERANT IN VIOLATION OF 40 C.F.R. PART 82,
PROTECTION OF ThE STRATOSPHERIC OZONE, SUBPART B: SERVICING
OF MOTOR VEHICLE AIR CONDITIONERS
Introduction
This appendix provides guidance for calculating the civil
penalties EPA wi].l’require in pre-trial settlement of judicial
enforcement actions, as well as the pleading and settlement of
administrative enforcement actions, pursuant to Sections 113(b)
and (d) and Section 609 of the Clean Air Act (“CAA”), as amended,
and 40 C.F.R. Part 82, Subpart B against persons who perform
service for consideration on motor vehicle air conditioners
involving the refrig.erant or who sell small containers of
refrigerant. Settlement of violations of the recordkeeping and
reporting provisions of the regulations should not, for purposes
of penalty assessment, be treated differently from any other CAlL
recordiceeping and reporting violation. g Clean Air Act
Stationary Source Civil Penalty Policy, p. 12.
This appendix is to be used for settlement purposes in civil
judicial cases involving violations of the motor vehicle air
conditioner servicing regulations, but EPA retains the discretion
to seek the full statutory maximum penalty in all civil judicial
cases which do not settle. In addition, for administrative
penalty cases, the appendix is to be used in conjunction with the
Stationary Source Civil Penalty Policy to determine an
appropriate penalty to be pled in the administrative complaint,
as well as serving as guidance fo settlement amounts in such
cases.
To assist EPA in monitoring compliance, the regulations
require persons who perform service for consideration on motor
vehicle air conditioners involving the refrigerant to report One
time and to keep records; persons who certify technicians must
report once every two years; and persons who sell small cans of
refrigerant must keep records and post a sign.
The Penalties for Violating Regulations
Section 113 of the Clean Air Act allows EPA to seek
penalties of up to $25,000 per day per violation. Each time a
motor vehicle air conditioner is serviced without properly using
approved refrigerant recycling or recovery equipment or is
serviced by an uncertified technician, each container of
refrigerant containing less than 20 pounds that is sold to a
1 10’

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person who is not a certified technician or who does not certify
to the retail establishment that the container was purchased for
resale, and each time a technician is certified by a technician
training program which has not been approved by the EPA
Administrator constitutes a separate violation (each with a
statutory maximum of $25,000).
EPA may in appropriate cases accept less than the statutory
maximum in settlement. The penalty assessments contained in this
policy (this appendix read with the Stationary Source Civil
Penalty Policy) reflect reductions from the statutory maximum
which can be made based on the statutory penalty assessment
criteria found in Section 113(e) of the Act. This policy takes
into account the size of the violator’s business, the violator’s
full compliance history, duration of the violation, the economic
benefit of noncompliance, and the seriousness of the violation.
The other factors in Section 113(e) should be taken into account
in determining whether the penalty should be reduced, but the
burden is on the defendant to raise those factors.
Penalties for violations are based on the particular
regulatory requirements violated. The minimum settlement penalty
amount is the sum of the penalties assigned to each violation of
a requirement.
Calculating a Penalty
In accordance with the general practice EPA follows when
calculating all Clean Air Act civil penalties, penalties assessed
for performing any service for consideration on a motor vehicle
air conditioner involving the refrigerant or selling small
containers of refrigerant will be the sum of an economic benefit
component and a gravity component.
Economic Benefit
This component is a measure of the economic benefit accruing
to the facility as a result of noncompliance with the Act. To
determine the actual economic benefit to a person 1 who performs
service for consideration on motor vehicle air conditioners
“Person” includes the technician who actually works on the
motor vehicle air conditioner and the individual, corporation,
partnership, association, State, municipality, political
subdivision of a State, and any agency, department, or
instrumentality of the United States who employs the technician.
For the purpose of calculating the penalty under this policy, it
was assumed that Regions would generally take enforcement actions
against service facilities rather than individual technicians.
Both technicians and service facilities, however, are legally
responsible for complying with 40 C.F.R. Part 82, Subpart B.

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—3—
involving the refrigerant, EPA will rely on the matrix which
follows to determine the economic benefit from delayed costs
(failure to purchase approved recycling or recovery equipment)
and avoided costs (failure to properly operate and maintain such
equipment).
Economic Benefit From Servicing Motor Vehicle Air Conditioners
Without Properly Using Approved Refrigerant Recovery Equipment:
Number of months since August 13, 1992/Economic_Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
1—3
$115
22—24
$1103
43—45
$2494
4—6
$236
25—27
$1274
46—48
$2733
$363 :
28—30
$1454
49—51
$2984
10—12
$496
31—33
$1642
52—54
$3247
13—15
$637
34—36
$1840
55—57
$3523
16—18
$785
37—39
$2048
58—60
$3811
19—21
$940
40—42
$2266
The matrix assumes that the service facility should have
purchased one piece of recovery equipment. The matrix was
calculated using August 13, 1992 as the date noncompliance began
and assumed that the date of compliance (the date equipment is
acquired) and the date that the penalty is paid are the same.
Because the matrix assumes that enforcement actions will be taken
against the service facility and because many technicians will be
personally responsible for the cost of getting trained and
certified, the matrix does not include the cost of technician
certification. In addition, it is difficult to predict how many
uncertified technicians a service facility might employ to
perform service for consideration on motor vehicle air
conditioners involving the refrigerant. If the Regions find that
service facilities usually pay for technician training, then they
should include the cost of technician training and certification
in their economic benefit calculations. In any enforcement
action against an individual uncertified technician, the Regions
should include the cost of training and certification in the
economic benefit calculation. The matrix is based on the BEN
computer model. If the litigation team determines that the
matrix does not reflect the defendant’s actual economic benefit
in a particular enforcement action, the litigation team may
calculate the benefit using the BEN model with inputs specific to
the action.

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The economic benefit to the person 2 who sells cans of
refrigerant containing less than 20 pounds is the profit on each
can. The profit will vary depending on how much the person paid
to purchase the cans and at what price the cans are sold. The
amount of profit averages $1.50 per can.
Although the Stationary Source Civil Penalty Policy
indicates that the litigation team may elect not to assess an
economic benefit component in enforcement actions where the
violator’s economic benefit is less than $5,000 (see p. 7),
Regions should assess the economic benefit component in Section
609 enforcement actions unless unusual circumstances indicate
otherwise. Given that the economic benefit component in Section
609 enforcement actions will likely always be small (less than
$5,000), if the general rule from the Stationary Source Civil
Penalty Policy were to apply, the economic benefit component
would rarely be included in the penalty calculation. Since EPA
policy requires the removal of the violator’s economic benefit in
every enforcement a tion, unless the factors in Section 113(e) or
litigation risks suggest that a reduction is appropriate, Regions
should assess an economic benefit component in all Section 609
cases.
Gravity
In addition to economic benefit, the violator must pay the
gravity component of the penalty. The gravity component is the
measure of the seriousness of the violation. The seriousness of
the violation has two components: the importance to the
regulatory scheme and the potential environmental harm (ozone-
depleting effect of the violator’s actions) resulting from the
violations.
The following violations can defeat the purpose of Section
609 by permitting the release of substances that degrade the
stratospheric ozone layer. Their importance to the regulatory
scheme, therefore, requires the assessment of the following
penalties:
2 “Person” includes the employee who actually sells the
small can and the individual, corporation, partnership,
association, State, municipality, political subdivision of a
State, and any agency, department, or instrumentality of the
United States who employs the employee. For the purpose of
calculating the penalty under this policy, it was assumed that
Regions would generally take enforcement actions against retail
facilities rather than individual employees. Both employees and
retail facilities, however, are legally responsible for complying
with 40 C.F.R. Part 82, Subpart B.

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A penalty of $10,000 against any person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment;
A penalty of $15,000 against each person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment and who has
previously been the subject of a Section 609 enforcement response
(e.g. notice of violation, warning letter, administrative order,
field citation, complaint, consent decree, consent agreement, or
administrative or judicial order);
A penalty of $5,000 against any person who performs services
for consideration on motor vehicle air conditioners involving the
refrigerant for each person who performs such service who is not
properly trained ane certified by a technician certification
program approved by the EPA Administrator;
A penalty of $5,000 against any person who sells a container
of refrigerant containing less than 20 pounds to a person who is
not a certified technician or who does not certify to the seller
that the container was purchased for resale;
A penalty of $10,000 against any person who sells a
container of refrigerant containing less than 20 pounds to a
person who is not a certified technician or who does not certify
to the seller that the container was purchased for resale and who
has previously been the subject of a Section 609 enforcement
response (e.g. notice of violation, warning letter,
administrative order, field citation, complaint, consent decree,
consent agreement, or administrative or judicial order);
A penalty of $5,000 (for each certificate issued after the
effective date of the regulation) against any technician training
program that has not received approval from the Administrator of
EPA;
A penalty of $5,000 against any retail establishment that
sells or offers for sale class I or II refrigerant in containers
of less than 20 pounds and fails to post a sign that meets the
requirements of 40 C.F.R. S82.42(c). This amount should be
assessed regardless of how many (if any) small cans are actually
sold after November 15, 1992, as long as they are offered for
sale. This amount is in addition to a $5,000 assessment against
the retail establishment for the sale of a container of
refrigerant containing less than 20 pounds to a person who is not
a certified technician or who does not certify to the retail
establishment that it is purchased for resale.

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EPA acknowledges that multiple violations of the Section 609
requirements may significantly increase the potential
environmental harm (ozone-depleting effect of the violator’s
actions) resulting from the violations. The Agency, therefore,
will assess the following additional amounts for each separate
violation to ensure that the total penalty assessed appropriately
reflects the seriousness of the defendant’s violations:
EPA will assess $60 against any person for each motor
vehicle air conditioner serviced without properly using approved
refrigerant recycling or recovery equipment or $75 against any
person who has previously been the subject of a Section 609
enforcement response (e.g. notice of violation, warning letter,
administrative order, field citation, complaint, consent decree,
consent agreement, or administrative or judicial order) for each
motor vehicle air conditioner serviced without properly using
approved refrigerant recycling or recovery equipment; and
EPA will assess $27 per pound against any person for each
sale of a container of refrigerant containing less than 20 pounds
to a person who is not a certified technician or who does not
certify to the retail establishment that it is purchased for
resale or $35 against any person that has previously been the
subject of a Section 609 enforcement response (e.g. notice of
violation, warning letter, administrative order, field citation,
complaint, consent decree, consent agreement, or administrative
or judicial order) for each sale of a container of refrigerant
containing less than 20 pounds to a person who is not a certified
technician or who does not certify to the retail establishment
that it is purchased for resale.
If appropriate, the gravity component of the penalty should
be enhanced according to the Stationary Source Civil Penalty
Policy to reflect the duration of the violation. Where EPA has
evidence of the duration of a violation or can invoke the
presumption of continuing violation pursuant to Section 113(e) (2)
of the Act for reporting violations and violations of the public
notice requirement (40 C.F.R. S82.42(c)), the gravity component
of the penalty should be increased by reference to the Stationary
Source Civil Penalty Policy, p. 12. y contrast, each violation
of 40 C.F.R. S82.34(a) (failure to properly use approved
refrigerant recycling or recovery equipment and/or failure to
employ properly trained and certified technicians to service
motor vehicle air conditioners) and 40 C.F.R. §82.34(b) (sale of
EPA has estimated that the benefit to be obtained from
avoiding the release of 1 kilogram of ozone depleting substance
ranges from $60 — $240/kg. For the purposes of this penalty
policy, it is assumed that the benefit is $60/kg.
see fn. 3.

