Clean Air Act
Compliance
Enforcement
Policy
Compendium
1988 ed.
Volume 4

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31

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Settling Enforcement Action in Clean Air Act Non—Attainment Areas
Against Stationary Air Sources Which Will Not Be In Compliance
by the Applicable Attainment Date
(11/23/87)
File at Part E, Document *31

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IlO S7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, D.C. 20460
NOV 2 3 1987
MEMORANDUM
SUBJECT: Settling Enforcement Actions in Clean Air Act
Noriattainment Areas Against Stationary Air Sources
Which Will Not Be In Compliance By The Applicable
Attainment Date
FROM: Thomas L. Adams, Jr.
Assistant Administrator for Enforcement
and Compliance Monitoring
J. Craig Potter
Assistant Administrator
for Air and Radiation
TO: Addressees
This memorandum lists special factors to be considered,
and requirements to be imposed, in settling enforcement actions
in Clean Air Act nonattainment areas against sources that will
not be in compliance by the applicable attainment date. These
requirements apply where the source is violating emission limita-
tions for the pollutant(s) for which the area has been designated
nonattainment. These requirements, which supplement those of
other general policy, are appropriate because these sources are
continuing to illegally contribute to the nonattairunent status
of the area after the date that attai’nmerit was supposed to have
been reached. The policy observes that shutdown by the specific
attainment date may be the appropriate relief in some cases,
but lists factors and requirements in considering whether an
expeditious compliance schedule going beyond the attainment date
may be appropriate in others.
This memorandum affects actions under Section 113(b) of the
Clean Air Act in nonattairiment areas where the area was to have
attained by December 31, 1982. It supersedes the September 20,
1982 policy titled “Enforcement Action Against Stationary Air
Sources Which Will Not Be In Compliance By December 31, 1982.”
It also applies to those sources in areas which are projected to,
but will fail to, reach attainment by December 31, 1987. Finally,
the policy applies to areas with attainment dates set beyond
December 31, 1987 which pass without attainment. No such areas
in the last category currently exist but we expect that new
attainment dates will be set for certain areas.

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—-b—
1 ga1 Issues
The C1. ’ ari Air ct r uir. areas r plan f’r att.iinrnent
of the primary ambient air qunlity standards for criteria
pollutants (e.g. ozone, carbon monoxide, sulfur oxides,
particulate matter) by December 31, 1982. Certain ozone
and carbon monoxide nonattaininent areas received extensions
until December 31, 1987 pursuant to Section 172 of the Act.
Many sources are unlikely to achieve timely compliance by
even this later date. Sources which are out of compliance
beyond the attainment date in a nonattairimerit area not only
violate the specific state regulation hut also contribute to
the area’s continuing nonattairim nt status. This contribution
becomes an important factor to consider in enforcement efforts
against these sources.
Our view that a shutdown of tha source is not necessarily
mandatory in all cases is based on the view that a district
court generally has equity power to fashion relief that allows
a source in violation of an environmental statute to continue
in operation while taking steps to come into cornplianceJ/ The
Supreme Court has been careful to point out that the full scope
of the courts’ discretion should be reco9nize’l in the absence
of Congressional intent to the contrary.’! Our review of the
Clean Air Act and the legislattve history convinced us that
Congress did not intend to limit the courts’ traditional dis-
cretion and thus depart from established principles. Of course,
some courts may decide, independent of EPA’s view, to shut a
source down. Recognizing that a court may or may not accept
EPA’s recommendation, this policy sets forth criteria to deter-
mine the specific equitable relief the Agency st ould seek in
such cases.
if Weinberger v. Romero—Barcelo 456 U.S. 305 (1982). See also
oco Production Co . v. Village of Gambell , No. 85—1239, slip
op. at 9 and 10 (U.S.S.C. March, 1987).
2, Congress did limit the district courts’ equitable power
regarding sources which had obtained relief under the Steel
Industry Compliance Extension Act of 1981 (“SICEA”). EPA has
always argued that the December 31, 1985 deadline in that Act
is absolute except in a few very limited situations involving
force majeure. That position was recently supported by dictum
in U.S. v. Wheeling Pittsburgh , No. 86—3456, slip op. at 15
(3rd Cir. May 18, 1987), where the court stated, “It is evident
therefore from the language of the statute and its legislative
history that Congress placed great significance on the [ SICEAJ
compliance dates arid intended to limit, if riot.entirely eliminate,
the district courts’ equitable discretion to extend compliance.”

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Threshold Criteria To Evaluate Extension of Non-Comp iancc
As a Jet1 r.t r i-f, the go.-i 1 ny F ’ cnfnr : i ,it -ict i ri
a . inst . urce in a ri .nar ’ n tltneflt ar i t bring
the oucce intO co’apL] ance expeli t io’: .y s po Lhle, but no
later tha: the approved attainment .late. EP ‘ 1 1 not recommen i
entry of a consent decree that allows the so’irc to remain in
operation anti out of compliance beyond the attainment date
unless, at a minimum, all of the EolLowing threshold criteria
are met: 1) the source must he unable to comply by the attainment
date other than by shutdown, 2) the source must denonstr te
that there is a public interest in its continued operation
which outweighs the environmental cost of an additional ?9tiod
of noncompliance, 3) if there is any doubt about the source’s
financial condition, the source t ust rie’ oi strate that it will
have sufficient funds to be able to comply expeditiously, and
4) the source must be, and must hive been, undertaking good
f. ith efforts to comply.
The following is a more complete discussioi of each of the
criteria.
Criterion 1 - Inability to Comply by Attainment Date
This evaluation must conclude that the source is physically
unable to install controls by the att. inment date. This conclusion
should be fully documented. Financial constraints which prevent
a company from moving quickly to comply should not play a role
here.
Criterion 2 — Public Interest a d Environmental costs
The determination of publi interest must be made on a
case—by—case basis and should i :1.ude consideration, at a
minimum, of the type of busines , the magnitude of excess
emissions, the amount of time ne. eu to comply, the public ser-
vice nature of the source (e.g. h - i .s, electric utilities),
the adverse public consequences w ch would result from closure
(e.g., significant unemployment i act), and the impact on
public health and welfare. The be ien is on the source to
provide information on the beneftts of its continued operation
and to show that those benefits tt:- igh the environmental cost
of an additional period of nonc np’iance. We expect that in
some cases the Agency will not .‘i the public benefit sufficient
and will not agree to continued . .aration beyond the attainment
date based on this criterion.

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r it e r i n 4 — i it i i )‘Jd t —_ ,
RejioIt—L \ ‘1ru9 i tr t r . d’ e .n :1 ju ‘j:t. nt t i]eterrni r e
WCthc t SufficLeilt irirerI Iitfy i t as to the healthy inan ial
stitus of the souu.:e t ) warr.tit a detijiieii Ccz)njirIic i’ t 1 ..’iS.
This analysis £hould duternine 4hether the source can pay for
the poflution control equipment. Headquarters has the technical
support, primarily through its “ABEL” computer model, to assist
in making this determination. The lack of ability to pay for
the pollution control equipment in this case will not merely
affect the penalty requested by EPA but 5hould result in the
shutdown of the source. If i source is not financially able to
complete an expeditious control. program, then it should not he
allowed to .perate with excessi’ e emissions in a nonattainment
area. Expeditious compliance i’ a key requirement for continued
operation.
Criterion 4 — Prior Good Faith Efforts To Comply
Finally, you must determine whether the source has been
arid is currently undertaking good faith efforts to comply with
applicable emissions standards. In most cases, the sources
have been aware of the state requirements for a number of
years arid so “good faith” must be manifested by actual efforts
that have been reasonably effective. Although in some cases
there maybe-an overriding interest in continued operation of
the source under an expeditious compliance schedule, generally a
prior history of disregard for environmental obligations should
militate against further extensions.
We wish to emphasize that this policy should not he seen
a general invitation to renegotiate consent deerees. Sources
which have already made a commitment, in the settlement of an
enforcement action, to come into compliance by the attainment
date or sooner should be required to do so unless the relevant
circumstances clearly and convincingly warrant a modification.
In cases where a consent decree already exists, EPA should
file a contempt action if the source is violating the terms
of the existing decree.
Specific Requirements for a Consent Decree Allowing
Post-Attainment Date Compliance
The terms of general policy on consent decrees must be
followedJ/ In addition, the Agency should insure, at a
minimum, that the decree incorporates the following elements
(some of which are listed to reemphasize certain of the
general policy requirements).
1/ This guidance titled “Guidance For Drafting Judicial
Consent Decrees,” issued on October 19, 1983, is GM #17 in
the General Enforcement Policy Compendium of the Office of
Enforcement arid Compliance Monitoring.

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—a-.
I) Th’ ).1Cf i Oliiflit3 I_i) omply viith relli : ffl flt 3 for
t least Pea on.b y vailabl. ‘)fltr’)l Technoloqy (“ :r” .f
r.o Part D t,lan is Lfl force ‘i’ re one is re-ru..re’3. Th ’ consent
decrt e should indicate that RACT limitations acceptable t)
EPA remain in effect and that the :o.irt retains jurisdiction
to enforce this provision until such t ne as a art D plan
‘ tisEying the re uireinents of Section 172 is aoproved by EPA
ii:1 becomes effective. Then the source ‘nay aoply to the
Court for a modiEic tion of the decree to conform with the
approved re. uirements.
2) The co npiiance schedule contains enforceable increiaents
of proaress.
3) The consent decree requires interim emission limitations
and control to the extent possible. Emission reductions,
while not i andate in every case, should be re. uired where
pos ib1e.
4) The consent iecree nclude nolitoring recuirements.
5) The consent decree includes reportinrz requirements,
includina timely reporting to EPA of the cornple ion of each
increment in the schedule.
6) The consent .1ecr ’ e provides for stipulated penalties.
At a minimum, the5e penalties should apply to failure to
implement interim controls, failure to meet increments of
progress in the complianc. schedule, and failure to demonstrate
final compliance.
7) The consent decree contains provisions preventinq
increases of emissions from the source. However, production
increases may be allowed so long as emissions per unit of
production ace decreased. This will allow a company to
respond to increased business while at the some time providing
an additional incentive to reduce emissions.
8) The consent decree requires payment of a significant
cash civil penalty. The general Clean Air ct Stationary
Source Civil Penalty Policy (“Penalty Policy”) of course
applies. 3 ! The fact that the area is nonattainment beyond
the attainment date should be viewed as an aggravating factor
under Section III.E. of the Penalty Policy and should result
in a higher gravity component.
3/ The current “Penalty Policy” was iued arch25, 1987 and
will replace the policy issued September 12, 1984 found at
V(Y) in the Clean Air ct Compliance/Enforcement Guidance
Manual —— Compendium of Operative Policies.

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-6-
9) Th consu’ic ecru.. < L i.i i 1.y rcs rv .. s th c it to
urt r thj uncc tv. LeE, Lnclud ing shutW,’. i .E c:
facility, if ch source does n t co.nply with the order.
10) Source compliance extensions beyond the attdinment
date are not allowed for s:lrces which a company does nnt
intend to controL. The CAA requires expeditious shutdo zn of
these sources. / Expeditious shutdown applies only if the
company is not building a replacement facility. If the company
is replacing the existing unit and commits to commencing and
completing construction of the new facility as expeditiously
as practicable, then EPA may agree to delay shutdown of the
violating source until, the replacement facility is constructed
and operable, provided that the o her criteria in the “shutdown”
policy and this policy are met. tn implementing this approach
the Region will need to consider the effect of any Clean Air
Act sanctions which ‘nay limit construction of new facilities
in the area.
11) Compliance through use of low-solvent technology is
still governed by the August 6, 1986 “Policy on the Availability
of Low-Solvent Technology Schedules in Clean Air Act Enforcement
Actions,” except that the statement in that policy requiring
compliance by the end of 1987 is modiELed by the present -
poi icy.
Deferral to State Action
The principles set furth in this me oranduzn should also
be used in conjunction with “ti:nely and appropriate” guidelines
to evaluate the adequacy state ad:ninistrative or judicial
enforcement action addre ‘ ig these sources. 5 /
4 See the “Clean Air A . :T nforcement Policy Respecting
ources Complying By Sh •do ,” issued November 27, 1985
found in the Clean Air AL: ‘s” -liance/Enforcement Guidance
Manual-- Compendium of 0p ac .ve Policies at Part I (L).
5/ See “Guidance on ‘Time: nd Appropriate’ EPA/State Enforcement
‘ esponse for Significant : Violators” issued June 28, 1984
found in the Clean Air Ar C npliance/Enforcement Guidance
Manual -- Compendium of pe: tive Policies at Part 1(1).

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—7-
•\ Li :: s sees
! e ,L’)nal AJn [ .i r--itors
Regions l-X
Deputy Regional Airninistrators
Regions I-X
Regional Counsel
Regions I-X
Regional Counsel Air Contact.
Regions I-X
Air Management Division Dire tors
Regions I, III and IX
Air and Waste Managenent Division Director
Region II
Air and Toxics Division Directors
Regions VU, VIII and X
Air, Pesticides, and Toxics Management Division
Directors
Regions IV and VI
Air and Radiation Division Director
Region V

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‘1 11 1 / / ‘, , a
* d c . /
- P — — . I $ 1 i. •
Gu4dance.. on- Ev-a]. uating Clean kir ct Enforcement of State
Implementation Plan Violations Involving Proposed State
Revisions
(-l-2-/ -l-f8-7+- // /9/
File at Part E, Document #32

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
LPRO -
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: Revised Guidance on Enforcement During Pending SIP
FROM: Mi:h:elS. A1ushin, ’/ , . -.___.
Associate Enforcement Counsel for Air
Office of Enforcement
John B. Rasnic, Acting
Stationary Source Compliance D ision
Office of Air Quality Planning and Standards
TO: Addressees
Attached is final guidance on the above—referenced subject.
We issued this guidance in draft on December 19, 1990. The final
policy attempts to reflect comments received from several of the
Regions submitted in response to that draft.
Existing guidance (Aug. 29, 1989) attempted to adapt Agency
policy to the unsettled judicial landscape which prompted the
Supreme Court to grant certiorari to hear the General Motors
case. Now that the Supreme Court has overturned unfavorable
precedents which had restricted EPA authority, and the Clean Air
Act Amendments of 1990 have added a new twelve month SIP revision
review deadline, we have developed this guidance to encourage
more vigorous federal enforcement of state implementation plans.
Some commenters asked for clarification of the meaning of
“high prob bi1ity” in Subpart D of the new policy. The draft has
been amended to make clear that only SIP revisions which have
been formally proposed by the State may have a high probability
of approval. Assessing the likelihood of approval, prior to
reviewing the supporting data contained in a formal application
by the State, in most instances would be inherently difficult.
Moreover, timely submittal of complete SIP revision applications
should be encouraged.
One cominenter asked that we define “adverse environmental
impacts” in Part I, Subpart C, to include non-quantifiable
impacts such as damage to the Agency’s integrity. We have done
so. This same commenter asked that we remove the paragraph
discussing the old guidance to avoid confusion. Since the new
Prrnted on Recycled Paper

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2
guidance supersedes the old, we are in agreement that inclusion
of this paragraph would be surplusage and potentially confusing
to cursory readers. We, therefore, have removed it.
Another commenter suggested that we expand the discussion on
factors contributing to prejudice to defendants. In response we
have asked that Regions consider, among other added factors,
whether the existence of a collateral suit indicates the
defendant has been prejudiced.
In conclusion, the need for more vigorous SIP enforcement
has been amplified by our continuing ozone nonattaininent problem
and an anticipated increase in the number of proposed SIP
revisions resultant from the 1990 Amendments. We are hopeful
this document will provide valued assistance to the Regions in
their efforts to enforce state implementation plans.
This guidance supersedes the “Revised Guidance on
Enforcement of State Implementation Plan Violations Involving
Proposed SIP Revisions,” dated August 29, 1989. Please insert
this document in its place at Part E, Document #32 of the Clean
Air Act Policy Compendium.
Attachment
P ddressees:
Regional Counsels
Regions I-X
Regional Counsel Air Contacts
Regions I—X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation 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
Air Compliance Branch Chiefs
Regions I-X

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3
Alan Eckert
Office of General Counsel
Robert Van Heuvelen, Acting Chief
Environmental Enforcement Section
U.S. Department of Justice
cc: James M. Strock
Assistant Administrator for Enforcement
William G. Rosenberg
Assistant Administrator for Air and Radiation

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UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON, D.C. 20460
MAR ‘ - 1991
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: Revised Guidance On Enforcement During Pending SIP
Revis ions
FROM: Michael S. Alushin , ‘i
Associate Enforcement Counsel for - ir
Office of Enforcement
John B. Rasnic, Acting Directc
Stationary Source Compliance DAvis:
Off ice of Air Quality Planning and Standards
TO: Addressees
Less than a year following our last guidance document
addressing the above subject (August 29, 1989) the United States
Supreme Court handed down its decision in General Motors Corp. v.
United States ( j), ___ U.S. , 110 S. Ct. 2528 (1990), which
affirmed the Agency’s authority to bring enforcement actions even
after EPA review of proposed State Implementation Plan (SIP)
revisions has exceeded four months. In addition, the Clean Air
Act was amended in October, 1990 to include, inter alia , a new 12
month review period for proposed SIP revisions.
In the wake of both this ruling and the recent amendments’
to the Act, this revised guidance is intended to assist the
Regions in deciding when to bring enforcement actions while SIP
1 S110(a) (3), 42 U.S.C. §7410, of the amended Act imposes
a twelve•month deadline for EPA SIP revision review:
Within 12 months of a determination by the
Administrator (or a determination deemed by operation
of law) under paragraph (1) that a State has submitted
a plan or plan revision (or, in the Administrator’s
discretion, part thereof) that meets the minimum
criteria established pursuant to paragraph (1), if
applicable (or, if those criteria are not applicable,
within 12 months of submission of the plan or
revision), the Administrator shall act on the
submission in accordance with paragraph (3).
Pnnted of? Recycled Paper

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2
revisions are pending. It should be emphasized from the outset
that the Supreme Court’s ruling in Q j has substantially lowered
the level of caution which must be exercised in deciding whether
to bring cases involving proposed SIP revisions, even in those
instances where the new 12 month period has been exceeded.
This document begins with a statement of the Agency’s new
policy on SIP enforcement during the pendency of proposed
revisions. Background material and a summary of the Supreme
Court ruling in follow the policy statement.
I. POLICY
The Supreme Court’s recent ruling in Q , in conjunction with
the 1990 amendments to the Clean Air Act, have resulted in a
marked shift in the law regarding EPA’S enforcement authority
during the review of proposed SIP revisions. The ruling in 4
affirms the Agency’s authority to enforce existing SIPs, even
when the Agency has unreasonably delayed the review of proposed
revisions. The remedy for unreasonable Agency delay is a suit to
compel Agency action or a diminution in penalties depending on
the degree of prejudice caused to the defendant. Although the
amendments create a presumption that Agency review beyond 12
months constitutes unreasonable delay, our authority to enforce
the existing SIP, through penalties or injunctive relief, remains
after that date. In short, has effectively reduced, but not
eliminated, the level of caution to be exercised when the Agency
has consumed more than 12 months in reviewing SIP revisions.
This guidance encourages Regions to vigorously pursue
violators of existing SIPS with a sensitivity for the particular
facts of individual cases. The guidance sets forth factors to
consider, in addition to those enumerated in the October 10,
1990, memorandum on Enhanced Regional Case Screening, in
selecting appropriate enforcement responses to SIP violations
involving pending review of proposed SIP revisions. The list has
been developed in consideration of Q j’s holding on the issue of
the appropriate remedy for unreasonable Agency delay in reviewing
proposed SIP revisions. The holding is two—fold; (1) a defendant
may obtain reductions in penalties commensurate with a trial
court’s determination of the degree of prejudice caused to a
defendant by EPA’s delay; and, (2) EPA will be subject to
collateral citizen suits to compel Agency action for unreasonable
delays in reviewing SIP revisions. Following is a list of
factors Regions should consider in determining appropriate
enforcement responses in SIP cases affected by proposed revisions
which have been pending before the Agency for more than 12
months.

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A. Need For Injunctive Relief In Cases of Ongoing
Noncompliance
Despite the existence of unreasonable Agency delay in
reviewing a particular SIP revision for more than 12 months, if a
case justifies injunctive relief for an ongoing violation, the
Region should proceed with civil enforcement. Since the primary
purpose of such cases is to compel compliance, the risk of any
diminution in penalties is of secondary concern. Cases involving
compliance with a proposed revised SIP, which is likely to be
approved, are discussed in Subpart C of this Part.
B. Penalty-Only Cases Involving A Lona Period of
Noncompliance In Comparison To The Length of Agency
Delay
In the wake of GM, trial courts in enforcement actions will
take into consideration the degree of prejudice caused to
defendants by Agency delay in reviewing proposed SIP revisions
for longer than the 12 months allotted by the Act. Therefore,
the utility of proceeding with penalties-only actions diminishes
in proportion to the degree of prejudice caused to defendant.
Regions should consider the period of noncompliance in relation
to the period of unreasonable EPA delay in reviewing SIP
revisions beyond 12 months in deciding whether to pursue a
penalties-only action.
Therefore, in those cases which involve a comparatively long
period of noncompliance in relation to the length of EPA ’s delay
in reviewing a proposed SIP revision beyond 12 months, the Region
should proceed, absent other factors militating against the suit.
If, however, the period of noncompliance is short in comparison
to the period of EPA delay, and other factors which would tend to
increase the penalty (ie. significant environmental impact and
economic benefit) are absent, Regions may want to consider
withholding the action. The anticipated penalty recovery in such
cases may not justify the resource burden placed on the Agency
and the Department of Justice to litigate the case. Once again,
if there exists a need for injunctive relief, Regions should
proceed irrespective of any elevated risk that the penalty will
2 Please note that the Clean Air Act Amendments of 1990
amended paragraph (e) of S113, 42 U.S.C. S7413, to effectively
shift the burden of proof to defendants on the issue of ongoing
violations. New S113(e) states that, for the purposes of
determining the number of days of violation for which a penalty
may be assessed, once the Government makes a prima facie showing,
the days of vio1at ion. shall be presumed to include the date of
notice issued to the csource of the violation, and each and every
day thereafter unti1 the violator establishes continuous, or
intervening, compliance.

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4
be reduced.
C. Cases Involving A High Probability That The Proposed
SIP Revision Will Be Approved
In instances where the source is in compliance with a
proposed SIP revision submitted in a formal application by the
State, and which has a high probability of approval, the need for
injunctive relief does not exist. However, there may still exist
a justification for pursuing penalties, particularly where the
source has been in violation of the existing SIP for a
substantial period.
Therefore, where there exists a high probability that the
proposed SIP revision will be approved, the Region should once
again consider the length of noncompliance in relation to the
length of unreasonable Agency delay in reviewing the proposed
revision. If the length of noncompliance is substantial in
relation to the length of EPA delay, the Region may still wish to
pursue a penalties-only claim despite imminent approval of the
pending SIP revision.
However, as in any case, the Region should weigh the
particular equities of each case in deciding whether a penalties-
only claim is merited. If the source’s noncompliance with the
existing SIP is techn .cal in nature, and does not have adverse
environmental impacts , a penalties-only action may be
inappropriate notwithstanding a lengthy period of noncompliance.
Alternatively, in those rare cases where a source obtains relief
through a SIP revision which allows it to gain some economic
advantage with adverse environmental consequences, a penalties-
only claim may be warranted; especially if the period of
noncompliance with the existing SIP is lengthy. 4
Adverse environmental impacts are not limited solely to
quantifiable environmental impacts. They also may include damage
to the Agency’s broader deterrence aims in the regulated
community which may result from unaddressed noncompliance with
the existing SIP.
An example is an emission violation caused by the
source turning of f control equipment prior to obtaining the SIP
revision allowing it to do so. In this case, the source has
obtained an economic benef-it from noncompliance, while causing
adverse nyironmental impact. A penalties-only action is merited
for the regulatory process violation.

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5
D. Whether The Existence of A Collateral Suit Compelling
Agency Action On A Proposed SIP Revision Indicates
Prejudice
An additional remedy available to regulated entities for
Agency delays in reviewing proposed SIP revisions is a collateral
suit to compel the Agency to act. Although the Supreme Court in
clearly ruled that the existing SIP remains enforceable
regardless of the pendency of any proposed revisions, 5 the
existence of a collateral suit to compel Agency action on a
pending SIP revision may affect the selection of the enforcement
response to the extent that it indicates the source is being
prejudiced by the delay.
Therefore, the Regions should consider whether the defendant
has sought to compel Agency action on the proposed revision when
evaluating whether the defendant is suffering any actual
prejudice from EPA’S delay on the SIP revision.
E. Assessing The Dearee of Prejudice To The Defendant
Additional considerations may bear on the extent of possible
prejudice to the defendant. Clearly, if a defendant is not in
compliance with the proposed SIP revision, then little prejudice
has resulted. However, if the defendant is in compliance with
the proposed revised SIP, and the revisions to the SIP will
significantly reduced the defendant’s compliance costs, then EPA
delay in processing the proposed revision may very well cause
prejudice to the defendant. In this case, the Region should
weigh the period of noncompliance against the period of EPA delay
as outlined above. Related factors which may support a decision
to bring a SIP enforcement action include whether the defendant
failed to make a good faith effort to comply with the existing
SIP or failed to plan for the possibility that the SIP revision
could be denied.
The Court recognized that the existing SIP remains
enforceable despite delay in review of a proposed revision. “The
language of the (CAA) plainly states that EPA may bring an action
for penalties or injunctive relief whenever a person is in
violation of any requirement of an ‘applicable implementation
plan’...(t]here can be little doubt that the existing SIP remains
the ‘applicable implementation plan’ even after the State has
submitted a proposed revision.. . (t]here is nothing in the statute
that limits EPA’S authority to enforce the ‘applicable
implementation plan’ solelyCtà”those cases where EPA has not
unreasonably delayed actiôn ñ a roposed SIP revision.” 110
S.Ct. at 2533—34.

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6
F. Pre- mendments Cases
Certain cases may involve a period of noncompliance, and a
now completed review of a proposed revision, both of which
occurred prior to the 1990 Amendments to the Act. Since the new
12 month period cannot be applied retroactively, EPA’S conduct in
reviewing proposed SIP revisions will be subject to the standard
existing before the amendments. In other words, the
reasonableness standard set forth in Q is applicable. Under
that standard, the court will look to the particular
circumstances surrounding EPA’s review of the proposed SIP
revision to determine if the length of time taken by the Agency
was “reasonable” pursuant to the mandates of the APA. If the
Agency can demonstrate that the length of time consumed in
reviewing the SIP revision was reasonable, then fortiori a
defendant cannot be prejudiced by that delay and a district court
cannot reduce penalties on this ground.
Factors which may support a decision to bring a SIP
enforcement action under these rather limited circumstances
include whether: (1) the notice and comment period has been
extended; (2) significant comments on proposed SIP revisions were
received after the comment period ended; (3) the Office of
Management and Budget reviewed the disapproval; (4) negotiations
between the Region and the State occurred to resolve issues in
advance; (5) the proposed revision required a complex equivalency
determination; and, (6) the proposed revision required a
determination of “Reasonable Further Progress” in a nonattainment
area.
II. Background
EPA currently reviews approximately 150 to 200 SIP revisions
each calendar year. Although the projected review time for such
revisions is fourteen months, in fact less than half of these
revisions are processed within this time period. Moreover, in
some instances, SIP revisions have taken four to five years to
review. Even with the administrative steps taken by EPA to
streamline the process ( g State Implementation Plan Processing
Reform: Notice of Procedural Changes, 54 FR 2214, January, 19,
1989), and legislation establishing a longer deadline, SIP
enforcement cases will continue to be affected by SIP revisions.
In the past several years, the number of SIP enforcement
cases has declined substantially. This drop-off is cause for
some concern since the number of SIP violations during this
period has probably remained constant or even increased.
Although there are a number of reasons for this diminution, a
principal reas9n is that recent lower court decisions have ruled
against the agency in SIP enforc rnent actions for what was deemed
unreasonable agéncTy delay when review of proposed SIP revisions
exceeded four’ months. The Agency is hopeful, however, that the

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7
Supreme Court’s recent decision in , in conjunction with the
amendments, will result in an increase in the number of SIP
enforcement actions in the coming months.
In the near future, proposed SIP revisions are also expected.
to increase substantially. With the amendments, SIP calls for
ozone nonattainment, and new SIPs resulting from NAAQS revisions
( e.g. , PM 10 ), the Agency’s workload will no doubt become heavier.
Thus the need for effective new guidance on exercising
enforcement discretion in cases involving proposed SIP revisions
has been magnified.
In recent years, a number of regulated parties successfully
argued in SIP enforcement actions that the four month limitation
on EPA review of original SIP submittals 1 kewise applied to the
Agency’s review of proposed SIP revisions. In light of these
adverse opinions, we promulgated revised guidance on August 29,
1989 in an attempt to adapt agency policy to the unsettled
judicial landscape.
The combined effect of and the amendments have largely
superseded our existing policy guidance on this issue. We have
therefore determined that a summary of and the amendments is
needed to clarify the current law and provide a guidepost for
deciding when to bring SIP enforcement actions while proposed SIP
revisions are pending.
III. Summary of General Motors
In order to fully understand the significant shift in the
law governing SIP enforcement, it is helpful to examine the
Supreme Court’s opinion in in light of the new 12 month review
period for proposed SIP revisions.
A. No Statutory Deadline
In the Supreme Court ruled that EPA review of proposed
6 See Duauesne Light v. EPA , 698 F.2d 456 (D.C. Cir.
1983); Council of Commuter Organizations v. Thomas , 799 F.2d 879
(2d Cir. 1986); American Cyanamid v. EPA , 810 F.2d 493 (5th Cir.
1987); United States v. General Motors , 876 F.2d 1060 (1st Cir.
1989); United States v. Alcan Foil , 889 F.2d 1513 (6th Cir.
1989)
In United States v. General Motors Corp. , 876 F.2d 1060
(1st Cir. 1989), the First Circuit-construed §110(a) (3) to
implicitly contain the same fou± mónth ’deadline set forth in
§110(a) (2) governing EPA review of - driginal SIPS. Apparently
concerned that EPA’S institutiona] fnterest in enforcing existing

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8
SIP revisions was not limited to a four month period. GM’s
principal argument was that since S11O(a)(3) pertaining to SIP
revision review requires EPA to approve such revisions if they
meet the requirements of §110(a) (2), the four month deadline
contained in §110(a) (2) also applies to proposed SIP revision
review. In disposing of GM’s argument, the Court concluded that
§llO(a)(3)’s reference to the “requirements of §110(a) (2)” was
only directed to the substantive aspects of the proposed SIP
revision, not the procedural. A contrary conclusion, stated the
Court, would obviate the need for the additional procedural
requirements of §110(a) (3). Since §110(a) (3), like §110(a) (2),
mandated that proposed SIP revisions required reasonable notice
and public hearings at the state level, to incorporate the
procedures of (a) (2) into (a) (3) would be duplicative and result
in a discordant reading of the statute.
Moreover, the Court marshalled further support for this
conclusion by pointing to numerous other provisions in the
statute which expressly imposed the same type of deadlines GM
argued existed implicitly in §1l0(a)(3). Applying the rule of
statutory construction which posits that the “expression of one
is the exclusion of all others” the Court decided that, had
Congress intended a four month deadline for review of proposed
SIP revisions to apply, it would have said so.
GM’S final argument was grounded on the language of §110(g),
which gives the Governor of any state the authority to suspend
any part of an existing SIP that would result in severe economic
disruption if EPA has failed to act on a proposed SIP revision
(which would alleviate the economic disruption) “within the
required four month period”. In summarily disposing of this
contention, the Court concluded that reference to any required
four month period in §110(g) did not by itself impose on EPA a
general requirement to process all proposed revisions within four
months. Rather, it merely authorized the Governor in such
instances to suspend that portion of the existing SIP. “Whatever
may be the correct interpretation of §110(g)...we do not think
this passing mention can be inflated into a requirement that the
(EPA] process each and every proposed revision within four
months.” 110 S. Ct. at 2538.
B. No Enforcement Bar
After deciding that no statutory deadline governed EPA
review of proposed SIP revisions, the Court next held that rather
than an enforcement bar, the appropriate remedy for unreasonable
SIPs conflicted with its responsibility to approve SIP revisions,
•the court stated: “we think it dangerous to defer in a situation
such as this where the Agency has a substantial institutional
interest in not imposing constraints on itself.” . j. at 1066.

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9
Agency delay in processing proposed SIP revisions was either a
citizen suit pursuant to §304, compelling agency action, or a
reduction in penalties by the district court in those cases where
the source is prejudiced by the unreasonable delay. 8 The Court
grounded its ruling on the absence of any reference to an
enforcement bar in the statute, as well as §].13(b)(2)’s express
authorization of actions for penalties or injunctive relief
whenever a source is in violation of the applicable SIP.
CONCLUSION
With the recent amendments to the Act, Congress expressly
determined that 12 months is a reasonable period to review
proposed SIP revisions. Therefore, the amendments have probably
created a statutory presumption that failure to review a proposed
SIP revision within the allotted 12 months is unreasonable. The
ruling makes clear, however, that notwithstanding this new 12
month statutory period, enforcement of existing SIPs is
authorized even when the Agency has exceeded its statutory review
deadline. In determining whether to bring SIP enforcement
actions involving proposed SIP revisions which have been reviewed
beyond 12 months, Regions should consider the factors enumerated
in this document on a case—by—case basis.
Our staff will be available to discuss specific cases with
you. Please contact Peter Fontaine of the Air Enforcement
Division if you have any questions regarding this policy.
8 According to the First Circuit, in those cases where
the Agency’s unreasonable delay has resulted in prejudice to the
defendant, the District Court is endowed with the authority to
reduce penalties. “If, for example, a trial court finds that the
review process should have taken ten months rather than two
years, it may decline to award penalties for the fourteen months
of unwarranted delay.” Q , 876 F.2d at 1068.