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class I or II refrigerant that is in a container which contains
less than 20 pounds of such refrigerant to a person who is not
properly trained and certified or who does not intend the
containers for resale), constitutes a separate violation for
which a separate penalty amount will be assessed for the
“Potential Environmental Harm” of the violator’s actions. Partly
for this reason and partly because these discrete violations are
not of a continuing nature, no duration of the violation
assessment attaches to these kinds of violations. Each
additional motor vehicle air conditioner serviced or small
container sold is ‘an additional violation and, therefore, the per
motor vehicle or small container assessment would be added to the
“Importance to the Regulatory Scheme” assessment for each
additional violation. In keeping with the matrix provided by the
Stationary Source Civil Penalty Policy, p. 14, EPA will assess an
additional amount to scale the penalty to the size of the
violator.
Adjustments to the gravity component must be made in
accordance with the provisions of the Stationary Source Civil
Penalty Policy, pp. 15—19.
Mitigating Penalty Amounts
Application of this policy significantly compromises the
penalty amount EPA is authorized to pursue under the CAA.
Penalty amounts calculated in accordance with this policy
represent the minimum penalty that EPA can accept in settlement
of cases of this nature. Reductions from this amount are
acceptable only on the basis of the violator’s demonstrated
inability to pay the full amount (substantiated by the ABEL
computer model) or other unique factors. In civil judicial
actions, a proposed penalty reduction from the amount calculated
under this policy must be approved by the Enforcement Counsel for
the Air Enforcement Division. If the litigation team believes
that reduction of the penalty is appropriate, the case file
should contain both a memorandum justifying the reduction and
documentation that the penalty reduction was approved. In
administrative enforcement actions, Regional Administrators or
their designees must submit penalty justification documentation
within 20 days of issuance or signing of consent agreements to
the Director of the Stationary Source Compliance Division in the
Office of Air Quality Planning and Standards and the Enforcement
Counsel for Air in the Office of Enforcement.
Examples of Penalty Calculations
Following are examples of the application of this policy.
Adjustments to the gravity component are made in accordance with
the Stationary Source Civil Penalty Policy.

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—8—
Example 1
Ace Automotive Air-Conditioning Service, Incorporated
services motor vehicle air conditioners. Despite a significant
outreach effort by the Region (acquainting the regulated
community with Section 609 ‘s requirements), Ace did not submit
the required owner certification to EPA and failed to purchase
recovery or recycling equipment. A search of Ace’s records
indicates that Ace has serviced 60 motor vehicle air conditioners
since the effective date of the rule. The facility performed 150
service jobs in 1990 and 1991. None of the three technicians who
regularly service motor vehicle air conditioners are trained and
certified. EPA inspected the facility on March 13, 1993.
Economic Benefit Component
The economic benefit of delaying
the purchase of equipment for seven
months + avoided costs of operating equipment $363
Gravity Component
Importance to regulatory scheme
(servicing without equipment) $10,000
60 motor vehicle air conditioners
(at $60 per vehicle) 3,600
Reporting violation
(failure to submit certification) 15,000
3 Uncertified technicians performing
service (at $5,000 per technician) 15,000
Duration of violation
(failure to submit certification
due Jan. 1, 1993 — from matrix on p. 12
of Stationary Source Civil Penalty Policy) 8,000
Size of violator (Net Worth is approx.
$2,000,000) +10.000
Total Gravity $61,600
Preliminary deterrence amount
Economic Benefit Component $363
Gravity Component +61,600

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—9—
Adjustment factors
20% upward adjustment to the gravity
component — Ace should have been aware
of Section 609’s requirements +12,320
Minimum enaltv settlement a, ount
$74,283
ExamDle 2
Diamond Auto Parts sells CFCs in canisters containing 14
ounces. On May 16, 1993, when an EPA inspector purchased two 14
ounce cans of refrigerant, he was not asked to show his
technician training certificate and he did claim to have a
certificate. In addition, the inspector noted there was no sign
in the check out area notifying customers that the sale of such
cans is prohibited unless the purchaser is a trained technician.
The inspector asked the owner whether the sign was posted on or
after November 15, 1992. The owner responded that he never
posted the sign.
Economic Benefit ComDonent
2 cans of refrigerant (at $1.50 per can) $3
Gravity ComDonent
Importance to regulatory scheme
(Sale of small can of refrigerant) $5,000
2 - 14 ounce cans of refrigerant
(at $27 per pound) 47.25
Importance to regulatory scheme
(Failing to post sign) 5,000
Duration of violation — failure
to Post sign on Nov. 15, 1992 — from
matrix on p. 12 of Stationary Source
Civil Penalty Policy) 12,000
Size of violator (Net Worth is approx.
$6,000,000) +20.000
Total Gravity $42,047.25

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— 10 —
Preliminary deterrence amount
Economic Benefit Component $3.00
Gravity Component +42.047.25
Minimum Settlement Penalty Amount
$42, 050.25
Summary
Type of violation
Penalty amount
Servicing with out equipment
1st violation - $10,000
2nd violation — $15,000
$60/per motor vehicle
Failing to certify
$15,000
Uncertified technicians
$5,000/per technician
Sale of Small Cans to Non-Technician
1st violation — $5,000
2nd violation — $10,000
$27/per pound
Uncertified Training Program
$5,000/certificate
Failure to Post Sign
$5,000

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Leif Palmer To. Patricia Strougal/R4IUSEPNUS@EPA
11/08/200101 16PM
cc Todd Russo/R4/USEPA/US@EPA
SubjectS CAA Civil Penalty Policy Appendix IX
Pat -- per your question about Appendix IX of the CAA Civil Penalty Policy, I believe that the size of
violator reference to page 12 is in error. The size of violator table is actually located on page 7 of
Appendix IX I cannot explain why it refers to page 12. I will ask the program to make this change on all
future penalty calculations.
I also think I’ve solved the mystery of which is the ‘Revised penalty policy referenced in the complaint.
While looking for an Appendix IX that has 12 pages (which I did not find) I found an old copy of the original
Appendix IX which is only 10 pages long. I will drop it off at your desk.
Apparently what happened is this, in 1993 EPA revised Appendix IX to include a size of violator
component was added to the policy. That appendixs title was then changed to include reference to the
year 1993. The pre-1993 Appendix IX policy does not include a size of violator table, instead I assume
that EPA used the size of violator table from the 1991 Stationary Source Penalty Policy at Page 14. EPA
then began referring to the 1993 Appendix IX as the ‘revised’ version.
I will ask the Program to change the reference to “Revised” Penalty Policy all future complaints to to track
the actual title of the 1993 Appendix IX which will hopefully eliminate any future confusion.
I can understand why this causes confusion. Thanks for pointing this out.
Todd -- please get with Dan and make these changes on the model complaint and penalty calculations.
If you have any questions, please call me at 2/9542

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I •
U
APPENDIX IX
CLEAN AIR ACT CIVIL PENALTY POLICY APPLICABLE TO PERSONS WHO
PERFORM SERVICE FOR CONSIDERATION ON A MOTOR VEHICLE AIR
CONDITIONER INVOLVING THE REFRIGERANT OR WHO SELL SMALL
CONTAINERS OF REFRIGERANT IN VIOLATION OF 40 C.FSR. PART 82
PROTECTION OF THE STRATOSPHERIC OZONE, SUBPART B: SERVICING
OF MOTOR VEHICLE AIR CONDITIONERS
July 19, 1993
Introduction
This appendix provides guidance for calculating the civil
penalties EPA will require in pre-trial settlement of judicial
enforcement actions, as well as the pleading and settlement of
administrative enforcement actions, pursuant to Sections 113(b)
and (d) and Section 609 of the Clean Air Act (“CAA”), as amended,
and 40 C.F.R. Part 82, Subpart B against persons who perform
service for consideration on motor vehicle air conditioners
involving the refrigerant or who sail small containers of
refrigerant. Settlement of violations of the recordiceeping and
reporting provisions of the regulations should not, for purposes
of penalty assessment, be treated differently from any other CAA
recordkeeping and reporting violation. See Clean Air Act
Stationary Source Civil Penalty Policy, p. 12.
This appendix is to be used for settlement purposes in civil
judicial cases, but EPA retains the discretion to seek the full
statutory maximum penalty in all civil judicial cases which do
not settle. In addition, for administrative penalty cases, the
appendix is to be used in conjunction with the Stationary Source
Civil Penalty Policy to determine an appropriat, penalty to be
pled in the administrative complaint, as well as serving as
guidance for settlement amounts in such cases.
To assist EPA in monitoring compliance, the regulations
require persons who perform service for consideration on motor
vehicle air conditioners involving the refrigerant to- report one
time and to keep records; persons who certify technicians must
report once every two years; and persons who sell small cans of
refrigerant must keep records and post a sign.
The Penalties for Violatina Reaulations
Sectiolr 113 of the Clean Air Act allows EPA to seek
penalties of up to 525,000 par day per violation. Each time a
motor vehicle air conditioner is serviced without properly using
approved refrigerant recycling or recovery equipment or is
serviced by an uncertified technician, each container of
refrigerant containing less than 20 pounds is sold to a

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person who is not a certified technician or who es not certify
to the retail establishment that the container was purchased for
resale, and each time a technician is certified by a technician
training program which has not been approved by the EPA
Administrator constitutes a separate violation (each with a
statutory maximum of $25,000).
EPA may in appropriate cases accept less than the statutory
maximum in settlement. The penalty assessments contained in this
policy (this appendix read with the Stationary Source Civil
Penalty Policy) reflect reductions from the statutory maximum
which can be made based on the statutory penalty assessment
criteria found in Section 113(e) of the Act. This policy takes
into account the size of the violator’s business, the violator’s
full compliance history, the economic benefit of noncompliance,
and the seriousness of the violation. The other factors in
Section 113(e) such as the economic impact of the penalty on the
business and any good faith efforts to comply should be taken
into account in determining whether the penalty should be
reduced, but the burden is on the defendant to raise those
factors.
Penalties for violations are based on the particular
regulatory requirements violated. The minimum settlement penalty
amount is the sum of the penalties assigned to each violation of
a requirement.
Calculatina a Penalty
In accordance with the general practice EPA follows when
calculating all Clean Air Act civil penalties, penalties assessed
for performing any service fo consideration on a motor vehicle
air conditioner involving the refrigerant or selling small
containers of refrigerant will be the sum of an economic benefit
component and a gravity component.
Economic Benefit
This component is a measure of the economic benefit accruing
to the facility as a result of noncompliance with the Act. To
determine the actual economic benefit to a person’ who performs
1 “person” includes the technician who actually works on the
motor vehicle air conditioner and the individual, corporation,
partnership, association, State, municipality, political
subdivision of a State, and any Agency, department, or
instrumentality of the United States who employs the technician.
For the purpose of calculating the penalty under this policy, it
was assumed that Regions would generally take enforcement actions
against service facilities rather than individual technicians.
aoth technicians and service facilities, however, are legally

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—3—
service for consideration on motor vehicle air conditioners
involving the refrigerant, EPA will rely on the matrix which
follows to determine the economic benefit from delayed costs
(failure to purchase approved recycling or recovery equipment)
and avoided costs (failure to properly operate and maintain such
equipment).
Economic Benefit From Servicing Motor Vehicle Air Conditioners
Without Properly Using Approved Refrigerant Recovery Equipment:
Number of Months since August 13, 1992/Economic_Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
1—3
$115
22—24
$1103
43—45
$2494
4—6
$236
25—27
$1274
46—48
$2733
7—9
$363
28—30
$1454
49—51
$2984
10—12
$496
31—33
$1642
52—54
$3247
13—15
$637
34—36
$1840
55—57
$3523
16—18
$785
37—39
$2048
58—60
$3811
19—21
$940
40—42
$2266
The matrix reflects that the service facility should have
purchased one piece of recovery equipment. The matrix was
calculated using August .3.3, 1992 as the date noncompliance began.
The date of compliance (the date equipment is acquired) and the
data that the penalty is paid are the same. Because th. matrix
reflects that enforcement actions will be taken against the
service facility and because many technicians will be personally
responsible for the cost of getting trained and certified, the
matrix does not include the cost of technician certification. In
addition, it is difficult to predict how many uncertified
technicians a service facility might employ to perform service
for consideration on motor vehicle air conditioners involving the
refrigerant. If the Regions find that service facilities usually
pay for technician training, then they should include the cost of
technician eraining and certification in their economic benefit
calculations. In any enforcement action against an individual
uncertified technician, the Regions should include th. colt of
training and certification in the economic benefit calculation.
The matrix is based on the BEN computer model. If the litigation
team determines that the matrix does not reflect the defendant’s
actual economic benefit in a particular enforcement action, the
responsible for complying with 40 C.F.R. Part 82, Subpart B.

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litigation team may calculate the benefit using BEN model
with inputs specific to the action.
The economic benefit to the person 2 who sells cans of
refrigerant containing less than 20 pounds is the profit on each
can. The profit will vary depending on how much the person paid
to purchase the cans and at what price the cans are sold. The
amount of profit averages $1.50 per 12 ounce can.
EPA policy requires the removal of the violator’s economic
benefit in every enforcement action, unless the factors in
Section 113(e) or litigation risks suggest that a reduction is
appropriate. Although the Stationary Source Civil Penalty Policy
indicates that the litigation team may elect not to assess an
economic benefit component in enforcement actions where the
violator’s economic benefit is less than $5,000 (see p. 7),
Regions should assess the economic benefit component in Section
609 enforcement actions. Given that the economic benefit
component in Section 609 enforcement actions will likely always
be small (less than $5,000), if the general rule from the
Stationary Source Civil Penalty Policy were to apply, the
economic benefit component would rarely be included in the
penalty calculation. Therefore, Regions should assess an
economic benefit component in all Section 609 cases.
Gravity
In additiän to economic benefit, the violator must pay the
gravity component of the penalty. The gravity component is the
measure of the seriousness of the violation. The seriousness of
the violation has two co’mponents: the importance to the
regulatory scheme and the potential environmental harm (ozone—
depleting effect of the violator’s actions) resulting from the
violations.
The following violations can defeat the purpose of Section
609 by permitting the release of substances that degrade the
stratospheric ozone layer. Their importance to the regulatory
scheme, therefore, includes the assessment of the following
“Person” includes the employee who actually sells the
small can and the individual, corporation, partnership,
association, State, municipality, political subdivision of a
State, and any Agency, department, or instrumentality of the
United States who employs the employee. For the purpose of
calculating the penalty under this policy, it was assumed that
Regions would generally take enforcement actions against retail
facilities rather than individual employees. Both employees and
retail facilities, however, are legally responsible for complying
with 40 C.F.R. Part 82, Subpart B.

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—5—
penalties:
A penalty of $10,000 against any person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment;
A penalty of $15,000 against each person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment and who has
previously been the subject of a Section 609 enforcement response
(e.g. notice of violation, warning letter, administrative order,
field citation, complaint, consent decree, consent agreement, or
administrative or judicial order);
A penalty of $5,000 against any person who performs services
for consideration on motor vehicle air conditioners involving the
refrigerant for each person who performs such service who is not
properly trained and certified by a technician certification
program approved by the EPA Administrator;
A penalty of $2,000 against any person who sells a container
of refrigerant (suitable for use in a motor vehicle air
conditioner) containinq less than 20 pounds to a person who is
not a certified technician or who does not certify to the seller
that the container was purchased for resale;
A penalty of $5,000 against any person who sells a container
of refrigerant containing less than 20 pounds to a person who is
not a certified technician or who does not certify to the seller
that the container was purchas d for resale and who has
previously been the subject of a Section 609 enforcement response
(e.g. notice of violation, warning letter, administrative order,
field citation, complaint, consent decree, consent agreement, or
administrative or judicial order):
A penalty of $5,000 for each certificate issued after the
effective date of the regulation against any technician training
program that has not received approval from the Administrator of
EPA;
A penalty of $1,000 against any retail establishment that
sells or offers for sale the refrigerant suitable for use in a
motor vehicle air conditioner in containers of less than 20
pounds and fails to post a sign that meets the requirements of 40
C.F.R. §82.42(c). This amount should be assessed regardless of
how many (if any) small cans are actually sold after November 15,
1992, as long as they are offered for sale. This amount is in
addition to the $2,000 assessment described above against the
retail establishment for the sale of a container of refrigerant
containing less than 20 pounds to a person who is not a certified

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technician or who does not certify to the retail establishment
that it is purchased for resale;
A penalty of $2,500 against any retail establishment that
sells or offers for sale the refrigerant suitAble for use in a
motor vehicle air conditioner in containers of less than 20
pounds and fails to post a sign that meets the requirements of 40
C.F.R. S82.42(c) and who has previously been the subject of a
Section 609 enforcement response (e.g. notice of violation,
warning letter, administrative order, field citation, complaint,
consent decree, consent agreement, or administrative or judicial
order);
EPA acknowledges that multiple violations of the Section 609
requirements may significantly increase the potential
environmental harm (ozone—depleting effect of the violator’s
actions) resulting from the violations. The Agency, therefore,
will assess the following additional amounts for each separate
violation to ensure that the total penalty assessed appropriately
reflects the seriousness of the defendant’s violations:
EPA will assess $40’ against any person for each motor
vehicle air conditioner serviced without properly using approved
refrigerant recycling or recovery equipment, or $50 against any
person who has previously been the subject of a Section 609
enforcement response (e.g. notice of violation, warning letter,
administrative order, field citation, complaint, consent decree,
consent agreement, or administrative or judicial order) for each
motor vehicle air conditioner serviced without properly using
approved refrigerant recycling equipment; and
EPA will assess $18’ per pound against any person for each
sale of a container of refrigerant containing less than 20 pounds
to a person who is not a certified technician or who does not
certify to the retail establishment that it is purchased for
resale and $25 against any person that has previously been the
subject of a Section 609 enforcement response (e.g. notice of
violation, warning letter, administrative order, field citation,
complaint, consent decree, consent agreement, or administrative
or judicial order) for each sale of a container of refrigerant
containing less than 20 pounds to a person who is not a certified
techniciaitar who does not certify to the retail establishment
that it is purchased for resale.
‘ EPA estimates that the benefit to be obtained from
avoiding the release of 1 kilogram of ozone depleting substance
ranges from $13—$53/kg. For the purposes of this penalty policy,
the benefit should be calculated at $40/kg. See Regulatory
Impact Analysis for Section 608, Chapter 5 (March 25, 1993).
‘ See fn. 3.

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—7—
EPA will assess reporting violations pursuarr :c the Clean
Air Act Stationary Source Civil Penalty Policy, October 25, 1991,
page 12. However, this assessment shall not include a length of
time violation component.
EPA will assess an additional amount to scale the penalty to
the size of the violator using the following matrix:
et worth (corporations); or net current assets (partnerships and
sole proprietorships):
Under $100,000 $0
$100,001 — $500,000 $1,000
$500,001 — $1,000,000 $2,500
1,000,001 — 5,000,000 55,000
5,000,001 — 20,000,000 510,000
20,000,001 — 40,000,000 $15,000
40,000,001 and above $20,000
Where the size of the violator figure represents over 50% of
the total preliminary deterrence amount, the litigation team may
reduce the size of the violator figure to 50% of the preliminary
deterrence amount.
Adjust ants to the gravity component must be made in
accordance with the provisions of the Stationary Source Civil
Penalty Policy, pp. 15—19.
Mitiaatina Penalty Amounts
Application of this policy significantly compromises the
penalty amount EPA is authorized to pursue tinder the CM.
Penalty amounts calculated in accordance with this policy -
represent the minimum penalty that EPA can accept in settlement
of cases of this nature. Reductions from this amount are
acceptable only on the basis of the violator’s demonstrated
inability to pay the full amount (substantiated in accordance
with Agency policy) or other unique factors. In civil judicial
actions, a proposed penalty reduction from the amount calculated
under this policy must be approved by the Enforcement Counsel for
the Air Enforcement Division. If the litigation team believes
that reduc j n of the penalty is appropriate, the case file
should contain both a memorandum justifying the reduction and
documentation that the penalty reduction was approved. In
administrative enforcement actions, Regional Administrators or
their designees must submit penalty justification documentation
within 20 days of issuance or signing of consent agreements to
the Director of the Stationary Source Compliance Division in the
Office of Air Quality Planning and Standards and the Enforcement
Counsel for Air in the Office of Enforcement.