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10
Addressees
Regional Counsels
Regions I-X
Regional Counsel Air Contacts
Regions I-X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation 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
Air Compliance Branch Chiefs
Regions I-X
Alan Eckert
Office of General Counsel
Robert Van Heuvelen, Acting Chief
Environmental Enforcement Section
U.S. Department of Justice
cc: James M. Strock
Assistant Administrator for Enforcement
William G. Rosenberg
Assistant Administrator for Air and Radiation

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33

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_____ 3

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... •, -
f UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON. D.C. 20460
I
JAN 2flgeg
MEMORANDUM
SUBJECT: Guidance on Inclusion of Environmental Audi irig
Provisions L . n Air Act Settlements /‘_,fr.. -
FROM: Terrell. S. Hunt . - ce E’ ’- -
AssocLate En rcemant Counsel
Air Enforcement Division
John S. SaLtS, Director ___ ___
Stationary Source Compli Division
Office of Air Quality Planning Standards
TO: Addressees
Attached is the new Guidarice on Inclusion of Environmental
Auditing Provisions in Clean Air Act Settlements. This guidance
supplements the ‘EPA Policy on the Inclusion of Environmental
Auditing Provisions in Enforcement Settlements,’ issued by Tom
Adams on November 14, 1986. A draft of this guidance was dis-
tributed to the Regions and DOJ for comment on June 30, 1987.
As you can see from the attached summary of comments
submitted by the Regions (DOJ asked that their comments remain
confidential), considerable effort has been invested in this
project. We attempted to incorporate every comment submitted.
The Ga a t Bros. consent decree was the best example of an
asbestos case wit environmental auditing that was available when
this guidance was sent out for comment. Several suggestions for
improvemsata in the Bros . consent decree were received.
Those i roveaenta plus more recent consent decrees that have
been .atersd with the courts are available upon request. The
best eza le currently is U.S. v. City of Ottuava , which is
appended to thu guidance, but it too will certainly be surpassed
in time. To stay abreast of the latest developments in this and
other dynamic areas, we recommend that you utilize the clearing-
house function provided by the lead regional attorney concept In-
addition to the resources we offer at B.adquart.rs. Presently,
the lead regional attorney for environmental auditing is Randye
Stein, Region X I (flS 264—3277).

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we appreciate the considerable efforts which you have made
to comment on the draft guidance and to inClude environmental
auditing-in your programs. Please continue to emphasize ei•tig
valuable enforcement tool.
Questtons regarding this guidance should be addressed to
Charles Girlow of OECM at FTS 475—7088.
Attachments
Addressees:
Regional Counsels
Regions t—X
Regional Counsel Air Contacts
Regions !—X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions Z, tt , and I X
Air and Radiation Management Division Director
Region V
Air, Pesticides, and Toxics Managem.nt Division Directors
Regions IV and-Vt
Air and Toxics Division Directors
Regions VII, VIII, and X
David Buent., Chief
Environmental Enforcement Section
Department of Justice
Robert Van leuvelen, Assistant Chief
Environmental Enforcement Section
D.putmemt of Justice
Justias 1uqb
ID1S Coocdiutor
010 1-kit

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ZNCLUStON OP ENVIRONMENTAr. AuDtrfllc PROVtStONS
IN Ct .EAN AZ ACT SETTt .EMENTS
This document gets forth guidance for inclu 0 of
environmental auditing prov .sions in settlement of Clean Air
Act enforcement actions. EPA policy encourages the use of envi-
ronmental auditing to enable regulated entities to achieve and
maintain compliance with environmental laws and regulations. EPA
maintains that effective environmental auditing promotes higher
levels of compliance and reduces risks to human health and the
envtronment. 51 . Fed. Reg. 25004 (July 9, 1986). This policy is
based on the statutory authority of Section 114 of the Clean Air
Ace, 42 U.S.C., S74l4 and the information gathering provisions of
other environmental statutes. 1 ’
The Clean Air Act environmental auditing guidance supplements
the ‘EPA Policy on the Inclusion of Environmental Auditing Provi-
sions in Enforcement Settlements,’ issued on November 1.4, 1986
(‘EPA Policy’). That policy establishes a general framework,
applicable to enforcement under all environmental statutes, for
the use of environmental auditing provisions in settlement agree-
ments. This guidance addresses the application of the general
policy to air pollution cases.
Appropriateness of Environmental Auditing Provisions
AS stated in the general policy, environmental auditing
provisions are appropriate to propose in settlement negotiations
tn instances In which: 1) a pattern of violations results, at
least partially, from the absence of an effective environmental
management system, or 2) the nature of the violations indicates a
likelihood that similar noncompliance may occur at other parts of
the same facility or at other facilities owned by the same entity.
The need for environmental auditing is most likely to apply to
the owner or operator of extensive or multiple facilities, but
may in some circumstances apply to a single facility company as
well. See EPA Policy at p. 2.
In the stationary source program, the most likely candidates
to benefit from environmental auditing would include:
]/Sicttos 104 of the Comprehensive Environm.ntal Response,
c ap.naatton and Liability Act of 1980, as amended, 42 U.S.C.
19604 j Section 308 of the Clean Water Act, as mended,
33 u.s.C.113 1 8 Sections 3007 and 3013 of the Resource
Conservation and xecoviry Act, 42 U.S.C. 016927 and 6933, Section
l423(c)(8) of th• Safe Drinking water Act, 42 U.S.C. 0300h—2(c)(8) ,
and Section 11(c) of the Toxic Substances Control ACt, IS u.s.c.
12610(c).

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1) National, demolition/renovation companies encaced
activitLes Subject to the National ffliSSiOn Standard for sbestos
This is a. unique category of air pollution sources, since a
company does not typically own and operate a fixed universe of
facilities but Instead is involved in the operation of a con-
stantly Changing group of transient activities. EPA has learrteó
n enforC*ng the asbestos regulations that larae demolition
companies may have a corporate awareness of the applicable recuire—
ments but lack an effective environmental, management system to
assure compliance with the law. The need for Such S system is
particularly acute due to the very nature of the business, which
involves an itinerant work force and sometimes relies on temporary
employees. Establishing a means of managing the activity of
demolition or renovation crews is an appropriate element of a
consent decree designed to enjoin future noncompliance with
asbestos control requirements. Such a system should involve
accountability for environmental compliance at each work site
involving asbestos, training of workers, and enhanced corporate
oversight of the activities of the work crews. As an example of
model provisions applicable to a demolition contractor see the
consent decree in U.S. V. City of Ottumwa, et a] . (S.D. Iowa),
attached.
Common characteristics of recent asbestos consent decrees
include:
• Training for all asbestos workers with tests to ensure
understanding.
• Enhanced training for supervisors/managers.
• Instruction brochures for each employee to keep
permanently as a reference.
Ensuring the presence of trained supervisors at work sites.
• Checklist for proper equipment, notice, training
certificates.
2) Owners/operators of multiple volatile organic compound
(VOC) sources. anies that own several facilities, such as
can-coating or automobile—coating plants, may benefit from
environasatil miditing. In such instances, a co liancs audit
may identify coon problems at similar facilities, and th. same
or similar resdies at one facility may be applicabl, to the
company’s other planes. Environmental auditing would be particu-
larly appropriate where SPA or a state hu cited more than one
facility for VOC violations.

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Suggested provisions for VOC environmental auditing .nCLt de:
0 Improved checklists to log all coatings With a certifjcaeio.
that they are in compliance with the relevant requirements.
• Establishment of procedure for periodic maintenance of voc
-rncLrterators and other control eauipment.
• Training for supervisors and other employees on recocnizirtg
the occurrence of abnormal operating conditions.
3) volatile hazardous air pollutant (VHAP) sources. The
t 1ational Emission Standard for Hazardous Air Pollutants reaulateg
fuqttive emissions of VHAPS at 40 CFR Part 61, Subpart V. The
regulations require that a source Institute specified leak
detection and repair procedures addressing potentially hundreds
of pumps, valves, and other pieces of eaulpment at a facility.
The standard requires monitoring, reporting, and recordkeeplnc,
rather than installation of control eauipment. Comoliance with
the VHAP regulations demands particular diligence and attention
to detail. Our limited enforcement experience to date Indicates
that companies have not completely identified the equipment
subject to the standard and have not established adequate systems
to assure that the required procedures are followed. Due tO the
nature of the VHAP standard, a compliance audit would be appropriate
to enable corporate management to identify violations and to put
management systems in place to ensure that the requirements are
followed. An example of such a VNAP auditing requirement Is
attached. (Consent, decree, U.S. v. Texaco Refining &. Marketing,
Inc . (D. Del.)).
The major provisions In the Texaco environmental auditing
decree are:
• Selection of EPA approved independent contractor.
0 Delivery of detailed schematics identifying all equipment
in benzene service to EPA and auditor.
• Thorough compliance audit.
• Co.plianc. report with schedule for corrections to be
undertaken and training to be conducted.
4) Asphalt Concrete Plants are Likely candidates for the
auditing provisions because these air pollution sources, which
have a high turnover in ownership, can be easily relocated.
They, th.refore. can be subject to differing emission limits
becaus. of the various stat. impl.mentation plan provisions.

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—4—
Consequently, mobility of t e source can result in an evasLon of
enforcement. Environmental auditina of Such sources Would
enforcement personnel data that would help in identifying S mLi P.
violations of plant owners. Owners often have several other
facilities and an audit would reveal the locations of the plant:
tdikely auditing provisions in this category could include:
• Making available to the auditor and EPA a list of all olants
owned within the last five years, a list of those curr ntly
owned and the various states in which they have been
located.
• Providing to the auditor and EPA any and all evidence that
these plants have been and are in compliance with apo]icable
SIPS.
• Conducting a thorough compliance audit of all facilities.
• Having the auditor prepare a plan (training, management
procedures) to ensure compliance, which plan would be an
enforceable provision of the decree.
5) Multi-media sources. Facilities that are likely to have
water pollution or wast. management problems in addition to being
a source of air pollution may also benefit from environmental
auditing. A compliance audit in such circumstances would enable
the company to develop a comprehensive approach to its environmental
responsibilities. Environmental auditing would be particularly
appropriate where EPA or a State has cited violations by the
facility under more than one statute.
A multi-media audit would at least include:
° A review of current management practices and procedures
used to ensure compliance with various environmental
requirements.
• An in—depth compliance audit to determine how well these
procedures an being utilized.
• An analysts of additional management procedures needed to
track co 1ianci.
• by., and supervisor training in the law and regulations
if meting ths facility and in th• new protocol to be
tmpl.a.ntid.
• Certification by the source that it is in compliance with
all environaental requirements.

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We suggest these categorLes of sources as li.kely C3nd da-es
to benefLt from environmental auditing, but they are not Lr tended
to iLmit in any way the universe of sources for which audLtjno
appropriate. The case development or litigatLon team Should 6 e
alert to ifldiCitj 0 that a company has an environmental manage-
ment problem Or that similar vtolations are likely to Occur at
other parts of the same facility or at other facilities. An
example of such a management problem would be a continuing series
of violations blamed on operator error. This management problem
could be addressed by better required operator training courses
complemented by periodic refresher courses. The litigation team
should routinely review the case docket to determine if the
company has had environmental problems in other regions or other
media. Where such indications exist, EPA should probe the need
for auditing with a site inspection, in a Section 114 letter or
n a discovery request. An example of such a Section 114 Letter
is attached.
Contents of Audit Provisions
The consent decree provisions should clearly identify the
type of audit to be performed. A compliance audit is an indepen-
dent assessment of the current status of the party’s compliance
with environmental requirements. A management audit Is an inde-
pendent evaluation of the party’s environmental compliance
policies, practices, and controls. The nature of each type of
audit is described in greater detail in the EPA Policy at p. 3.
Both a compliance audit and a management audit should be
encouraged. The nature of the case will determine which type of
audit is mote appropriate. The audit provisions appropriate for
demolition and renovation contractors are unique but fit more
closely within the ambit of a management audit. Its focus is to
assure centralized management controls over the decentralized
functions of the company. VOC sources are most likely to benefit
from a compliance audit, which may identify recurring problems at
similar facilities. VHAP sources may be candidates for a hybrid
of the two. Violating VflAP sources typically have not even
determined what equipment is subject to the standard and conse-
quently are not fully aware of their compliance status. In
addition, VIAP sources have a particular need for operation and
maintenance progra, monitoring, recordk.eptng, and reporting
systems, aid other management controls to assure compliance with
the standard.
The consent decree provisions should identify the party
conducting an audit. The auditors may be a consultant or an in-
house person or team. In any event, the auditors should be
independent of the persons and activities to be audited, although
in house auditors are often not u ‘independent’ U outside
auditors. See SPA Policy it p. 4. SPA and the state should be
provided with advance notic. of th. audit and an opportunity to
participate in the audit...

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-6—
The consent decree should include clearly soecif Led and
enforceable schedules, eil etables and reaujr,men s for co’no1et on
of the audit. In the case of demolition/renovation contraètors,
the audit will be an ongoing requirement that will accompany th’
performance of work St facilities containing friable asbestos,
and uillWOt be subject to a schedule for completion.
EPA assumes that any and all information submitted to EPA
pursuant to these audit provisions is not automatically considered
to be confidential business information (CBI). However, a business
ma submit such information with a request that the information
be treated as C3!, sub)ect to appropriate statutory and regulatory
restrictions (cf. S U.S.C. 5552, 40 C.F.R. Part 2, Subpart B).
The consent decree should specify that the Agency is entitled
to copies of all information developed during the audit, including
not only final audit reports, but also copies of all underlying
audit data as well as draft audit reports, whether developed by
the employees or contractors of the defendant. Though entitled
to this information, the Agency need not always demand access to
the data.
Conseauences of Audit
For an audit to benefit the company and the environment, the
consent decree should require that, upon completion of the audit,
the company implement its recommendations provided, however, that
some procedure should be Included for the Agency to review and
approve the audit’s conclusions and for the company to dispute
the findings/recommendations of the audit. The consent decree
may require the company simply to certify that it has remedied
any problems uncovered by the audit, or it may require full
disclosure to EPA of the audit results. The decree may also
require the party to submit a compliance or environmental manage-
ment plan, or both, with an enforceable schedule for completion.
Additionally, the consent decree should address the
enforcement of audit—discovered violations. In particular, the
consent decree i&y provide for stipulated penalties for viola-
tions that can be predicted and are promptly remedied. See EPA
Policy at p. S. Sic also the C t of ottu.wa consent decree for
an .xa Is of stipulated penalties or V olations of the audit
provisiasi.
Ii act of Amdit Provisions on Civil Penalties
If a source, by agreeing to implement an environmental
audit, exhibits an extraordinary degree of cooperation, it may be
appropriate to consider that cooperation in adjusting the gravity
component, but not the economic benefit of noncompliance, downward.
See !PA Policy at p.6. An audit would not be a credit towards
paying the bottom line penalty.

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Adjustments to the qravtty Component should only be made
in compe ling circumstances n cases in WhLCPt the grav ty
component Is a major pottLon of the penalty. Appendix EU of
the Civil Penalty Policy, pertaining to asbestos cases, establjg!tes
a scheme for the gravity component which recognizes that asbestos
is a hazardous air pollutant and explicitly punishes repeat
violators more than first—time violators. £PA should assure that
the pe aIty in any asbestos case meets these objectives. In most
such asbestos cases, the gravity component of the penalty is much
hLgher than the benefit component. Similarly, the benefit com-
ponent in VHAP cases is likely to be smaller than the gravity
component. Therefore, In both instances, the gravity component
should not be adjusted unless the bottom line penalty is still
sufficient to deter future violations.
Attachments

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Summary of Regional Comments on Draft Guidance on the
- tnelusjo of Environmental Auditing Provtsions In
Clean Air Act Enforcement Cases
Region I: En—house auditors are not likely to be “independent.”
EPA and States should get advance notice of audit and an
opportunity to participate In audit.
Audit results should always be fully disclosed.
Several comments on Improving the Geppert 3ros . Consent
Decree were offered.
Region III: Regions should remain free to determine when auditing is
appropriate.
It is good that no additional decree requirements are
mandated.
Region V: Asphalt/concrete plants are good examples of candidates
for auditing.
There should be due process for companies by Including
an opportunity to dispute the findings of the audit.
Agency should review & approve audit findings before the
company is required to implement the recommendation.
Region VI: tn—house auditors are not very independent.
Difficult to determine how much to adjust penalties if
auditing done.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION III
841 Chestnut BuildIng
PPiil 5delphii, Pennsylvania 18107
In Reply Refer To: 3AM22 SEP a 1987
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. M. J. Holmes
General Manager, Philadelphia Refinery
Chevron U.S.A. Inc.
30th Street and Penrose Avenue
Philadelphia, Pennsylvania 19104
Dear Mr. Holmes:
Under Section ll4Ca)(1) of the Clean Air Act (CAA), 42
u.s.c. S 7414(a)(1, the United States Environmental Protection
Agency (EPA) may require a person who owns or operates an
emission source to which an emission standard under Section 112
of the CAA, 42 U.S.C. S 7412, applies, to provide information
to EPA for the purpose of determining whether such person is in
violation of such emission standard.
On June 6, 1994, EPA established an emission standard
under Section 112 of the CAA, 42 U.S.C. S 7412, for equipment
leaks of benzene. Chevron U.S.A. Inc. presently owns and
operates the Philadelphia Refinery which consists of various
process units, and pieces of equipment contained therein, which
are emission sources of benzen. to which such emission standard
applies.
Under Section 114(a)(1) of the CAA, 42 U.S.C.
S 74l4(a)(1), EPA hereby requires Chevron U.S.A. Inc. to
provide the following information to EPA for the purpose of
determining whither Chevron U.S.A. Inc. is in violation of the
emission standard for equipment leaks of bensen., established
by EPA undeg Section 112 of the CAA, 42 U.S.C. S 7412, which
emission standard was effective on Jun. 6, 1984, was applicable
to new sources on that date, and was applicable to existing
sources nia•ty (90) days thereafter on September 5, 1984:
1. A description of the history of Chevron U.S.A. tnc.’s
ownership and operation of the Philadelphia Refinery,
including the 1985 merger involving Gulf Oil
Corporation (Gulf) and Chevron U.S.A. Inc. (C—USA).
The description of the merger should include, at a
minimum, the date of-the merger, the surviving
corporate entity, the date of the name change to
Chevron U.S.A. Inc., and the consequences of the

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2
necger in terms of Chevron U.S.A. Inc. ’ 5 assumption of
G.i].f Oil. Corporation’a liabilities for, among other
things, any pre-merger violations of the emission
standard for equipment Leaks of benzene (See 40 C.F.R.
PTtt 61, Subpart A, 61.15(d) (5)].
2. M identification and description of all process
units, past and present, at the Philadelphia refinery,
including those which are, or were, considered, by
Gulf or C—USA, to “conceivably contain equipment in
(benzerte] service”, under 40 C.F.R. Part 61, Subpart
V. 4 61.245(d) (1). For each process unit, past and
present, at the Philadelphia refinery, and eacn piece
of equipr’ nt contained therein, pro ’tde the dates that
construction thereof (and any subsequent modification
thereof) was commenced, their operating design
capacities, their initial. startup dates, and their
actual operating production rates, including their
actual hours of operation. For the Philadelphia
refinery in its entirety, past and present, provide
the amount of benzene per year (in megagrams) which
the Philadelphia refinery is, and was, designed to
produce or use (See 40 C.F.R. Part 61, Subpart 3.
5 61.110(c) (2)].
3. Copies of any applications for determination of
construction or modification submitted by. and any
determinations provided to, Gulf or C-USA. under 40
C.F.R. Part 61, Subpart A, 4 61.06.
4. Copies of any applications for approval of
construction or modification submitted by, and any
approvals 9ranted to, Gulf or C—USA. under Section 112
(C) (I.) (A) of the CAA, 42 U.S.C. 4 7412(c) (1) (A), and
40 C.F.R. Pact 61, Subpart A. 44 61.07 and 61.08.
3. Copies of any notifications of anticipated and actual.
dates of initial startup furnished, by Gulf or C—USA.
under 40 C.1’.R. Part 6]. Subpart A. 3 61.09.
6. copy of any information provided, by Gulf or C•USA,
undar 40 C.P.R. Part 6]. Subpart A. 3 61.10(a).
7. Copie, of any requests for waiver of compliance
submitted by. and any waiver of compliance grant.d to.
Gulf or C—USA. under Section 112(c) (1) (3) (ii) of ths
CAA. 42 U.S.C. 3 7412(c) (1) (8) (ii). and 40 C.T.R. Part
61. Subpart A. 83 61.10(b) and 61.11.
8. Copies of any changes in the information provided by
Gulf or C-USA under 40 -C.?.R Part 61. Subpart A.
H 61.10(a) or 61.07(b). provided, by Gulf or C—USA.
under 40 C.F.R. Part 61. Subpart A, 3 61.10(c).

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3
9. An identification and description of, and Copies of,
any operat ng and maintenance procedures for
minimizing emissions of benzene from equipment Leaks
used. oy Gulf or C-USA, as required by 40 C.F.R. Part
61, Subpart A, 61.1.2(c).
10. Copies of any permits, licenses, or approvals, and
applications therefor, required of Gulf or C—USA by
the Commonwealth of Pennsylvania or the City of
Philadelphia, for the construction, modification, and
operation of all process units, past and present,
which are, or were, considered, by Gulf or C-USA, to
‘conceLvably contain equipment in benzene) service ”,
under 40 C.F.R. Part 61, Subpart V. ‘ 61.245(d) C].).
and each piece of equi , ment contained therein, at the
Philadelphia refinery, under 40 C.F.R. Part 61,
Subpart A, 61.1.7(a) (2).
11. Copies of any applications for exemption submitted by,
and any exeaipti.ons yranted to. Gulf or C—USA. under 40
C.F.R. Part 61. Subpart 3, 61.110(c).
1.2. Copies of any documents evidencing demonstrations of
compliance, by Gulf or C-USA, under 40 C.F.R. Part 61,
Subpart V. 61.242—1(a).
1.3. Copies of, or-samples of, markings used, by Gulf or
C-USA, under 40 C.F.R. Part 61, Subpart V.
§ 61.242—1(d).
L4. An identification and description of each pump
equipped with a dual mechanical seal. system that
includes a barrier fluid system, including an
identification and description of the design criteria
(failure) determined, by Gulf or C—USA, under 40
C.F.R. Part 61. Subpart V, 6]..242—2(d) (5) (ii).
15. An identification and description of each pump
designated, by Gulf or C-USA. for no detectable
emissions, under 40 C.F.R. Part 61, Subpart V.
61.242—2(e). and copies of any documents evidencing
th• initial, and subsequent annual, tests, required by
40 C.r.R. Part 6], Subpart V. 4 6 1.242—2(e) (3) and
61.24 5(c).
16. An identification and description of each pump
equipped with a closed-vent system and control device,
under 40 C.F.R. Part 61, Subpart V. 6.1.242—2(f).
17. An identification and description of each pump located
within the boundary of an unmanned plant site,
including an Identification and description of the
frequency of visual inspection, by Gulf or C-USA, of

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4
e4ch such pump, under 40 C.F.R. Part 61, Subpart V.
61.242—2(i).
13. s identification and description of each compressor
seal system equipped with a barrier fluid system that
is connected by a closed—vent system to a contra].
device, under 40 C.P.R. Part 61, Subpart V.
61.242—3(b) (2).
19. An identificatiurt and description of each compress r
located within the boundary of an unmanned plant site,
under 40 C.F.R. Part 61, Subpart V, 61.242—3(e) (1).
20. An identification and description of the design
criteria (failure) determined, by Gulf or C—USA, for
compressor systems. under 40 C.F.R. Part 61, Subpart
V. 61.242—3(e) (2).
21. Art identification and description of each compressor
equipped with a closed-vent system and control device.
under 40 C.F.R. Part 61. Suopart V. 61.242—3(h).
22. An identification and description of each compressor
designated. by Gulf or C—USA, for no detectable
emissions, under 40 C.F.R. Part 61. Subpart V.
61.242-3(L), and copies of any documents evidencing
the initiaL, and subsequent annual, tests, required by
40 C.F.R. Part 61, Subpart V. 6].242—3(i)(2) and
61.245(c).
23. Copies of any documents evidencinJ monitoring, by Gulf
or C-USA, of pressure relief devices in gas/vapor
service to confirm the condition of no detectable
emissions aiter pressure releases, under 40 C.PUR.
Part 61, Subpart V, H 61.242—4(b) (2) and 6 1.245(c).
24. An identification and description of each pressure
relief device in gas/vapor sirvic. •quipp.d with a
closed-vent syst.m and control device. undir 40 CJ.R.
Pact 61, Subpart V. 61.242—4(c).
25. Am Ld.ntification and description of each sampling
connection system equipped with a closed—purg, system,
undsr 40 C.!.R. Part 61. Subpart V. 6 1.242—5(a).
(b) (1) and (2).
26. An identification and description of .ach sampling
connsction system equippid with a closed-vent system
and control device, under 40 C.?.R. Pact 61, Subpart
V. 61.242—5(a) and_(b)(3).
27. An identification and descriieion of any in—situ
sampling systems, undqr 40 C.?.R. Part 61. SuBpart V.
61.242—5(C).

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28. An identification and description of each open—endej
valve or Line, includin whether each open—ended valve
or line is equipped with a cap, blind flange, plug, or
second valve, indicatin j specifically with which of
-—-these four alternatives each open—ended valve or line
is equipped, under 40 CIF.R. Part 61, Subpart V,
4 61 .242—6(a) (1)
29. A specific identification of eacn valve monitored, by
Gulf or C—USA 1 the first month of every quarter,
rather than monthly, under 40 C.F.R. Part 61, Subpart
V 1 4 61.242—7(c).
30. An identification and description of each valve
designated, by Gulf or C-USA, for no detectable
emissions, under 40 C.F.R. Part 61.. Subpart v,
4 61.242—7(f), and copies of any documents evidencing
the initial, and subsequent annual, tests, required by
40 C.F.R. Part 61, Subpart V , 44 61.242—7(f) (3) and
61.245Cc).
31. An identification and description of each valve
designated, by Gulf or C—USA. as unsafe—to—monitor,
under 40 C.F.R. Part 61, Subpart V. 4 61.242—7(g).
Lrtcluding an identification and description of the
basis for each such designation, and a copy of the
written plan requiring monitoring as frequent as
practicable during safe.to*monitor times, under 40
C.F.R. Part 61, Subpart V. 4 61.242—7(g) (2).
32. An identification and description of each valve
designated, by Gulf or C—USA. as difficult—to—monitor,
under 40 C.F.R. Part 61. Subpart V. 4 61.242—7(h),
including an identification and description of the
basis for each such designation, and a copy of the
written plan requiring monitoring at Least once per
calendar year, under 40 C.F.R. Part 61. Subpart V.
4 61.242—7(h) (3).
33. Copies of any documents evidencing findings, by Gulf
or C—USA. of evidence of potential leaks at pressure
relief divicis in liquid service and flang.s and other
connectors, and subsequent monitoring thereof under
40 C.Y.R. Part 61, Subpart V, 4 6 1.242—8(a).
34. An identification and description of each product
accumulator vessel equipped with a closed—vent syst.m
and control device, under 40 C.?.R. Part 61. Subpart
V. 4 61.242—9.
35. An identification and description of each delay of
repair, by Gulf or C-USA, based upon the technical
infeasibility of such repair without a process unit

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6
s hutdown, under 40 C.F.R. Part 31, Subpart V.
61.242—10(a).
36.An identification and description of each delay of
repair, by Gulf or C-USA, beyond a process unit
shutdown, under 40 C.F.R. Part 61, Subpart V.
§ 61.242—10(e).
37. An identification and description uf each delay of
repair, by Gulf or C—USA, for equipment isolated from
the process and which did not remain in benzene
service, under 40 C.F.R. Part 61, Subpart V.
§ 61.242—10(b).
3 . An identification and description of each delay of
repair for valves, by Gulf or C—USA, based upon the
emissions of pur jed material resulting from immediate
repair being greater than the fugitiv, emissions
Li ely to result from delay of repair, and involving
the eventual collection and destruction or recovery of
sucn purged material in a control devics, under 40
C.F.R. Part 61, Subpart V, 61.242—10(c).
39. An identification and description of each delay of
repair for pumps, by Gulf or C-USA. based upon such
repair requiring the use of a dual mechanical seal
system that £ncludes a barrier fluid system, under 40
C.F.R. Part 61, Subpart V. 61.242—10(d).
40. An identification and description of each closed—vent
system and control device, under 40 C.F.R. Part 61,
Subpart V, § 61.242-11(a), including an identification
and description of all times when emissions may be
vented to them, under 40 CJ.R. Part 61, Subpart V.
§ 61.242— 1 .1(9), and an identification and description
of the nature and sources of all such emissions vented
to them.
41. Copies of any documents evidencing the initial, and
subsequent annual, monitoring 0 f closed-vent systems
by detsctiam Lnstr aaent and visual inspection,
rquir.d by 40 C.F.R. Part 61. Subpart V.
$ 11.242—11(f). by Gulf or C—USA.
42. Am identification and description of the organic vapor
recovery •ffici•ncies (both design and operating) of
each vapor recovery system, under 40 C.P.A. Part 61.
Subpart V. 61.242—1.1(b).
43. An identification and description of the benasne
emission reduction .fCici.ncies and minimum residence
time at minimum temperature specifications (both
design and op.ratin9) of each enclosed combustion

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7
device, under 40 C.F.R. Part 61, Subpart V
61.242—11(c).
44.--Copies of any docut ents evidencing Visible emission
observations, by Gulf or C—USA, of each flare, under
40 C.F.R. Part 61, Subpart V, 6 l.242—l1(d).
4 . An identification and description of each device used,
by Gulf or C-USA, to monitor and detect tne presence
of a flare pilot flame at all times at each flare,
under 40 C.F.R. Part 61, Subpart V, 61.242—11(d).
46. An identification and description of each flare,
including tne foUowiny information for each:
a. whether the flare is steam—assisted,
air—assisted, or non—assisted;
b. the net heating value of the gas being combusted
in the flare, and the calculation thereof;
c. the exit velocities of each flare (both design
and operating), and the calculation of each
actual operating exit velocity; and
d. tne tnaximum permitted velocity, V max, and the
calculation thereof, for each flare for which
such maximum permitted velocity is relevant;
under 40 C.F.R. Part 61, Subpart V. 61.242—1.1(d)
and 61.245(e).
47. An identification and description of how each control
device is, or was, monitored via selected parameters,
by Gulf or C-USA, to ensure that each control c ice
is, or was, operated and maintained in conformance
with its design, under 40 C.F.R. Part 61, Subpart V,
§ 6 1 .242—I l(s) and 61.246(d) (3).
48. An identification and description of the detection
instrument used, by Gulf or C-USA. under 40 C.?.R.
Part 61, Subpart V. 61.245(b).
49. ftc each process unit, past and present. at the
P i1ad.1pNia refinery, which is, or was, considered,
by Gulf or C—USA, to conceivably contain equipment in
Cb.nzen.] ssrvics, und.r 40 C.P.A. Part 61, Subpart
V. 61.245(d) (1) Cpreviously required to be
identified and described as part of the information
required to be provided in respmnss to Paragraph 2.
above], an identification and description of th. basis
for so considering such proc.ss units.

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a
5 D. For each process unit, past and present, at the
Philadelpn ia refLnery, which is, or was, considered,
by Gulf or C-USA, to not “conceivably contain
equipment in benzeneT7ervjce”, under 40 C.F.R. Part
61, Subpart V. 4 61.245(d) (1) Calso previously
required to be identified and described as part of the
information required to be provided In response to
Paragraph 2. above], an identification and description
of the basis for so considering such process units,
indicating specifically whether any applications for
exemption were submitted, by Gulf or C—USA. under 40
C.F.R. Part 61. Subpart J. 4 61.110(c) (1) and (3).
51. For each process unit, past and present, at the
PhiLadelphia refinery, which is, or was, considered.
oy Gulf or C—USA, to TM conceivabty contain equipment in
[ benzenej service”, under 40 C.F.R. Part 61., Subpart
v, 4 61.245(d) (1). copies of any documents evidencing
any demonstrations that any pieces of equipment within
such process units are not, or were not, in benzene
service, under 40 C.F.R. Part 61. Subpart V.
4 61.245(d).
52. For each piece of equipment within a process unit
which is, or was, considered, by Gulf or C—USA, to be
i t benzene service at any tim., copies of any
documents evidencing any revised consideration of such
pieces of equipment. under 40 C.F.R. Part 61, Subpart
V. 4 61.245(d) (2) (ii).
53. Copies of, or samples of. the weatherproof and readily
visible identifications attached, by Gulf or C—USA, to
leaking equipment, under 40 C.F.R. Part 61. Subpart v,
4 61.246(b) (1).
54. Copy of the leak Jetection log(s) kept, by Gulf or
C—USA, under 40 C.F.R. Part 61. Subpart V. 4 61.246(c).
55. Copy of the records of the design requirements for
closed-vent iyst.u and control, devtces kept, by Gulf
o C.USA. under 40 C.?.R. Part 61. Subpart V.
1 61.246(d).
56. c pp-ot the equipment log(s) kept. by Gulf or C-USA.
under 40 C.P.R. Part 61. Subpart V. 61.246(s).
57. Copy of the unsaf./difficult - to—ionitoc valve log(s)
kept, by Gulf or C-USA. under 40 CJ.R. Part 61,
Subpart V. 4 61.246(f).
sa. Copy of the design criteria (failure) log(s) kept, by
Gulf or C—USA, under 40 CJ.R. Part 61. Subpart V.
4 61.246(h).