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—8—
Examples of Penalty Calculations
Following are examples of the application of this policy.
Adjustments to the gravity component are made in accordance with
the Stationary Source Civil Penalty Policy.
Example 1 .
Ace Automotive Air-Conditioning Service, Incorporated (ACE)
services motor vehicle air conditioners. Despite a significant
outreach effort by the Region (acquainting the regulated
community with Section .609’s requirements), Ace did not submit
the required owner certification to EPA and failed to purchase
recovery or recycling equipment. A search of Ace’s records
indicates that Ace has serviced 60 motor vehicle air conditioners
since the effective date of the rule. The facility performed 150
service jobs in 1990 and 1991. None of the three technicians who
regularly service motor vehicle air conditioners are trained and
certified. EPA inspected the facility on March 13, 1993.
Economic Benefit Com onent
The economic benefit of delaying
the purchase of equipment for seven
months + avoided costs of operating equipment $363
Gravity Comoonent
Importance to regulatory scheme
(servicing without equipment) $10,000
60 motor vehicle air conditioners
(at $40 per vehicle) 2,400
Reporting violation
(failure to certify to EPA that person
performing service is using approved
recycling equipment and that such person
is properly trained and certified)
(from Stationary Source Civil
Penalty Policy, page 12) 15,000
3 Uncertifiid technicians performing
service (at $5,000 per technician) 15,000
Size of violator (Net Worth is approx.
$2,000,000) +5.000
Total Gravity $47,400

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—9—
Preliminary deterrence amuunt
Economic Benefit Component $363
Gravity Component +47.761
Adiustnient factors
20% upward adjustment to the jravity
component - Ace should have been aware
of Section 609’s requirements + 9,552.60
Minimum penalty settlement amount
$57,315.60

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— 10 —
Exam 1e p
Diamond Auto Parts sells CFCs in canisters containing 14
ounces. On May 16, 1993, an EPA inspector purchased two 2.4 ounce
cans of refrigerant. He was not asked to show his technician
training certificate which he claimed to have. In addition, the
inspector noted there was no sign in the check out area notifying
customers that the sale of such cans is prohibited unless the
purchaser is a trained technician. The inspector asked the
owner whether the sign was posted on or after November 15, 1992.
The owner responded that he never posted the sign.
Economic Benefit Component
2 cans of refrigerant
(at $1.50 per 12 ounce can) $3.50
Gravity Comoonent
Importance to regulatory scheme
(Sale of small can of refrigerant) $2,000
2 - 14 ounce cans of refrigerant
(at $18 per pound) 31.50
Importance to regulatory scheme
(Failing to post sign) 1,000
Size of violator (Net Worth is approx.
$6,000,000) +3.031.50
Total Gravity $ 6,063.00
Preliminary deterrence amount
Economic Benefit component $3.50
Gravity Component +6,063.00
Minimum Settlement Penalty Amount
$6,066.50

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— 11
SunuTtarV
Type of violation
Servicing without equipment
Failing to certify
Uncertified technicians
Sale of Small Cans to Non—Technici
Uncertified Training Program
Failure to Post Sign

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(qb)

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Oei— ’ /
, O 3r
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
.JUN 2 8 993
MEMORANDW4
SUBJECT: Draft Revised Penalty Policy Applicable to Persons Who
Perform Service for Consideration on a Motor Vehicle Air
Conditioner Involving the Refrigerant or Who Sell Small
Containers of Refrigerant in Violation of 40 C.F.R. Part
82, Protection of the Stratospheric Ozone, Subpart B:
Servicing of Motor Vehicle Air Conditioners
FROM: Kathie A. Stein .
Enforcement Counsel for Air
Office of Enforcement
John B. Rasnic, Director 4.
Stationary Source Complia ce Division
Office of Air Quality Planning and Standards
TO: Addressees
Attached is a copy of the draft revised Penalty Policy
Applicable to Persons Who Perform Service for Consideration on a
Motor Vehicle Air Conditioner Involving the Refrigerant or Who
Sell Small Containers of Refrigerant in Violation of 40 C.F.R.
Part 82, Protection of the Stratospheric Ozone, Subpart B:
Servicing of Motor Vehicle Air Conditioners. Please review this
draft and provide us your comments not later than COB July 6,
1993.
When final, this policy will be immediately effective. For
existing cases the Regions should determine whether the new policy
results in a lower proposed penalty, and if so the Region should
apply the new policy to the case. The Region should consider
whether the complaint should be amended to reflect the lower
penalty. This policy shall not apply to cases closed before the
effective date of this policy.
At the Air Division Directors meeting and the Air Branch
Chiefs meeting earlier this spring, the Regions stated that they
believe that in some circumstances the penalty policy generates
penalty amounts that are too high given the size of the violators.
In particular, most of the defendants in the small can actions are
small businesses. The proposed policy revisions discussed below
respond to the concerns raised by the Regions in these and
subsequent discussions.
Pnnted on Recycled Paper

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2
The draft revisions to the December 28; 1992, penalty policy
include: 1) lowering the penalty both for sales of small cans to
non-technicians and for failure to post the required sign
notifying the public that sales of small cans to non-technicians
are prohibited; 2) adding a penalty for repeat public notice
violations; 3) deleting the duration of the violation component
for public notice violations; and 4) adding an appendix-specific
matrix for assessing the size of violator component.
The Regions had suggested that the penalty be lowered for
sales of small cans to non-technicians and failure to post the
required sign notifying the public that sales of small cans to
non-technicians are prohibited. As there is neither a statutory
requirement nor a direct environmental harm associated with a
failure to post the sign, the penalty for failure to post can
justifiably be less than the assessment for the sale of a small
can. The former assessment for each of these violations was
$5,000. The attached draft revised penalty policy reduces the
assessment for the failure to post the required sign to $1,000 and
for the sale of small cans to non-technicians to $2,000. A $2,500
assessment for repeat violations of the public notice requirement
has been added. The $10,000 penalty formerly assessed for repeat
violations of the small can sales restrictions has been reduced to
$5, 000.
The Regions had also suggested that the duration of the
violation penalty component be waived for certain violations. The
Clean Air Act Stationary Source Civil Penalty Policy provides a
duration component to be assessed from the first day of violation
of a notice, reporting, and recordkeeping requirement such as the
public notice requirement. In some small can cases, this standard
assessment results in a penalty that some may view as
disproportionate to the seriousness of the violation and the size
of the violator. Accordingly, we propose waiving the assessment
of a duration of violation component for violations of the public
notice requirement of Section 609.
Finally, to assure that the overall enalties assessed for
violations of this rule are appropriate for the minor nature of
the violations and yet still produce significant penalties for
larger defendants, we propose adding a size of violator matrix
specific to this appendix. The proposed matrix provides for size
of violator assessments that range from zero for a company with
net worth or net current assets of less than $100,000 to $20,000
for a company with net worth or net current assets of more than
$40 million. We propose using values from this matrix for Section
609 cases instead of the values found at page 14 of the Clean Air
Act Stationary Source Civil Penalty Policy.

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3
If you have any questions regarding this draft policy, please
contact Craig Haas of the Stationary Source Compliance Division at
(703) 308-8682, or Tiffany Schauer of the Office of Enforcement at
(i2’02) 260—6781.
Attachment
Addressees:
John Seitz, Director
Office of Air Quality Planning and Standards
Alan W. Eckert
Associate General Counsel
Air and Radiation Division
Steve Seidel, Acting Director
Stratospheric Protection Division
Air, Pesticides and Toxics Management Division
Directors
Regions I and IV
Air and Waste Management Division Director
Region II
Air, Radiation and Toxics Division Director
Region III
Air and Radiation Division Director
Region V
Air, Pesticides and Toxics Division Director
Region VI
Air and Toxics Division Directors
Regions VII, VIII, IX, and X
Regional Counsels
Regions I - X
Air Branch Chiefs/Team Leaders
Office of Regional Counsel
Regions I - X
Air Division Branch Chiefs
Regions I - X
John C. Cruden, Chief
Environmental Enforcement Section

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4
Joel Gross, Deputy Chief
Environxnen al Enforcement Section
Walker Smith, Assistant Chief
Environmental Enforcement Section

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APPENDIX IX
CLEAN AIR ACT CIVIL PENALTY POLICY APPLICABLE TO PERSONS WHO
PERFORM SERVICE FOR CONSIDERATION ON A MOTOR VEHICLE AIR
CONDITIONER INVOLVING THE REFRIGERANT OR WHO SELL SMALL
CONTAINERS OF REFRIGERANT IN VIOLATION OF 40 C.F.R. PART 82,
PROTECTION OF THE STRATOSPHERIC OZONE, SUBPART B: SERVICING
OF MOTOR VEJJICLE AIR CONDITIONERS
__________ é¼ # Z 3 /9 €3
Introduction /
This appendix provides guidance for calculating the civil
penalties EPA will require in pre-trial settlement of judicial
enforcement actions, as well as the pleading and settlement of
administrative enforcement actions, pursuant to Sections 113(b)
and (d) and Section 609 of the Clean Air Act (“CAA”), as amended,
and 40 C.F.R. Part 82, Subpart B against persons who perform
service for consideration on motor vehicle air conditioners
involving the refrigerant or who sell small containers of
refrigerant. Settlement of violations of the recordkeeping and
reporting provisions of the regulations should not, for purposes
of penalty assessment, be treated differently from any other CAA
recordkeeping and reporting violation. See Clean Air Act
Stationary Source Civil Penalty Policy, p. 12.
This appendix is to be used for settlement purposes in civil
judicial cases, but EPA retains the discretion to seek the full
statutory maximum penalty in all civil judicial cases which do
not settle. In addition, for administrative penalty cases, the
appendix is to be used in conjunction with the Stationary Source
Civil Penalty Policy to determine an appropriate penalty to be
pled in the administrative complaint, as well as serving as
guidance for settlement amounts in such cases.
To assist EPA in monitoring compliance, the regulations
require persons who perform service for consideration on motor
vehicle air conditioners involving the refrigerant to report one
time and to keep records; persons who certify technicians must
report once every two years; and persons who sell small cans of
refrigerant must keep records and post a sign.
The Penalties for Violating Regulations
Section 113 of the Clean Air Act allows EPA to seek
penalties of up to $25,000 per day per violation. Each time a
motor vehicle air conditioner is serviced without properly using
approved refrigerant recycling or recovery equipment or is
serviced by an uncertified technician, each container of
refrigerant containing less than 20 pounds is sold to a

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2 DRAFT June 23, 1993
person who is not a certified technician or who does not certify
to the retail establishment that the container was purchased for
resale, and each time a technician is certified by a technician
training program which has not been approved by the EPA
Administrator constitutes a separate violation (each with a
Statutory maximum of $25,000).
EPA may in appropriate cases accept less than the statutory
maximum in settlement. The penalty assessments contained in this
policy (this appendix read with the Stationary Source Civil
Penalty Policy) reflect reductions from the statutory maximum
which can be made based on the statutory penalty assessment
criteria found in Section 113(e) of the Act. This policy takes
into account the size of the violator’s business, the violator’s
full compliance history, the economic benefit of noncompliance,
and the seriousness of the violation. The other factors in
Section 113(e) should be taken into account in determining
whether the penalty should be reduced, but the burden is on the
defendant to raise those factors.
Penalties for violations are based on the particular
regulatory requirements violated. The minimum settlement penalty
amount is the sum of the penalties assigned to each violation of
a requirements
Calculatina a Penalty
In accordance with the general practice EPA follows when
calculating all Clean Air Act civil penalties, penalties assessed
for performing any service for consideration on a motor vehicle
air conditioner involving the refrigerant or selling small
containers of refrigerant will be the sum of an economic benefit
component and a gravity component.
Economic Benefit
This component is a measure of the economic benefit accruing
to the facility as a result of noncompliance with the Act. To
determine the actual economic benefit to a person’ who performs
service for consideration on motor vehicle air conditioners
“Person” includes the technician who actually works on the
motor vehicle air conditioner and the individual, corporation,
partnership, association, State, municipality, political
subdivision of a State, and any Agency, department, or
instrumentality of the United States who employs the technician.
For the purpose of calculating the penalty under this policy, it
was assumed that Regions would generally take enforcement actions
against service facilities rather than individual technicians.
Both technicians and service facilities, however, are legally
responsible for complying with 40 C.F.R. Part 82, Subpart B.