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9
59. Copy of the exemption log(s) kept, by Gulf or C-USA,
under 40 C.F.R. Part 61, Subpart V. 61.246(j ).
60.-Copy of the demonstration log(s) kept, by Gulf or
C—USA, under 40 C.F.R. Part 61. Subpart v, 4 61.246(j).
61. Copy of any statement submitted, by Gulf or C—Usa,
under 40 C.F.R. Part 6], Subpart V. 4 6.L. 1 47(a).
62. Copies of any semiannual reports submitted, by Gulf or
C-USA, under 40 C.F.R. Pact 61, Subpart V. 4 61..
247 (b)
63. An identification and description of any new sources
resulting from construction or modification
undertaken, oy Gulf or C—USA. for which an application
for approval of construction or modification was not
required, under 40 C.F.R. Part 61, Subpart V.
5 61.247(e).
All terms used an this letter shall have the meaning given
them in the CAA, including Sections 112 and 302 of the CAA, 42
U.S.C. 55 7412 and 7602, and in 40 C.F.R. Part 61, Subparts A.
including 55 61.02 and 61.15, J. including 5 61.111. and V,
including 5 61.241. Chevron U.S.A. Inc. is required to respond
individually anti completely to each numbered para9raph above
without regard to any prior submissions or comaun cations of
information to EPA. With regard to those numbered paragraphs
requiring the provision of copies of documents, a response
which fails to provide a required copy of a document and which
indicates the availability for inspection and copying of such
document at premises of Chevron U.S.A. Inc. shalt not be a
con’plying response and shall constitute a failure or refusal by
Chevron U.S.A. Inc. to comply with, and a violation of. a
requirement of Section 114 of the CAA. 42 U.S.C. 4 7414.
The above information required to be provided is to be
provided by Chevron U.S.A. Inc. to £PA’R.gion III. by
postmarked response, within fourteen (14) calendar days of the
date of Chevron U.S.A. Inc.’s receipt of this letter. Failure
to provide the above information as required say result in
enforcement action under Section 113 of the CAA, 42 U.S.C.
4 7413. Ssctton 113(c) (2) of the CAA, 42 U.S.C. 4 7413(c) (2).
states that •(a]ny person who knowingly sakes any false
statement. representation, or certification in any...docuaent
filed...under this Act...ahal1 upon conviction, be punished by
a fine of not more than $10,000. or by imprisonment for not
more than six months, or by both’. In addition, the Criminal
Fine tforcement Act of 1984, P.1.. 98-396. provides for fines
in •*cess of the amount specified in the CM under certain
circumstances.

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10
Any subsequent change which would have the effect of
rendering the information initially provided incomplete.
L%accurate, or misleading in any respect must be reported to
EPA—Region III in a timely fashion, and any appropriate
supp1emen.. al information must also be provided to EPA—Region
III at that time.
Under reguLations at 40 C.F.R. Part 2, Subpart B. Chevron
U.S.A. Inc. is entitled to assert a claim of business
confidentiality covering all or part of any provided
information, in the manner required at 40 C.?.R. Part 2,
Subpart B, 4 2.203(b), unless such information is Nemission
data” as defined at 40 C.F.R. Part 2. Subpart B.
5 2.301(a) (2). Information sub)ect to a props&. y and
permissibly asserted claim of business confidentiality will, be
made available to the public only in accordance with the
regulations at 40 C.F.R. Part 2, Subpart B. Unless a business
confidentiality claim is properly and permissibly asserted at
the time required information is provided. EPA may make this
L formatLon availaole to the ?u3liC without further notice to
Chevron U.S.A. Inc.
If you should have any questions concerning this letter.
please contact Bernard E. Turlineki. Acting Chief, Air
Enforce ment Branch, at (215) 597—3989. or Ronald J. Patterson.
of his staff, at (215) 597—ó550.
Sincerely.
to r
Air Management Div ion
cc: William Reilly, Assistant Health Com$issiOn.r
Philadelphia Air Management Services

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT 0? IOWA
UNITED StATES OP AIaRICA, )
)
Plaintiff,
)
v.
)
CITY OF OTT Th(WA, IOWA, )
)
and
CIVIL ACTION NO. 88-i64-E
OIWrTJMWA AIRPORT AUTHORITY,
Defendant.
___________________________________________________________________________________________ )
PAW IAL CONSENT DECREE
WHEREAS, Plaintiff, the United Stat.. of kasrica, on
behalf of the Adainistrator of the Zzwironasntal Protection
Agency (‘EPA’ or Plaintif I ’) filed a complaint herein on Xarch
28, 1988, alleqing.that Defendants City of Ottuava, tows, (‘the
City’) and Ottuava Airport Authority (‘OAk’) had violated the
Clean Air Act, as aasrtded, 42 U.S.C. H 7401 g g. (‘the
Act), and certain specified provisions of the National Emission
Standards for Hazardous Air Pollutants •stablishea pursuant to
Section 112 of the Act, 42 U.S.C. 1 7412, codified it 40 C.F.R.
Part 61 (tha ‘asbestos N!SHAP ’): and
IM, Plaintiff and Defendants agree that settlement
of th.aforssa id sitters without further litigation would serve
the public interest and that entry .f this Partial Consent Decree
is the most appropriate means of resolving this matter; and

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—2—
WHEREAS, Plaintiff and Defendants have consented to the
taking aM entering of this Partial Consent Decree; obligating
Defendants to taplesent certain resedial actions as specified
herein; providing for paysent f a civil penalty in settlesent of
violations alleged in the Cosplaint; and providing for
stipulated penalties in the event of noncospliance herewith: and
WHEREAS. Defendants’ agreesent to this setttssent and
entry of this Consent Decree does not constitute an edaiss ion or
an adjudication of the validity of Plaintiff’s allegations or of
any liability by Defendants but such agreesent by Defendants ii
solely to tersinate this lawsuit and to settle the.. claias on
the terse set forth in this docusent;
NOW, THEREFORE • upon consent and agrs.aent of these
parties herein, and the Court having considered the latter and
being duly advised,
It is hereby AD7TUIDGED, ORDERED MD DECREED as follows.
-I ..
3TanI ’rt0II
This Court has subject setter jurisdiction pursuant to
Sections 123 aM 113 of the Act, 42 U.S.C. U 7412 aM 741.3, and
pursuant t t s ZS u.s.c 1331, 1345, and 1355. Thi Coaplaint
states dais upon which relief can be granted.

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—3—
—II ..
APPLICATION Aim SCOfl
A. The provisions of this Partial Consent Decree shall
apply t and be binding upon the parti.s to this action, and upon
Defendants’ officers directors, agsnt., servants, eaployees.
successors and assigns, and to all persons, f iris or
corporations having actual notic. of the Decree who az., or vii.].
be, acting in active concert or participation with the Defendants
or their off ic.rs, director., agents, servants, eiployees,
successor. or assign..
B. Prior to any sale assiqTlaent, or other transfer of
property or operations which are subject to this Partial Consent
Decree, Defendants shall advise the purchaser, assignee or
transferee, in writing, of the existence of this Partial Consent
Decree, and øf it 5 binding effect upon said purchaser, assign..
or transferee. A copy of such written notification shall be sent
by certified sail, return receipt requested, to the Director, Air
and Toxics Division, EPA Region V I I, 726 Minnesota Avenue, Kansas
city, Kansas 66101 no later than 5 days after any such sale,
assignaent, or transfer.
C. Tho provisions of this Partial Consent Decree
shall aply to eu of Defendant’s denolition and/er renovation
ope rattus-.

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-4—
—III .-
Terse used in this Partial Consent Decree that are
defined in Section 112 of the Act. 42 U.S.C. S 7412, or in 40
C.F.R., Part 61, Subpart N, shall have the seining. assigned to
those terse in said definitions.
- I v ..
INSPICTIOW. SAJ(PLIWO urn ANALYI!I
A. Prior to couencing any dasolition or renovation
operation, Defendants shall conduct a diligent and cosplete
survey of the facility to be desolished or renovated for the
presence of friable asbestos-containing saterial ( ACM ) and/or
ACM vhich say b.cose friable during the course of desolition or
renovation operations.
B. If Defendants discover suspected ACM and/er ACM
during the course of its operations, all york which could disturb
the suspected ACM and/or ACM shall cease iediat.ly until
Defendants inferus, in vriting, the Director, Air and Toxic.
Division, EPA l.gies VIE, 726 )Ltnnesota Avenue, Mneas City.
Eansas 11111 aM qprsprist. ItitS sad/or local sir pollution
contreP ecitis. Defendants shall notify all appropriate
authoz4tte vith.ta 24 hours • If Defendants’ previous notice to
EPA indicated that no ACM was present, or if the asount of ACM
discovered puts the total asawit of £0 1 ever 240 linear feet on
pipe. or 160 square feet oa other facility co onents, then

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—5—
Defendanta sh I, i.diate]y inform EPA aM the appropriate stat.
and/or local authorities. Defendants shall, make this
notification to the appropriate authorities within 24 hours and
shall discontinue any operations which may disturb A X or
suspected A for at least 24 hours after EPA and the appropriate
state and/or local authorities have received such notice.
C. If Defendants discover any friable material,. or
any materials which may become friable, Defendants may elect to
treat these materials as A without sampling and analyzing.
Except as provided for in Section lv i and IV.D., before
Defendants may treat such material, as non.A Defendants shall
collect at least three representative samples of the materials.
Defendants shall take these samples from representative locations
within the materials, and shall label each sample container with
a sample identification number unique to the sampling location.
Defendants shall arrange for analysis of the samples by an
independent laboratory with expertise and experience in analyzing
samples for the pres.nce of asbestos, as evidenced by an EPA-
approved test method. Defendants shall not commence any work
which might disturb any suspected A until the laboratory has
completed its analysi, and reported the results to Defendants,
confi a said natsrial is. in fact non—Au.
0. Nothing in this Section IV shall be construed to
reliv Defendants of their obligation. undar the asbestos NISHAP
set forth at 40 C.?.*. Part 41, Subpart N.

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-V.’,
21QM
A. Defendants ihall, bY written notification post-
ark.d or delivered ten days prior to coasencesent of work which
say potentially dist arb AC if the asount of ACI is at Least so
linear asters (260 linear feet) on pipes or at Least 1S square
a.t.rs (160 square f set) o t t ether Coaponents or twenty (20) days
prior to coasencsasnt of work which say potentially disturb ACM
in all other operations, advise EPA Region Vt! and the
appropriate stat. and/or local air pollution control
authorities, of any planned duolition and/or renovation of a
facility containing A . If A is discovered after the project
has begun, Defendants shall notify the EPA legion V II and the
appropriate state and/or local air pollution control authorities
as provided in Section IV.B, hereof.
S. In the case of a facility being duo liah.d pursuar. .
to the order of a State or local governasntal agency, issued
because the facility is structurally unsound and in danger of
ininent collapse, Oefendata shall send written notification of
the desolition ot s’ 1 ash facility tø the appropriate EPA Regional
Office, the appropriat, stat. and/er local air pollution
ControL Ltias, U early as pouibls, aM shall includ, with
such nI*Ulsatien CL) a copy of the order pursuant to Which the
deao1itie is hemp conducted, and (ii) recitation of the nase,
title, address, and authority of the State or local official who
ordered the desolition.

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-7—
c. Any notification required by Section V(A) and (B)
shall be provided by employing the Notice form annexed hereto as
Attachasnt I. and shall include all of the information required
by that form. In addition, Defendants shall prepare for each
sits a graphic representation generally depicting the proposed
demolition or renovation showing the location(s) of the areas
sampled in accordance with Section IV hereof, and identifying all
areas where A M was found. This graphic representation shall be
maintained on-site by the Asbestos Site Coordinator.
—
A. !STOS CONTROL PIOGRAN
Defendants shall establish an internal program to
assure compliance with the asbestos N!SXAP, and the requirements
of this Partial Consent Decree (the ‘Asbestos Control Program’)
as hereinafter specified.
A. Within 60 days of the entry of the Partial Consent
Decree, Defendants shall designate an Asbestos Program Manager
and, in his/her absence or unavailability, an alternate Asbestos
Program Manager (the ‘Asbestos Program Manager’). Defendants may
at their option their designation of the Asbestos Program
Managers on 30 days prier notice to EPA. The Asbestos Program
Managets viii report directly to the Deputy Mesith Officer of the
City of Ottuiws, Iowa or his designee and shall have the
following duties and responsibilities:

-------
—s —
1. Managing all, of Defendants’s Asbestos Control,
Progran activities including the asbestos training progras
required ny Section VII hereof.
2. Ensuring that EPA and the appropriate state or
local air pollution control agency receive the notifications
required b Section V hereof.
3. Ensuring that each job site within their purview is
properly inspected, and that sasples of all friable astsrial,s are
taken and analyzed, to the extent required by Section IV hereof.
4. Supervising the asbestos site coordinators in
the perferasnce of their prescribed duties under Section Vt(S)
hereof.
S. Acting a. Defendants’ prinary liaison with EPA and
any state or local air pollution control agency on natters not
covered by the dutiss of the asbestos site coordinator.
6. Maintaining the following records for activities:
(i) a coeplete record of each demolition or
renovation operation involvina asbestos, as
required by Paragraph C, Subparagraph 7 of
this Sections
(ii) reports of seaples taken and analyses
p.rtoru.d to deternine the presence of AQI or
to asniter the presence of asbestos in the
air:
(iii) nanifests, landfill rsceipta, and other

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—9—
docunentation relating to transport and
disposal of AaI: and
(iv) Any other record required to be saintairted
pursuant to the terms of this Partial
Consent Decree.
7. Cosplete the training required in Section V I I A.,
8., and C., herein.
e. Conencing no later than 60 days after entry of
this Partial Consent Decree, Defendants shall desigi at. an
asbestos site coordinator within seven (7) days after eari inq
that any new site at which Defendants proposes to engage in
deaelition or renovation work contains A . If suspected A is
discovered during the course of its work, Defendants shall
designate an asbestos site coordinator as soon as possible after
learning that suspected AaI ii present. Operations shalt neither
conence nor continue prior to the designation of an asbestos
site coordinator. The asbestos site coordinator shall oversee
all activities involving A ( at the site and shall have been
trained according to the training requiresents described herein
in Section V II.
I. Ths asbesto. site coordinator shall report directly
to ths M sstas Progrs. Manager and shall have the following
diatiese responsibilities:
1. esing present when actual asbestos renoval or
stripping first co ences at a project site.

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— 10
2. Managing all activities at the work sits relating
to the requirements of the asbestos NISHAP and the provisions of
this Partial Consent Decree.
3. Giving guidance and instructions on asbestos
r. ova1 to employees at the sit..
4. Acting as the primary liaison between on.site
employ... and EPA and state or local inspector..
5. Immediately correcting any violations of the
asbestos MISHAP or this Partial Consent Decree. If an immsdiat.
remedy is not possible, the asbestos site coordinator shall stop
all A removal activities until all such violations are
corrected.
6. Retaining the following documents in his possession
while at the work site: a) a copy of the written notification
for the •it S, required by Section V hereof; b) a copy of the
graphic representation required by Section V(C), hereof:
C) a copy of the certification of training for each employee on
sit., as required by Section VII(L), hersof, or a copy of the
card issued by Dsfsndants certifying the successful completion of
the required training, pursuant to Section VII (R) • hereof: and d)
a copy OS Isfendants’ ‘Asbestos Training Pamphlet’, preparation
of which is reqiiz.d by Section V!(D), snof.
7. Zecordinq, on a daily basis, with respect to any
demolition or renovation of a facility at which Aø1 ha. been
found, ths inforeation called for by a prescribed Daily check

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— 12. —
List in the form annexed hereto as AttaChment II, and certifying
to the accuracy of the recorded information.
S. Complete the training required in Ssction vti o.,
E., and V., herein.
o. 2.. Dfendants shall develop a written document
entitled Defendants ‘Asbestos Training Pamphlet’ (‘the
Pamphlet’). Th• Pamphlet shall address all of the requirements
of this Partial Consent Decree and 40 C.P.R. Part 61, Subpart M;
shall describe Defendants’s Asbestos Control Program, and the
respective responsibilities of the Asbestos Program Kanagers, the
asbestos site coordinator, and all employees engaged in work
involving A : shall detail the requirements applicable to
handling, removal, transportation and disposal of Aa and shall
encourage workers to report any violations of these requirements
to the Asbestos Proqru Manager, the asbestos sits coordinator,
as appropriate. The Pamphlet may contain additional material
related to particular state and/or local requirements which may
apply.
2 • Within thirty (30) after the Asbestos Program
Manager has cempleted the training described in Section VII, A,
hersof, feadaats shall submit a draft of the Pamphlet to the
Diroctax. Air aM Taxies Division, EPA Region VII. 726 Minnesota
Avenu Masse City, Xansss 66101 for rsvisv and approval.
3. EPA shall notify Osfendante, in vritinq, of EPA
approval or disapproval of the draft Pamphlet, and shall specify
deficiencies, if any.

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— 12 —
4. within 30 days of receipt of EPA notification of
disapproval of any portions of the draft Paiphiet, Defendants
shall and an subnit to EPA a revised draft that rsiedies the
deficiencies specified by EPA.
5. A copy of the Pa3phlet, in the fore approved by
EPA, shall be given by Defendants to each eaploy.. and supervisor
involved with asbestos activities.
6. The Pasphl.t shall be reviewed by the Asbestos
Progran Managers and Defendants’s of fic.r’s annually in addition
to whenever there is a change in the asbestos $UHAP. The
Paephl.t shall be revised to reflect changes in the asbestos
NESMAP regulations.
7. leither the teres of the Psaphiet nor Defendants’
failure to tieely develop or distribute to its employees an EPA
approved Pamphlet or to revise an approved Pamphlet to reflect
new regulatory requirements shall absolve Defendants of liabili
for any violation of the terms of this Partial Consent Decree or
the asbestos MISMAP whether or not attributable to the actions
or derelictions of any of defendant’s employ....
S. Defndants shall maintain all of the records
required by this Partial Consent Decree for the duration of the
Partial es.nt Dscm., including any extansion, pursuant to
5ectio I X hereof. and shall t* them available to SPA upon
request. These records shall include, but not be liait.d to, all
records of: (1) employee training; (2) inspections made prior to
demolition/renovation job.; (3) any demolition or’ renovation work

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— 13 —
involving A (including, but not Limited to, the o.ily Check
List required by g.ction VI(C)(7) hereto); (4) transportation of
ACM; and( ) disposal of ACX.
— Vt! —
RZOUIRZD ASUSTOS T AIM!WG
No employee of Defendants shall engage in the
demolition or renovation of any facility containing ACM, or
inspect a facility for the presence of ACM pursuant to the
requirements of Section IV hereof, unless he has successfully
completed a course of asbestos training, a. hereinafter
specified.
A. The Asbestos Program Manager ( “kP1 ”), the alternate
Asbestos Program Manager, and all employee. whose duties include
inspection of facilities for the presence of A pursuant to the
provisions of Section IV hereof, shall successfully complete, or
have already compl.t.d, an EPA-approVed training course entitled,
‘Inspector/Management Planner” or equivalent, si.tbject to EPA
approval. In the alternative, Defendants may engage an
instructor, accredited by EPA to provide the AURA asbestos
training osuree entitled: tnspector/Manageaent Planner” or
an EPA-approved q ivalent to the A 1 and alternate UN.
S Osfandanta’ employ.., subject to the requirement of
Section VtX(k), hereof, who have net successfully cepleted the
five-day courma of study by the date of entry of this Partial

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— 14 —
Consent Decree, shall be enrolled in the flSXt EPA-approved five-
day course of study, ‘tnspector/Xanaqes.nt Planners or an
EPA-approved equivalent, offered within the EPA Region V I I or,
at Defendants’s election, an earlier fiveday course of study
offered in any other Region, or, if Defendants elect to engage an
instructor as provided in Section VII(A) no later than O days
after entry of this Partial Consent Decree.
C. Esployses of Defendants who becose subject to the
requires.nts of Section ‘ 1 1 1(A), hereof, after the date of entry
of this Partial Cons•nt Decree, eithsr by hiring or assignaent of
new work responsibilities subsequent to that date, shall not
engag. in work involving A until they have successfully
cospl.ted a five-day cours. of study.
0. Defendants’ asbestos site coordinator (A3C) shall
successfully cosplete, or have cospl.t.d, an EPA.approv.d
training course entitled: ‘Contractor/Supervisor or an
EPA-approved equivalent. En the alternative, Defendants say
engage an instructor, accredited by EPA to provid, the AXERA
asbestos training course entitled, Contrsctor/Super’visor or
an EPA-approved .quivslent, to the AEC.
I. All asbestos site coordinators who have not
succesot 11y co 1etd a four-day course of study by the date of
entry 4f the Partial Decree shall be enrolled in the next EPA-
approved four-day course of study, Contractor/Supez’visor’ or
an EPA-approved equivalent, offered within EPA legion VI I or at
Defendants’s election, an earlier four-day course of study

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— 1.5 —
offered in any other Region, or. if Defendants elect to engage an
instructor, accredited by EPA to provide the AHERA asbestos
traintnq course entitled, Contractor/Sup.rvjsor’ or
an EPA-approved equivalent, said course sust be held no Later
than 90 days after entry of this Partial Consent Decree.
F. Eaployses of Defendants who becoae subject to the
r.quire snts of Section VII(D) hereof, after the date of entry of
this Partial Consent D.cr’se, either by hiring or assigi aent of
new work responsibilities subsequent to that date, shall. not be
Asbestos Site Coordinators until they have successfully
coapleted a four-day course of study.
G. All e.ployses of Defendants who ar. not required by
the teras of this Partial Consent Decree to coaplete a four-or
five-day course of study, and who will engage in asbestos
renoval, handling, transportation and/or disposal activities,
shall. successfully coaplete, or hav• coipleted, an EPA-approved
training course entitled: kbateasnt Worker or an EPA-approved
equivalent. Defendants’ eaployees subject to the requiresent of
this paragraph, who have not successfully coapleted a three-day
course of study by the entry of this Partial Consent Decree,
shall be s11ed th the next EPA-approved three-day course of
study, 1het t Vorksr or an EPA approved equivalent,
of fer within EPA region VII or at Defendants’ election, art
earlier EPA-approved three-day course of study offered in any
other Rgion or if Defendant elects to engage an instructor
accredited by EPA to provide the AEUA asbestos training course

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— 16 —
entitled, Ahatesent Worker or an EPA-approved •quival.n , said_
course mist be held within 90 days of the date of entry of thi.
pa rt-i al-Consent Decree.
H. No employ., of Defendants shall engage in asbestos
removal, handling, transportation, and/or disposal activities
unless he has successfully completed the EPA-approved three-day
training course entitled Abateaent Worker’ or an EPA-approved
equivalent.
I. Appropriate tests shall be administered at the
conclusion of the five, four, and three—day courses. Such tasts
shall be administered by the organization conducting the course,
and shall be in writing to those Defendants employees who read
English. The tests shall be administered orally, in the native
language of the employee, to those Defendants employees not
fluent in English The passing grades for’ such tests, whethei
written or oral, shall be these established in 40 C.?.R. 763,
Appendix C to Subpart E--EPA Xodel Contractor Accreditation Plan.
(I) (2), Examinations. No employee of the Defendants will be
deemed to have ‘successfully completed’ his training, as that
term is used in this Partial Consent Decree, until he has passed
the t.at associated with the relevant comrs. of study or
traininq p ogxem.
7. Defendants shall retain a record of each employee’s
training, which viii be kept at the office where the employee
will work. This record shall include:

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— 17 —
1. A certification of successful, cempl,etjon of the
training together with any supporting documentation to evaluate
the identity of the employ., and the validity of certification;
2. A copy of the test taken or, for test adsinistered
by outside EPA-approved vendors, a record from which it be
determined that an appropriate test was taken and passed;
3. A statement as to whether the employee can read
the language in which the materials are printed, and if not, the
nam. of the person who orally tested him: and
4 • For those subject to the one-day training program,
or those who have supplied documentation of successful completion
of training fro. another EPA-approved source, an ac ovledgement
in the for. annexed hereto as Attachment III signed by the
employee. If the employee is unabl. to read, the document shall
also be signed by the person who read the document to the
employee.
K. For each employee for whom Defendants have compiled
and maintained the documentation required by Section VII(J)
above, Defendants may issue the employe, a card, in a form to be
approved by EPA. indicating that the employee has fulfilled all
of the training requirements or the training provider may issue
the employss such a card.
L. An . loyes’s successful completion of the train-
ing required by this Partial consent Osox.. shall not absolve
Defendants of liability for any violation of this Partial Consent

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— 18 —
Decre. or th. asbestos NESRAP whether or not attributable to the
action(s) or dereliction(s) of that esployee.
.N. Nothing in this Section shall be construed as
relieving Defendants fros any sore stringent training obligations
isposed or to be isposed by any federal, stat. or local law or
regulation, including but not liiited to EPA’s regulations
pro.ulgatsd pursuant to the Toxic. Substances Control Act, a.
,asended.
— VIII -
COIIT &CTOR AND SU C0NT5A OI IXCWS!ON
Section VI, paragraphs C.2-4 and 0.5 and the training
requiruents of Section VII of this Partial Consent Deere. do not
apply to third-party contractor or subcontractor esployees
conducting duolition or renovation operations on behalf of the
Defendants provided, however, that nothing in this Section shall
be construed to relieve Defendants of their obligations under the
asbestos NESMAP e.t forth at 40 C.F.R. Part 61, Subnart N.
A. rinq the duntion of this Partial Consent
Decroc fsManta shall not vithheld consent for EPA and/or
state or local air pollution control ag.nciss, and/or their
authorized contractors and consultants and representatives, to
enter on, through and about the site of any d lition and/or

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— 2.9 —
renovation operation with which Defendants Is involved, at
reasonable ti3es, and Without notice, to take such sasples and
photographs and to inspect and copy any records as say be deesed
necessary to d.tersine Defendants’s coeplianc. with the
requiresents of the asbestos NUXAP and the provisions of this
Partial Consent Decree.
3. The provisions of Section VtII(A) hereof are in
addition to, and not a lisitation on, any rights of access
afforded by any statute, regulation, or other isv.
i2kT!ON OP INT l OI 2I
Defendants’s obligations under this Partial Consent
Decree shall conaence upon entry hereof. Unless extended by the
Court, this Partial Consent Decree shall teralnate two (2) years
after the date of final entry of the Decree by the Court. The
United States shall have the right to seek extension of the
period of tins this Partial Consent Decree is in effect. This
right is in addition to any other rights the United States say
hav• to enforce this Partial Consent Decree.
- X I -
A. Defendants shall pay a civil penalty of fifty
thousand dollars ($50,000.00). Thi. civil penalty shall be paid
within thirty days Of the date of entry of this Partial Consent

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20 —
Decree by certified chick payable to The United States of
America, and forwarded to:
United States Attorney’s Off ics
Southern District of Iowa
115 U. S. Courthouse
Des Moines, Iowa $0309
Notification of all such paynents, as veil as copies of all such
certified checks shall be sent to:
Regional (earing Clerk (3RCOO)
U. S. Invironnental Protection Agency
Region VII
726 Minnesota Avenue
Xansas City, Kansas 66101
B. The United States shall be deened a judg .nt
creditor for purposes of collection of the foregoing civil
penalties. Any penalty paynents nade under this Partial Consent
Decree ar. not tax deductible.
— XII —
5T! 3L&T D P (AL?I I
Defendants shall be liable to Plaintiff for Stipulated
Penalties in the anount of Five Hundred Dollars ($500.00) per
violation per day fox each violation of any require.ent of this
Partial eat Decree contained in Section IV, Section V,
Section V!. kctiea VT!, and Section VIII hereof. This
stipul&ted penalty prevision does not apply to violation. of the
asbestos flSHAP regulation, 40 C.P.R. Part 61, subpart K.
Defendants shall pay $tipul ted Penalties vithin fifteen (15)
day. of it receipt of a written deniM by Plaintiff for such

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— 21. —
penalties. If Defendants believes it ii not liable for the
desanded Stipulated Pana ties, it say petition the Court within
fifteen t 15) days of its receipt of the vritt.n desand to hear
evidence on whether Defendants ii liable for the Stipulated
penalties desanded by Plaintiff. Defendants shall have the
burden of proof in establishing that it ii not liabl, for the
stipulated Penalties desanded by the United States. Defendants
say present sitters to the Court which it believes sitigates the
asount of any stipulated penalties for any violation of the
Partial Consent Decree provided however that nothing in this
Section shall be deesed to expand any defenses available to
Defendants pursuant to the terss of Section XI I, hereof. Paysent
of Stipulated Penalties will be sade in the sanner as that
specified in Section X hereof. Plaintiff reserves the right to
seek such additional relief for violations of the Partial Consent
Decree and/or applicable law as is available by law or in equity.
XII I
I2 IPW&L P lO VIS tO N I
A. The Court aball retain jurisdiction to sodify and
enforce t provisions of this Partial Consent Decree, to
resolve disputes arising hereunder, and to entertain any
application on say be necessary or appropriat, for the
construction and effectuation of this Psr’tial Consent Decree.
5. Any asdification of this Partial Consent Decree
shall be in vritinq and approved by the Court. EPA reserves the

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— 22 —
right to seek a sedification of this Partial consent Decree to
conforsto any asbestos NESRAP requiresenta sade applicable
by reason of any revision of the Clean Air Act and/or its
isplesenting regulations.
C. This Partial Consent D.cree is neither a persit
nor a sodification of any existing p.rnit and in no way relieve.
Defendants of itS obligations to cosply with all applicab],.
federal stats or local laws or regulations.
D. Plaintiff reserves any and all legal and equitable
resediss available to enforce the provisions of this Partial
Consent Decree and of the Clean Aix Act and its isplesentinq
regulations.
E. Nothing herein shall be construed to lisit the
authority of the United States to undertake any action against
any person, including the Defendant, in respons. to conditions
which say present an ininent and substantial .ndangers.nt to th...
public health, welfare or the .nvirenaent.
F. Notices required in this Decree, as applicable (and
except as otherwise provided herein), shall be trans*itt.d to the
addresses noted in Attachnent It.
• X IV °
Defendants shall pay th. plaintiff United States of
Aserica $llO2. in costs for this action.