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3 DRAFT June 23, 1993
involving the refrigerant, EPA will rely on the matrix which
follows to determine the economic benefit from delayed costs
(failure to purchase approved recycling or recovery equipment)
and avoided costs (failure to properly operate and maintain such
eqtipment).
Economic Benefit From Servicing Motor Vehicle Air Conditioners
Without Properly Using Approved Refrigerant Recovery Equipment:
Number of Months since August 13, 1992/Economic_Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
1—3
$115
22—24
$1103
43—45
$2494
4—6
$236
25—27
$1274
46—48
$2733
7—9
$363
28—30
$1454
49—51
$2984
10—12
$496
31—33
$1642
52—54
$3247
13—15
$637
34—36
$1840
55—57
$3523
16—18
$785
37—39
$2048
58—60
$3811
19—21
$940
40—42
$2266
The matrix assumes that the service facility should have
purchased one piece of recovery equipment. The matrix was
calculated using August 13, 1992 as the date noncompliance began
and assumed that the date of compliance (the date equipment is
acquired) and the date that the penalty is paid are the same.
Because the matrix assumes that enforcement actions will be taken
against the service facility and because many technicians will be
personally responsible for the cost of getting trained and
certified, the matrix does not include the cost of technician
certification. In addition, it is difficult to predict how many
uncertified technicians a service facility might employ to
perform service for consideration on motor vehicle air
conditioners involving the refrigerant. If the Regions find that
service facilities usually pay for technician training, then they
should include the cost of technician training and certification
in their economic benefit calculations. In any enforcement
action against an individual uncertified technician, the Regions
should include the cost of training and certification in the
economic benefit calculation. The matrix is based on the BEN
computer model. If the litigation team determines that the
matrix does not reflect the defendant’s actual economic benefit
in a particular enforcement action, the litigation team may
calculate the benefit using the BEN model with inputs specific to
the action.

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4 DRAFT June 23, 1993
The economic benefit to the person 2 who sells cans of
refrigerant containing less than 20 pounds is the profit on each
can. The profit will vary depending on how much the person paid
to purchase the cans and at what price the cans are sold. The
a ount of profit averages $1.50 per can.
Although the Stationary Source Civil Penalty Policy
indicates that the litigation team may elect not to assess an
economic benefit component in enforcement actions where the
violator’s economic benefit is less than $5,000 (see p. 7),
Regions should assess the economic benefit component in Section
609 enforcement actions unless unusual circumstances indicate
otherwise. Given that the economic benefit component in Section
609 enforcement actions will likely always be small (less than
$5,000), if the general rule from the Stationary Source Civil
Penalty Policy were to apply, the economic benefit component
would rarely be included in the penalty calculation. Since EPA
policy requires the removal of the violator’s economic benefit
unless the factors in Section 113(e) or litigation risks suggest
that a reduction is appropriate, Regions should assess an
economic benefit component in all Section 609 cases.
Gravity
In addition to economic benefit, the violator must pay the
gravity component of the penalty. The gravity component is the
measure of the seriousness of the violation. The seriousness of
the violation has two components: the importance to the
regulatory scheme and the potential environmental harm (ozone—
depleting effect of the violator’s actions) resulting from the
violations.
The following violations can defeat the purpose of Section
609 by permitting the release of substances that degrade the
stratospheric ozone layer. Their importance to the regulatory
scheme, therefore, includes the assessment of the following
penalties:
2 “Person” includes the employee who actually sells the
small can and the individual, corporation, partnership,
association, State, municipality, political subdivision of a
State, and any Agency, department, or instrumentality of the
United States who employs the employee. For the purpose of
calculating the penalty under this policy, it was assumed that
Regions would generally take enforcement actions against retail
facilities rather than individual employees. Both employees and
retail facilities, however, re legally responsible for complying
with 40 C.F.R. Part 82, Subpart I.

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5 DRAFT June 23, 1993
A penalty of $10,000 against any person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment;
A penalty of $15,000 against each person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment and who has
previously been the subject of a Section 609 enforcement response
(e.g. notice of violation, warning letter, administrative order,
field citation, complaint, consent decree, consent agreement, or
administrative or judicial order):
A penalty of $5,000 against any person who performs services
for consideration on motor vehicle air conditioners involving the
refrigerant for each person who performs such service who is not
properly trained and certified by a technician certification
program approved by the EPA Administrator;
A penalty of $2,000 against any person who sells a container
of refrigerant containing less than 20 pounds to a person who is
not a certified technician or who does not certify to the seller
that the container was purchased for resale;
A penalty of $5,000 against any person who sells a container
of refrigerant containing less than 20 pounds to a person who is
not a certified technician or who does not certify to the seller
that the container was purchased for resale and who has
previously been the subject of a Section 609 enforcement response
(e.g. notice of violation, warning letter, administrative order,
field citation, complaint, consent decree, consent agreement, or
administrative or judicial order);
A penalty of $5,000 (for each certificate issued after the
effective date of the regulation) against any technician training
program that has not received approval from the Administrator of
EPA;
A penalty of $1,000 against any retail establishment that
sells or offers for sale the refrigerant in containers of less
than 20 pounds and fails to post a sign that meets the
requirements of 40 C.F.R. §82.42(c). This amount should be
assessed regardless of how many (if any) small cans are actually
sold after November 15, 1992, as long as they are offered for
sale. This amount is in addition to the $2,000 assessment
described above against the retail establishment for the sale of
a container of refrigerant containing less than 20 pounds to a
person who is not a certified technician or who does not certify
to the retail establishment that it is purchased for resale;

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6 DRAFT June 23, 1993
A penalty of $2,500 against any retail establishment that
sells or offers for sale the refrigerant in containers of less
than 20 pounds and fails to post a sign that meets the
requirements of 40 C.F.R. §82.42(c) and who has previously been
t e subject of a Section 609 enforcement response (e.g. notice of
violation, warning letter, administrative order, field citation,
complaint, consent decree, consent agreement, or administrative
or judicial order);
EPA acknowledges that multiple violations of the Section 609
requirements may significantly increase the potential
environmental harm (ozone-depleting effect of the violator’s
actions) resulting from the violations. The Agency, therefore,
will assess the following additional amounts for each separate
violation to ensure that the total penalty assessed appropriately
reflects the seriousness of the defendant’s violations:
EPA will assess $60 against any person for each motor
vehicle air conditioner serviced without properly using approved
refrigerant recycling or recovery equipment, or $75 against any
person who have previously been the subject of a Section 609
enforcement response (e.g. notice of violation, warning letter,
administrative order, field citation, complaint, consent decree,
consent agreement, or administrative or judicial order) for each
motor vehicle air conditioner serviced without properly using
approved refrigerant recycling equipment; and
EPA will assess $27’ per pound against any person for each
sale of a container of refrigerant containing less than 20 pounds
to a person who is not a certified technician or who does not
certify to the retail establishment that it is purchased for
resale and $35 against any person that has previously been the
subject of a Section 609 enforcement response (e.g. notice of
violation, warning letter, administrative order, field citation,
complaint, consent decree, consent agreement, or administrative
or judicial order) for each sale of a container of refrigerant
containing less than 20 pounds to a person who is not a certified
technician or who does not certify to the retail establishment
that it is purchased for resale.
EPA will assess an additional amount to scale the penalty to
the size of the violator using the following matrix:
EPA has estimated that the benefit to be obtained from
avoiding the release of 1 kilogram of ozone depleting substance
ranges from $60 - $240/kg. For the purposes of this penalty
policy, it is assumed that the benefit is $60/kg.
See fn. 3.

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7 DRAFT June 23, 1993
Net worth (corporations); or net current assets (partnerships and
sole proprietorships):
Under $100,000 $0
ibo,ooi — $1,000,000 $2,500
1,000,001 — 5,000,000 $5,000
5,000,001 — 20,000,000 $10,000
20,000,001 — 40,000,000 $15,000
40,000,001 and above $20,000
Ad:) ustments to the gravity component must be made in
accordance with the provisions of the Stationary Source Civil
Penalty Policy, pp. 15—19.
Mit igatinu Penalty Amounts
Application of this policy significantly compromises the
penalty amount EPA is authorized to pursue under the CAA.
Penalty amounts calculated in accordance with this policy
represent the minimum penalty that EPA can accept in settlement
of cases of this nature. Reductions from this amount are
acceptable only on the basis of the violator’s demonstrated
inability to pay the full amount (substantiated in accordance
with Agency policy) or other unique factors. In civil judicial
actions, a proposed penalty reduction from the amount calculated
under this policy must be approved by the Enforcement Counsel for
the Air Enforcement Division. If the litigation team believes
that reduction of the penalty is appropriate, the case file
should contain both a memorandum justifying the reduction and
documentation that the penalty reduction was approved. In
administrative enforcement actions, Regional Administrators or
their designees must submit penalty justification documentation
within 20 days of issuance or signing of consent agreements to
the Director of the Stationary Source Compliance Division in the
Office of Air Quality Planning and Standards and the Enforcement
Counsel for Air in the Office of Enforcement.
ExamDles of Penalty Calculations
Following ard examples of the application of this policy.
Adjustments to the gravity component are made in accordance with
the Stationary Source Civil Penalty Policy.
Examp]. el
Ace Automotive Air-Conditioning Service, Incorporated
services motor vehicle air conditioners. Despite a significant
outreach effort by the Region (acquainting the regulated
community with Section 609’s requirements), Ace did not submit
the required owner certification to EPA and failed to purchase
recovery or recycling equipment. A search of Ace’s records
indicates that Ace has service4 60 motor vehicle air conditioners