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— 23 —
— xv —
PU LIe NO TICK
The par-ties agree that final. approval, and entry of this
D.cz -se is subject to th. public notice requirsients of 2 1 C.P.R.
S 50.7.
For Plaintiff United States of Aaerica*
ROGER 3 • MARZULLA Dated
Assistant Attorney General
Land and Natural Resources Division
United States Departsent of Justice
CYRUS S. PICI N, JR.
Trial Attorney
Land and Natural Resources Division
Environa.ntal Enforossent Section
United States Depart*snt of Justice
C) ISTOPKER 0. HAGER
United States Attorney
Southern District of Iowa
RICHARD L. RZCHAPDI
Assistant United States Attorney
Southern District of Iowa
115 U. S. srths a s.
Dee ‘ois, tows SO3O
(515) 214—373
TXOIIAS L. ADAJIS, JR.
Assistant Adinistrator Enforcoasat
and Cospliance Nonit.ring
United States Environasntal Prot•ction
Agency

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— 24 —
As.i.ta t- Rqional. Coun.e1
Unitd Stat.. Environ snta1 Prot.ction
kgincy
R.qion III
726 Xinn..ot. kv nus
Xansa. City, Xan..s 66101
For the 0.f.ndants:
Ottu wa Airport A atherity
City of Ottuawa, Iowa DatSC
TMOMAS XINTIGX
Attorney for Defendants
IT IS SO ORD!UD:
WIXTID S DII ZCT JUOGI

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ADrAc,o zzrr I
KOTXCE 0?
ASBESTOS R OVAL ACTIVTIES
D IOLITIOH MD/OR REIIOVATIOK
ASBESTOS KESRAP’S CONTACT
AIR MMAG NT DIVISION
USEPA
Dear ________________________
FACILITY TO SE DEXOLISII!D OR RIIIOVATID
Ha.., address and phone n br of facility:
Na .., a su eM pbaii. nuabsr of oimsr:

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D.scriptipn, size, age and prior u .s of facility:
De o1itien or renovation i.thods to be used:
Nate, title and authority of stats or local government
representativ, who has ordered the demoLition (if applicable)
ASBESTOS NOTIFICATION
AR ISTOS !IIPORW&?IOW
Sit. Asbestos Coordinator: ___________________________________
Sit.-Aab..tos-Fereaan (if applicable):
Start date: _________________ Co.pl.tion date: ____________
Quantity ed frisbie asbestos contsininq aiterial on pipes: —___
liasst ft. (required) _________________________________
ic ft. (optional) _____________________________

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Quantity of friable asbestos-containing aatsrjal on other
facility COIpon.nts:
square ft. (required) ________________________________
cubic ft. (optional) __________________________________
If lass than 260 linear feet on pip.. and less than 160 square
f lit on othir facility coaponents, •xplain techniques of
situation
Description of Asbestos-Containing )Iatsrials ____________________
Location of Asbestos-Containing Materials: _____________________
Person who aade the identification: ___________________________
Method of id.ntification: ______________________________________
(Attach tha results of any laboratory analysis of suspected
asb.sto.ucontaining iaterial to this torn.)
Eniss ion Control Procedures and other procedures to be used to
co p1y with 40 C.F.R. Part 61 Subpart M: ______________________
ASBESTOS NOTIflCATXOII
ASIESTOS DISPOSAL I1IPO (AT!O)1
Type of 1sk tiqht containers to be aaed : _____________________
fasts h .iiq is.ien control procedure, and other procedures
to be to amply with 40 C.T.R. Part 61, Subpart K: _______
Transporter: nm, address and phone nuabsr; _________________—

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DispoUl ette: na •, address and phone nu3ber; ____________
S thc.re]y,
Asbestos Progra3 Manager
cc: Appropriate State or Local
Air Pollution Control Agency

-------
ATrAC)o(ENT II
ASBESTOS REMOVAL PROJECT
DAILY CI4ECK LIST
PROJECT -IOCATION: __________________________________________
ASBESTOS SITE COORDINATOR: ____________________________________
JOB NUMBER: ______________ DAY: __________ DATE: __________
ASBESTOS SITE COORDINATOR, TX1 AT SITE _____TI) LEFT SITE ____
YES NO
1. ( ) ( ) COPY OF ALL NOTIFICATIONS AND WO R TRAINING
RECORDS AT SITE
2. ( ) C ) ALL ASBESTOS WORi BS TRAINED AND TESTED AND
RECORDS CERTIFYING TRAINING ARE COMPLETE
3. ( ) ( ) MEDICALIS PERIO D Oil ALL ASBESTOS WOR R5
BEFORE JOB BEGAN
4. ( ) ( ) WORE AREA ISOLATED BEFORE JOB BEGAN
5. ( ) ( ) WARNING SIGNS POSTED BEFORE JOB BEGAN
6. ( ) ( ) DECONTAMINATION UNIT INSTALLED AND OPERATING
7. ( ) ( ) PROTECTIVE CLOTHING USED BY ALL WOR RS DURING
ENTIRE WOREDAY
C ) coveralls ( ) respirator.
( ) hoods ( ) spare filters
()boota ()qlov..
8. ( ) ( ) WATER AVAILABLE AT SITE AND USED FOR ASBESTOS
R.ENOVAL MD SHOWERS -
9. ( ) ( ) AIRLESS SPRAYIR/BEFTU VEI’TU ON SITE AND USED
II .W$?flNG OPERATION
10. ( ) ( ) 11E &TIVI AIR MA INU USED ENTIRE WORNDAY
11. ( ) ( ) BEPA VAc JU I USED ENTIRE WOR AY (110: _______
12. ( ) ( ) VACU-LOADER USED ENTIRE WORHOAI (NO: ________
13. ( ) () ALL ASBESTOS CONTAINING MATERIALS (Au) MAIIDLED
WET
14. ( ) ( ) AflU WE?flNG, ALL ASBESTOS CONTAINING
MATERIALS PlACED II I PNOPULY lABELED LEAE TIGHT
CONTAINER3

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- nuab.r of cont jn.rs aied —
typ of containers used ___________________
- size of containers aced __________________
15 ( )• ( ) ALL AO REROVED BEFORE ANY DISMANTLING OR
DEMOLITION STARTED
16. ( ) ( ) VISIBLE EMISSIONS TO OUTSIDE AIR PREVENTED
17. ( ) ( ) ALL A ( DISPOSED 07 IN AN APPROVED LANDFILL
18. ( ) C ) MANIFESTS COMPLETE (OWNER SIGNATURE)
19. ( ) ( ) VISITORS ON SITE: __________________________
Asbestos-Site—Supervisor
COIO NTS:

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ArrACl*cENT III
‘ S AC 4OWt1DGE)q!NT OP ASB!STOS TP.AINING
In accordance with applicable law, Cleveland Wrecking
Company Is required to provide proper safety training to al.].
employees whose job responsibilities involve (or will, involve)
the removal, handling, transportation or disposal of materials
containing asbestos.
If you have received asbestos training, please read
paragraph 1, below, and decide if it accurately describes the
training you received. By signing your name at the bottom of
thi, sheet, you will be acknowledging (1) that you received the
training described: and (2) that you understand that review of
the training materials by the United States Environmental
Protection Agency does not assure that your job site is free from
all. health and safety risks.
. •-
1. I have completed at least eight hours of training
on the dangers of asbestos, and the proper procedures for
removing handling, transporting, and disposing of. materials
containing asbestos. I took an examination following the
training o aa , and was informed that I bad passed that
examinatia. I viii keep on my person proof of my training.
3. I have received and read a copy of the Cleveland
Wrecking sny’s Asbestos Training Pamphlet.
3. I undfrstand that although the Environmental
Protection Agency reviewed the materials employed by the
Cleveland Wrecking Company in training me, the Environmental

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Protection Agency’s approval of those materials was not intended
as a guarantee or assurance to me that my workplac, is free of
all health and safety risks, or that Cleveland Wrecking is in
compliart.c.I with regulations and laws enforced by EPA or other
agencies such as the Occupational Safety and Health
Administration.
Signature of Employ.. ________________________
Printed Name of Employee _____________________
i witnessed the named .mploye.’s signature.
(_] I certify that the employee can read English.
OR
( ] The employee cannot read, or cannot read English.
— I read this document to him before he signed it
and he acknowledged understanding it. contents.
Signature of Witness
Printed Name of Witness

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
UNITED -$ rATES OF AMERICA,
)
Plaintiff, ) Civil No. 86—32L—) qS
)
V.
)
TEXACO REFINING AND MAR1 TING )
INC., f/k/a GET Y REFINING )
AND MARKETING COMPANY, and )
TEXACO CHEMICAL COMPANY, )
)
Defendants.
COISEIT DICUI
WHEP2M, Plaintiff, the United States of America
(hereinafter ‘United States’), on behalf of and at the rsq 1eat of
the r Tnited States Environmental Prot.ction Agency (‘EPA’), filed
its Complaint against defendants Texaco Refining and Marketing
Inc., f/k/a Getty Refining and Marketing Company, and Texaco
Chemical Company (com.1.ectivsly ‘Texaco’) on July 24, 1986, and
filed its Amended Complaint against Texaco on July 28, 1987;
WHER!M, the original Complaint and the Amended
Complaint (collectively the ‘Complaint’) alleg, that Texaco
violated the Clean Air Act (the ‘Act’), .42 U.S.C. *S 7402-7642,
and the National iasions Standard for Mazardous Air Pollutants
(‘NESMAP’) for benson., 40 C.F.R. Part 62, Subparts A, 3, and V,
at Texaco’s petroleum refinery in Delaware City, Delaware (‘the
refinery’); -
WHEREAS, the Complaint alleges that in connection with
owning and operating the refinery which produces benzene as part

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—2—
of the petroleum refining process, Texaco violated reporting,
monitoring, and leak repair requirements of the benzene NESRAp;
WHWM, the United States’ Complaint seeks permanent
injunctive relief and the imposition of civil penalties;
WHEP2AS, Texaco denies the material allegations of the
Complaint and denies any and all liability and has asserted
various defenses;
WHEREAS, the United States and Texaco agree that
settlement of this action is in the public interest, and also
agree to entry of this Consent Decre. as an appropriate means of
resolving this matter:
WHEREAS, this Consent Decree is entered prior to any
trial or adjudication of any issue of law or fact in this action;
tl THERE7ORI, upon consent of the parties hereto, it
is hereby ORDERED, ADJUDGED MD DECREED as follows:
r. su i erro
A. This Court has jurisdiction over the subject matter
of this action and over the parties consenting hereto pursuant to
Section 113(b) of the Clean Air Act, 42 U.S.C. 7413(b), and
28 U.S.C. H 1331, 1345, and 1355. Venus is proper in this Court
pursuant to Section 13.3(b) of the Clean Air Act, 42 U.S.C.
7413(b), aM 2$ U.S.C. 1391(b) and (c).
B. The Complaint filed states a claim upon which
relief may be granted against Texaco pursuant to Section 113 (b)
of the Clean Air Act, 42 U.S.C. 1 7413(b).

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II. DEFINITIONS
Tsr5.s used in this Consent Decre. that are defined in
42 i .S.C. 7412, and 40 C.F.R. I 61.02, 61.111, and 61.241,
shall have the meanings set forth in such definitions.
tIE. 3!NDINC EFFECT
A. The provisions of this Consent Decree shall apply
to and be binding upon the parties hereto, their respective
officials, officers, directors, agents, servants, employees,
successors, and assigns.
3. Texaco shall give notice in writing of this Consent
Decree to any successors in interest prior to a change in
ownership or a transfer of right to operate the refinery. A copy
of such written notice shall be simultaneously provided to EPA.
C. The undersigned defense counsel and representatives
of Texaco are authorized to sign this Consent Decree en behalf of
the entities they represent, and the undersigned representatives
of the Department of Justic. and EPA are authorized to sign this
Consent Decree on behalf of the United States and EPA
respectively.
Iv. Nmgg
Unlees otherwise indicated, whenever under the terms of
this Co eet Decree written notice Li required to be given, or a
report or other docuitent is required to be forwarded by one party
to the other, such notice or ether document shall be mailed first
class, postage prepaid, to the following individuals at the

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—4—
addresses specified below (or to such other addresses as tnay be
designated by written notice):
A. If to the United States or EPA:
U.S. Environmental Protection Agency
Attention: Chief, Air Enforcement aae
Activities Section (3A1122)
841 Chestnut Building
Philadelphia, Pennsylvania 19107
B. If to Texaco:
Plant Manager
Texaco Refining and Marketing, Inc.
2000 Wrangle Mill Road
Delaware City, Delaware 19706
Such notice shall be considered timely if postaarksd on
the date such notice is due.
V. REFINERY AUDIT
A. In accordance with the provisions set forth below,
Texaco shall. hir, and bear the cost of an aqr..d-uporr iridependi
contractor (the “Contractor) to conduct a benzene audit
(“audit) of the refinery.
I.. Within fifteen (15) working days (j. 1 j ,
excluding weekends and federal holidays) of the entry
of this Consent Decree, Texaco shall inform EPA of the
identity of the Contractor that Texaco intend.. to
employ to perform the audit.
2. Th. United States shall have the right to
dtuppravs the Contractor if the United States
determines that the Contractor ii not qualified to
perform the audit, or if the United State. determines
that the Contractor is not independent of Texaco • The
United States shall notify Texaco, in writing, within
twenty (20) working days following receipt of Texaco’s
notice of Contractor whether the United States
disapproves the proposed Contractor. Should the United
States disapprove of the propos.d Contractor, the
United States shall state the reasons tb.ersfor.

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3. In the event the United States disapproves the
proposed Contractor, Texaco shall, as soon as
practicable following receipt of the United States’
notice but no later than fifteen (15) working days
following rsceipt of such notice, propose an alternate
Contractor to perform the audit. The United States
shall hav, the right, as set forth in Paragraph V.A.2.,
to disapprove such Contractor.
4. In the event the United States does not notify
Texaco that the United State. disapproves of th•
Contractor within the tim. prescribed by Paragraph
V.A.2., or if the United State. notifies Texaco, in
writing, that the United States does not intend to
invoke its right to disapprov, the Contractor, the
Contractor shall be deemed selectad ’ by Texaco to
perform the audit of the refinery.
5. The United States shall not be held out as or
d..m.d a party to any contract betvssn or among Texaco
and the Contractor retained to perform the audit.
B. Within thirty (30) working day. from the entry of
this Consent Decree, Texaco shall provide the following
information to EPA:
1. Schematics of the refinery that identify the
refinery process flow with streams (j j,, as identified
on the most recent version of drawing number 1201-120-
KD—56 for the refinery in general, and as identified on
the most recent version of drawing number 1290-132-lCD-
3000 for the benzene facilities in particular). Th.se
schematics shall be identified hereinafter as the
‘general schematic’.
2. Schematics of the refinery that identify each
piece of equipment that contains or contacts benz.ne
from the bottom of Unit 25-C-3 and the top of Unit 32—
C —lOL to the termination of the benzene process
stream(s). These schematic., as well as any other
schematics requested by the Contractor pursuant to
Paragraph V.C.2., shall be identified hereinafter as
the ‘detailed schematic’. The detailed schmatic shall
identify the complete benzene process streams from
their initial formation to final off-loading .it..,
including all storage areas and vents, and shall
indicate where, if anywhere, any fluid (liquid or gas)
composed of 10% benzene by weight or greater is removed
from the process stream.

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3. For any piece of equipment identified on
the detailed schematic that Texaco knows or
determines in its engineering judgment contains or
contacts a fluid (liquid or gas) less than 10%
benzsn. by weight and that Texaco has not made a
part of its benzene NESMAP program, Texaco shall
indicate each such piece of equipment on the
detailed schematic. In the event that Texaco and
EPA do not agre. on whether a piece of equipment
is in benzen. service, and at EPA’s written
request, Texaco shall verify the benzsne content
for each such piece of equipment through ASTM
Method 0—2267.
4. The results of the benzens content tests
conducted pursuant to Paragraph V.3.3., shall b.
recorded in a log provided by Texaco to EPA.
5. The information required by Paragraph V.3.
herein, shall be forwarded to EPA.
C. Within twenty (20) working days from the selection
of the Contractor as described in Paragraph V.A., Texaco shall
enter into a contract with the agreed-upon Contractor and provide
the Contractor with copies of the general and detailed sch.mati
referred to in Paragraph V.3. above. Texaco shall send a copy
such contract to EPA. Texaco shall ensure that the Contractor
undertakes the following steps (which shall be made a part of the
contract between Texaco and the Contractor):
1. The Contractor, using th. general schematic
referred to in Paragraph V.3., shall make an
independent assessment of each process unit with regard
to Texaco’s determination as to the presence, or lack
tbsrsof, of bsnzsns.
2. The Contractor, using the detailed schematic
referred to in Paragraph V.3., shall make an
independent assessment of each piece of equipment shown
and not already tagged and monitored to determine if
such pi.ce of equipment, in the Contractor’s judgment,
contains or contacts a fluid (liquid or gas) that is
10% or greater benzerie by weight. Th• Contractor shall
have the right to request of Texaco other schematics
which, in the judgment of the contractor, are needed to

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—7—
mak. an independent assessment. The Contractor, in
making its assessment, shall. conform to the procedures
set forth at 40 C.F.R. 61.245.
3. Pursuant to Paragraphs V.C.1. and 2.
herein, the Contractor shall have the right to
conduct whatever on site inspection and/or testing
the Contractor dseas necessary to determine the
b.nzene content of any piec, of equipment. If
Texaco wishes to limit the extent of any on site
inspection and/or testing by the Contractor, such
limitation must be approved by EPA prior to
Texaco’s imposition of such limitation.
4. Once the Contractor has identified all.
pieces of equipment that contain or contact a
fluid (liquid or gas) that is 10% or greater
benz.n. by weight, the Contractor shall ensure,
subject to EPA review, Texaco’s compliance with
the identification and equipment requirements of
the b.nzene NESHAP. This shall require that the
Contractor:
a. tag any piec. of in b.nzen. ssrvic•
equipment that has not been tagged
pursuant to 40 C.F.R. 3 61.242-1(d).
Equipment may be tagged in a manner
cons istant vith sxistirtg tagging at the
refinery so long as such tagging
complies with applicable regulations.
The Contractor shall prepare a list of
all pieces of equipment tagged pursuant
to this subparagraph;
b. identify all open—ended valves and lines
in b.nzene service to verify that each
is equipped with a cap, blind flange,
plug or second valve as required by 40
C.F.R. 3 61.242—6. The Contractor shall
prepare a list of all open—ended valves
and lines where such equipment is absent
but is required pursuant to the benasne
RIE$EAP: and,
c. review all other pieces of in bensene
service equipment to verify that each
such piece of equipment complies with
the standards set forth in the benzen.
NESHAP. The Contractor shall prepare a
hit of any equipment that does not
comply with such standards.

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5. The Contractor shall review all information
that Texaco i required to keep under the b.nzene
1IESHAP to assess the completeness of such informatjor
and the efficacy of Texaco’s information gathering
methode. Subject to EPA review, the Contractor shall
prepare a li.t of all deficiencies found. The
Contractor’s review shall include, without Limitation,
the recordkeeping and reporting requirements ‘contained
in 40 C.F.R. 61.246 and 61.247.
6. The Contractor will review Texaco’s monitoring
and leak detection and repair practices to ensure such
practices comply with the benzsn• NESMAP. Subject to
EPA review, the Contractor shall prepare a List of any
deficiencies noted. This review shall, consist of:
a. accompanying Texaco personnel or any
agent or contractor hired by Texaco to
perform any of Texaco’s obligations
under the b.nzene NESEAP, on one monthly
leak detection review, during the first
month of a quarter, of all tagged in
bensens service equipment at the
refinery. Such leak detection review
shall include those pieces of equipment
required to be inspected on an annual
basis: and,
b. reviewing the procedures employed by
Texaco personnel and/er any agent or
contractor of Texaco responsible at the
refinery for leak detection and Leak
repair to assure proper monitoring and
leak detection and repair.
7. The Contractor shall have the right to perform
any tests pursuant to 40 C.1.R. 61.245 to assess the
performanc. of Texaco or Texaco’s agent or contractor.
If Texaco wishes to limit the extent of any on site
inspection and/or testing by the Contractor, such
limitation must be approved by EPA prier to Texaco’s
i ositiOn of such limitation.
$ • Far each piece of equipment that is either
own or determined, in Texaco’s engineering judgment,
to contain or’ contact a fluid (liquid or gas) less than
10% b.nzene by weight and that is not tagged, the
Contractor shall identify and. prepare a list, subject
to EPA review, of each such piece of equipment whose
content has the potential to at any time fluctuate to
or over the 10% b.nzen. limit. Texaco or the

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Contractor shall tag each such piece of equip1 ent in
the maimer set forth at Paragraph V.C.4. above.
D. Within thirty (30) working days from the completion
of the york as described in Paragraph V. C., Texaco • in
conjunction with the Contractor, shall submit to EPA a’compjjance
report the R.port’). This Report shall be sent to EPA and
shall include the following:
1. A complete description of the work performed
by the Contractor pursuant to Paragraph V. C., attaching
any lists or other documents prspared by the
Contractor, or prepared by Texaco for the Contractor,
pursuant to such paragraph.
2. A complete description of any work performed
directly by Texaco pursuant to Paragraph V. C.
3. A detailed description of any remaining work
(as of the date of the Report), that must be performed
to bring the refinery into compliance with the benzene
NESMAP and the terms of this Decree. This description
shall include:
a. the nature and scope of the work to be
performed;
b. for each item identified, an estimate of
the time necessary for completion; and,
c. for each item identified, the person(s)
responsible for the performance of the
work.
4. The Report shall include a section entitled,
‘Compliance Program Schedule.’ Such section shall
include the following:
a. for the work identif Led in Paragraph
V.D.3., for each item identified and/or
described, Texaco shall set forth a
deadline f or completion and identify the
person(s) responsible for each such
deadline;
b. a description of all procedurss, or
training programs that Texaco and/or
Texaco’s contractor(s) shall ase to

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assure future Compliance with the
benzerte NES)(AP, including an effective
date for the implementation of each
identified procedure or program. (Po
each training program identified, suck
description shall includ, the data(s) o
such programs, the identity of all
persons responsthl.. for initdiction, and
the identity of attendees.)
d. a statement by Texaco that all pieces of
in banzene service •quipmsnt that were
identified and tagged pursuant to
Paragraph V.C. shall be monitored in
accordance with the benzen. NESMAP; and,
a. a statement by Texaco explaining how
deficiencies noted by the Contractor
during the audit have been addressed in
the Report.
E. Within forty-five (45) vorking days of the
submission of the Report tO EPA pursuant to Paragraph V.D.,EPA
shall inform Texaco, in writing, whether EPA accepts or rejects
all or part of the Report. In the event of rejection, EPA SM
specify its objections in writing. Th• following schedule and
previsions shall thereafter apply:
1. Within forty-five (45) calendar days of
receipt of any EPA notification of rejection, Texaco
shall submit to EPA a revised Report which remedies the
specified obj actions.
2 • In the event the parties cannot agree to
appropriat, amendments to the Report following EPA
notification of Report rejection, either party may
invoks ths Dispute Resolution provision set forth in
Paragraph VIII.
?. Ones EPA accepts the Report, then the Compliance
Program Schedule dascribmd in Paragraph V • D • 4 • shall become art
enforceable addendum to this Consent Decree.

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VI. STIPULATED PENALTI
A. If Texaco fails to meet the deadlines and/or
requirements imposed in this Consent Decree, Texaco shall pay
tipu1ated penalties to the United states in the amount of Two-
Hundred Fifty Dollars ($250) per day p .r violation for the first
ten (10) days of noncompliance and One—Thousand Dollars ($1,000)
per day per violation th•rsaft r.
B. Stipulated penalties shall be paid within fifteen
(15) calendar days of demand by the United States, shall be paid
by check mad. payable to Trsasur.r, United States of Aaerica,
and shall be delivered to the Unit.d States Attorney for the
District of Delaware, 3. Caleb Soggi Federal Building, 844 Xing
Street, Room 5001, Wilmington, Delaware 19801. Texaco shall
send a copy of any such check together with the transmittal
Letter to the Regional Hearing Clerk (3RCOO), U.S. Environmental
Protection Agency, Region III, 841 chestnut Building,
Philadelphia, Pennsylvania 19107.
C. If Texaco wishes to contest any liability for,
and/or the amount of, any demand by the United States for
stipulated penalties made pursuant to Paragraph V!.A. herein,
Texaco may invoke the Dispute Resolution provision sat forth in
Paragraph VtI!.
D. Nothinq contained in this Consent Decree shall be
construed to prevent or limit the rights of the United States to
obtain any other appropriate relief uMr the Act, including but
not. rimit.d to any injunctive relief or civil penalties, in order

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to obtain compliance with this Consent Decree, the Clean Air Act,
or the r.9ulations promulgated thereunder, except as expressly
provided in this Consent Decree.
E. Payment by Texaco of stipulated penalties is in the
nature of a civil penalty and Texaco shall not claim this payment
as a deduction for federal tax purposes.
VI I. FORCE MAJEURK
A. If any event occurs that causes or may cause a
delay in Texaco’s compliance with any of the deadlines set forth
in this Consent Decree, Texaco shall notify EPA in vriting within
ten (10) calendar days of such occurrence, describing in detail
th. anticipated length of delay, the specific cause or causes of
the delay, the measures taken or to be taken to minimize the
delay, and the timetable for the implementation of such measure-
Texaco shall adopt all reasonable measures to avoid or sinimizu
any such delay. Failure by Texaco to notify EPA within the time
period set forth shall constitute a waiver of any claim that
circumstances beyond Texaco’s control hav, prevented compliance
with this Consent Decree. Notification, by itself, shall not
excuse the delay.
B. If the parties agre. that the delay in compliance
with this asent Decree has been or vi ii be caused by
circumstances enttzsly beyond the control of Texaco and that
Texaco could not have foreseen or prevented such delay by the
exercis. of due diligence, the time for performance of such
requrrement may be extended Jar a period not exceeding the delay

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— —
actually caused b such circumstances. Stipulated penalties
shall not be due for such delay. In the event the parties cannot
reach such agreement, then any party may involie the Dispute
RssoldflOfl provision set forth in Paragraph V III. The burden of
proving that any delay is caused by circumstances beyond the
control of Texaco and that Texaco could not have foreseen or
prevented such delay by the exercise of due diligence, and of
proving the appropriate duration of any extension shall rest upon
‘Texaco.
C. The following shall not, in and of themselves, be a
basis for changes in this Consent Decree or for extensions of
time under this Paragraph:
1. Incr•as.d costs or expenses associated vtth
the implementation of action. called for in this
Consent Decree;
2 • A change in the economic circumstance, of
Texaco:
3. Any claim of technical infeasibi]ity in
achieving compliance with the Consent Decree or
applicabi. Clean Air Act requirements; or,
4. Difficulty in achieving compliance with the
Consent Decree or applicable Clean Air Act
r.quirusnts.
VIII. O!SptJ’f! P O!fl’fI0V
Any dispute that arises among the parties regarding
the r.quiz nts of this Consent Decree, shall, in the first
instance, be the subject of informal negotiations between Texaco
and ths United States. If either party believes it has a dispute
with the other party, it shall notify the other party in writing,
setting forth the a.tt.r(sL in dispute. For purposes of this

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Paragraph only, Texaco shall address such flotjfjcatjon to: U.S.
Environmental Protection Agency, Attention: Chief, Air and Toxics
Branch (3 10), 841 Chestnut Building, Philadelphia, ylva
1.9107,- with a copy to Robert L. Hines, Environmental Enforcement
Section, Land and Natural Resources Division, U.S. Dspartm.i t of
Justice, P.O. Box 7611, Ben Franklin Station, Vashington, D.C.
20044 (referring to Case lie. 90521—952). If the dispute
cannot be resolved by the parties within thirty (30) calendar
days from recsipt of such notice, then Texaco shall follow the
position of the United States unless Texaco files a petition with
the court for resolution of the dispute within fifteen (15)
calendar days of receipt of the final dcision of the United
States, which shall be denominated as such and shall not be
mailed prior to the expiration of the thirty (30) day period
described above. The petition shall set forth the nature of ti
dispute with a proposal for its resolution. The United States
may within thirty (30) calendar days file a respons. with an
alternate proposal for resolution. In any such dispute, Texaco
shall have the burden of proving that it. proposal fulfills the
terms, conditions, requirement., and ob jectives of this Consent
Decree, and that it proposal is more reasonable than the
proposal d t s UDttsd Statu.
IX. CIVIL P (ALTY
A. Texaco shall pay a civil penalty in the total sum
of ONE HUNDRED FZPTY 1 EE THOUSAND DOLLARS ($153, 000) in
s.ttrement of all civil violations alleged in the C laint, and

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all other Violations described in Paragraph XI.C. below. Within
thirty 30 calendar days after entry of this Consent Decree,
Texaco shall tender pay .nt of the civil penalty to the United
States Attorney for the District of Delaware, 7. Caleb Bagge
Federal Building, 844 ICing Street, Room 5001, Wilaingten,
Delaware 19801, by check payable to ‘The Treasurer United
States of Anerica. ’ Copies of the trans2ittal letter and check
shall. be sent to Robert L. Bins., Environmental Enforceient
S.ction, Land and Katural Resources Division, Dsp..rtaent of
Justice, P.O. Box 7611, Ben Franklin Station, Washington, D.C.
20044 (referring to Case Mo. 905-2-L952) and Regional. Bearing
Clerk (3RCOO), Office of Regional Counisi, Region I I!, U.S. EPA,
841 Chestnut Building, Philadelphia, Pennsylvania 19107.
S. Such payHent is in the nature of a civil penalty
and Texaco shall not c]ai this payisnt as a deduction for
federal tax purposes.
X. RIGHT 0? !NTRY
A. For the purposes of onitorinq co plianc. with the
provisions of this Consent Decree, any authorized r.presentativ.
of the United States Environ sntal Protection Agency shall. have a
right of try into the refinery.
I. Psraqraph X. herein in no vay haiti or otherwise
affecta asy right of entry held by the United States pursuant to
applicable F.d.ral or State laws, regulations or preits.

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— Lb —
XI. MISCELLANEOUS PROVISIONS
A. me United States doss not, by its Consent to the
entry of this Consent Decree, warrant or aver in any wmer that
coaplete conpliancs by Texaco with Paragraph V. above yi]l result
in ceepliance with the provisions of the benzene NESRAP, or the
Act. Notwithstanding any reviv and acceptance by the United
Statss of any plans, reports, policies or procedures, Texaco
shall rexain solely responsible for coaplianc. with the terns of
this consent Decree and the benzene NESEAP regulations, 40 C.P.R.
Part 61, Subparts A, 3, and V.
B. Nothing contained in this Consent Decree shall be
construed to prevent or Liait the rights of the United States to
obtain civil penalties, interest, costs or fees under the Clean
Air Act or any other Federal statutes or regulations for
violations of this Consent Decree or any other provisions of law,
except a. expressly provided in this Consent Decree.
C. This Consent Decree shell be in full. settlenent and
satisfaction only of those c] .ains set forth in the Coaplaint
filed by the United States with this Court, except that in
consideration of Texaco’s perforeance of, and c pliance with.
the provisions of Paragraph V. above, the United States covenants
not to ins T. cs for ds ainisis violations discovsrsd in the
course of isplm%tation of the provisions of Paragraph V. of
this Consent Decree.
0. This Consent Decree does not relieve Texaco of its
obli atiens to c ply with all applicable requirnts of the

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Clean Air Act, 42 U.S.C. § 7401-7462, and the regulations
promulgated thereunder, and in no way affects or relieves Texaco
of any responsibility to comply with the requirements of any
other federal, state, or local laws and regulations, or any order
of this Court. It shall be the responsibility of Texaco to
achieve and maintain complete compliance with all applicable
Federal and State laws, regulations and permits, and compliance
with this Consent Decree shall be no defense to any actions
commenced pursuant to said laws, regulations or permits, except
as expressly provided in this Consent Decree.
E. Nothing contained in this Consent Decree is
intended or shall be construed as a waiver by the United States
of its right to institute enforcement action or abatement action
against Texaco for any past, present or future violations of any
statutes or rules or regulations enforced by the United States
except for those violations specified in the Complaint filed
herein and except as otherwise expressly provided in Paragraph
XI.C. herein.
F. This Consent Decree does not limit or affect the
rights of the United States or Texaco as against any third
parties. This Consent Decree shall not operate to release,
waive, limit or impair in any way the claims, rights, remedies or
defenses of the United States or Texaco against any person or
entity not a party hereto.
G. This Consent Decree, represents the entire agreement
between the parties.

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H. There shall be no modification of this Consent
Decree without the written consent of all parties and the
approval of the Court.
XII. TERMINATION
A. One year from the date that Texaco has completed
the requirements set forth in Paragraph V. above, and has paid
all ‘outstanding penalties, and has otherwise complied with all of
the provisions of the Consent Decree, and on notice to the Court,
this Consent Decree shall terminate. Until such termination,
jurisdiction is retained by this Court to enable the Court to
issue such further orders or grant such relief as is necessary
and appropriate to carry out this Consent Decree and to resolve
all disputes arising hereunder.
B. Texaco shall notify EPA when Texaco has completed
the requirements set forth in Paragraph V. above, and has paid
all outstanding penalties, and has otherwise complied with all of
the provisions of the Consent Decree. A copy of such
notification shall be provided to the Court.
C. The United States may petition the Court, on the
basis of a showing of good cause, to extend the termination date
set forth in Paragraph XII.A. above.
XIII. SEVERABILITY
The provisions of this Consent Decree shall be
severable, and if any provision is declared by a Court of
competent jurisdiction to be inconsistent with any law, and

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— 19 —
therefore unenforceable, the ren aining provisions of this Consent
Decree shall remain in full force and effect.
XIV. COSTS OF ACTION
Each party shall bear its own costs and attorney fees
in this action. Should Texaco subsequently be determined to have
violated the terms and conditions of this Consent Decree, then
Texaco shall be liable to the United States for reasonable costs
and attorneys’ fees incurred by the United States in any action
against Texaco for noncompliance with this Consent Decree.
XVI. PUBt. IC CO 1ENT
In accordance with 28 C.F.1%. § 50.7, this Consent
Decree shall be lodged with the Court and published in the
Federal Register to allow thirty (30) days for public conunent
prior to entry of the Decree.
The parties hereby consent to entry of the foregoing
Consent Decree:
FOR THE UNITED STATES OF AMERICA:
ROGER 3. XARZULLA Date
Assistant Attorney General
Land and Natural Resources Division
United States Departnent of Justice
Washington, D.C. 20530

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— 20 —
WILLIAM C. CARPENTER, JR.
United States Attorney
District of Delaware
By:
DAVID C. WEISS Date
Assistant United States Attorney
District of Delaware
J. Caleb Boggs Federal Bldg.
844 King Street
Wilmington, Delaware 19801
ROBERT L. HINES, Trial Attorney Date
Environmental Enforcement Section
Land and Natural Resources Division
United States Department of Justice
10th & Pennsylvania Avenue, N.W.
Washington, D.C. 20530
( e C _
THOMAS L. ADAMS, JR. Date
Assistant Administrator
Office of Enforcement and
Compliance Monitoring
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460

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— 21. —
Agency
841 Chestnut Building
Philadelphia, Pennsy]vania 19107
KATHERINE L. SHINE
Assistant Regional Counsel
Region III
U.S. Environmental Protection
Agency
841 Chestnut Building
Philadelphia, Pennsylvania 19107
22 J9
Date / .
2 /fà’il
. DIAMOND
Regional Counsel
Region III
U.S. Environmental Protection

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— 22 —
FOR TEXACO:
Plant Manager
Texaco Refining and Marketing Inc.
2000 Wrangle Mill Road
Delaware City, Delaware 19706
/7
à / 1 /f1C
YOUNG/ 7
Senior Vicq’ Presid t
Texaco Chemical Company
Houston, Texas
-A
,e-< , . a
RICHARD D. ALLEN
Morris, Nichols, Arsht
& Tunnell
1105 Market Street
P.O. Box 1347
Wilmington, Delaware
19899
J’4-1 L
/ ‘ 7
Date
-
i rr -
Judgment is hereby entered in accordance with the
foregoing Consent Decree this
_____ day of
, 1988,
Wilmington, Delaware. The parties are hereby ordered to
comply with the terms thereof.
D te
UNITED STATES DISTRICT JUDGE

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‘34

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/ /
/

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. 32/i
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, D.C. 20460
4 L O1 ’
JUN 27
MEMORANDUM
SUBJECT: Acid Rain Compliance/Enforcement Guidance
FROM: John B. Rasnic, Director ‘4 4-”-A e_I
Manufacturing, Energy, and Transportation Division
Office of Compliance
Kathie A. Stein, Director
Air Enforcement Division
Office of Regulatory Enforcement
TO: Air, Pesticides, and Toxics Management Division
Directors
Regions I and IV
Air and Waste Management Division Director
Region II
Air, Radiation, and Toxics Division Director
Region III
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Division Director
Region VI
Air and Toxics Division Directors
Regions VII, VIII, IX, and X
The Stationary Source Compliance Division (SSCD) and the Air
Enforcement Division (AED) have developed the Acid Rain Compliance
and Enforcement Guidance document (Attachment 1). This document
was developed with input from the Acid Rain Division (ARD) and the
Regions. The purpose of the guidance is to assure national
consistency in enforcing the acid rain program by identifying
functions and roles in the enforcement process and recommending
minimum enforcement actions to be taken for specific violations.
The guidance should be used along with the Agency penalty policy
and the Acid Rain Addendum to the February 7, 1992, Timely and
Appropriate Enforcement Response to Significant Air Pollution
Violators (SVT&A Guidance) in addressing violators of the Acid
Rain Regulations. The addendum is included as Attachment 2.
ecycIediRecycIabIe
Pvlrfled with SoylCanoli Ink on paper that
contalna at least 50% recycled like,

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2
In addition, a compliance and enforcement workgroup has been
formed to coordinate enforcement approaches on a case-by-case
basis as violations occur. Monthly conference calls are held to
discuss the compliance status of Phase I sources and the
appropriate enforcement response(s) for any violations.
We hope that these efforts will help in facilitating the
successful implementation of the acid rain rules and focus the
compliance and enforcement resources where they will provide the
best results.
Attachments
cc: Regional Counsels
Acid Rain Enforcement Work Group Members

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ATTACHMENT 1
ACID RAIN COMPLIANCE/ENFORCEMENT GUIDANCE

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ACID RAIN
COMPLIANCE/ENFORCEMENT
C tl ID ANC E
This document is intended solely for the guidance of
government personnel. It is not intended and cannot be relied upon
to create rights, substantive or procedural, enforceable by any
part in litigation with the United States. The Agency reserves the
right to act at variance with this gui.dance and change it at any
time without public notice.