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8 DRAFT June 23, 1993
since the effective date of the rule. The facility performed 150
service jobs in 1990 and 1991. None of the three technicians who
regularly service motor vehicle air conditioners are trained and
certified. EPA inspected the facility on March 13, 1993.
Economic Benefit Component
The economic benefit of delaying
the purchase of equipment for seven
months + avoided costs of operating equipment $363
Gravity CoinDonent
Importance to regulatory scheme
(servicing without equipment) $10,000
60 motor vehicle air conditioners
(at $60 per vehicle) 3,600
Reporting violation
(failure to certify to EPA that person
performing service is using approved
recycling equipment and that such person
is properly trained and certified) 15,000
3 Uncertified technicians performing
service (at $5,000 per technician) 15,000
Duration of violation
(failure to submit certification
due Jan. 1, 1993 — from matrix on p. 12
of Stationary Source Civil Penalty Policy) 8,000
Size of violator (Net Worth is approx.
$2,000,000) +5.000
Total Gravity $56,600
Preliminary deterrence amount
Economic Benefit Component $363
Gravity Component +56.600
Adjustment factors
20% upward adjustment to the gravity
component - Ace should have been aware
of Section 609’s requirements +11,320
Minimum Denaltv settlement amount
$67,920

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9 DRAFT June 23, 1993
Example 2
Diamond Auto Parts sells CFCs in canisters containing 14
ounces. On May 16, 1993, when an EPA inspector purchased two 14
ouhce cans of refrigerant, he was not asked to show his
technician training certificate and he did not claim to have a
certificate. In addition, the inspector noted there was no sign
in the check out area notifying customers that the sale of such
cans is prohibited unless the purchaser is a trained technician.
The inspector asked the owner whether the sign was posted on or
after November 15, 1992. The owner responded that he never
posted the sign.
Economic Benefit Component
2 cans of refrigerant (at $1.50 per can) $3
Gravity Component
Importance to regulatory scheme
(Sale of small can of refrigerant) $2,000
2 - 14 ounce cans of refrigerant
(at $27 per pound) 47.25
Importance to regulatory scheme
(Failing to post sign) 1,000
Size of violator (Net Worth is approx.
$6,000,000) +10.000
Total Gravity $13,047.25
Preliminary deterrence amount
Economic Benefit Component $3.00
Gravity Component +13,047.25
Minimum Settlement Penalty Amount
$13,050.25

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10
DRAFT June 23, 1993
Summary
Type of violation
Penalty amount
Servicing without equipment
1st violation — $10,000
2nd violation — $15,000
$60/per motor vehicle
Failing to certify
$15,000
Uncertified technicians
$5, 000/per technician
Sale of Small Cans to Non—Technician
1st violation — $2,000
2nd violation — $5,000
$27/per pound
Uncertified Training Program
$5,000/certificate
Failure to Post Sign
1st violation - 1,000
2nd violation — 2,500

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10

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LEGAL

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i2 L
w UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
4’?4( PRO
JUN — 7 1994
MEMORANDUM
SUBJECT: Transmitting Final Penalty Policy for Violations of 40
C.F.R. Part 82, Subpart F: Maintenance, Service,
Repair, and Disposal of Appliances Containing
Refrigerant
FROM: Kathie A. Stein
Enforcement Counsel for Air
Office of Enforcement
John B. Rasnic, Director ’- T!Lu 4 . .e .i1
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Addressees
Attached is a copy of the Final Penalty Policy for
Violations of 40 C.F.R. Part 82, Subpart F: Maintenance,
Service, Repair, and Disposal of Appliances Containing
Refrigerant. These regulations implement Section 608 of the
Clean Air Act.
This policy is effective immediately in all enforcement
actions to enforce Section 608 instituted after the date of the
policy, regardless of the date of the violation. For existing
cases the Regions should determine if the new policy results in a
lower proposed penalty, and if so the Region should apply the new
policy to the case. In administrative cases, the Region should
consider whether the complaint should be amended to reflect the
lower penalty. This policy shall not apply to cases closed
before the effective date of this revised policy.
The attached policy reflects the Regions’ comments in
response to the draft penalty policy which was distributed on
March 8, 1994. Generally, the Regions stated that they supported
the penalty policy. The revisions discussed below respond to
concerns raised by the Regions. We also included the Regions’
editorial comments where appropriate.
The revisions to the March 8, 1994 draft penalty policy
include: 1) clarifying the Persons Liable discussion;
Printed on Recycled Paper

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—2—
2) clarifying the Multiple Violations discussion; 3) providing an
alternate method for calculating size of violator; 4) providing
analysis with the examples explaining the rationale for assigning
the violations to their respective matrix cells; and 5) moving
Failure of Owner to Certify from Moderate to Minor under the
importance to the regulatory scheme section.
Several Regions suggested that the Persons Liable discussion
was unclear and potentially confusing. We did not intend to
limit the scope of persons responsible for complying with Section
608 and the implementing regulations. Our intention in the draft
policy was to indicate the breadth of persons liable within the
meaning of the statute and its implementing regulations. In the
final version of the policy, we have included a list which we
believe accurately reflects all of the types of persons who must
comply with the regulations. If in the course of implementing
this program the Regions find that a type of violator that is not
included is the liable person, the Regions should not be
constrained by this policy not to pursue such a violator. The
intent of this final penalty policy is not to limit the Agency’s
authority to pursue an enforcement action against any person who
is subject to Section 608 of the Act or the implementing
regulations.
Several Regions suggested that the Multiple Violations
discussion was confusing. We have changed the language and added
suggested language in an effort to ensure that all Regions
understand how this important factor is to be assessed. An
amount from Matrix 2 should be applied for each repeated
violation of the same requirement by the same violator. For
example, if a person violates the prohibition on the sale of
unreclaimed refrigerant on two occasions before the Agency
responds to the violations, an appropriate amount from Matrix 1
would be assessed plus an appropriate amount from Matrix 2 (for
the one additional violation after the first). If between the
first and second violations EPA had issued a Notice of Violation
to the violator, this situation would be treated differently. In
that case, the Regions would assess a penalty from Matrix 1 for
both the first violation and the second violation, except that
for the second violation the amount would be increased by a
minimum of 30%.
One Region indicated that it was sometimes difficult to
learn a violator’s net worth and suggested that an alternate
method be permitted for assessing the size of violator component.
This Region suggested that gross revenues are often more easy to
determine than net worth. In the final policy, we have made this
change. The policy reflects a preference for using net worth,
but allows gross revenues to be used when a net worth figure is
not available.

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—3—
Several Regions suggested that we add an analysis with each
penalty example to explain the rationale for assigning the
violations to their respective matrix cells. We have added such
an analysis for each violation within each example. A change in
the facts, however, might result in a different categorization
for the violation. These analyses are intended to help promote
consistency among the Regions, but should not be considered
controlling for these types of violations in every case.
Finally, several Regions suggested we move Failure of Owner
to Certify from Moderate to Minor under the Importance to the
Regulatory Scheme factor. They suggested that a Minor
classification was more appropriate given the relative importance
of this requirement to others in the regulation. We agreed with
their suggestion and in the final version, we have changed the
classification of this violation. This should not, however, be
taken as an indication that we do not believe that this
requirement is important.
Two Regions expressed concern with the complexity of the
penalty policy. We have carefully considered their comments and
believe that while the policy is somewhat complex, most Regions
understand it and believe that they can correctly apply it. We
think that the complexity of the policy is justified given all of
the penalty factors that we need to consider and the variety of
violations that can occur under this regulation. We regard this
policy as an appropriate balance between allowing for flexibility
and ensuring national consistency. If any of the Regions feel
that training is necessary for this policy, please let our staff
contacts know.
One Region expressed two concerns about calculating economic
benefit. The first concern was that the BEN model was not
appropriate for Section 608 violations and the second concern was
that the deviation from the $5,000 de minimis exception in the
Stationary Source Civil Penalty Policy was not justified. The
BEN model is appropriate in these cases because they often
involve avoided costs and/or delayed costs associated with the
purchase of recovery/recycling equipment, including its operation
and maintenance. The BEN model is designed to calculate such
avoided and delayed costs. We have considered this Region’s
second concern regarding this policy’s deviation from the de
minimis amount in the general penalty policy, but believe that
such an approach is justified. The general penalty policy’s de
minimis exception for economic benefit was established at $5,000
based on the much larger size of the sources and the more costly
control equipment required for compliance by those sources.
Since EPA’S goal is to collect the violator’s economic benefit in
every enforcement action, a more appropriate de minimis level for
Section 608 sources is $500.

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—4—
If you have any questions regarding this final policy,
please contact Craig Haas of the Stationary Source Compliance
Division at (703) 308-8682, or Rosemarie Kelley of the Office of
Enforcement at (202) 260—6781.
Attachment
Addressees:
John Seitz, Director
Office of Air Quality Planning and Standards
Alan W. Eckert
Associate General Counsel
Air and Radiation Division
Steve Seidel, Acting Director
Stratospheric Protection Division
Air, Pesticides and Toxics Management Division
Directors
Regions I and IV
Air and Waste Management Division Director
Region II
Air, Radiation and Toxics Division Director
Region III
Air and Radiation Division Director
Region V
Air, Pesticides and Toxics Division Director
Region VI
Air and Toxics Division Directors
Regions VII, VIII, IX, and X
Regional Counsel
Regions I - X
Air Branch Chiefs/Team Leaders
Office of Regional Counsel
Regions I - X
Air Division Branch Chiefs
Regions I - X
John C. Cruden, Chief
Environmental Enforcement Section

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—5—
Joel Gross, Deputy Chief
Environmental Enforcement Section
Walker’ Smith, Assistant Chief
Environmental Enforcement Section
Robert Van Heuvelen, Director-Designate
Office of Regulatory Enforcement
Connie Musgrove, Deputy Director-Designate
Office of Regulatory Enforcement

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APPENDIX X
CLEAN AIR ACT CIVIL PENALTY POLICY FOR VIOLATIONS OF
40 C.F.R. PART 82, SUBPART F: MAINTENANCE, SERVICE,
REPAIR, AND DISPOSAL OF APPLIANCES CONTAINING REFRIGERANT
June 1, 1994
INTRODUCTION
Purpose
This appendix provides guidance for calculating the civil
penalties EPA will require in pre-trial settlement of judicial
enforcement actions, as well as the pleading and settlement of
administrative enforcement actions.
Scope
This appendix is to be used pursuant to Sections 113(b) and
(d) for violations of Section 608 of the Clean Air Act (“Act” or
“CAA”), as amended, and 40 C.F.R. Part 82, Subpart F.
Usa e
This appendix should be used in conjunction with the
Stationary Source Civil Penalty Policy to determine a preliminary
deterrence amount, which is the sum of the economic benefit
accruing from noncompliance and the gravity component reflecting
the seriousness of the violation.
This appendix is to be used for settlement purposes in civil
judicial cases involving violations of Section 608, but EPA
retains the discretion to seek the full statutory maximum penalty
in all civil judicial cases that do not settle. In addition, for
administrative penalty cases, the appendix is to be used in
conjunction with the Stationary Source Civil Penalty Policy to
determine an appropriate penalty to be pled in the administrative
complaint, as well as serving as guidance for settlement amounts
in such cases. As the Stationary Source Civil Penalty Policy
indicates, for administrative penalty cases under Section
113(d) (1), the Region should plead the penalty calculated under
this policy, using the most aggressive assumptions supportable,
in its complaint.
Persons Liable
Any “person” as defined in the Act and in the Section 608
regulations may be held liable for violations of Section 608.
For example, all “persons” owning and/or operating a facility
subject to the provisions of the Act, and any employees of such a
facility, are legally responsible for complying with Section 608