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ACID RAIN CCMPLIAMCE/ENFORCEMENT GUIDANCE
NTRODUCT ION
Title IV of the Clean Air Act Amendments (the Act) of 1990
requires chat the United States reduce emissions of sulfur
dioxide (SO:) and nitrogen oxides (NOn) from utility boilers by 10
million and 2 million tons respectively. The acid rain rules
implementing the major requiremehts of Title IV were promulgated
on January 11, 1993 and include the permit, monitoring and
allowance regulations required by the Act. Implementation of the
acid rain regulations is a two-phase program involving multiple
deadlines depending on the phase and related rules.
The implementation and enforcement process is a joint
effort of the Office of Enforcement and Compliance Assurance
(QECA), the Acid Rain Division CARD) of the Office of Atmospheric
Programs, EPA Regional Offices (Regions), and state environmental
agencies (States) . To maintain the acid rain program’s
integrity, all enforcing parties are expected to take a very
aggressive approach to implementing and enforcing this program.
Any violations of the acid rain program must be addressed along
with all known violations of other air programs. In addition,
since many of the potential acid rain violators are major
sources, the violations may qualify as Significant Violations.
This guidance document addresses enforcement requirements
for the Excess Emissions rule, Continuous Emissions Monitoring
Systems (CEMS) rule, and Permit rule. This guidance document
will be amended in the future to add the enforcement requirements
for the NO, rule. This guidance document outlines
responsibilities for enforcement actions and provides recommended
enforcement responses (Appendix 1 for the Excess Emissions rule,
Appendix 2 for the CEMS rule, Appendix 3 for the Permit rule, and
Appendix 4 reserved, for the NO 1 rule) for the specified
violations. This guidance document should be used in conjunction
with the Acid Rain Addendum to the February 7, 1992 guidance on
Timely and Appropriate Enforcement Response to Significant Air
Pollution Violators (SV/T&A Guidance) and the Agency penalty
policy (Appendix 5 presents an index of EPA penalty/enforcement
response guidances) to identify and address violations.
Although this guidance generally identifies most of the
possible acid rain regulation violations, it does not necessarily
identify all non-compliance situations. When the Regions or ARD
encounter situations that may be violations of the rules but are
not specifically addressed in this guidance document and cannot
be addressed using Regional discretion, they should bring these
cases to the attention of OECA. The Regional Offices and OECA
will be involved in the resolution of these cases. The
recommended enforcement response for these cases will be
described and added to this guidance document as part of

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2
AcceridiX 6, Supplemental Enforcement Act .OflS.
? ES?CNSLBILITIES OF PARTIES
The Office of Enforcement and Compliance Assurance is
responsible for determining compliance with accounting and
reporting provisions of the Excess Emissions and CEMS rules.
The A.ED will take the lead on enforcement actions involving
provisions as indicated in Appendices 1, 2, and 4, arid will
coordinate enforcement responses against multi-Regional
violators. OECA will also provide guidance and assistance to the
Regions on enforcement-related issues, coordinate enforcement
actions with ARD and the Regions, provide legal and technical
support, help prepare legal packages, and coordinate enforcement
actions with the DOJ, when applicable. The QECA will review
copies of all administrative penalty orders and the
administrative consent agreements filed by the Regions. The OECA
will initiate a coordinated enforcement response action against a
utility with violations at power plants located in different
Regions. The OECA will work closely with the Regions and ARD on
these actions.
The OECA will prepare materials for filing or for referral
to DOJ. The OECA will coordinate with the Regions, ARD, and DOJ
on all civil judicial referrals. For Headquarters-led
Administrative Penalty Orders (APOs) and civil judicial
referrals, OECA attorneys will fulfill the role of the Agency’s
attorneys, preparing materials for filing or for referral to DOJ.
The OECA’s Criminal Investigation Division will investigate the
Headquarters-led criminal cases.
The Acid Rain Division is responsible for certain aspects of
program implementation, particularly for administering the
accounting provisions of the rules, issuing permits, and
participating in oversight of certain reporting procedures. ARD
will, in cooperation with OECA, generally identify potential
violations related to reporting requirements, allowance accounts,
and allowable emission rates. Within 30 days of identifying
potential violation., MD will notify the Regions and OECA and
provide all documentation on these violations. ARD will also
prepare and provide to OECA and each applicable Region a summary
of the units’ Allowance Tracking System CATS) account status no
later than 90 days after the end of any calendar year. In
addition, within 90 days after the end of a calendar year, ARD
will provide OECA with a list of utilities that exclusively rely
on SO 2 allowances as a compliance method so this information can
be used as a targeting tool to help assess compliance with other
regulations.
The EPA R.giona]. Offices are responsible for determining
compliance with the program (except for the accounting and

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3
reporting provisions of the Excess Emissions and CEMS rules) and
providing information on the violators to OECA. The Regions will
cake :he lead on enforcement actions for violations as indicated
in AppendiCes 1-4, except where nationally-coordinated
enforcement responses are appropriate against multi-Regional
violators, in which case headquarters would have the lead. Upon
receipt of permit applications, monitoring plans, notifications
of CEMS certifications, CEMS certification reports, and any
information (from field inspectors) on violations of CEMS
operation, maintenance, and calibration, the Regions will.
identify violations and violators. All violations must be
appropriately addressed.
En addition, in Phase II , the Regions may consult EPA
Headquarters if needed or when an approach to a particular
situation has not been developed in Phase I and listed in
Appendix 6 (Supplemental Enforcement Actions) . In addition, the
Regions will use all information provided by ARD on the status of
the ATS account to identify violators and initiate enforcement
actions. The Regions will notify AED about these actions.
The Regions will submit copies of all administrative penalty
orders, all signed consent agreements and penalty justification
documentation to the Air Enforcement Division (AED) of OECA
within 20 days of filing or entry to ensure a proper coordination
of the program’s enforcement. The Regions will refer civil
judicial actions to DOJ with copies to AED for review and
approval.
The Regions must assure that the regulated utilities are in
compliance with other relevant regulatory air programs and take
enforcement actions on all known violations of these programs
concurrently with enforcement responses against the acid rain
rule violations. In addition, the Regions will enter all
Significant Violators (and the subsequent enforcement actions)
into the Aerometric Information and Retrieval System (AIRS)
following the SV/T&A Guidance. AIRS will be used as a tracking
system for violations and enforcement responses. Acid rain
violations arid enforcement responses should be entered into the
system using the acid rain air program code.
Ths 8tat environmental agencies will actively assist the
Regions in any enforcement actions in Phase I and Phase II. In
Phase II, the Regions, at their discretion, may defer some
enforcement actions to the States if the States propose adequate
enforcement response plans.
All parties involved in the implementation, compliance, and
enforcement processes will direct inquiriea about coordinating
acid rain compliance and enforcement requirements with the
requirements of the NSPS and SIP programs to OECA.

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4
COMPLIANCE AND ENFORCEMENT RESPONSES
The Act provides EPA and its delegatees broad authority to
ur.cover violaci.ons, return a violator to compliance, and assess
penalties for violations. Section 114 of the Act delineates the
Agency’s authority to collect compliance information. The
Agency’s autnority to compel compliance and to assess penalties
is set forth in Section 113. While Section 120 of the Act
authorizes the assessment of noncompliance penalties equal to the
economic benefit of noncompliance, this authority provides less
flexibility than Section 113 remedies that confer the same
benefits. For this reason, Section 120 has not seen frequent
use. Various compliance and enforcement response options
available to the enforcing agency (i.e. States, EPA Regions, or
EPA Headquarters) are discussed below. Because selection of the
appropriate enforcement response option depends on the
circumstances surrounding a particular event 1 this guidance
describes the advantages and limitations of each form of
response.
The response options are presented here in order of
ascending stringency. The enforcing agency should select a
sanction commensurate to the seriousness or number of the
violations and the recalcitrance of the violator. Please note
that selection of one enforcement response does riot foreclose the
enforcing agency’s ability to initiate another response using a
different enforcement authority. Reliance on this guidance
should not replace existing case screening procedures.
Addressin Potential Violations
Because determinations of compliance with the acid rain
requirements will likely be founded on pervasive self-reporting
representative of the unit’s compliance status, reported data
indicating a violation will almost always be sufficient by itself
to support a finding of violation. On those rare occasions when
the overseeing agency decides that additional monitoring or
analysis is required to determine or confirm the violation,
Section 114 of the Act permits collection of any relevant
information that can be used to determine whether a person is in
violation of any provision of the Act. Overseeing agencies
should be mindful of the necessity of notifying sources of
violations at the earliest appropriate date.
Notification of discovered violations should riot be delayed
while the agency investigates other potential violations (see
discussion below). The following three information gathering
techniques are perhaps most useful.
Information Requelt
When the overseeing agency can precisely delineate the

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5
z f r ation it needs to complete its compliance determination,
send the suspeczed violator a “Section 114 letter” (or
Sta:e qui.valent) requiring the recioient to supply that
nfor’nac on by a specified deadline. In such Circumstances,
surgical use of potentially very broad Section 114 authority
recovers the necessary information quickly and without placing
ur.due burden on either the enforcing agency or the regulated
entity. A source’s failure to provide the requested information
constitutes a separate enforceable violation.
Site Inspection
Site inspections outside the normal inspection cycle should
be conducted when the overseeing agency cannot rely on
information submitted in response to a Section 114 letter to
complete its compliance determination. Circumstances in which a
site inspection might be appropriate include required stack tests
or agency review of records kept on site that are too voluminous
for the source reasonably to copy and submit.
Administrative Subpoena
Section 307(a) of the Act allows EPA to issue an
administrative subpoena requiring a person to appear, with
documents as needed, and give testimony under oath. The purpose
of the administrative subpoena is to gather any information and
documents related to the Act that EPA wishes to receive from a
person. The Agency need not have evidence of a violation
or have commenced an administrative proceeding before it uses
this investigatory tool. Administrative subpoenas are similar to
those issued by courts, but are issued by EPA under its own
authority. The administrative subpoena power could be very
useful in the acid rain program to get testimony and documents
from designated representatives. Administrative subpoenas should
only be used prior to the filing of a judicial complaint; after
that time, a deposition is the proper vehicle for obtaining
testimony prior to trial. EPA must pay subpoenaed persons the
same fees for time and mileage that the federal court would pay
in those circumstances. If a person fails to appear for an
administrative subpoena, the federal district court can,
following application by the United States, issue its own
subpoena to the person or hold that person in contempt.
Addressing Violations
Once the overseeing agency determines that a violation
occurred, it should send notice of its findings to the violator.
From that point forward, the enforcing agency has two goals: to
return the violator to compliance; and to recover a penalty that
removes the violator’s economic benefit of noncompliance and
serves as a credible deterrent to future violations. The Act
provides a number of options for each step of this process.

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r
Finding of Violation
There are several reasons the overseeing agency should
noti.fy the source of a unit’s violations. First, Section 113(a)
of the Act requires that the Administrator or his/her delegatee
notify a source that it has been found in violation of a SIP or
permit requirement at least 30 days before initiating an
enforcement action in either the administrative or a judicial
forum. The SV/T&A Guidance dictates that SIP and NSPS violations
by major sources must be addressed by either a Notice of
Violation (SIP violations) or a Finding of Violation (non-SIP
violations) by day 45. For the purpose of the non-permit acid
rain program violations, the use of an FOV is appropriate.
Notifying the source of its violations also shifts the
burden of proof for penalty purposes, allowing EPA to assert that
the source’s violations continue until the source can demonstrate
that it has achieved compliance. In addition, notifying the
source may alert it to the violations of which it was unaware and
allow the source to initiate compliance efforts at the earliest
possible date.
Whenever a violation is plain on the face of a source’s
report (i.e. required data is missing), the enforcing agency
should issue the FOV. Additional information relating to other
potential violations can be requested under Section 114 authority
as part of the FOV. Issuance of the FOV is a recommended
incremental step prerequisite to an adequate enforcement
response, and should not be considered the goal of the Agency’s
enforcement process. Following the issuance of the POV, the
enforcement process should proceed unless information gathered
after the issuance of the FOV indicates either that the Agency
lacks sufficient evidence of violation to support further action
or that no further action is warranted.
Field Citation
Section 113 Cd) (3) of the Act gives EPA authority to issue
field citations (PC) assessing penalties not to exceed $5,000 per
violation per day. While regulations and guidance implementing
this authority are not yet in place, field citations will most
likely be used to address minor violations that are few in number
and which can be easily detected, readily proved, and simply
corrected. Where a source has numerous minor violations or a
prior history of similar violations suggesting careless disregard
for the regulations, the Agency should rely on the more stringent
enforcement remedies discussed below.
Administrativ• Complianc. Ord.r
Section 113(a) authorizes the overseeing agency to order a
violator to return to compliance as expeditiously as possible,

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7
b ri rio event longer than one year after the date the order was
ss ed. Such orders should always specify the date by which
corpi.ance must be achieved and should, where applicable, include
ver f able interim milestones. A source’s failure to comply with
an admir istrative compliance order (ACO) is a separate
er.forceable violation. Issuance of an ACO is appropriate where
the actions necessary to achieve compliance are straightforward,
clearly can be completed in less than one year, and the agency
believes that the source will perform the required actions. An
important limitation of the administrative compliance order is
that it cannot assess a penalty.
Ad iniatrative Penalty Order
Administrative penalty orders (APO’s) under Section 113(d)
are the flip side of ACO’s. By means of an APO, the overseeing
agency can assess a penalty, but cannot order compliance.
Because APO’s and ACO’s complement one another, they are often
issued in tandem. A source’s failure to pay the assessed penalty
is a separate enforceable violation.
The Act limits EPA’s use of APO’s in two important respects.
The Agency cannot use an APO to address violations that occurred
more than one year before filing, or to address violations for
which the penalty (calculated in accordance with the Clean Air
Act Stationary Source Civil Penalty Policy) exceeds $200,000.
While both of these limitations can be waived by joint agreement
of the Administrator and the Attorney General, the limitations
remain in place at this writing. Counts which relate to
violations more than twelve months old should not be severed to
allow issuance of an APO. Likewise, counts should not be dropped
simply to bring the penalty assessment below $200,000. EPA
interprets the limitations to apply to all viable counts which
are known at the time of filing.
Not all cases with penalty amounts less than $200,000 and
with violations less than 12 months old are appropriate for
administrative enforcement. Please consult Michael Alushin and
John Rasnic’s October 29, 1991 memorandum titled “Guidance on
Choosing the Appropriate Forum in Clean Air Act Civil Enforcement
Actions” for a discussion of factors, such as evidence of
multiple or repeat violations, a need for court-supervised
injunctive relief, the necessity of extensive post-filing
discovery, and the existence of new legal issues, the presence of
which indicate that a case should be brought in the judicial,
rather than administrative, forum.
Civil Judicial Actions
Section 113(b) of the Act authorizes civil actions seeking
temporary or permanent injunctions and penalties of up to $25,000
per day for each violation. Any enforcement action involving

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3
,iolatioflS more than one year old, seeking a penalty in excess of
S2’JO,COO (where these l :nitat ons have not been waived) or
-.ecess::ating imposition of a compliance schedule requiring more
: an one year of activity on the part of the defendant, must be
filed as a civil action in accordance with Section 113(b) because
the rei:ef sought exceeds the authorities of Sections 113(a) and
(d) . The civil judicial (CJ) forum is appropriate when the
Agency believes it will need the court’s injunctive, discovery,
or contempt authorities, and when the case presents precedential
legal issues. Cases involving complex compliance issues are also
better suited to a judicial action as a compliance plan resolving
these issues can be negotiated as part of the consent decree
resolving the action, and will then be enforceable by the court.
Criminal Sanctions
Section 113(c) authorizes assessment of criminal sanctions
against any person (including a corporation or utility) who
knowingly violates a requirement or prohibition of Title IV.
Criminal sanctions may also apply if the violator knowingly
provides false information to the United States. Suspected
criminal activity should be reported either to the Regional
office of the Criminal Investigation Division or Regional
Criminal Enforcement Counsel. A separate civil action to address
civil violations may be pursued in the judicial or administrative
forum if immediate action is required to mitigate substantial
danger to human health or the environment or other specified
circumstances (see Procedures for Requesting and Obtaining
Approval of Parallel Proceedings, June 15, 1989)
Contractor Listing
Section 306 of the Act mandates that no federal agency
may enter into a contract with a person who is convicted of a
criminal violation of the Act which would require performance at
the facility where the violations occurred until such time as the
Administrator certifies that the violations giving rise to the
conviction have ceased. The Administrator may extend the
prohibition to other facilities owned and operated by the
convicted person. Regulations appearing at 40 C.F.R. Part 15
also provide the Administrator authority to prohibit contracts
with persona in continuing civil violation of the Act. Such
listing, whether mandatory or discretionary, can be a powerful
tool for leveraging compliance from a recalcitrant violator.
VIOLATIONS/EPA RESPONSE
This section presents a brief description of violations
under Parts 77, 75, and 72. For each rule, the violations are
ranked according to their importance to the acid rain program.
For instance, the two most significant violations of the CEMS
rule are monitor installation and data reporting. In the Excess

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9
:m ssion rule, the most important vLolations are related to
icwance holding and the payment of penaitLes for excess
e ssi.cr.s requirements and allowance holding.
The s ecific enforcement response applicable for each of the
categor:es are presented in Appendices 1-3. The enforcement
responses listed reflect the recommended minimum response within
each category of violation depending on the violation’s
significance. According to the recommended enforcement
responses, the most important violations may require an APO as a
minimum. An OV (or FOV for non-permit violations) should
precede such an APO. It is expected that any enforcement action
(except the Field Citation) involving a penalty will be
accompanied by an ACO.
The enforcement responses provide the enforcement
authorities with some flexibility. For certain minor violations,
the Region may decide not to pursue the enforcement action after
issuing an FOV if a subsequent investigation reveals that further
action is not warranted.
The enforcement agency should undertake any one or all of
the listed applicable actions, as appropriate, along with actions
in response to known violations of other air programs.
Since the enforcement staff is familiar with most of the
enforcement policies (Appendix 5), this guidance does not address
any details of these policies. A specific guidance on field
citations will be issued upon promulgation of the rule and will
be added to Appendix 5.
Excess Emissions Rule
The following.is a general description of possible
violations under the provisions of the acid rain rule Part 77 -
Excess Emissions. Three categories of potential violations are
outlined below. Appendix 1 presents the specific minimum
enforcement vehicles appropriate for the violations of the rule.
• Deductions versus Offsets
The designated representative (DR) must hold enough
allowances in the appropriate compliance subacçount to cover the
deductions to be made in accordance with paragraph (a) or
paragraph Cc) of section 77.5. An APO is a minimum level
enforcement response.
• Penalties for Excess Emissions
The owner or operator must pay to the Administrator within
60 days an excess emissions penalty, as calculated under
paragraph (b) of section 77.6. n all instances when the owner

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10
or operator fails to pay the penalty without demand, the EPA
5r .all either issue an APO or take judicial action.
• Offset Plans for SO,
The excess emission provisions of the Rule require the
designated representative for the unit to submit to the
Administrator a complete proposed offset plan to offset excess
emissions of sulfur dioxide. The offset plan shall be submitted
not later than 60 days after the end of any calendar year during
which excess emissions of sulfur dioxide occurred. Each day
after the 60 day deadline that the designated representative
fails to submit a complete proposed offset plan shall be a
separate violation of this part. The minimum enforcement
response is an APO.
CEMS Rule
The following is a general description of violations under
the provisions of the acid rain rule Part 75 Continuous Emission
Monitoring. Five categories of potential violations are outlined
below. Appendix 2 presents the specific minimum enforcement
responses appropriate for the violations in each of the four
categories.
• Monitoring
The monitoring provisions of the Rule require the owner or
operator of the affected facility to measure opacity, SO 2 ,
and CO 2 emissions for each affected unit by installing a CEMS
or approved alternative monitoring system along with the data
acquisition and handling system (DAMS) before the compliance
deadline. A minimum enforcement response for the violation of
this requirement is an APO.
• Reporting
The reporting provisions of the Rule require the designated
representative to submit all certification or recertification
notifications, certification or recertification applications,
monitoring plane, petitions for alternative monitoring systems,
notifications, electronic quarterly reports, and other
communications required by 40 CFR Part 75 to the Administrator.
Copies of the above requirements must be submitted to the
appropriate Regional Office of the U.S. Environmental Protection
Agency and appropriate State or local air pollution control
agency.
A minimum suitable enforcement response in this violation
category is an APO for failure to submit quarterly electronic
reports and a Field Citation for all other violations.

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11
• operation and Maintenance
The operation and maintenance provisions of the Rule
requ.re the owner or operator of an affected unit to certify,
operate, calibrate, and maintain each CEMS used under the acid
rain program according to the quality assurance and quality
control orocedures in 40 CFR Part 75, Appendix B. The owner or
operator also is required to ensure that all calibration gases
used to quality assure the operation of the instrumentation
required by 40 CFR Part 75 meets the definition in section 72.2
of this chapter.
The owner or operator must use the appropriate reference
test methods included in 40 CFR Part 60, Appendix A to conduct
monitoring system tests for certification or recertification of
CEMS and quality assurance and quality control procedures.
Additionally, if an out-of-control period occurs to a monitor or
CEMS, the owner or operator must take corrective action and
repeat the tests applicable to the ‘out-of-control parameter” as
described in 40 CFR Part 75, Appendix B.
In all cases where there is a violation, the Region shall
issue a Field Citation as a minimum.
• Missing Data Procedures
When the data for an affected unit has not been measured and
recorded, the Rule requires the owner or operator to provide
substitute data according to the missing data procedures in 40
CFR Part 75.
In all cases where there is a violation, the enforcing
agency shall at least issue a Field Citation.
• Recordkeeping
The recordkeeping provisions of the Rule require the owner
or operator to maintain for each affected unit a file of all
measurements, data, reports, and other information required by 40
CFR Part 75 at the source in a form suitable for inspection for
at least three (3) years from the date of each record.
Compliance determinations are made on the basis of a review of
the records at the production facility or company headquarters.
The owner or operator must also prepare and maintain a
monitoring plan, and update the monitoring plan whenever a change
has been made to either the certified CEMS or continuous opacity
monitoring system including the DAMS or in the flue gas handling
system that requires recertification.
Generally, recordkeeping violations will be addressed
through the use of a Field Citation, as a minimum, issued by the

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12
Region with responsibility for the plant. In instances where the
nsDector cannot verify the information in the quarterly report,
or t e company has changed its recordkeeping procedures without
informing EPA, the Region will take enforcement action after
consultation with OECA and in accordance with this guidance.
Permit Rule
The following is a general description of possible
violations under the provisions of the acid rain rule Part 72
Permits and minimum penalties for these violations. Five
categories of potential violations are outlined below. Appendix
3 summarizes the discussion that follows. Unless otherwise
stated, actions are pursued by the Regions (or States in Phase
II, if the Regions delegate the responsibility)
• Emission Limits
For this category of violations the minimum acceptable
enforcement action will be an APO, but depending on the
circumstances and past record, a more serious enforcement action
(CJ, criminal) may be appropriate. Additionally, for the failure
to meet the required SO 2 reduction, allowances will be deducted
(based on the formula in section 72.42(f) (1) (i) (B)) from the
unit’s compliance subaccount for the year of the violation.
• Permit Requirements
This category contains requirements for retired units and
general permit requirements. If a DR does not follow the
procedures as required by the rule for permit modifications,
application of fast-track modifications or administrative permit
amendments, then the permitting authority will first send a
letter to the DR requesting further information. If the DR does
not respond to the letter, then the request will be denied. For
violations other than record.keeping or procedural violations an
ACO, APO, or CJ (preceded by an NOV) may be needed.
• Designated Representative
This category of potential violations deals primarily with
the certification statements and complete permit application
submissions required of the DR. Where the required submissions
are incomplete on the deadline (e.g., not signed by the DR), ARD
should send a letter to the DR requesting that the submitted
document be completed and resubmitted within 30 days. If the
requested information is not resubmitted, ARD will deny the acid
rain permit application or affected portion of the permit
application, and notify OECA and the applicable Region for an
appropriate enforcement response.

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13
in cases where a source has more than one DR, or does riot
have a common DR as required under a Phase ii repowering
exte sLOfl plan until the existing unit is permanently retired
under :ne plan, the enforcement response may range from an
ACO/APO (preceded by an NOV) to CJ depending on the circumstances
of the •, o1ac:on and past record of the DR.
• Required Methods, Conditions, and Procedures
If a unit does riot meet the conditions to be considered in a
reduced utilization plan, then the request will be denied by ARD.
If a source does not properly activate or terminate a compliance
option, then the activation or termination may be denied. For
improper termination of a repowering plan, the enforcement
response should range from an FC through ACO, APO to CJ depending
on the circumstances of the violation and past record of the DR.
For the other violations in this category, the enforcement
response may range from an ACO, APO, to CJ.
• Incomplete Submissions/Submission Deadline
The Rule requires complete submission of information as
specified in the various subparts. If, for example, a compliance
plan is not complete as specified, a letter should be sent to the
DR requesting any additional information necessary (see section
72.61) . The DR shall submit the additional information within 30
days, or request an extension for submitting the information. If
the DR does not respond within 30 days, and an extension for
submission is not granted, that compliance plan option of the
acid rain permit application will be disapproved. The same is
true for the whole acid rain permit application. If the general
application is not complete, and the DR does not respond to a
request for additional information, then the entire acid rain
permit may be denied. If the source operates a unit without the
proper permit or permit application, then the enforcement
response may range from an ACO, APO to CJ.
For reporting violations listed in this category, the
minimum enforcement response is a Field Citation.
For permit applications, compliance options, dispatch system
identifications, retired unit exemptions, and repowering plans,
the rule requires that submissions be made by certain deadlines.
If a submission is made prior to the deadline, but is not
complete, then the procedure mentioned in the Incomplete
Submission section will be followed. If a submission of the
required information is not made by the deadline, the request may
be denied and the enforcement response ranges from an ACO, APO to
CJ.
For new or retired units that are no longer exempted, or for
the commencement of operation, removal from operation, or

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14
deci.siOfl to terminate repowering extensLon plans, Eailure to meet
e submission deadline will result in an ACO, APO to CJ.
Q, Rule (to be added)

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APPENDIX 1
ACID RAIN COMPLIANCE/ENFORCEMENT RESPONSE
EXCESS EMISSIONS RULE
REGULATION
VIOLATED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
EXCE8S EMI$BXON
Deductions of
allowances to offset
excess emissions of
sulfur dioxide -
section 77.5
Hold enough allowances in the
appropriate compliance subaccount to
cover the deductions to be made in
accordance with paragraph (a) or
paragraph (c) of section 77.5
Administrative
Penalty Order
Civil Judicial
ORE/AED
Penalties for excess
emissions of sulfur
dioxide and nitrogen
dioxides - section
77.6
Pay, without demand, an excess
emissions penalty, as calculated under
paragraph (b) of section 77.6
Administrative
Penalty Order
Civil Judicial
ORE/AED
Offset plans for excess
emissions of sulfur
dioxide - section 77.3
Submit to the Administrator a complete
proposed offset plan to offset excess
emissions, not later than 60 days
after the end of any calendar year
during which an affected unit had
excess emissions of sulfur dioxide
Administrative
Penalty Order
Civil Judicial
ORE/AED
.

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APPENDIX 2
ACID RAIN COMPLIANCE/ENFORCEMENT RESPONSE
CEMS RULE
UGUL ATI0N
VIOLATED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
CONTINUOUS EMISSION
MONITORING
Monitoring Require nei .
75.10
Install a SO 2 CEMS with DAHS and a flow
monitor, NO CEMS with DAHS and a
diluent monitor, CO 2 CEMS with DAHS,
and a COMS with DAHS
Administrative
Penalty Order
Civil Judicial
Regions
Reporting Requirements
75.64
Submit electronic quarterly reports to
the Administrator
Administrative
Penalty Order
Civil Judicial
ORE/AED
75.60
75.61
75.62
75.63
Submit all certification or
recertification notifications,
certifications or recertification
applications, monitoring plans,
petitions for alternative monitoring
systems, and other communications
required to the Administrator
Submit copies of certification or
recertification notification,
certification or recertification
applications and monitoring plans to
the appropriate Regional Office of U.S.
EPA and appropriate State or local air
pollution control agency
Field Citation
Administrative
Compliance
Order
Administrative
Penalty Order
Regions
75.65
Report excess emissions of
opacity to
Field Citation
States
the applicable State or local
air
Administrative
pollution control agency, in a format
specified by applicable State or local
Compliance
Order
air pollution control agency
Administrative
Penalty Order
1

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2
REGULATION
VIOLATED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
Operation &
Maintenance
Requirements
75.20
75.22
Certify a SO 2 CEMS with DAI-IS and a flow
monitor, NO 1 CEMS with DAHS and a
diluent monitor, CO 2 CEMS with DAHS,
and a COMS with DAHS
Field Citation
Administrative
Penalty Order
Civil Judicial
Regions
75.20
75.21
Operate; and maintain a SO 2 CEMS with
DAHS and a flow monitor, NO 1 CEMS with
DAES and a diluent monitor, CO 2 CEMS
with DAHS, and a COMS with DAHS.
Field Citation
Administrative
Compliance
Order
Adininistrat ive
Penalty Order
Civil Judicial
Regions/States
75.24
Take corrective action and repeat the
tests applicable to the “out-of-control
parameter as described in Appendix B
Field Citation
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States
Missing Data
Substitution Procedures
75.30
Except as provided in
section 75.34
Provide Bubstitute data for each
affected unit according to missing data
procedures in this subpart whenever
unit combusta any fuel and a valid hour
of SO 2 concentration data (ppm), or
flow data (scfh), or NO 1 emission rate
data (lb/mm BTU) has not been measured
and recorded for an affected unit
Field Citation
Administrative
Compliance
Order
Administrative
Penalty Order
Regions/States

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3
REGULATION
VIOLATED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
Recordkeep i ng
Requirements
75.50
Maintain for each affected unit, a file
of all measurements, data, reports, and
other information required at source in
a form suitable for inspection for at
least three (3) years from the date of
each record
Field Citation
Administrative
Compliance
Order
Administrative
Penalty Order
Regions/States
.
Monitoring plane
75.53
Prepare and maintain a monitoring plan
Update the monitoring plan whenever a
change has been made to either the
certified CEMS or COMS including the
DANS or in the flue gas handling
system, that requires recertification
Field Citation
Administrative
Compliance
Order
Administrative
Penalty Order
Regior s/States

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APPENDIX 3
ACID RAIN COMPLIANCE/ENFORCEMENT RESPONSE
PERMIT RULE
REGULATION
VIOLATED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
PERMITS REGULATION
Emission Limits
72.42(f) (1) (i)
.
Demonstration of at least 90 percent
reduction of SO 2 at a control unit
governed by an approved Phase I
extension plan.
Deduct
Allowances
Administrative
Penalty Order
Civil Judicial
Regions/States
72.42(t) (1) (ii)
Meet NO 1 emission limitation.
Administrative
Penalty Order
Civil Judicial
Regions/States
72.44
Not transfer allocated allowances to
any account other than the unit
accounts of other units at the same
source as the repowering unit.
Administrative
Penalty Order
Civil Judicial
Regions/States
Permit Requirements
72.8(d) (1)
Not emit any SO 2 and NO 1 during
exempted period for retired unit.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States
72.90
Submit annual compliance certification
Administrative
Compliance
Order
Administ rat ive
Penalty Order
Civil Judicial
Regions/States

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2
REGULATION
VIOLATED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
72.8
Not resume operation unless the DR
submits an Acid Rain permit
application for the unit not less than
24 months prior to operation.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil judicial
Regions/States
72.9, 72.30
Have an Acid Rain permit or permit
application, and operate in accordance
with the permit or permit application.
Administrative
Compliance
Order
Civil Judicial
Regions/States
72.80, 72.81, 72.82,
72.83
Retain the required documents for 5
years unless otherwise specified.
Follow the proper procedures as
required for permit modifications.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States
Designated
Representative
72.20, 72.21, 72.23
Signed certifications by the
authorized DR for all submissions.
Serve notice to the owners/operators
of the source of any written
determinations by the Administrator or
permitting authority.
Revised certificate of representation
following changes in owners,
operators, DR or alternative DR.
Administrative
Penalty Order
Administrative
Compliance
Order
Civil Judicial
Regions/States
72.44 Have common DR for units governed by Administrative Regions/States
the plan under paragraph (b) (2) of Compliance
this section (Phase II repowering Order
extension) until unit is permanently Administrative
retired under the plan. Penalty Order
Civil Judicial

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3
REGULATION
VIOL&TED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
Required Methods,
Condition and
Procedures
72.7
For each exempted New Unit, determine
sulfur content of the fuel by
specified method and retain records as
required.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States
72.40, 72.41, 72.43,
72.44
Proper activation of a conditionally
approved compliance option.
Proper termination of a compliance
option.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States
72.43
Meet requirements to be considered as
reduced utilization plan that has been
approved by the overseeing agency.
Administrative
Penalty Order
Regions/States
Incomplete
Submiss jon/Submission
Deadi inea
72.7, 72.8
Complete Acid Rain permit when new
unit is no longer exempted.
Retired units exemption petition.
Administrative
Compliance
Order
Administ rat ive
Penalty Order
Civil Judicial
Regions/States
72.9, 72.30, 72.40,
72.41, 72.42, 72.43,
72.44
Complete Acid Rain permit application
or permit reapplication including
compliance Options.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States

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4
REGULA’!flON
VIOLkTED REQUIREMENT
ENFORCEMENT
RESPONSE
ENFORCEMENT
LEAD
72.33
Complete identification of dispatch
system, or petition to treat as the
dispatch system for an owner’s portion
of the unit, the dispatch system of
another unit. Submission of required
reports for the dispatch system.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States
72.94
Repowering extension plan design and
engineering contract requirements,
removal from operation, commencement
of operation, or decision to
terminate.
Administrative
Compliance
Order
Administrative
Penalty Order
Civil Judicial
Regions/States

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APPENDIX 4
ACID RAIN NO Rule

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APPENDIX 5
EPA ENFORCEMENT GUIDANCE DOCUMENTS

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Index of Guidances Relevant to Initiation of Enforcement Actions
JN THE GENERAL ENFORCEMENT POL.ICY COMPENDIUM
REFERRAL PROCESS
Memorandum of Understanding Between DOJ arid EPA (GM-3)
Policy on Invoking Section 9 of the DOll EPA Memorandum of
Understanding (GM-63)
Draft DOJ/EPA Litigation Procedures (GM-8)
Process for Conducting Pre-Referral Settlement Negotiations on
Civil Enforcement Cases (GM—73)
Model Litigation Report Outline and Guidance (GM-48)
General Operating Procedures for EPA’s Civil Enforcement Program
(GM— 12)
Implementing Nationally Managed or Coordinated Enforcement
Actions (GM—35)
Headquarters Review and Tracking of Civil Referrals (GX—26)
Expansion of Direct Referral of Case. to DO 7 (GM —69)
Implementation of Direct Referral for Civil Cases (GX-18)
00.7 Procedur. for Returning Certain Unfil.d Cases to EPA for
Further Processing (GX-70)
Hold Action Requests (GM-90)
PUALTIU
Policy on Civil Penalties (GM—21)
A Framework for Statute-Specific Approach.. to Penalty
Assessments (GX-22)
Documenting Penalty Calculation, and Justifications in WPA
Enforcement Actions (GM—BE)
Remittance of Fines and Civil Penalties (GX —38)

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Guidance for Calculating the Economic Benefit of Noncompliance
for a Civil Penalty Assessment (GM—33)
Division of Penalties with State and Local Governments (GM-45)
Guidance on Determining a Violator’s Ability to Pay a Civil
Penalty (GM—56)
Policy on the Use of Supplemental Enforcement Projects in EPA
Settlements (GM—77)
Guidance on Calculating After Tax Net Present value of
Alternative Payments (GM-51)
Use of Stipulated Penalties in EPA Settlement Agreements (GM-75)
Procedures for Assessing Stipulated Penalties (GM—67)
CONTRACTOR LISTING
Implementation of Mandatory Contractor Listing (GM-32)
Guidance on Implementing the Discretionary Contractor Listing
Program (GM-53)
SETTLEMENTS
Form of Settlement in Civil Judicial Cases (GM—42)
Guidance on the Use of Alternative Dispute Resolution in EPA
Enforcement Cases (GM-62)
Enforcement Settlement Negotiations (GX—52)
Multi Media Settlements of Enforcement Cases (G*80)
Interia Policy on the Inclusion of Pollution Prevention and
Recycling Provision in Enforcement S.ttl.ments (GX-79
Final EPA Policy on the Inclusion of Environmental Auditing
Provisions in Enforcement Settlements (GX-52)
Guidance for Drafting Judicial Consent Decrees (GK—17)
Procedures for Modifying Judicial Consent Decrees (GX-68)

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PUJ.LL L P*0C3881N0
Revised EPA Guidance for Parallel Proceedings (GM-83)
Procedures for Recp.zesting and Obtaining Approval of Parallel
Proceedings (GM—82)
Supplement to Parallel Proceedings Guidance and Procedures for
Requesting and Obtaining Approval of Parallel Proceedings (GM-84)
Air-Soecific Documents
Timely and Appropriate Enforcement Response to Significant Air
Pollution Violators — John Seitz and Robert Van Heuvelen,
February 7, 1992
Guidance on Choosing the Appropriate Forum in Clean Air Act Civil
Enforcement Actions — Michael S. Alushin and John Rasnic, October
29, 1991
Clean Air Act Stationary Source. Civil Penalty Policy - William
G. Rosenberg and Edward E. Reich, October 25, 1991.

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APPENDIX 6
ACID RAIN SUPPLEMENTAL ENFORCEMENT RESPONSES

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ATTACHMENT 2
ACID RAIN ADDENDUM TO THE
TIMELY AND APPROPRIATE ENFORCEMENT RESPONSE TO
SIGNIFICANT AIR POLLUTION VIOLATORS

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Acid Rain Addendum to the Timely and Appropriate Enforcement
Response to Significant Air Pollutlon Violators
I. SCOPE & GUIDANCE APPLICABILITY
guidance is an addendum to the “ Timely and A oroDriate
f rcement ResDonse to Sianificant Air PollutlOn Violators” ,
issued n February 7, 1992 and is applicable to v olators of the
Acid Ra. .r. ?: Dgram (40 CFR Parts 72, 75, and 77) . This guidance
lays ouc the definition of “significant violator” for the Acid
Rain Program since sources covered by the Acid Rain Program were
not included in the definition of “significant violator” in the
February 7, 1992 guidance. For areas not covered in this addendum
(i.e., timelines for enforcement actions, etc.), refer to the
“ Timely arid Ao ro riate Enforcement Res orise to Sianificant Air
Pollution Violators. ”
The Acid Rain addendum is an initial step towards defining a
significant violator of the acid rain program. It is expected
that the addendum will be modified in future years to reflect
experiences in the implementation and evolution of the acid rain
program.
II. SIGNIFICANT VIOLATOR (SV) DEFINITION
Agencies shall deem a source to be a SV if it is a “Major”
source (as defined by the CAAA) and it violates one or more of the
following requirements:
A. install, certify, operate and maintain required CEMS/COMS
system (including DAHS) or approved alternative,
40 CFR §75.10(a) & (b);
B. have an Acid Rain Permit, §72.9 (a) (2.) (ii);
C. hold allowances, as of the allowance transfer deadline,
in the unit’s compliance subaccount, not less than the
total annual emissions of sulfur dioxide for the previous
calendar year from the unit §72.9(c) (1) (i);
D. submit a cou lete proposed offset plan, §77.3;
E. gn vtit electronic quarterly reports to the administrator,
§75.64;
F. for units governed by a Phase I extension plan,
demonstrate at least 90% reduction of S02 in 1997,
1998, or 1999, §72.42(f) (1) Ci);
G. ensure that all certification tests for the required
CENS/COMS are completed not later than the specified
dates, §75.4;
H. any provision of either a Federal Consent Decree or
Federal Administrative Order resolvina Clean Air Act
violation(s) ;

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2
. any su stanc re provision of a State Judicial Order r a
State A n .s::a: ie Order wh cn was :ssued for an
underlying c .d Ra n •;1a: n.
-:-e following sec:.or.s are :ne saitie as in :he “ Ti e1’, and
ace r.for r eri: Resoor.se :o Si n .fi:pnt Air Pollution
:i: r ’ . :ssued on February 7, :992 ( V/ThA poficy):
?RCCESSING CF SIGNIFICANT VIOLATORS
A r: 1ELINEs FOR INFORCE ENT ACTON
V. PENALTIES
‘11. CONSULTATION AND DATA TRANSFER
The following ranking criteria may be used in conjunction
wi:h Appendix A to the SV/T&A policy:
Criteria Environmental Weight
Factor/Violation
1. Failure to have an acid rain permit 10
2. Failure to submit a complete proposed offset 10
plan or pay without demand, an excess emissions
penalty
3. F i1ure to install, certify operate and 10
maintain required C CS/COMS
4. Failure to submit electronic quarterly reports 5
or complete all certification tests for the
required C 4S/COMS by the specified dates
5. Failure to hold allowances as of the 5
transfer deadline
6. Failure to demonstrate at least 90% reduction S
of S02 for units governed by a Phase £
extension plan

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F

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—9—
E’. Section 114: Inspection, Entry and Monitoring
1. Guidance for Section 114(d) of the Clean 12/02/77
Air Act
2. Regional Office Criteria for Neutral 05/13/81
Inspections of Stationary Sources
3. Liability Agreement Between EPA Contractors 08/17/81
and Stationary Air Pollution Sources
4. Execution of Confidentiality Agreements 12/15/83
Under Section 114 of the Clean Air Act
5. Use of Contractors to Conduct Clean Air Act 02/22/84
Inspections After the Supreme Court’s
Decision in United States v. Stauffer
Chemical Co. , 464 U.S. 165 (1984)
6. Final Guidance on Use of Unannounced 09/06/84
Inspections
7. Transmittal of Reissued OAQPS CEMs Policy 03/31/88
8. Compliance Monitoring Strategy for FY89 03/31/88
Related documents
a. Guidance: Enforcement Applications of 04/22/86
Continuous Emissions Monitoring System Data
-- filed at Part E, document #25

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I

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Guidance for Section 114(d) of the Clean Air Act
(12/02/77)
File at Part F, Docunient #1

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*I D Sl
i. ’ —
7..) 4 ____ UNITED STATES ENViRONMENTAL PROTECTION AGENCY
‘ / WASHINGTON. D.C. 20460
DEC 2 fl
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: Guidance for Section 114(d) of the CAA
FROM: Director, Division of Stationary Source Enforcement
TO: Enforcement Division Directors, Regions I—X
Surveillance and Analysis Division Directors,
Regions I—X
Air and Hazardous Materials Division Directors,
Regions I, 111-X
Facilities Technology Division Director, Region II
Attached is the final guidance package on Section 114(d)
of the CAA. This guidance incorpót ates comments solicited
by DSSE in my September 9 memorandum, It should be remembered
that this guideline only covers the provision for notifying
the States pursuant to the requirement. Even though most
regions are currently practicing some form of this guideline,
it should be implemented immediately.
Guidance on suspension of such notification should EPA
believe that the State agency is informing the subject
facilities’ is forthcoming. Any occurrences of this nature
should be brought to the attention of the DSSE technical
advisor, for your region.
Attached under separate cover are’ the regional comments
on the interim guidance and DSSE’s response. I would like
tO thank all those participating for their comments.
Edward E. Reich
cc:, Richard’ Wilson
Walt Barber
Richard Rhoads
Donald Goodwin

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Guidance on the Use of Section 114(d):
Notice to the State in Case of Certain Inspections.
Introduction
The purpose of this guideline is to provide general
policy on implementing the requirements of Sec. 114(d) for
enforcement purposes. This guideline only covers the pro-
visions of notification to the State agency of an EPA entry,
inspection or monitoring. Future guidance will be provided
for suspension of this noticeshould EPA believe that the
State agency is informing subject facilities.
This guideline should be used in conjunction with S.12
‘General Policy on the Use of Section 114 Authority for
Enforcement Purposes’.
Requirements of S114(d )
New subsection 114(d) adds an additional requirement to
the process of carrying out. Section 1l4(a)(2) of the CAA.
Section l14(a)(2) establishes right of entry for certain
purposes and the right of the Administrator to sample emissions. -
Section 114(d) provides that the Administrator (or his
representatives*) shall provide the State air pollution
control agency with ‘reasonable prior notice’ before carrying
out Section 114(a)(2). It also requires EPA to indicate
the purpose of the activity.
Implementation
The Regional office should first establish .contact with
the directors of State agencies to formulate a mutually
agreed upon procedure for implementation of this new
requirement. This procedure should include:
Name of person(s) to be notified
Means .of notification (telephone or written)
Lead timeprior to any EPA field investigation
(reasonable prior notice)
Policy of notifying the state of unscheduled inspections
Extent of the stated purpose of the visit.
*The term ‘representatives’ includes specific regional office
and headquarters personnel and contractors with credentials
under EPA contract. . .

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In establishing these procedures with the State agencies
it is suggested that the following guidance be implemented..
Reasonable prior notice is interpreted as an official
notification to the State agency that EPA is planning to
conduct a surveillance action at a source and the purpose of
that activity. It is recommended that all notifications be
made within the 30 day period prior to the field activity;
with 48 hours being the minimum notification perioa under
normal circumstances. This is to provide sufficient travel
time for EPA personnel and State personnel should the state
choose to attend. An exception to the 48 hour notice would
be a Section 303 situation where an emergency requires
immediate attention. In such cases, the State agency should
immediately be informed by phone that an action is needed.
In cases where the region practices the policy of notifying
states of inspections 2—3 months in advance with a request that
they be contacted if state personnel wish to accompany them, a
confirmation of only those state accompanied inspections should
be made.. A phone call a few days before the inspection is
sufficient. An effort should also be made to minimize
changes in this advanced notification schedule.
The means of notifying the States can be in the form of
written or oral comm inication. A record of all written or
oral notlficationsshould be kept. This should include,a
record of unscheduled inspections and Section’303 actions.
The record of the written or oral notification should consist
of:
(1) name and location of subject facility
(2) date and approximate time of the activity
(3) Regional office contact (phone number, etc.)
(4) reason for the visit
(5) name.of State person contacted
(6) date and time of notification
Each office should have a central file containing records
of all notifications should a request for a list of all
notifications be made. It is not necessary for the State
to approve the inspection before EPA proceeds.
As stated in the amendments, all sources covered by an
approved.SIP or those under a State 113(d) order are subject
to these requirements. Surveillance of those sources that
are subject to EPA. promulgated regulations do not require
advance notice by EPA. In reality, few sources will fall.
into this latter category. If the region adheres to EPA
policy, all emission points at a source should be inspected...
In doing so it is likely that certain points will be subject
to SIP regulations; therefore, subject to the notification
requirements. it is recommended that States be notified of
all EPA field actions, including those concerning non—state

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regulations unless good cause exists not to do so. Written
inquiries to sources under Section 114(a)(l) do not require
advance notice to the State.
Enforcement Procedures
It is the intent of this additional section to increase
State/EPA cooperation and, as such, it must be fully complied
with. However, as stated in Sec. 114(d) (2), failure by EPA
to notify the State of any entry, inspection or monitoring
will not prejudice any case involving information obtained
during such an activity and will not constitute grounds for
objection by the source.

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2

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ll O ffz Ük k ©
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- -
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_
-.-.

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Regional Office Criteria for Neutral Inspections
of Stationary Sources
(05/13/81)
File at Part F, Document #2

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, 1O SP4t
UNITED STATES ENViRONMENTAL PROTECTION AGENCY
WASNINGTON. D.C. 204&3
\,
KAY 131901
OrF CE cc ENFORCtYLP T
MEMORANDUM
SUBJECT: Regional Office Criteria for Neutral Inspections of
Stationary Sources———Amended Guidance
FROM: Director
Division of Stationary Source Enforcement
TO: Enforcement Division Directots
Regions I—X
Surveillance & Analysis Division Directors
Regions I—X
Air & Hazardous Materials Division Director
Region II
We have reviewed the neutral. inspection schemes voluntarily
submitted to us by several Regional Offices in response to the
general guidance we issued on October 29, 1980. While the Regional
criteria we have examined so far seem to track that general
guidance, there are some problems remaining in these Regional
schemes. This memorandum is intended to isolate and clarify these
problems, as well as to make some amendments to the general
guidance as suggested by some of the Regional drafts.
The. purpose of having a neutral inspection scheme on file in
each Regional Office is to enable the Agency to justify to a court
a request for a warrant to conduct a compliance inspection in the
absence of evidence that a.particular source is violatinq the Clean
Air Act. This type of inspection is usually conducted as part of
each Region’s annual Overview Inspection Program, but might also be
applicable to routine inspections of NESHAPS sources, NSPS sources,
and any other sources for which the Agency has primary enforcement
responsibility (e.g., PSD sources or sources subject to New Source
Review, where such programs have not been delegated to the States)
and which must be inspected annually.
One of the questions raised by our general guidance was the
characterization of the critecia for selection of sources to be
inspected. Several factors were listed as Optional Criteria. By
this description, we did not meanto infer that these factors could
be ignored, ‘in the selection process. Rather, we intended that a
source to be inspected must meet not only the criteria labeled
Mandatory, but also at least one of those termed Optional. To take
the selection ‘process through only the Mandatory Criteria would
leave too much latitude in source selection in violation of
principics enunciated by the Suprc ric Court in the 1978 2’L
— I.,_. — — — —— a. - - —

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—2—
relabel the selection criteria as Primary and Secondary, with both
sets of criteria to be applied to each source chosen for
iQspection. Every source inspected must meet the Primacy Criteria
and at least one of the Secondary Criteria. Authorization for
inspection of NESHAPS sources, which had been set forth separately,
is now subsumed in this characterization. At the suggestion of
Regional staff, we have also expanded the list of Secondary
Criteria. Additionally, in order to account for the presence of
fugitive emissions, we have amended Secondary Criteria !7 to
include sources with process , equipment requiring particularly cood
operation and maintenance procedures in order to maintain
compliance.
It should be remembered that the purpose of a written neutral
inspection scheme is to provide authorization for routine
compliance inspections. Any source not covered in the sche e
cannot be inspected, absent suspicion of a violation of the Clean
Air Act. Therefore, an additional problem in some of the Regional
drafts is the utilization of source categories to select sources
for inspection. The drawback in this system is that a Region might
wish to inspect a source long overdue for a routine inspection but
be unable to do so because the source is in a category not covered
by the neutral inspection scheme. Th ce is also the possibility
that categorization will exclude various significant lead., NSPS, or
NESHAPS sources.
Please review your neutral inspection sche mes once again to
see if they fit within the attached amended general guidance. Feel
free to call Mark Silvermintz of my staff at FTS 755—2570 if you
have any questions. S
cL -c: $/ L4,>k.
E wacd E. Reich
Attachment
cc: Richard 0. ‘ ilson
Acting Assistant Administrator
for Enforcement
David E. Menotti
Associate General Counsel
for Air, Noise, and Radiation

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CRITERIA FOR SELECTION OF STATIONARY SOURCES
FOR ROUTINE COMPLIANCE INSPECTIONS
I. Sources subject to State Implementation Plans (including
provisions approved or promulgated under 40 CFR 551.18 and
Parts C and D of Title I of the Clean Air Act), or Sill of
-the Act (NSPS) or S112 of the Act (NESHAPS).
A. Primacy Criteria
1. In selecting a stationary source for a compliance
inspection, the source should be one which:
a. Emits an air pollutant subject to the Clean Air Act
and the regulations promulgated thereunder, and
for which:
1. The actual emissions or potential emissions
while operating at design capacity with
pollution controls are equal to or exceed
100 tons per year of the regulated air
pollutant (Class Al sources), or
2. The uncontrolled emissions while operating
at design capacity are equal to or exceed
l0O tons per year of the regulated air
pollutant (Class A2 sources); or
b. Emits less than 100 tons per year of a
regulated air pollutant in the absence
of pollution controls (Class B sources)
and which may contcibute to nonattainment
of an ambient air quality standard for that
pollutant; or
c. Emits lead; or
d. Is subject to a NSPS or NESHAPS.
2. The source should also be one which:
a. Was reported within the preceding
year by a State or local agency
as being in compliance with
applicable emission limits; or
b. Was either not inspected by a State
or local agency or by EPA during the
preceding year, or was subject to an
inconclusive inspection during the
preceding year.

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3. Secondary Criteria
The following criteria (at least one)
should be used in selecting facilities
for inspection from among those which meet
the Primary Criteria (and may be used by
each Regional Office in any order it chooses
and in a manner best suited to its resources
workload, manpower, and area of geographic
responsibility):
1. Source emits a criteria pollutant and is located in
a ponattainment area for that pollutant, or in an
area unclassified for such pollutant;
2. Source has a significant impact upon local ambient
air quality or emits a hazardous air pollutant;
3. Source is located in an urban area where there is
greatest exposure of population;
4. Source has a history of violations and now is
reported as in compliance;
5. Source has had frequent changes in
compliance status;
6. Source has undergone process changes subsequent to
its most recent inspection or has commenced
initial operation;
7. Source requires particularly good operation and
maintenance of pollution control or process
equipment in order to maintain compliance;
8. Source is located near other sources which have
been scheduled for inspection at approximately
the same time in accordance with this Criteria
for Selection of Stationary Sources for Routine
Compliance Inspections or under probable cause
to believe the source isin violation of the
Clean Air Act;
9. Source was subject to a prior compliance test,
inspection or information request which produced.
inconclusive data concerning its compliance
status.

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110 ff
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Liability Agreement Between EPA Contractors
and Stationary Air Pollution Sources
(07/17/81)
File at Part F, Document #3

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\,uu ø, WASHINGTON. D.C. 20460
OVrICEOP
MEMORANDUM OtI.t AL COUNUL
SUBJECT: Liability Agreei tents Between EPA Contractors
and Stationary Air Pollution Sources
FROM: Ge Associate General Counsel
Cr and General Administration Division
(A 1 j134)
TOr EdVward Reich, irector
Division of Stationary Source Enforcement (EN—341)
Your memorandum of September 23, 1980, raises several issues
for our consideration concerning liability agreements between EPA
contractors and stationary air pollution sources (hereinafter
sources). You ask what the legal and practical effects are on
EPA of a ‘hold harmless agreement between a contractor engaged
in comp1iaT ce inspections as an EP representative under section
114. of —the Clears Air Act and a sources Such an agreement would
in einnify the source for payments it makes for injuries to employ-
ees of the contractor. Additionally, you inquire whether amounts
paid under such agreements could exhaust contract funds allocated
to the inspection task itself. EPA has determined previously
that EPA officers and employees conducting inspections may not
enter into such agreements since they are not equivalent to
private visitors. (See the November 8, 1972 memorandum captioned
‘Visitors’ Releases and Hold Harmless Agreements as a Condition
to Entry of EPA Employees on Industrial Faci1ities. )
Discussion
A ‘hold harmless’ agreement is a contract of indemnification.
As used in the context you describe, it obligates a contractor to
reimburse a source for the source’s payments of contractor employee
injury claims where the employee’s injury is caused by the negli-
gence or breach of a duty of care by the source. The practical
effect of such an agreement is to shift financial liability to
the contractor for a source’s negligence or breach of duty. The
costa associated with such an assumption of liability, if allowed
as àosts under the contract, raise both legal and policy concerns.

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A.. Costs Generated From Hold Harm1ess Agreements Could Expand
Gove ñmental Financial Liability
Costs that are or may be incurred by a contractor when it
enteh into a whold harmless agreement can take the form of
either increased contractor insurance costs, or the. additional
costs of the contractor’s indemnification of the source’s expendi-
tures where there is an absence of insurance coverage. If a
contractor entering into such agreements does so with EPA approval
(by determining these costs to be allowable under the contract),
EPA will ultimately bear the financial burdefl of the shift of
liability since EPA will pay the costs of the increased premium
or will reimburse the contractor under the contract for its
indemnification payment. EPA will also have to bear legal costs
associated with any litigation. In this context there is no
reason for EPA to treat its contractor representatives any differ-
ently than EPA officers and employees regarding their entering
into •hold harmless agreements. (See November 8, 1972, memorandum
referenced above.)
1. Uff Harmless Agreements Could tncrease Contractor Opera-
tional Costs
The assumption by,.a contractor of financial liability under
a ‘hold harmless agreement is contrary to EPA s interest in
minimizing,-operational costs. The typical government contract
requires the contractor to secure workmen’s compensation and
occupational disease insurance for the protection of its employees
from job related injuries. This insurance requirment effectively
limits the amount of the Government’s contractual liability for
such injuries.. Where the contractor is enrolled in a workmen’s
compensation plan the employee is generally precluded from seeking
recovery from the contractor outside the workmen’s compensation
plan. The amounts received by the injured employee from the
contractor is limited to rates of awards established by the
workmen’B compensation plan. The amount of the workmen’s compen-
sation award is not recoverable under the contract. The EPA is
obligated by itB contract only to pay for the contractor’s costs
in maintaining the workmen’s compensation plan. Thus, by requiring
a contractor to maintain a workmen’s compensation plan the Govern-
ment has accomplished two things. First, it has ensured that
adequate financial protection is provided to cover injuries to
contractor employees. Second, it has limited contractor opera—
tional costs, as regards payments for injuries to its employees,
to levels either conforming to maximum workmen’s, compensation
payments or applicable insurance or enrollment costs for the
workmen’s compensation plan. This second factor is of significance
to EPA contract consideratins. ‘lb the extent that a contractors’
operational costs are kept to a minimum, government costs are
also reduced. A hold harmless agreement has the dual effect
of expanding the potential operational costs of the contractor
to include these additional costs and increasing the total costs
chargeable under the contract.

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—3—
2. Indemnification Payments Under a ‘Hold Harmless’ Agreement
Would Subject EPA to Reimbursements In Excess of the Amounts
of Its Normal Liabilities
An injured employee may elect to proceed directly against a
nonemployer for damages under various state law theories of negli-
gence or breach of duty. Such actions are not resricted by work-
men’s compensation’s monetary limits on the amounts of possible
awards. In fact, such awards are usually’ substantially higher
because of the escalation in awards caused when such factors as
pain and suffering, emotional distress, loss pf consortium, etc.
are considered. Since ‘a source is liable and viii make payment
for injuries to a contractor’s employee only where the employee
can show negligence or wrongful breach of duty by the source, a
contractor’s reimbursement of a source under the ‘hold harmless
ageement would, in most instances, be for sums well in excess of
workmen’s compensation limits. To the extent these contractor
costs are determined’ to be allowable costs under the contract,
EPA’S contract costs could substantially exceed cost projections
based only on the contractor’s potential liability under its
workmen’s compensation plan. (Note also that, to the extent the
contractor is found to be an agent or employee of the EPA in
carrying o it the •inspeetiàn function, EPA’s reimbursement of a
contractor’s ‘indemnification for employee personal injuries could
be argued to be an’ improper attempt. to circumvent the Federal
Tort Claims Act’s limitation on tort suits against the United
States.)
3. ‘ Hold Harmless’ Agreements Adversely Affect Subrogation
Actions
A contractor employee injured because of the negligence of a
source could elect to receive compensation for his injuries under
the employee’s workmen’s compensation plan. Payment by the plan
would create a right of subrogation in the payor. Thus, to the
extent the contractor or the insurer makes payments to the employee
it can proceed against a negligent third—party for recovery of
the amounts of is payments. However, an indemnification agreement
would severly hamper, if not preclude, recovery of the contractor’s
or the insurer’s costs through a subrogation action. A contractor
seeking to recover, from a negligent source, its expenditures for
an efltplOyee’B injuries is likely to find that the ‘hold harmless’
agreement effecively bars such recovery. This result is, possible
‘since recovery by the’ contractor from the source leads to recovery
by the source from the contractor (using the ‘hold harmless’ agree—
inent). thereby nullifying the subrogation action. Additionally,
even where payment is made by the contractor’s workmen’s compensa-
tion insurance carrier, the exercise by the insurer of its subroga-
tion right also leads to the contractor liability under the ‘hold
harmlesS’ agreement. Thus the net effect of a ‘hold harmless’
agreement is to create higher contractor and higher EPA contract
costs by hampering recovery action against potentially liable
sources.

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—4—
B. Public Policy Does Not Appear to Favor These Types of “Hold
Narmless’ Agreements
Two principles allow an injured party to recover damages from
one whose actions caused the injury. First, it is in the public
interest that a; party is held responsible for the consequences of
its ctions. Second, in the allocation of risks between parties
the’individual whose negligence causes an injury is in a better
position to be aware of the potential for harm and is better able
to protect a third party from the risk of the harm. The ‘hold
harmless’ agreement tends to reduce the duty of care usually
associated with a soárce as an ongoing business concern. The
agreement protects the source from the financial consequences of
its negligence which causes injury to contractor employees.
However, the source clearly possesses the best knowledge of
the potential hazards of its operations. Additionally, it is in
the best position to mitigate, to the extent possible, the risks
of harm to individuals such as contractor employees. Yet, since
the agreement holds the source harmless, the incentives (i.e.,
potential financial liability) for its active participation in an
ef fort to protect these types of individuals is substantially
reduced. To the extent EPA concurs in its contractor’s execution
of “bold harmless’ agreements, it appears to sanction the irnplemen—
tation of a standard of care for a source which is less stringent
for contractor employees than that imposed for EPA officers or
employees. Since the contractor- -is—acting-aa a representative or
agent of the- EPA, such a distinction appears to be unwarranted.
C. Hold Harmless’ Agreements Could Exhaust Contract Funds
Allocated To The Inspection Task
If costs created by the ‘bold harmless’ agreement are allow-
able costs under the contract, they can be satisfied from all
available contract . funds. The ‘Limitation of Costs clause
genearily inserted into these types of EPA contracts would most
likely limit EPA’S liability for such costs to sums specifically
set out in the contracts schedule. The scheduled amount would
establiBh a dollar ceiling for costs claimed under a particular
contract. Thus, the point in time at which the contractor incurs
the particular cost (early in the contract period or late in the
period) will be determinative of whether contract monies will be
exhausted in order to satisfy these costs. -
Conclusion
A contractor’s execution of a “hold harmless’ agreement
could have a direct effect on EPA operations and could create an
unwarranted distinction between EPA employees and contractor
employees acting as EPA representatives in inspectionB under
section 114 of the Clean Air Act. However, execution of a ‘hold
harmless’ agreement by an EPA contractor would not, in our opinion,
be a violation of any law r regulation.

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4

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II OL 7T

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Execution of Confidentiality Agreements Under
Section 114 of the Clean Air Act
(12/15/83)
File at Part F, Document #4

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PN 114-83-12-15-003
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON. D.C. 20460
DEC 15 1,983
OFFICE OF
AIR. NOtSE. AND RADIATION
SUBJECT: Execution of Confidentiality Agreements under
Section 114 of th Clean Air Act
FROM: I s trato r
for Air and Radiation (ANR—443)
TO: Office Di rectors
Regional Administrators
The purpose of this memorandum is to review aspects of existing
regulations and procedures with respect to agreements relating to confidential
treabnent of information claimed to be trade secret.
Obtaining the information needed for rulemaking and other activities
of this office is essential to carrying out the responsibilities which
have been assigned to it. Section 114 provides EPA with authority to
obtain the needed information. In the past, we have generally sought to
obtain the necessary information by requesting it in a “Section 114”
letter or by entering appropriate facilities. We have sought, wherever
possible, to obtain responses to such letters and to arrange such entry on
a consensual basis, i.e., to avoid the necessity, to use the enforcement
mechanisms provided by Congress. ,
For that reason we have generally, sought, and.will continue to try,
to respond favorably to reasonable company’requests for clarification or
explanation of information requests, for additional ‘time, or for use of
some more convenient and equally useful form or manner of response. •, We
have’also established, by regulation and by contract provision, reason-
able safeguards, deterrents and sanctions against the improper disclosure
of information claimed to be trade secret, including the debarment of’
contractors (whetheror not such contractors have been designated EPA
representatives) and the constituting of’ sources’ as third party beneficiaries
of the terms of EPA contract provisions relating to handling of such
information, 40 CFR Part 2, 41 CFR 15—1.350-1, 15-1.350-2. These protections
end remedies. are additional to the protections and remedies afforded by
other provisions of law, e.g., common law and State criminal law.
114
3—1

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g7 q r k O S

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Use of Contractors to Conduct Clean Air Act Inspections
After the Supreme Court’s Decision in United States v. Stauffer
Chemical Co. , 464 U.s. 165 (1984)
(02/22/84)
File at Part F, Document #5

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C. 20460
?I(
FEB 22 198 4
OFFICE OF
E NFO N CE ME NT ANO
MEMORANDUM S COMPLIANCE MONITORiNG
SUBJECT; Use of Contractors to Cdnduct Clean Air Act
Inspections after the Supreme Court’sDecision
in United States v. Stauffer Chemical Co. , No.
82-1448 (decided January 10, 98 )
FROM: Michael S. Alushin , i4 2 ’t
Associate Enforcement Counsel for Air
Edward E. Reich, Director
Stationary Source Compliance Division
TO: Regional Counsels
Regions I-.X
Directors, Air and Hazardous Management Divisions
Regions II, IV, VI-Vilt, and X
.flixectors, AirManagement Divisions
Regions I, III, V, and IX
Many of you are aware that EPA’s authority to designate
contractors as “authorized representatives” of the Administrator
to conduct inspections under §114 of the Clean Air Act was
one of the issues pvesented to the Supreme Court in United
States v. Stauffer Chemical Co. , No. 82-1448. The case was
heard by the Court on November 2, 1983, and decided on January 10,
1984. The purpose of this memorandum is to inform you of
the decision’s effect On EPA’s authority to use contractors,
and to advise you of EPA’s present policy regarding the use
of contractors to conduct inspections. A copy of the Supreme
Court’s decision is attached.
Supreme Court’s Decision
This case came before the Court on a petition for
certioriari from the United States Court of Appeals for the
Sixth Circuit. Two questions were presented to the Supreme
Court: (1) Whether EPA may designate a private contractor to
conduct inspections as its “authorized representative t ’ under
§114 of the Clean Air Act, and (2) whether the government
should be collaterally estopped from relitigating against
Stauffer Chemical Company the question of whether private
contractors can be “authorized representatives” because it
had already litigated that question in a proceeding involving
a different plant against Stauffer in the Tenth Circuit and
lost.