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and with 40 C.F.R. Part 82, Subpart F. For the purpose of
seeking penalties for violations, EPA will often bring
enforcement actions against the owners and/or operators of such
facilities, -rather than against individual employees. However,
for the purpose of Section 608 violations, “person” includes the
technician who services an appliance and the employee who sells
refrigerant, as well as the individual, corporation, partnership,
association, State, municipality, political subdivision of a
State, and any Agency, department, or instrumentality of the
United States who employs the technician or employee. Person
also includes owners of appliances, disposal facilities,
manufacturers and importers of recycling or recovery equipment,
technician certification programs, reclaimers, and equipment
testing organizations. Matters involving possible criminal
behavior by individuals or organizations should be referred to
the Regional Criminal Enforcement Counsel.
PENALTIES FOR VIOLATING THE ACT AND THE REGULATIONS
Section 113 of the Clean Air Act allows EPA to seek
penalties of up to $25,000 per day for each violation. EPA may
in appropriate cases accept less than the statutory maximum in
settlement. The penalty assessments contained in this policy
(this appendix read with the Stationary Source Civil Penalty
Policy) reflect the statutory penalty assessment criteria found
in Section 113(e) of the Act. This policy takes into account the
size of the violator’s business, the violator’s full compliance
history, duration of the violation as established by any credible
evidence, the economic benefit of noncompliance, and the
seriousness of the violation. The other penalty assessment
factors in Section 113(e) should be taken into account in
determining an appropriate penalty (the economic impact of the
penalty on the business, good faith efforts to comply, and
payment by the violator of penalties previously assessed for the
same violation). However, reliable information on these factors
is rarely available to EPA when a penalty is proposed.
Accordingly, these factors will be considered if raised and
properly documented during settlement. Respondents have the
burden of persuasion on these factors, which are in the nature of
affirmative defenses.
CALCULATING A PENALTY
In accordance with the general practice EPA follows when
calculating all Clean Air Act civil penalties, penalties assessed
for violations of Section 608 and the implementing regulations,
40 C.F.R. Part 82, Subpart F, will be the sum of an economic
benefit component and a gravity component.

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Economic Benefit
This component is a measure of the economic benefit gained
by the violator as a result of noncompliance with the Act. The
economic benefit gained by a person due to delayed or avoided
costs will be determined in accordance with the Stationary Source
Civil Penalty Policy using, as appropriate, the BEN computer
model. Economic benefit should be calculated from the earliest
provable date of violation until the date that the violation is
corrected.
BEN is not appropriate in addressing the sales restriction
imposed by the regulations. In this case, the economic benefit
to the person who sells class I or II substances for use as a
refrigerant is the profit on each sale. The profit will vary
depending on how much the person paid to purchase the refrigerant
and at what price the refrigerant is sold.
Although the Stationary Source Civil Penalty Policy
indicates that the litigation team may elect not to assess an
economic benefit component in enforcement actions where the
violator’s economic benefit is less than $5,000 (see p. 7 of the
general policy), Regions should assess an economic benefit
component for the entire matter in Section 608 enforcement
actions unless it is less than $500. Given that the economic
benefit component in Section 608 enforcement actions will likely
always be small (less than $5,000), if the general rule from the
Stationary Source Civil Penalty Policy were to apply, the
economic benefit component would rarely be included in the
penalty calculation. Since EPA policy requires the removal of
the violator’s economic benefit in every enforcement action,
except for very limited circumstances, Regions should assess an
economic benefit component in all Section 608 cases where it is
greater than $500.
Gravity
The gravity component, which is assessed in addition to
economic benefit, is the measure of the seriousness of the
violation. The gravity component should be determined by
examining three factors: the potential environmental harm
(ozone-depleting effect of the violator’s actions) resulting from
the violations, the extent of deviation from the statutory or
regulatory scheme, and the size of violator.
1. Potential Environmental, Harm
The Section 608 regulations were promulgated to prevent harm
to human health and the environment by preventing the release of
substances that degrade the stratospheric ozone layer.

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Noncompliance with the requirements of the regulations,
therefore, can result in harm to human health or the environment.
Accordingly, the portion of the penalty ca .culation reflecting
the potential environmental harm of the violation should be based
on two factors:
1) the risk of or actual loss of refrigerant to the
environment
2) the importance of compliance to the statutory or
regulatory scheme
Risk of or actual loss
The risk of or actual loss presented by a given violation
depends on both the likelihood of loss to the environment and the
seriousness of the loss, which would include both the amount of
refrigerant lost and its ozone depletion potential. A penalty
should reflect the probability that the violation could have
resulted in, or has resulted in, a loss of refrigerant to the
environment. A larger penalty is appropriate for class I
chemicals because of the greater ozone depletion potential than
for class II chemicals. The greater the potential, the more
ozone that may be destroyed in the stratosphere. In most cases,
an actual loss would result in higher penalties than a potential
loss.
One factor enforcement personnel should evaluate in
determining whether the potential for harm is major, moderate, or
minor in a particular situation is the risk of loss. The degree
of risk of loss represented by each category is defined as:
MAJOR: the violation poses or may pose a substantial risk of
or actual loss of refrigerant to the environment
MODERATE: the violation poses or may pose a significant risk of
or actual loss of refrigerant to the environment
MINOR: the violation poses or may pose a relatively low risk
of or actual loss of refrigerant to the environment
In determining the degree of the risk of loss of refrigerant
to the environment, Regions should consider: how much
refrigerant is normally in the system (e.g. 20,000 pounds or 2
pounds) and how likely was the activity in question to result in
a release (e.g. changing a filter or changing the compressor).
For example, changing the compressor on a system containing
20,000 pounds of CFC-12 without having removed the refrigerant
prior to repair would fall into the category of Substantial risk
of or actual loss. Changing the filter on the same system

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without having removed the refrigerant prior to repair would fall
into the category of Significant risk of or actual loss.
Changing the filter on a system containing 2 pounds of HCFC-22
without having removed the refrigerant prior to repair would fall
into the category of Relatively Low risk of or actual loss. This
assumes that filter changes can be accomplished quickly and with
a smaller loss of refrigerant.
Importance of compliance to statutory or regulatory scheme
A second factor enforcement personnel should evaluate in
determining whether the potential for harm is major, moderate, or
minor in a particular situation is the importance of compliance
to the statutory or regulatory scheme. The degree of importance
of compliance to the statutory or regulatory scheme represented
by each category is defined as:
MAJOR: the actions have or may have a substantial adverse
effect on the statutory or regulatory scheme
MODERATE: the actions have or may have a significant adverse
effect on the statutory or regulatory scheme
MINOR: the actions have or may have a small adverse effect on
the statutory or regulatory scheme
In determining the importance of compliance to the statutory
or regulatory scheme, Regions should use the categorizations on
the following list unless unusual circumstances suggest the these
categories are inappropriate:
Major
1. Knowing Venting
2. Not using recycling/recovery equipment
3. Not repairing leaks (for equipment 50 lbs and over)
4. Accepting signed statement pursuant to S 82.156(f) (2)
if the person knew or had reason to know that such a
signed statement is false
5. Failure to follow required practices in §82.156
Moderate
1. Technicians not properly trained and certified
2. Recovery/Recycling equipment not properly
maintained/does not pull specified vacuum
3. Not using equipment certified for the type of appliance
4. Manufacture or import of recycling or recovery
equipment that is not certified

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—6—
5. Altering design of certified refrigerant recycling or
recovery equipment
6. Unapproved technician training or testing programs
issuing certificates
7. Sale and distribution of refrigerants to persons who
are not certified technicians after November 1994,
unless for resale
Minor
1. Recordkeeping requirements not properly followed
2. Training certificate not available on request
3. Sale of unreclaitned refrigerant
4. Sale of refrigerant reclaimed by uncertified reclaimer
5. Release of more than 1.5% by reclaimer
6. Sale of equipment that does not have servicing aperture
or process stub
7. Failure of owner or reclaimer to certify
If, in the Region’s analysis, the two factors constituting
potential for harm result in two different designations, the more
serious designation should be used. For example, the actions
have or may have a substantial adverse effect on the statutory or
regulatory scheme, but the violation poses or may pose a
relatively low risk of loss of refrigerant to the environment.
In this example, the potential for harm would be designated
major.
2. Extent of Deviation
The extent of deviation from Section 608 and the
implementing regulations relates to the degree to which the
violation defeats the requirement violated. In any situation, a
range of potential noncompliance with each requirement exists.
In other words, a violatbr may be substantially in compliance
with the provisions of a requirement or it may have totally
disregarded a requirement. In determining the extent of
deviation, the following categories should be used:
MAJOR: the violator deviates from requirements of the
regulation or statute to such an extent that most (or important
aspects) of the requirements are not met, resulting in
substantial noncompliance. For example, the owner certification
is not submitted.
MODERATE: the violator significantly deviates from the
requirements of the regulation or statute, but some of the
requirements are implemented as intended. For example, the owner
certification is submitted six months late and includes only the
name and address of the purchaser and the name and address of the
establishment where each piece of equipment is located.