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The Supreme Court unanimously held that “the doctrine of
mutual defensive collateral escoppel’is applicable against
the government to preclude relitigation of the same issue
already litigated against the same party in another case
involving virtually identical facts.” (Slip opinion at 4.)
Therefore, the government was collaterally estopped from
relitigating the statutory question against Stauffer, at
least’ in those circuits in which the issue was one of first
impression. The Court did not address the question of EPA’s
authority to use contractorTTor inspections under the Clean
Air Act.
Background
This case arose out of Stauffer Chemical Company’s
refusal to allow private contractor employees, who had been
designated by EPA as “authorized representatives” under
§ ‘114(a)(2), to enter one of Stauffer’s plants in Tennessee.
When Stauffer refused to allow the contractor’s employees to
enter its plant, EPA obtained a warrant authorizing the
contractor’s employees to enter the plant for the, purpose of
conducting an inspection. Stauffer refused to honor the
warrant. ‘ When EPA brought a civfl contempt action in District
Court, Stauffer moved to quash the warrant. The District
Court denied Stauffer’s motion, accepting EPA ’s argument that
the inspection authority conferred upon “authorized represen-
‘tatives” by §114.(a)(2) extends to private contractors retained
by EPA. United States v. Stauffer Chemical Co.. , 511 F.
Supp. 744 (M.D.. Tenn. 1981). Stauffer.appealed this decision
to. the Sixth Circuit.
In.the Sixth Circuit Stauffer argued that (1) private
contractors are not -“authorized representatives” as that term
is’ used in §114(a)(2) of the Clean Air Act, and (2) that the
government should be collaterally estopped from relitigacing
the statutory question against Stauffer because it had already
litigated that question against Stauffer and lost in the
Tenth Circuit, in Stauffer Chemical Co. v. EPA , 647 F.2d 1075
(1981) (hereinafter Stauffér I) . The Sixth Circuit’s decision,
United States v. Stauffer Chemical Company , 684 F.2d 1174 (1982)
( hereiriatterStauffer II), reversed the Tennessee District
Court, but the three judges did not agree on the basis for
the decision. Two judges agreed with the Tenth Circuit that
private contractors are not authorized to conduct inspections
under §114(a)(2). 0n of those two also held that the government
was collaterally estopped from relitigating this statutory
question against Stauffer. The third judge held that the
government was collaterally estopped from relitic ’ating the
question against Stauffer, and therefore express d his opinion
that the court should not have reached the merits of the

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statutory question. Both the collateral estoppel issue and
the question of statutory authority were presented to the
Supreme Court. The Supreme Court affirmed the holding of
the Court of Appeals that the government is estopped from
relitigating the statutory question against Stauffer. The
Supreme Court did not reach the merits of the statutory
question.
The Effect of this Decision
Because the Supreme Court did not reach the issue of
statutory construction 1 its decision leaves unresolved the
pre-existing split in court decisions on the question of
EPA’s authority to use contractors for inspections. The
Tenth Circuit, in Stauffer I , and the Sixth Circuit, in
Stauffer II , have held that only EPA officers and employees
may be “authorized representatives t ’ of the Administrator
under §114(a)(2). The Ninth Circuit in Bunker Hill Co. v .
EPA, 658 F.2d 1280 (1981), and one District Court (in the
Fourth Circuit) in Aluminum Co. of America v. EPA , No. M-80-13
(M.D.N.C. Aug. 5, 1980), have held that EPA may designate
contractors as authorized representatives under §114(a)(2).
It had been hoped that the Supreme Court would rule on
the statutory question and. resolve the issue of whether
contractors and their employees could be designated by EPA as
“authorized representatives” of the Administrator under
§114(a)(2). It did not do so. Final resolution of the
státutory,question could be reached by a clarifying.am ndment
to the Act or by one or more additional test cases in circuits
which have not ruled on the question (assuming the Supreme
Court would grant certioriari in such a case).
EPA’s Present Polity on Use of Contractors to Conduct
Inspect ions :. .
Itcontinues to be EPA’s position that. both the language
and the legis].ative history of §114 support the us e of
cdntraätörs as ‘designated “authorized representatives” of the
Administrator under §114(a)(2). The Supreme COurt clearly
decided, that EPA may not relitigate this issue with Stauffer
in any of the circuits which have not yet ruled on the
question. The Supreme Court did not decide whether Stauffer
is also immune from relitigation of this Issue in the Ninth
Circuit or in other jurisdictions where either Federal courts
or state courts have ruled in EPA’s favor. Therefore, EPA
will not designate contractors as representatives of’EPA to
conduct inspections at Stauffer facilities,’ except perhaps
in the Fourth and Ninth Circuits.
Contractors should not, absent express permission from
Headquarters, be designated as representatives of EPA to
conduct inspections pursuant to §114(a) in the Sixth or
Tenth Circuits. The following states are located in

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-4-
the Sixthand Tenth Circuits: Kentucky and Tennessee in
Region IV, Michigan and Ohio in Region V 1 New Mexico and
Oklahoma in Region VI, Kansas in Region VII, and Colorado,
Utah and Wyoming in Region V III.
• Contractors may definitely be designated as representatives
of EPA in the Ninth Circuit. States located in the Ninth
Circuit are: Montana in Region VIII; Arizona, California,
Nevada, Guam and Hawaii in Region IX; Alaska, Idaho, Oregon 4
and Washington in Region X. Therefore, EPA may continue to
use contractors to conduct inspections of facilities in the
Ninth Circuit.
The First, Second, Third, Fourth, Fifth, Seventh, Eighth
and Eleventh Circuits have not ruled on the question of
whether contractors may be designated as authorized represen-
tatives of EPA. 1 In the absence of any ruling prohibiting
their use, EPA may continue to use contractors to conduct
inspections of facilities owned by anyone other than Stauffer
in these circuits.
It is important that the Air Enforcement Division be
kept informed of any potential new litigation on this issue
so that the agency’s litigation efforts can be, focused and
coordinated. Toward this end, we are asking the Regions to
notify and consult, with Tracy Stewart, an attorhey in the
Office of Enforcement and Compliance Monitoring’ (at F S
382-2824) whenever the Regional Office wishes to seek a
warrant to gain, entry for a contractor. A warrant may be
sought after a source has refused entry to a contractor or
prior to seeking entry if the Region has reason to expect
that the source will challenge the contractor’s right of
•entry under §114. We hope that Regions will not be deterred
from using contractors, where it would otherwise be appro-
priate, by the mere possibility of a court challenge.
Attachment
1 The Middle District of North Carolina, located in the
Fourth Circuit) has affirmed EPA ’s authority to designate
contractors as representatives of the Administr4tor.
Aluminum Co. of America v. EPA, supra .

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6

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llb t O 7 7 [ :

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Final Guidance on Use of Unannounced Inspections
(09/06/84)
File at Part F, Docunient #6

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t’ ’—1 ; I 1’}I) S’F.\IIS I \IRO\\II,Nr•\1. ‘i: iI;:I I()\ .•\(;I:
; \ • I I I\ ;i iN, D. c.
‘?
SEP -6 984
OFF 1C OF
MK A’4DkADlAT OS
MEMORANDUM
SUBJECT: Final Guidance on Use of Unannounced Inspections
FROM: Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Air and Waste Management Division Directors
Regions II, IV, VI—Vill and X
Air Management Division Directors
Regions I, III, V, and IX
This memorandum presents final guidance on the use of
unani ourtced inspectiorts by EPP as a component of Regional
inspection programs. Comments in response to the draft guid-
ance issued on July 17, 1984 were received from six Regions
and one State agency. Because all respondants generally
supported the proposed guidance, changes to it were minimal.
Those changes and comment,s are discussed below.
One Region felt that the tone of the guidance was too
strong in encouraging the use of unannounced inspections,
that under the policy EPA is somehow required not to announce
most of its inspections,u and that •the policy might ucreate
unnecessary concern over what fraction of each Region’S
inspections is unannounced. Our strong support for use of
unannounced inspections, as a component of’ an overall inspec-
tion program, which comes through in this guidance, is based
on the belief that they are more representative of normal
operating conditions. While we recognize the concerns asso-
ciated with use of such inspections, several Regions perform
a high percentage of unannounced inspections without adverse
impact on resources or EPA/State relations. However, although
this guidance does encourage the use of unannounced inspections,
no fractional or percentage ‘requirements were established or
impliedt this judgment should be made by the Region in light
of the nature of the inspections to be performed and the
sources in the Region. We would expect to see some program
in all Regions, ,howeVer.

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Another Region expressed a concern for program imple—
inentation: ‘We would like to emphasize the need for maximum
flexibility and control to be retained by the Regional Office
staff in setting up and conducting unannounced or announced
inspections.’ We believe this guidance offers a great deal of
Regional discretion in implementation of a nationally—consistent
inspection programusing unannounced and announced inspections.
While the guidance offers direction and options, it also defers
to Regional experience: As the guidance specifically notes
‘Regional Offices are free to vary the procedures used if they
believe an alternative approach would be preferable.’
One Region expressed concern that an inspection policy
utilizing unannounced inspections could ‘damage the working
relationships of inspectors and the company officials,’ and
that “some companies will shut down or refuse entry in light
of what they perceive is a change In agency attitude.’
While these concerns are real, Regional experience has
shown that they can be minimized such that they are not an
impediment to performing unannounced inspections. Most sources
accept unannounced inspections and consider them little more
than an inconvenience once they realize that EPA has the legal
right to perform them, ansi will do so when appropriate.
Experience indicates that companies which refuse entry to EPA
inspectors are few, and that entry is usually just delayed
until the company discusses the matter with Regional Counsel.
Finally, one Region requested clarification on whether the
definition of an announced inspection included such activities
as stack tests, CEM audits, and PSTs. We believe the definition
of an announced inspectionwould include these types of site
visits, however, Regions are free to assess these activities
for announcement purposes on a case—by—case basis if that has
been their previous practice.
c ,
Edward E. Reich
Attachment
cc: Air Program Branch Chiefs, Region I—X
Air Compliance Branch Chiefs, Regions II, III, V, VII, IX

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Guidance On EPA Use of Unannounced Inspections For
Stationary Sources of Air Pollution
The inspection is the primary compliance assurance method
presently available in the air program for validating source
performance. As such, the issue has been raised concerning
whether or not inspections should be announced to the source
in advance of the actual visit. To assist in responding to
this issue, the Stationary Source Compliance Division (SSCD)
surveyed (through correspondence dated January 18, 1984) EPA
Regional Office practices and experience in performing both
announced and unannounced inspections. Based on the information
compiled through this survey, SSCD recommends that all Regional
inspection programs incorporate unannounced inspections as part
of their overall inspection approach. The use of this inspec-
tion type has value in obtaining data which are more represen-
tative of normal source operating conditions and can encourage
continuous source compliance. Possible obstacles to the use of
this type of inspection identified by some Regions have been.
successfully addressed by the Regional Offices which effectively
carry out an unannounced inspection program and are therefore
no overall bar to its use.
The SSCD survey’conducted earlier this year received nine
Regional responses. From these responses several observations
were made. Usage of unannounced inspections is highly variable
among Regions; several Regions perform them in the majority of
situations while others only perform them under very limited
circumstances or not at all. The most commonly cited positive
aspect of performing unannounced inspection, is the opportunity
to, observe the source under normal operating conditions, , since
the source does not have time to prepare for the inspection.
Other positive aspects mentioned are:
o Detection of surreptitious violations;
o Detection of visible emissions and O&M.type
problems and violation;
o Creation of an increased level of attention by
a source to its compliance status, and
Projection of a more serious attitude toward
surveillance by the Agency.
One Region found the in violation” rate in ne State in 1982
to be thr,ee times higher at sources where inspections were
unannounced, versus announced.

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2
Some of the potential negative aspects of performing
unannounced inspections were reiterated by several Regions:
O The source may not be operating, or key plant
personnel are not available; and
O There may be an adverse impact on Regional
resources or EPA/State relations.
However, as previously noted, these concerns have been addressed
and were successfully resolved by Regions which make fuller use
of unannounced inspections. Therefore, it was felt the cited
drawbacks were more anticipated than real and could be overcome.
The conclusion drawn from this survey is that all Regions
can and should perform unannounced inspections when appropriate
as a component of their inspection programs. The following
guidance addresses the issue of when announced or unannounced
inspections are more appropriate, and provides procedures based
on Regional experience which facilitate the incorporation of
unannounced, inspections into Regional inspection programs.
Regional Offices are, however, free to vary the procedures used
if they believe an alternative approach would be preferable.
Definition Of An Announced And An Unannounced Inspection
For the purpose of this guidance, an announced inspection
shall mean •an onsite visit where the source to be inspected is
given advanced notification by the control agency of the specific
date of the inspection such that enough time would elapse to
permit significant source operating modjfications prior to the
site visit.
• An unannounced inspection shall mean an onsite visit where
the control agency. provides no prior notification of the actual
date of the inspection to the source, or where notice is given
shortly before the inspection such that the representativeness of
the source operation is not likely to be affected.
Advanced notification of both announced and unannounced
inspection dates shall be provided to the State or local control
agency. In this regard, please note the requirements of
Section 114(d) of the Clean ir Act. relative to notice to States.

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3
Announced Inspections
EPA is not required by federal regulation to announce the
date of an impending inspection to the source. Therefore,
announced inspections should be performed by EPA and its’
representatives when some specific purpose is served by
providing such notice. Situations where announced inspections
would be appropriate are:
• When specific information is being sought which must
be prepared by the source, or where t.he source must
make significant accommodations for the inspector to
gather the information;
o When the assistance of specific plant personnel is
necessary for the successful performance of the
inspection, i.e., the information they provide can not
be obtained from other on—duty plant personnel or by a
follow—up information request;
o When inspecting government facilities or sources
operating under government contract where entry is
restricted due to classified operations; and
o When inspecting un—manned or extremely remote
sources. ‘
Questionable operating status of a source or process
generally does not preclude ‘utilizing an unannounced inspection.
When daily operating status is questionable, the inspector may
confirm it with the source just prior to leaving for the inspec-
tion. The Inspector may also wish to consult with the ‘State or
local agency to obtain any current information they may have
about the source’s operational status.
Unannounced Inspections
Unannounced inspections will provide the most representative
pictureof normal source operation and’practices. They should
be performed whenever there is no reason for announcing the
inspection to the source as described previously. ‘
As an alternative to arriving at the source totally
unannounced, if In the inspector’s judgment the . representative—
ness of the source operation would not be altered and the
success of the inspection would be improved by contacting the

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.4
source shortly before the scheduled inspection time, this may
also be considered unannounced. If this latter method is
used, the amount of advanced notice given the source should be
noted in the inspection report.
Inspection Announcement Responsibility
When EPA accompanies a State or local agency in conducting
an inspection, or where EPA is requested by a State to assist
in compliance monitoring and enforcement at a source, the
decision regarding inspection announcement should defer to the
preference of the State or local agency. •When the State or
local agency accompanies EPA on an EPA—initiated inspection,
inspection announcement shall be the responsibility of EPA and
the State or local agency should be so informed.
Inspection Announcement Protocol
The decision on inspection announcement to the source
and the name of the responsible individual should be noted in
the inspection report. The State or local agency should be
given a minimum of five working days notice in advance of an
inspection, whether it is announced to the source or not. An
exception to this minimum time period would be when the inspec-
tion is scheduled in response to an emergency Situation which
does not allow such advanced notice. In cases where EPA has a
reasonable basis for believing the State or local agency will
notify the source of the inspection, no notification is required.
If the source is to be given advance notice of an inspection
date, it should be afforded a mInimum of five working days notice,
but no greater than that given the State or local agency. This
latter point will assure that the State or local agency is always
notified before notice is given to the source.
When announcing an inspection to the source, advanced notice
may be given by telephone or in writing. Instances where
written notification (instead of oral) is appropriate are:
o When requested by the State/local agency or by
the source;
o . When extensive or specific records are being sought,
o When the inspection is to be performed solely by an
EPA contractor;
° When inspecting government facilities with classified
operations or otherwise restricted entry; and
0 Special—purpose inspections, e.g., to establish
conditions for a source—specific SIP revision.

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5
If notice is given orally, the date of the telephone
call, and the person contacted should be noted in the inspection
report. A copy of any written notification should be attached
to the inspection report.
Unannounced Inspection Implementation
State and local agencies should be notified by EPA that
unannounced inspections are a component of EPA source inspection
programs, and that they will be performed.
A pre—inspection review of all pertinent sources of infor-
mation on the source should be made (or intensified) to avoid
any preventable inconvenience to the source as a result of the
inspection. This should include contact with the State or local
agency to obtain any additional information which they may have.
Sources may be contacted as necessary, and notified that
an unannounced inspection will be performed during a specified
time period (e.g., quarter or fiscal year) an.d that they should
notify EPA if key plant personnel or processes will be unavailable
for known extended periods. Portable sources, such as asphalt
concrete plants, may be required, pursuant to Section 114 to
report their scheduled location(s) on a monthly or quarterly
basis, if questionable source location is an impediment to
performing unannounced inspections.

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7

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Transmittal of Reissued OAQPS CEMs Policy
(03/31/88)
File at Part F, Document #7

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460

1 MAR 1988
OFFICE OF
AIR AND RAO ATION
MEMORANDUM
SUBJECT: Transmittal of Reissued OAQ
FROM: Gerald A. Emison, Direci
Office of Air Quality
TO: Air and Waste. Managelnent Division Director
Region II
Air Management Division Directors
Region I, III and IX
Air, Pesticides and Toxics Management Division
Directors
Regions IV and VI
Air and Toxics Divisior Directors
RegionsVII, VIII and X
Air and Radiation Division Director
Region V
Attached is the OAQPS policy dn Continuous Emission
Monitoring Systems (CEMS) data. This policy was originally
issued on July 28, 1987. However, because of the late
transmittal date, Fl 1988 implementatiOn of the policy was
done voluntarily. The policy, after minor streamlining, is
being reissued at this time to insure implementation during
FY 1989. It has been streamlined j removing the o. tdated
section called “Future Actions.”
In accordance with the Operating Year Plan, FTEs and
LOE contract funds have been allocated to the Regional Offices
for CEMS and compliance u nitoring activities. Implementation
of this strategy should help ya.i utilize these available resources
more efficiently and effectively.

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Furthertr re, note that tracking SO 2 CEMS requirements is
an element of the FY 1989 Strategic Planning and Management
System (SPMs). The FY 1989 SPMS requires determination and
reporting of the compliance status of SO 2 sources subject to
CEMS requirements. Specifically, these sources are to be
identified, and their compliance status determined with
respect to CEMS installation, certification, report submission
and emission limits. While sources are emphasized in
SPMS, this measure should be carried out for all sources with
CEMS requirements.
If you wish to discuss this further, please contact me or
Louis Paley of SSCD at F’rS 382—2835.
P ttathment
cc: John Calcagni, AQMD
Jack R. Farmer, ESD
William Laxton, TSD
Don R. Clay, R
Bruce Armstrong, OPAR
Paul M. Stolpmart, OPAR
Michael S. Alushin, AED
Alan W. Eckert, OGC
CEMS Technical Coordinators

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C Sr ,
J )
I, \ TU) I \TI I \\ IR()\\I [ \TU PR()TF(TIJ\ \CF’\i
\ . iI\;Tv. \. 1)1:. 2O4f
1..
. Dg’.
31 1988
OFI1CI ( I
MR R DJ.471L)N
StJ BJ E CT: CEMS Pol i cy , ,, /,
APPROVED: Gerald A. Emison,
Office of Air Quality Planning and Standards
DATE:
Purpose
This states the OAOPS policy, which is effective
immediately, on the use of Continuous Emission Monitoring
Systems (CEMS) data and provides specific guidance as to how
that policy should be implex nted.
Definition
CEMS is one o several self — ordtoring. teäiniques used
by regulatory agencies to monitor continuous compliance of
sources. Sampling and analysis of sulfur in fuel to assess
SO 2 compliance of sources and recordkeeping for assessment of
compliance with volatile organic compound (VOC).emission
limitations are two other self—monitoring techniques.
Information
As the air compliance program resolves initial compliance
problems and sources install control equipn nt, efforts to
assure continuous compliance become increasingly important.
Based on the review of State and Regional programs that
promote the use of CEMS, OAQPS has found that CEMS is a
valuable tool for assuring continuous compliance.
Self—monitoring techniques should be integrated into the air
compliance program as a n ans of assessing stationary source
continuous compliance with air quality regulations.

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Some of the States.which effectively use CEMS data in
compliance monitoring and in supplementing or supporting
enforcement actions are Washington (with SO 2 and total reduced
sulfur data) and Tennessee (with opacity monitoring data).
Ohio has a comprehens4ve program for requiring CEMS in
operating permits which has resulted in installation of CE lS
on a wide variety of source types. Pennsylvania and Indiana
have highly structured CEMS programs, including penalty
programs based on reported excess emissions.
Policy
OAQPS is committed to promoting, encouraging and utilizing
CEMS data as a compliance asses ment measure. Our Office is
also committed to the use of CEMS in direct enforcement where
CEMS is the compliance test method and i!or supporting enforcement
where CEMS is not the compliance test method. OAQPS encourages
the use of CEMS data by States in compliance monitoring and
in supplementing or supporting enforcement actions. If it is
technically feasible, CEMS requirements should be incorporated
into NSR preconstruct ion revi zs, operating permits and
resolutions of enforcement actions including consent decrees
and administrative orders.
CEMS should be used to assure continuous compliance of
sources in both attainment and nonattainrnent areas. Resources
should be ailoca ted to monitor CQntinUOUS- compliance of
sources in areas where the greatest environmental benefit is
likely to occur. Therefore, priority should be given :to
NESHAPS sources subject to continuous monitoring requirements
(currently 40 CFR 61, subparts F, N, 0 and V) and to SIP
(including major and minor NSR sources) and NSPS sources in
nonattainment areas (for the pollutant for whidi the area is
in nonattainment). Next, CEMS should be used to monitor the
continuous compliance of NSPS and PSD sources in attainment
areas. Sources with excessive emission limit excursions
identified bj CEMS data should be targeted for foll —up
action (on—site inspection or §114 letter). Where CEMS is
the compliance test method, CEMS data should be used to identify
significant violators. These sources will then be tracked in
accordance with the “Timely and Appr riate Enforcement
Response Guidance,” issued by OPLR on April 11, 1986.
There are two different types of CEMS data — direct
compliance monitoring data and excess emissions monitoring data.
Where CEMS is the compliance test method, the status of the
source is established and documented byCEMS data. Compliance
status determined by CEMS data should be coded in the Compliance

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—3—
Data System (CDS). Violations identified by direct compliance
monitoring data require appropriate enforcement action
including the assessment of penalties. There are plans to
modify the CEM Subset of CDS to allcM for entry of direct
compliance monitoring data. Use of CEMS data for direct
enforcement where CEMS is the compliance test method is
discussed in “Guidance: Enforcenent Applications of Continuous
Emission Monitoring System Data,” issued bj OAQPS and OECM on
April 22, 1986.
The second type of CEMS data is where CEMS is not the
compliance method. In these cases, CEMS data should be used
to monitor the continuous compliance of sources and to initiate
follow—up action including on—site inspections, requesting
further information, and issuing a notice of violation. This
applicati&1 is also discussed in the aforementioned guidance.
Conclusion
CEMS is an important technique for monitoring the
continuous compliance of stationary sources. It should be an
expanding component of the air compliance program. Evaluation
of CEMS data has been shown to be effectiye for identifying
sources with continuous compliance problems and has al1 ed
agencies to utilize their compliance monitoring resources
more effectively.

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8

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llw o 1rz W

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Compliance Monitoring Strategy for FY89
(03/31/88)
File at Part F, Document #8

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$T4
_____ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASH GTON, D.C. 20460
l’p
4 jI
FI AR 31 198
OFVI E OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: Compliance Monitoring Strategy for FY 89
FROM: John S. Seitz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Air Management Division Director
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
I am transmitting to you the attached Compliance Monitoring
Strategy (CMS) for implementation in F! 89. This strategy is
the culmination of a multi—year effort that focused on addressing
some very important issues of the Air compliance program.
feel the CMS makes major strides in guiding our surveillance
activities in a direction that will dramatically improve the
program.
As yo now, the Compliance Monitoring Strategy will
replace th. Inspection Frequency Guidance (IFG) in FT 89.
The CMS emphasizes flexibility with accountability. This
strategy recommends developing a comprehensive inspection
plan that identifies all sources or source categories
committed to be inspected by the State agency (means State
or local agency throughout) during their fiscal year.

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The State inspection plan must address national priorities
and may also include inspections not normally of EPA concern.
The plan, to fully utilize the flexibility offered, will be
organized around four groups of sources.
Group I: Traditional stationary sources such as Class A
and known Class B SIP, NSPS, and operating
NESHAPS sources.
Group II : Asbestos D&R Strategy contractors.
Group III: Small VOC Compliance Strategy sources.
Group IV: Sources of State concern.
High Points of the New Strategy
New features of the Compliance Monitoring Strategy are
the following.
(1) Ability to address local air pollution concerns.
The CMS provides State agencies with the discretion to.
address significant localair’ po1l tion concerns such as.
citizen complaints, odor problems, and other localized toxic,
hazardous, and nuisance issues. These types- of concerns may
not be national priorities, but are legitimate resource
expenditures under this strategy. Group IV is where local
issues and new State—specific initiatives may be addressed.
(2) Use of inspection targeting.
The concept of inspection targeting provides an approach
to systemically direct resources toward the most significant
problems. The approach employed is a PC—based model using
multiple targeting criteria to, determine inspection frequency.
The targeting model accepts source specific targeting data
supplied by the State inspector in such areas as plant emis-
sions,. c liance information, and air quality factors. The
model a 0 values to these data, and mathematically combines
the val ‘to produce a ranking of sources to be inspected
along vi the estimated resource costs.

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(3) Account for the total.inspection activity.
This strategy will credit a program for its total inspéc—
tion activity. The totaiState inspection resource budget
must be provided to EPA for this key aspect to be accomplished
effectively.
(4) Maintain minimum resource expenditure levels in the
inspection program.
Minimum resource expenditure levels for Group I sources
are defined to be the average inspection effort over the last
three years. The levels for Group II asbestos D&R contractors
are those reported in the SPMS for the latest fiscal year.
Group III resource levels are the minimum number of inspections
required by the Small VOC Source Compliance Strategy or
supplied by the State, whichever is larger. Group IV levels
are generally supplied by the State.
5) Focus on national priorities.
Each year the Compliance Monitoring Strategy will reflàct
the Air program’s stated national priorities as identified in
EPA’s Operating Year Guidancó. These national priorities are
encompassed by Groups I., .11, and III.
Comments
The responses I reviewed from both State and EPA personnel
were universally supportive of the general approach in the
CMS. I thank you for your time. The kinds of concerns expressed
typically revolved around the following issues.
1. Targeting model input data may not be known by the
inspector.
Since the model’s input is often qualitative and is so
critical to effective source compliance understanding, the
lack of data is a key finding. In addition, experience -
has shov at such a structured model helps guide an inspector
toward t eded data to carry out effective source inspections
and provfdl. supervisors with valuable management
control information.

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2. More resources (Regional and State) will be needed to
implement the CMS with targeting.
Our experience has shown that initially more time Is
required to establish the source inventory, to develop
a working database, and to negotiate a plan. However, the
initial resource commitment is very dependent upon the current
condition of an agency’s database. Thereafter, the resource
burden Is greatly reduced.
Given a principal aim of targeting is to be a more focused
‘use of scarce resources, targeting over time, is expected to
realize a resource savings. A program using targeting
should find and correct more problems than a program that
does not. Therefore, resources may actually go further
because of more effective use.
3. The Inspection Frequency Guidance (IFG) should remain an
option.
We recognize in some cases, as mentioned in the CMS, the
current IFG will be a more viable means for States to meet
their inspection commitments. Therefore, the IFG•’ is the
alternate approach. However, we strongly encourage,, the use
of the CMS with targeting whenever- possible. To. further
‘promote the CMS,we intend to monitor, in which States and for
what reasons, the CMS is not used.
One final observation, after reviewing the comments I
found a more comprehensive reading of the strategy should
answer any remaining questions. It became apparent that
inadequate attention was given to reviewing the strategy
because so many questions and comments were already answered
in the draft CMS. I will be happy to discuss with anyone
issues associated with implementing and interpreting the CMS,
but please read it carefully first.
Next Step .
SSCD $ arranged to conduct Regional. training (States
may be in t.d as well) in the use of the inspection targeting
model and provide on—call technical support. Please contact
Howard Wright at FTS 475—7034 to schedule training. To
effectively coordinate ten Regions training, Mr. Wright would
like to know what Regional dates are suitable for this one
day training session. Please notify him of your preferred
dates by April 22, 1988.

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—5—
The diskette containing the model along with the
Dicription and Explanation document will be distributed at
the training sessions. For technical support In the model’s
operation, please contact Perrin Quarles Associates, Inc. at
804—979—3700.
Attachment
cc: Air Compliance Branch Chiefs
Regions II, III, IV, V, VI and IX
Air Program Branch Chiefs
Regions -I, VII, VIII and X

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Compliance Monitoring Strategy
Introduction
The Inspection Frequency Guidance (IFG) will be replaced In FY 1989 by
the Compliance Monitoring Strategy (CMS), which provides a more flexible
approach for determlnlng,State 1 Inspection commitments. The CMS
emphasizes flexibility with accountability. This strategy recommends the
development of a comprehensive Inspection plan that identifies all sources
or source categories committed to be Inspected by the State agency during
their fiscal year.
Strategy Components
The CMS has five parts.
(1) Objectives
The Compliance Monitoring Strategy has five objectives.
- To provide the ability to address significant local
concerns where they differ from national priorities.
a To ensure effective national oversight of the air
compliance monitoring program, to. permit Its evalua-
Uon, ahd to establish a feedback mechanism.
- To promote the Importance of enforcement presence
through effective compliance monitoring activities.
- To ensure an adequate level of resource cornniitment.
- To assure emission standaids are met through effec-
tive use of compliance monitoring activities.
(2) RequIrements
Sources Ject to this strategy, If its flexibility is to be fully utilized, are
the follow1n
Group!: Traditional stationaxy sources - ClassA
and known Class B SIP. NSPS. and operating
NESHAPs sources.
Group II: Asbestos D&R Strategy contractors.
1 means State or local agency throughout.
I

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Group III: Sources subject to the Small VOC Source Compliance
Strategy.
Group 1V: Sources of State concern.
The national priorities must be met, or In cases where exceptions are
justified, the rationale for the exceptions must be agreed to by EPA. Groups I,
II. and III will encompass the national priority categories In FY 1989.
However, national priorities may change from year to year.
In FY 1989, the national priorities are the following.
- Class A sources emitting VOC In ozone nonattainment
areas. (Group I)
- Class Al sources emitting TSP. S02. CO. or NOx In
nonattainment areas. (Group I)
- Class A sources emitting any riterla pollutant In
attainment or unclassified areas that have known or
suspected compliance problems. (Group I)
• - Lead SIP and operating NESHAP sources. (Group I)
- Asbestos demolition/renovation contractors per the
revised Asbestos Strate dated. March ai , 1988.
(Group II)
- Small VOC sources per the Small VOC Source Compliance
• Strate r dated July 6. 1987. (Group III)
Inspection quality under this strate r must be Level II or higher, as defined
by EPA guidance. Furthermore, this strate r will credit a program for Its total
Inspection activity. That Is, this approach will account for the total
federally-funded compliance monitoring effort including, where It is mutually
agreed. the substitution of non-federally regulated source inspections (Group
IV) for federally regulated (Group I). It will be necessary to present the
rationale for this substitution and to enter only the substituted Group l v
sources Into CDS.
The Ins targeting model will be run by States wishing to use the
flexibility tear offers to determine the Inspection commitment for
Group I sour a and those Group LV sources that will be substituted for Group
I source Inspections. Inspector-supplied data on emissions, air quality
compliance histoty, Inspection level, Inspection time and Inspection
frequency are Inputs into the model for these sources. The output of the
targeting model Is a prlorlty.ranklng of sources to be Inspected with
cumulative resource needs. Attachment 1 provides further defsifls on the
Inspection targeting model. Training In the use of the model will be provided
at EPA’s Regional Offices upon request.
2

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The asbestos and small VOC source strategy requirements. where
applicable. will be used to determine the inspection commitments for Groups
II and III.
Recognizing the significant departure this strategy is from the IFG, it Is
expected to take more than one year for wIdespread implementation of the
Inspection targeting approach. For that reason, Headquarters will closely
monitor the implementation of the CMS to assess progress and to make
necessary adjustments. Therefoi e ..the Regions are required to re qrt In
j States, ind fnr whc t re snns, the Inspection targeting apprQackis nOt
used. This information should be submitted annually to SSCD along with each
State’s inspection plan.
The strategy requires a minimum Inspection resource base (baseline) be
established for each group. It will be used by the EPA Regions as a
benchmark to evaluate their States’ Inspection plan submittals. The minimum
baseline for each State Is established in F? 1989 in the following way.
Group I: The average number of Inspections from the
last three years, as reported In CDS.
Group II: The number of Inspections In the last
fiscal year, as reported In SPMS.
Group Ill: The number of Inspections the Sm ’Il VOC
Source Compliance Strategy requires. or.
- supplied by the State, whichever iS
larger.
Group 1V: The number of Inspections supplied by the
State.
The total level, I.e.. the summation of the minimum. baselines for Groups I-1V,
used to establishe dthe baseline In F? 1989 shall not be reduced In
subsequent years.
(3) State Inspection Plan Submittal.
Each lns ctIon -plan submittal will present how that State will address
national p 1 Mles and will justify exceptions to the national priorities. The
plan will a4jdentlfy specific sources to be Inspected, allocate the total
inspection midget among source groups. and cover other issues that are
necessary to meet the Compliance Monitoring Strategy objectives and
requirements.
The targeting model should be used to determine Group I and specific
Group IV sources to be Included in this inspection plan as well as their
priority of inspection. Groups II and Ill will be addressed by their national
strategy requirements and by the resources allocated to each group. For
other Group IV source Inspections, a block resource allocation will be made
by the State In their plan submittal.
.3