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MINOR: the violator deviates somewhat from the regulation or
statutory requirements but most, if not all important aspects of
the requirements are met. For example, the owner certification
is submitted one month late and does not include the number of
service trucks used.
Each of the above factors, potential for harm and extent of
deviation from a requirement, forms one of the axes of the
penalty assessment matrix. The specific cell is chosen after
determining which category (major, moderate, minor) is
appropriate for the potential for harm factor arid which category
is appropriate for the extent of deviation factor. The complete
matrix is:
Matrix 1 :
EXTENT OF DEVIATION FROM REQUIREMENT
Major
Moderate
Minor
Major
$15,000
$12,000
$10,000
Moderate
$9,000
$7,000
$4,000
Minor
$3,000
$1,500
$750
For violations by a person who has previously been the
subject of a Section 608 enforcement response (e.g. notice of
violation, warning letter, or administrative or judicial order),
the amounts in Matrix 1 should be increased by a minimum of 30%
for the first violation after an enforcement response and by a
minimum of 50% for the first violation after the second or
subsequent enforcement responses. These percentages may be
increased at the Regions’ discretion.
Multiple Violations
EPA acknowledges that multiple violations of the same
requirement by the same company of the Section 608 requirements
may significantly increase the actual or potential environmental
harm resulting from the violations. The Agency, therefore, will
assess additional amounts against a company for each repeated
violation of the same requirement to ensure that the total
penalty assessed appropriately reflects the seriousness of the
defendant’s violations. After the base gravity component has
been determined from Matrix 1 for the violation of a particular
requirement, the multi-incident component of the settlement
penalty is calculated as follows:
POTENT IAL
FOR
HARM

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1) Using the same gravity-based designations for the
violations as were used in Matrix 1, locate the
corresponding cell in Matrix 2. If the potential for
harm of the initial violation (e.g., venting of 20
pounds of HCFC—22) is significantly different than the
subsequent violations (e.g., venting 20 pounds of CFC-
12), Regions may use a different potential for harm
cell in Matrix 2 that the one used in Matrix 1.
2) Multiply the dollar amount selected from the
appropriate cell in Matrix 2 by the number of
violations (e.g., number of additional appliances
serviced).
Matrix 2 :
EXTENT OF DEVIATION FROM REQUIREMENT
Major
Moderate
Minor
Major
$3,000
$2,500
$2,000
Moderate
$1,800
$1,200
$800
Minor
$600
$300
$100
For violations by a person who has previously been the
subject of a Section 608 enforcement response (e.g., notice of
violation, warning letter, or administrative or judicial order),
Regions should also assess an aggravated amount from Matrix 2
(i.e., increased by the same percentage as Matrix 1). The
aggravated amount should be multiplied by the number of repeat
violations of the same requirement. If the Region believes that
this penalty amount is insufficient for deterrent effect, it may
apply Matrix 1 to all repeat violations.
3. Size of violator
EPA will scale the penalty to the size of the violator
(calculate only once per violator). Size of violator is
determined from an individual’s or a company’s net worth. In the
case of a company with more than one facility, the size of the
violator figure is determined based on the company’s entire
operation, not just the violating facility. With regard to
parent and subsidiary corporations, only the size of the entity
sued should be considered. If the Region is unable to determine
net worth, it may determine size of violator based on gross
POTENTIAL
FOR
HARM

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—9—
revenues from U revenue sources during the prior calendar year.
If the revenue data for the previous year appears to be
unrepresentative of the general performancç of the business or
the income of the individual, an average of the gross revenues
for the prior three years may be used. The gravity component
will be scaled for size of violator using a multiplier. If a
business has a net worth of $300,000 (or gross revenues of
$1,000,000), the appropriate amount from the matrix (or matrices)
above should be multiplied by 1. For businesses with net worth
of less than or more than $300,000 (or gross revenues of less
than or more than $1,000,000), Regions should divide the net
worth by $300,000 (or the gross revenues by $1,000,000) to
determine the multiplier. Generally, the size of violator
component should not be more than 50% of the penalty (i.e., no
multiplier greater than 2 would be used). The penalty for
environmental harm/importance to the regulatory scheme multiplied
by the size of violator factor becomes the adjusted gravity
component. If EPA is unable to obtain information about either
net worth or gross revenues, than the Region should use an
aggressive assumption for the size of violator, and adjust it
downward if proof of a lower number is presented during
negotiations.
Mitigating Penalty Ai ounts
The penalty amount calculated in accordance with this policy
represents the minimum penalty that EPA can accept in settlement
of cases of this nature, unless reductions from this amount are
made in accordance with the provisions of the Stationary Source
Civil Penalty Policy, pp. 15-19 (dated October 25, 1991). In
civil judicial actions, a proposed penalty reduction from the
amount calculated under this policy must be approved by the Air
Enforcement Division. If the litigation team believes that
reduction of the penalty is appropriate, the case file should
contain both a memorandum justifying the reduction and
documentation that the penalty reduction was approved. In
administrative enforcement actions, Regional Administrators or
their designees must submit penalty justification documentation
within 20 days of issuance or signing of consent agreements to
the Director of the Stationary Source Compliance Division in the
Office of Air Quality Planning and Standards and the Enforcement
Counsel for Air in the Office of Enforcement.
Examples of Penalty Calculations
Following are examples of the application of this policy.
Adjustments to the gravity component are made in accordance with
the Stationary Source Civil Penalty Policy.

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Example 1
Grady’s Heating and Air-conditioning Service services home
and office air conditioning systems. Hotel A, located in Miami,
Florida, is having problems with its air conditioning system. It
does not seem to be cooling properly. In October 1993, Hotel A
hires Grady’s to fix the system. One of Hotel A’s employees,
Grace, notices that the service person is not carrying recovery
or recycling equipment. She follows him to where the chiller is
located. The unit contains 230 kilograms of CFC-l2. She
observes him vent the entire charge from the system. Grace
reports her observation to EPA. An inspection by EPA of Grady’s
facility reveals that the company owns recovery equipment and has
apparently properly serviced all other appliances using the
equipment. Grady’s net worth is $330,000.
Economic Benefit Component
The economic benefit of not using
the equipment for this job and
avoided labor cost
(less than $500) $0
Gravity Component
Knowing venting $15,000
(from major-major cell)
Analysis: The violator’s actions resulted in Major potential for
harm because there was an actual loss of a substantial
amount of CFC-12, which is relatively more ozone
depleting than HCFCs, and because a knowing release is
prohibited during servicing unless it is de minimis.
The violator’s actions were a Major deviation from the
requirement because the company did not comply at all
with the requirement that persons not knowingly release
refrigerant.
Size of violator (Business’ net worth
is approximately $330,000)
(330,000/300,000 = * 1.1
$16.500
Preliminary deterrence amount
Economic Benefit Component o
Gravity Component +16.500
Minimum penalty settlement amount $16,500

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One year later, the Agency receives a tip that Grady’s has
hired a new certified technician who is not always using recovery
equipment when it is needed. After investigating the tip, the
Agency concludes that on three occasions, Grady’s has violated
the venting prohibition.
Economic Benefit Component
The economic benefit of not using
the equipment for this job and
avoided labor cost
(less than $500) $0
Gravity Component
Knowing venting $15,000
(from major-major cell)
aggravated by 30% (15,000 *.30)
because violation occurred after
an enforcement response + 4.500
19, 500
19,500
Analysis: The violator’s actions resulted in Major potential for
harm because there was an actual loss of a substantial
amount of CFC-12, which is relatively more ozone
depleting than HCFC5, and because a knowing release is
prohibited during servicing unless it is de ininimis.
The violator’s actions were a Major deviation from the
requirement because the company did not comply at all
with the requirement that persons not knowingly release
refrigerant.
Multi-incident assessment
(# of additional violations multiplied
by major-major cell amount)
2 * $3000 6,000
aggravated by 30% (6,000 *30)
because violations occurred after
an enforcement response + 1.800
7,800
+ 7,800
27,300
Size of violator (Business’ net worth
is approximately $330,000)
(330,000/300,000 = * 1.1
S30.030

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Preliminary deterrence amount
Economic Benefit Component o
Gravity Component +30.030
Minimum penalty settlement amount $30,030
Example 2
Joe, owner of Joe’s Repair, has been manufacturing
refrigerant recovery devices for small appliances in his spare
time. Joe has not had the devices tested or certified by an
approved equipment testing organization. Since November 15,
1993, Joe has manufactured seven units and is using them at his
shop. When EPA tested the units, it determined that the
equipment could recover 50% of the refrigerant in a small
appliance. Joe’s net worth is $180,000.
Economic Benefit Component
The economic benefit of delaying
the cost of testing + cost of building
equipment that meets standards or
purchasing approved equipment $ amount
from BEN
Gravity Component
Manufacturing uncertified equipment $7,000
(from moderate-moderate cell)
Analysis: The violator’s actions resulted in a Moderate potential
for harm because there was an actual loss of a
significant amount of refrigerant (the equipment can
only recover 50%) and because his equipment does not
meet the minimum standard for recovery. The violator’s
actions involve a Moderate deviation from the
requirements because although Joe is using some
equipment, i.e, he is not simply venting, he did not
have his equipment tested and certified.
Multi-incident assessment
(# of additional violations multiplied
by moderate-moderate cell amount)
6 * $1200 = $7. 200
$14,200
Size of violator (Business’ net worth
is approximately $180,000)
180,000/300,000 = * .6
$8,520

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Preliminary deterrence amount
Economic Benefit Component
Gravity Component + 8,520
Minimum penalty settlement amount $
Example 3
Dave, a building manager for an office complex in Tacoma,
Washington, uses passive recovery equipment when he or his crew
(two people) work on the rooftop chiller that contains 30 pounds
of R-22. Dave decided not to purchase the appropriate (and more
expensive) recovery equipment for the building or get himself or
his crew trained and certified. During a routine inspection in
January 1994, an EPA inspector discovers that the building does
not have the required recovery equipment, nor did Dave or the
building owner ever submit a certification indicating that
certified equipment had been acquired. The inspector also
reviews the building’s repair log which shows 5 repairs when the
passive equipment was used. The building owner’s net worth is
$1,500,000.
Economic Benefit Component
The economic benefit of delaying
the purchase of equipment + cost
of operation and maintenance +
cost of certifying technicians $ amount
from BEN
Gravity Component
Servicing without using
certified equipment $7,000
(from moderate-moderate cell)
Analysis: The violator’s actions resulted in a Moderate potential
for harm because there was an actual loss of a
significant amount of refrigerant (passive equipment
can only recover a small percentage of the actual
charge) and because Dave is not using equipment that is
appropriate for the appliance serviced. The violator’s
actions involve a Moderate deviation from the
requirements because although Dave is using some
equipment, i.e, he is not simply venting, he is not
using the equipment required by the regulations for
this type of appliance.

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Multi-incident
(# of additional violations multiplied
by major-moderate cell amount)
(4 * $1200) - 4,800
Technicians not certified 9,000
(from moderate-major cell)
Analysis: The violator’s actions resulted in a Moderate potential
for harm because the risk of loss due to untrained
technicians improperly using recovery equipment is
significant. The violator’s actions involve a Major
deviation from the requirements because the technicians
did not comply with any of the technician certification
requirements.
Multi-incident
(# of additional violations multiplied
by moderate-moderate cell amount)
(2 * $1200) 2,400
Failure to submit certification 3,000
(from minor-major cell)
Analysis: The violator’s actions resulted in a Minor potential
for environmental harm because failure of an owner to
certify undermines the Agency’s ability to determine
compliance with the regulations. The violator’s
actions involve a Major deviation from the requirements
because the owner did not comply with any of the
certification requirements.
26,200
Size of violator (Business’ net worth
is approximately $1,500,000)
(1,500,000/300,000 = 5)
Because generally the size of violator
should be no more than 50% of the
preliminary deterrence amount, the
multiplier is reduced to 2) * 2
$52,400
Preliminary deterrence amount
Economic Benefit Component
Gravity Component +52,400
Minimum penalty settlement amount $

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