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These steps will allow the State agency to develop their Initial
comprehensive Inspection plan, which will be submitted to the EPA Region
for review. To justify exceptions to national priorities, the State must submit
the basis for their decisions, such as the inspection targeting model inputs
and results.
(4) Final Inspection Plan Negotiation
The final comprehensive State Inspection plan will be agreed to by both the
EPA Region and the State. This plan will result in the State’s Inspection
commitment to EPA for F? 1989. The resources necessary to fulfill this
commitment are provided by the Section 105 federal grant and State
matching funds.
The final mutually accepted plan will have two parts.
(a) Inspection commitments and associated resource alloca-
tions.
- Group I sources will be identified by name.
- Group II contractors will be Identified by name.
- Group III sources will be Identified by category with
• the estimated resources allocated to this group.
• Group• N sources will be identified by name If they
are to be traded off for Group I Source Inspections,
otherwise an estimated resource allocation will be
assigned this group.
(b) Accountability measures such as data to l e reported
In CDS to measure the States fulfillment of their
inspection plan commitments. (see Reporting and
Evaluation component).
The EPA Region and State will use the following to finalize the plan.
- State-supplied Input and output from the inspection
targeting model’s ranking of Groups I and IV sources.
- Natlønal strategies for asbestos D&R and small voç
source
- Other A-estabI1shed national priorities.
- State-supplied Inspection resource budgets by group.
- Baseline EPA estimates of inspection resource budgets
by group. This gives EPA a benchmark to assess the
State-supplied Inspection resource budget.
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(5) ReportIng and Evaluation
Improving upon the current IFG, this strategy will emphasize effective and
timely reporting of accountability measures, evaluate each year’s results of
plan Implementation, and build the resulting recommendations Into guidance
for the upcoming operating year.
The principal data management tool EPA will use for evaluating the
Implementation of this strategy is the CDS. The specific sources, as well as
data needed for evaluation, should in most cases be tracked In the CDS.
—.--)The data that must be kept current and complete in the CDS for Groups I,
, and Hr sources and those specific Group l v sources that are substituted for.
Group I inspections, consistent with existing CDS guidance, include the
following.,
- source identifier and location Information.
- current nd historic compliance status.
- key enforcement actions such as inspections and source
tests completed, EERs submitted, and malfunction reports.
- pollutant specific classifIcation for all class A sources
and for any sized VOC source In an ozone nonattalnment area.
- nonattainment and attainment status code (PAQC).
- pollutant code (PLL’l .
- air program code.
- Inspection flag.
For other Group IV sources that are not of federal concern, a year end
accounting of resources consumed versus the beginning of the year block
resource allocation estimates should be discussed at the time of the plan
evaluation. This Is part of the total inspection activity assessment and
provides a complete picture of resource use in the inspection program.
These other Group IV sources are not tracked In the CDS.
Additional mechanisms that will be used to monitor and evaluate the
implementation of this strategy will be the National Air Audit System and the
Section 105 compliance guidelines. The NAAS is presently being revised to
accommodate the CMS. The Section 105 compliance guidelines are under
development and wili be Issued thIs year.
Alternate vzoac.n
In the event that a State and EPA Region cannot work out an inspection
plan using the recommended strategy approach, the current Inspection
Frequency Guidance plus the Asbestos D&R and Small VOC Source
Compliance Strategies will determine the State inspection commitments for
the upcoming year. See Attachment 2 for the full text of the current IFG.
For those States that use the current IFO to identify their FY 1989
Inspection commitments, an Inspection plan must still be submitted to and
accepted by the EPA Region. These plans will basically be limited to Groups I,
II, and III sources.
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The fundamental differences between a State inspection plan developed
using the current IFG and one using the full CMS will be the following.
- Group N source Inspections will generally not be In
an IFG-based inspection plan.
- An IFG-based inspection plan will not capture an
agency’s total Inspection activity.
- SpecifIc focus on national priorities is not as well
defined In an IFG-based Inspection plan.
While offering this alternate approach, EPA strongly recommends using the
full CMS with inspection targeting whenever possible. However, it is.
recognized that for such reasons as the lack of suitable software and
hardware, a small, easily managed regulated community, an adequate resource
base for comprehensive inspection coverage, and an inspection program ‘tied
to an operating permit fee system. the CMS with nspecUon targeting will not
be universally appropriate.
Responsibilities
(1) EPA Headquarters
EPA Headquarters Is responsible for the annual Implementing guidance for
the Compliance Monitoring Strategy. It will be issued, to the Regional Offices-
before April of the preceding fiscal year.
In addition, ongoing reflnement.and training in the use of the Inspection
targeting model Is Headquarters responsibility. It is expected that as more
agencies become familiar with the value of targeting to their program, the
model will sell itself. After initial training, some level of ongoing support will
be necessaxy for the users of this tool. Headquarters will provide that
support.
Finally, Headquarters will evaluate and’ report the previous year’s
implementation of the strategy to the Mr compliance community in the.
second quarter of the next fiscal year. The results will be incorporated into
the annual Implementing guidance and any strategy modifications.
(2) EPA Re i1 Office.
The Regions are charged with negotiating, approving, and submitting to
Headquarters by August the individual State Inspection plans for the
upcoming federal fiscal year. Along with the Inspection plans, the Regions are
required to report to Headquarters in which States, and for what reasons, the
inspection targeting approach is not used.
In addition, the Regions must ensure that the applicable sources scheduled
to be Inspected per the negotiated Inspection plan are entered and flagged In
6

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CDS on time. The Reg )flS are also responsible for ensuring the appropriate
data necessary for eval 4 qation are in CDS or are reported to EPA in a complete
and timely fashion.
(3) State Agencies
The State agencies are responsible for providing information and for
running the inspection targeting model, where applicable. They are also
responsible for meeting the commitments of their negotiated inspection
plans. Finally, the State agencies are responsible for ensuring the appropriate
data are reported in a timely and complete fashion to the Regional Office or
directly into CDS.
When preparing an inspection plan submittal, it is recommended the State
use the Inspection targeting model for ranking Group I sources, and those
Group IV sources that may be substituted for Group I source inspections. on a
State-wide level. The Inputs and results are then presented at the Inspection
plan n. gotiation meeting with EPA.
For local districts that have direct Section 105 grantee status, It is
recommended that such districts be ranked using the inspection targeting
model separately from other districts In their State. Iii such a State. the
State-wide• ranking should be an aggregation of individual local grantee
district rankings with the rest of the State. However, as a general practice,
running d1 trict by district rankings and: aggregating them to the State level IS
-discouraged. To do this diminishes a management benefit of the Inspection
targeting model that allows identifying where current resource distributions
may need reallocation.
For Assistance
The EPA Headquarters contact for this strate r Is Howard Wright. He can
be reached at (202) 475-7034. The contractor for the inspection targeting
model is Perrin Quarles of Perrin Quarles Associates, Inc. He can be reached
at (804) 979-3700.
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Attachment 1
Further Det4Ils on the Inspection Targeting Model
The inspection targeting model is Jointly funded by Regions V, VIII, and
SSCD. It lsbeing piloted In Michigan and Colorado. These efforts have
provided a refined product ready for more widespread application.
The model Is a computerized program which ranks sources for Inspection
priority based on information supplied by State agency inspectors. It
currently runs on a standard X I ’ or AT personal computer and on an Apple
Macintosh. Approximately 3 megabytes of storage capacity and 512 RAM are
required to run the program for a 2.500 source database. The program Is
menu-driven and requires no special computer knowledge.
What Information Is Needed to Use the Model?
Targeting data for each source normally Include:
- Source identification and classification information
- Size data (for targeted pollutants)
- Last inspection results
- Other recent compliance histoly (to the extent available)
- The Inspector’s assessment of potential upset conditions at the source
‘(with four options)
- The Inspector’s rating of O&M practices at the-source - -
(with four options)
- NAAQS attainment status
- Relative contribution of the source to air’ quality problems
(with four options)
- Whether there are multiple compliance problems and/or multiple
pollutant Impacts
- The desired inspection frequency for the source
- The required inspection time and relative inspection difficulty for the
source
- Other unique taigetlng considerations that the Inspector feels should be
considered, as well as the Inspector’s own rating of the source’s
Inspection priority (on a 1 to 4 scale).
What is Ness to Implement the Program?
The followwg steps are necessazy to start up and maintain the program.
- Compile a list of sources that will be eligible for inspection targeting.
The State must identify all NSPS and NESHAPs sources and all sources
over a minimum size (e.g., 10 tpy actual uncontrolled emissions). Inspectors
should review this list to make sure that Important sources have not been
omitted. This review may occur when the inspectors are completing
Individual data forms. Our experience has, shown for the typical State, this
I

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pre-screenirig of the inventory may take 10 workIng days of total inspector
time during the inItial year.
- Prepare targeting data forms for each source Included
on the targeted source list.
Basic source Identification Information can be compiled by administrative
staff using Information normally available In agency reports, emissions
inventories, and the like. A data form for each source may be partially filled
out by administrative staff, then forwarded to Inspectors responsible for the
Individual sources. Compliance and other unique targeting information would
be provided by the Inspectors.
To minimize misinterpretation and Inconsistency among inspectors and to
ensure maximum efficiency, a half-day meeting or work session should be
scheduled to review the data form and answer questions. All Inspectors
should participate. The forms should then be filled out by the inspectors, and
checked by a designated reviewet’ or manager.
If all Inspectors participate, the initial meeting and data form completion
process should take no more than 3 working days for each Inspector.
- Enter targeting data into the computer program.
After targeting data forms have been completed. computer en y may be
performed by clerical staff. Initial entry should be made by one person, then
checked by another person to ensure accuracy. Experience indicates that
Initial data entry should require an average of appro dmately 2 minutes per
form and verification should require approxImately 1 minute per form.
- Generate ranking and planning reports.
A ranking report may be generated by simple menu driven computer
commands. The length of time required to generate the report is dependent
on the number of sources and the computer capability. A typical Xl’ processor
at 6 nih without a math coprocessor will norm2lly process a 500-source
database In 2-3 hours. The printing of the report may be generated in 10-30
minutes depending on the speed and type of printer and computer. These
time requIr ents are significantly reduced by using a 80286 or 80386 based
computer , ttm .
- MaInta ’i the database.
Once established, the database may be fairly easily maintained. As new
Inventory, compliance, or air quality data are obtained, these may be entered
directly into the computerized database by Inspectors or field support staff.
It is also possible to edit the hai d copy form for data entry by clerical staff.
2

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Maintaining the program may be accomplished in a single annual update, or
It may be accomplished as new data are obtained (e.g., Immediately following
an Inspection). Editing and reentry require less than one-half of the time per
form that was required for Initial completion and entry.
Surnmn y
The model Itself is easy to use for anyone. It was designed for use by
Inspectors and managers with very limited computer skills. There Is a help
file accessible at any time as data are being input.
When the ranking and estimated inspection times are coupled with the
known resource base, the actual sources planned to be visited annually can
easily be determined. As a result, an Inspection plan Is born. This plan can
serve the State agency as an effective management tool for Its own Inspectors
as well as serve to meet the EPA’s Compliance Monitoring Strategy
requirements.
Final refinement of the targeting model Is completed. It Is avaThthle to all
EPA Regions for your testing and familiarization prior to Implementation In FY
1989. It Is on a floppy disk with accompanylngdocumentatlon and will be
distributed at the time of the Regional training. Headquarters will continue to
support this activity with on-call technical assistance.
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Attachment 2
Inspection Frequency Guidance
INTRODUCTION
The Inspection is the primary compliance assurance method presently
available In the air program for validating source performance. Therefore,
EPA believes it is imperative that an effective inspection program be
implemented In all States. The following guidance on the expected frequency
of Inspections is Intended to balance the need for a nationally-uniform data
base to enable an evaluation of the effectiveness of the program with the.
needs of State and local agencies to make optimal use of their limited
resources to address the varied and unique air quality problems faced by each
State and locality.
CRITERIA FOR INSPECTION
The frequency of an inspection shall be determined by which requirements
are applicable (SIP, NSPS, NESHAPs) and, for SIP and NSPS sources, by
whether the source is a Class Al or A2 source. In cases where more than one
program requirement is applicable, the source must be Inspected based on
the hIg1 iest frequency of inspection for any of the applicable requirements. It
Is imperative that all sources be Identified by source classification (If
applicable) and appropriate air progi am (SIP, NSPS. NESHAPs) and that
these databe duly entered and maintained in EPA’s Compliance Data System
(CDS).
DEFINITION OF AN INSPECTION
For the purpose of this guidance, a minimally-acceptable State or local
compliance inspection (Level II) is an onsite visit to the operating source to
assess compliance with at least applicable federal air pollution control
requirements. At a minimum, a compliance inspection must be performed for
all federally-regulated air pollutants emitted by the source. Also, a source that
is regulated for visible emissions should be evaluated using an acceptable
reference method. Where a source is federally-regulated for more than
opacity. a compliance Inspection involving only a visible emissions observation
is not gener considered to be a minimally-acceptable compliance
lnsDectlon.
As part of the minimally-acceptable source compliance inspection, an
inspector must record the process operating conditions and, if appropriate,
the control device conditions to determine if any significant change has
occurred since the last inspection or any process or control operation outside
normal or permitted conditions has occurred. It is expected that
minimally-acceptable compliance inspections would also include at least an
operations log check of process and control equipment including continuous
emission monitoring systems logs. It should be noted that these
requirements for a minimally-acceptable Inspection do not require the direct
measurement of operating conditions by the Inspector.
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CLASS Al SIP SOURCES
All operating Class Al SIP sources regulated under the Clean Air Act shall
be inspected annually. Annually is construed to mean at least one onsite visit
is made to each such source between October and September, corresponding
to the federal fiscal year.
There are four permissible exceptions to the Class Al annual Inspection
requirement. The first Is for sources whose operations are seasonal in nature
(e.g., alfalfa dehydrators) and which do not operate more than 90 days per
year. This operating time restriction does not need to be included in a permit
for a source to qualify. However, the nature of its business should clearly
preclude the source from operating more than 90 days per year. To qualify
for this exception, a seasonal source should be well-controlled, should not
have a history of noncompliance. and should not be located in a
nonattainment area for a pollutant that is the determining pollutant for the
Class Al classification. All seasonal sources must In any event be Inspected at
least once every five years.
The second category Is for Class Al SIPgas-flred combustion facilities (gas
turbines, boilers, and Internal combustion sources) which are regulated only
for sulfur dio,dde emissions and which can operate in compliance with the
sulfur dioxide emissions limitations without controls.
The third category is Class Al NSPS and PSD gas turbines that are
regulated only for NOx emissions. An annual compliance determination for
these-sources can be accomplished through record checks without an annual
onsite inspection of equipment.
The last category Is oil-fired or coal-fired Industrial boilers which axe Class
Al SIP sources only because of their sulfur dioxide emissions and which can
operate In compliance with the sulfur dioxide emission limitations without
either controls .or use of low sulfur fuel.
To be excepted, sources In these latter three categories should not have a
history of noncompliance. All excepted sources shall be inspected ‘at least
once every five years.
Exception&to the annual inspection requirement should be ëommunlcated
by the Regi Office to EPA’s Stationary Source Compliance Division (SSCD)
at the start Inspection year and the data base properiy adjusted by the
Regional for subsequent analysis and reporting. Regional Offices are
encouraged to discuss with SSCD any novel Issues which may arise In their
discussions with their States.
CLASS A2 SIP SOURCES,, ,
Except as noted below, operating Class A2 sources regulated under the
Clean Air Act shall be Inspected biennially. However, a State may propose a
modified inspection scheme to Its EPA Regional Office which presents at least
the same level of resource commitment but which the State believes is more
2

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responsive to the needu of Its air quality program. This can consist of any
combination of addItioi al Class Al SIP inspections. Class A2 SIP Inspections.
and Inspections of other sources regulated under the Clean Air Act. This
could include Class B SIP sources In those areas where they are particularly
significant. EPA Regional Offices and their States are free to establish
whatever approach is best suited to their situation as long as the following
conditions are met:
- SSCD must receive information copies of such agreements at the start of
fiscal yeà .
- The State must demonstrate that the modified approach Is based on at
least the same resource expenditures as would be required to Inspect all
Class A2 SIP sources on a biennial basis.
- All operating Class A2 SIP sources must be inspected at least once every
five yea s.
NSPS SOURCEL.
Any operating NSPS-subject source which Is Class Al In size shall be
Inspected at least once every federal fiscal year. All other NSPS sources shall
be treated as Class A2 sources.
NESHA’s SOURCES
All operating nontransitory NESHAP-subject sources shall be Inspected at
least once every federal fiscal year.
ALTERNATIVES TO CONDUCTING PERIODIC ONSITE INSPECTIONS
An alternative to an onsite visit for purposes of saUsf rlng Inspection
frequency guidance by the Statefor any SIP or NSPS source Is the use of
conUn ous emission monitoring Excess Emission Reporting (EER) on a
quarterly basis in lieu of periodic inspection requirements. An EER is a
suitable alternative to an onsite inspection If EER data from the source is at
least equivalent to the information that could be obtained from a
minimally-acceptable Inspection as previously defined. EER data must be
submitted for all pollutants emitted by the source for which the source Is
regulated. tended use of the EER alternative must be agreed upon
between the te and the EPA Regional Office and EPA must receive the
name and C numbers of all sources covered by the alternative.
Another alternative to an onsite Inspection is available for sources whose
compliance Is based solely on the characteristics of the fuel oil burned
(typically percentage of sulfur in the fuel). This alternative is an inspection of•
the fuel oil supplier’s records and a sampling of the supplier’s product. To
realize the saving of Inspector time, a source’s fuel oil suppliers must be
known and fixed over time. If a source purchases fuel oil from the spot
market, has many suppliers, or has suppliers which are not easily monitored
by the State, this alternative may not be appropriate.
3

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G

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— 10 —
G. Section 120: Noncompliance Penalty
1. Priorities for Issuing Notices of 09/12/80
Noncompliance
2. Format for Notices of Noncompliance 12/24/80
3. Implementation of Noncompliance Penalty 02/12/81
Program Under Section 120 of the Clean Air
Act
4. Settlement of Noncompliance Penalty 04/02/81
Assessment Under Section 120 of the Clean
Air Act
5. Adjudicatory Proceedings Under Section 120 04/15/81
of the Clean Air Act
.6. Issuance of Notices of Noncompliance Under 04/30/81
Section 120 of the Clean Air Act to
Seasonal Sources
7. Settlement of Section 120 Actions 02/03/82
8. Use of Section 120 Noncompliance Penalties 04/30/82
to Promote Compliance of Stationary Sources
9. Waiver of Consultation Requirements for 04/21/83
Initiation of Administrative Enforcement
Under the Clean Air Act and Adjustments to
Section 120 Penalties
10. Section 120 Consultation Policy 04/13/84
11. More Effective Use of Clean Air Act Section 07/12/84
120 as an Enforcement Tool
12. Permissible Grounds for Settlement of 03/19/85
Noncompliance Penalties Under Section 120
of the Clean Air Act
13. Rules Governing Conclusion of Clean Air Act 05/15/85
Section 120 Actions
14. Impact of Intermittent Source Operations on 07/02/85
Clean Air Act Penalty Calculations

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— 11 —
G. Section 120 (Noncompliance Penalty), continued
15. Availability of LST Schedules in Clean Air 12/23/86
Act Section 120 Enforcement Actions
Related documents
a. Penalty Computations Under Section 113 06/25/85
Civil Penalty Settlet ent Policy and Section
120 of the Clean Air Act
-- filed at Part E, document #18

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I

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llWil [ O 7 b ff
. )

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Priorities for Issuing Notices of Noncompliance
(09/12/80)
File at Part C, Document #1

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S7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY A
WASHINGTON, D.C. 20460
1
+•• 4 #‘
SEP
‘.JUU OFFICE or ENFORCEMENT
MEMORANUDM
Subject: Priorities for Issuing Notices o.f Noncompliance
From: Director
Division of Stationary Source Enforcement
To: Enforcement Division DirectorS
Regions I — X
As you know, the preamble to the regulations implementing
Section 120 of the Clean Air Act states that on January 1, 1980,
EPA will be issuing the first notices of noncompliance to major
sources that have never achieved compliance with the Act and are
not sUbject to federal or EPA—approved State consent decrees and
adminjetrative orders. Now that you have updated the MSEE docket
pursuan.t to Jeff Miller’ s January 9 and May 12 memoranda, we are
able to predic.t the approximate number of those highest priority
sources. Because some regions will have relatively few such
sources we must determine how to identify and when to reach the
second level of priority.
After informal discussions with many of your staffs, it
seems to us that the most efficient way to proceed is to create a
second category which would include all other sources in viola-
tion of any requirement under a State Implementation Plan (SIP),
New Source Performance Standard (NSPS), or National Emission
Standard for Hazardous Air Pollutants (NESHAP). Within this
second category the region would determine the order in which to
issue notices of noncompliance using such evaluative factors as
size of the economic benefit enjoyed, nature and amount of the
source’s emissions, whether the emissions are causing or contri-
buting to a nonattairtment situation, and the cause of the
violation. We would normally expect particular attention to be
given to NESHAP sources because of the serious nature of those
violations.
It would be appropriate to reach into the second category of
sources whenever the first category is exhausted. I assume that
you would want cases from the first category to be well into the
first administrative hearings before choosing to issue notices to
sources in the second group, because every petitioned case must
be decided by an administrative law judge within the statutory
framework of ninety days.

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—2—
Sources in compliance with schedules contained in approved
orders and consent decrees are the Agency’s lowest priority. It
seems doubtful that such sources will be reached in the forsee—
able future, but. if there is a time when you feel circumstances
justify reaching into that category, please call and discuss it.
It seems to me that this system of priorities imposes the
fewest restrictions on regional operations. Please consider
these ideas and let me have your views, or call Judith Larsen of
my staff at 755—2580. If we can reach a consensus on this
approach we will add it to the implementing guidance which will
go out to you in October.
Edward E. Reich

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II U2 77

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Format for Notices of Noncompliance
(12/24/80)
File at Part G, Document #2

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHIN T0N D.C. 20460
OFFICE O ENFORCEUCNT
MEMORANDUM DEC 2 4 98Q
SUBJECT: Format for Notices of Noncompliance
FROM:’ Director
Division of Stationary Source Enforcement
TO: Enforcement Division Directors
Regions I—X
Some questions have been raised about whether a particular
form is to be used for Notices of Noncompliance. The attached
form was suggested for use in The Noncompliance Penalty Adjudi—
catory Hearing Manual, which your staff has as a resource book.
We have made certain changes in that form, and recommend it as one
which includes all of the necessary elements, It would be prefer-
able to use it unless some particular reason exists for varying
the form.
If you have any questions about. this, please fee ]. free to
call me, or call Judith Larsen of my staff at 755—2560.
/ Edward E. 6ich

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CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Re: (Name and address of facility]
Dear [ Responsible official of source owner/operator]:
Under Section 120 of the Clean Air Act (CAA), as implemented
by 40 C.F.R. Part 66, and by authority of the Administrator duly
delegated to me, I am required to assess and collect a penalty
against stationary sources violating CAA requirements. This
penalty is designed to remove the economic advantage that might
otherwise accrue to a source because of its failure to comply with
air pollution control standards after the effective date of the
specific requirements.
Upon investigation, I have determined and hereby give notice
that the subject facility owned and/or operated by (source
owner/operator] is violating the following legal requicements:
[ Specifically refer to each applicable legal
requirement that the source is violating and follow
with a brief statetne t of the factual basis for each
finding of violation).
The material supporting the above findings is contained in [ name
or description of file and filing system number, if any] located
in [ name of branch or division) of this Regional Office and may be
examined during normal business hours.
As a result of the foregoing findings, you are further
notified that within 45 days of receipt of this notice, you are
obligated to comply with one of two requirements. You must submit
a penalty calculation and a quarterly payment schedule, both of
which are to be determined in accordance with the noncompliance
penalty regulations Technical Support Document and Instruction
Manual, 45 Fed. Reg. 50122—50240, ( uly 28, 1980). Penalties
shall be calculated from the date you receive this notice, and the
first installment of the penalty shall be paid on the date six
months after such receipt.. The calculation of the penalty owed
arid the appropriate quarterly payment schedule, together with
supporting data sufficient to verify the calculation, shall be
sent to [ person, room number, branch, etc.] at this Regional
Office. (The Environmenta , Protection Agency is authorized to
enter into a contract to determine the appropriate penalty and/or
payment schedule in the event that you do not submit the foregoing
in a timely manner. Costs incurred by the Agency for this
independent calculation may be added to the penalty to be assessed
against you).

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In the alternative, pursuant to 40 C.F.R. S66.13, you may
submit a petition for reconsideration challenging the finding of a
violation or alleging entitlement to an exemption from noncompli-
ance penalty assessments. The petition for reconsideration must
be submitted to (person, room number, branch, etc.] at this
Regional Office. Within 30 days of receipt of the petition, the
Agency will, grant an opportunity for an adjudicatory hearing,
proirided that issues of material fact are raised-in your petition
for reconsideration.
Your cooperation in this matter is appreciated.
Sincerely yours,
Regional Administrator
Enclosures

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11 1 g7r ) F [

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Implementation of Noncompliance Penalty Program
Under Section 120 of the Clean Air Act
(02/12/81)
File at Part G, Document #3

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, (tQ $744,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
L p O ’
FEB12 1981
THE ADMINISTRATOR
MEMORANDUM
TO: Regional Administrators
Regions I—X
SUBJECT: Implementation of Noncompliance Penalty Program
Under Section 120 of the Clean Air Act
As you know, implementation of the noncompliance penalty
program under Section 120 of the Clean Air Act began on
January 1, 1981. In preparation for implementation, the
Administrator signed eight delegations of authority to the
Regional. Administrators, one of which addressed the authority
to issue Notices of Noncompliance. Although that delegation
allows Regional Ac3ministrators to redelegáte the authority to
issue Notices t.o the--Division Director level, it seems
advisable, for the time being, for the Regional Administrators
to sign all Notices of Noncompliance. . Therefore, until
further notice please ensure that you sign all Notices issued
within your region.
As a reminder, prior to issuance of a Notice of
Noncompliance, Regional Offices’ are teguired to consult with
the Office of Enforcement at Headquarters. ‘the Director of
the Division of Stationary Source Enforcement is the focal
point in the Office of Enforcement for coordination with
Regional Offices on proposed Notices. -
Finally, as a courtesy to the State in which the
noncomplying source is located, Regional Offices should consult
with the appropriate state official prior to issuance of any
Notice of Noncompliance.
If.you have any questions regarding the foregoing, please
feel free to call Richard Wilson at 755—2977, or Ed Reich at
755—2550.
/ /
Walter C. Barber, Jr.
Acting Administrator

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4

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L
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Settleinent of Noncompliance Penalty Assessment
Under Section 120 of the Clean Air Act
(04/02/81)
File at Part G, Document # 4

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WAS) IPlGTO . D.C. Z 46O
APR2 i
ocr cz or ZN,o*:twzxr
) i EMDR NDUM
Subject: Settlement of NoncomplI nee Penalty Assessments
Under Section 120 of the Clean Air Act, as AzT ended
(the Act)
Fromz. Ric) ard D. Wilson
Acting AssistanV m r . or Enforcement
To: Regional Adn ii,istrator s
Enforcement Division Directors
Regions X—X
As you know, the gencybas established a settiement’policy
for noncompliance penalty as essments. under Section 120 of, the
Act, the particulars ’o which were corTu unicated to you in a
rnemorandum dated October 30, 1980.
Proper ed iniCthtivèprocedures for emotia1izii g the érms
of noncompliance penalty settlements are essential-to enSure -
judicial enforceability of settlement agreements between the
Agency and noncomplying sourcél. With this objective in mind, we
have decided upon the following ’procedures for both conducting
&ettlei ent discussions with noncomplying sources and concluding
settlement agreements .withln the context of Section 22.18-os the
Consolidated Rulesof Practice set, forth in 40 CFR Part 22.
The terms and’condition& of noncompliance per alty étt1erne.ntn
which have been concurred upon by the Division of Stationary ’
Source Enforcement shall be incorporated in a wrjtten ç nsènt
egreement and proposed settlement ørder both of which:eheuld be,
!orwarded to the Rá ionalAdministrator. ’Fo1lowLng reviei z,f the
Eettlement ternts;theBegional Administrator shall Lsauë’i consent
rdec representing final Agency action of the noncorn äee r
145 Fed. Peg . 24360(April 9, 1980). Section 6.9lôf be-
r oncompliance penalty ce lations, 45 Fed. Reg. 5Oll7 (3U1y 5 -
1980), provides, in pertinent part, ’that the Coñso11ciate8 ’ Rp1eB of -
Practice in conjunction’vlth Part’66 Subpart of the r nco1 Pli
nce penalty regulatiãñs -shall govern all adjudicationi ,6f:pen ’eltY
isscssments, Section 2218 of the ‘.Cöñsolidated Ruléa6fPtbCt
provides foe a procedurë ’for settle nent’of penalty asses n ent
proceedings.

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—2—
penalty proceeding. Incorporation of the terms and conditions of
the penalty. settlement in the form of a consent order signed by
the Regional Administrator ‘will enable the Agency to t 1timately
enforce the cor .prorr.ise in Federal istrict Court. 2
1scussions with a noncomplying source regarding settlement
of noncornplianc.e penalty assessments ‘would normally occur, at the
earliest, following issuance of a Notice of t oncompliance to the
source. 3 Notwithstanding settlement discussions,a noncomplying
source must submit a petition for reconsideration to the Agency
within 45 days of receipt of the notice if it wishes to preserv.e
its right to adjudication should a negotiated settlement prove.
elusive, 4 Likewise, the Agency ust respond to a petition for
reconsideration wIthin 30 days from receipt. -
Subsequent to the granting of a hearing, should there be
m tua1 interest in eitheicoTr nenCing or continuing settlement
negotiations, the parties must agree, in ‘writing, to toll the
ninety day time period provided by the Act for an initial decision
by the Presiding Officer. 5 The written agreementbet een the.. - •
2 Consent orders requiting a onetary payment lh settlement of
sources’ noncomplIance penalty liabilities are enfo ceabl . undet
Section 113 (b) of the Act. Consent orders embodyinga credit
program in lieu of a moneta;y pay .ent are enforceable under 28 USC
Sections 1337 and 1345. - -
3 1n some instances, settlement discussions ‘with a noncon plying
source prior to teceipt of a petition for reconsideration maybe
..premat re. A source r.ay choose to forego the opportunit7 for - -
adjudication and. submit its penalty calculation to the Agency
within 45 days of receipt of the notice of noncompliance.
rurther, following receipt and consideration of a petitiontor
reconsideration, it is likely that a more informed judgmentcan be
reached by the Agency regardingthe merits of settling 4particU—
2ar noncompliance penalty action.
To avoid potential estoppClarguments, Regional OffkeO 6u1d
ake clear to noneon plying sources during settlement-dIscussiOns
that the 45 day submittal requirement for petitions fbr
reconsideraticn remains binding. -
5 Section 120 of the Act ónd Section 66.42 of thá iinplerenttng
regulations require thePresidir’g Officer to lssuean initial
decision within ninety days -after the l4thrinisttatOr grantsafl
adjudicatory hearing, unless Otherwise agreeÔ upon by the
parties.

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—3--
parties should expressly provide a limited Interim period to
conclude a settlement of the noncomp’iance penalty action, after
which time the case will proceed to adjudication absertt an
agreement between the parties. 6
Should. settlement be reached between the Agency and the source
during this interim period, the terms r d conditions of the
settlement shall be incorporated in a written consent agreement and
proposed settlement order, both of which should be forwarded to the
Regional Administrator. Followfng.review of the settlement terms,
the Regional Administrator shall issue a consent order representing
final Agency action of the noncompliance penalty proceeding.
In the event settlenent of the noncompliance penalty actiàn
is reached after a Presiding Officer is assigned to the ease for
adjudication, the art ies shall so inform the Presiding Officer and.
request leave to file with the Regional Administrator a written
consent agreement and proposed settlement order. upon execution of
the consent order by the Regional Administrator, the partiei to the
adjudicatory proceeding shall move for withdrawal of the action
without prejudice.
Where a nonco p y .ng source s no subject to an outs’tanding
Federal orFederally approved consent decree or order, the Agency
will not enter into settlement of nonco pliance penalty asseis enta
except in unusual ctrcumstinces without concluding .a consent decree
or order with the source which requires compliance with all appli-
cable legal reguirements. Thus, prior to. the Agency cor cluding a
-settlement of noncompliance penalties, a noncomplying source muøt
xecute a consent decree or order, the terms of whIch are
.acceptable to the Agency. Tbe Federal decree must pcovid.e for
satis!action of any civil penalty liability under Sect jon 113(b) of
the Act. Normally, execution by the Regional Admfriistrator of the
oncompliance penalty settlemer t should not occur prior to10d9iflg
a Section 113(b) consent decree. The Regional Vffices should
onsult with the Division of Stationary Source Enforcement in t) ose
Unusual circumstances where prior execution of the penalty -,
compromise by the Regional Administrator eppe rS nécessaryto avoid
4nreasonable delay in consurnmatthg the noncompliance penalty -
:settlement or impeding effective enforcement of settlement-termS.
copy of the wr1 tten agre mènttolling the ri e dayt1 .The
period. should be forwarded to the Chief Administrative I4 3udge
*nd Director, Division of Stationary Source £nforcement.
copy of the co sent order issued by the Regional
:Admini.stratoc should be forwarded to the Chief Administrative Law
udge and Director, Division of StatIonary So etnforCe eflt.

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—4-
The tents of a noncor pl.iance penalty 6ettlement may provide
monetary payr ent. to the Tinited States Treasury in an enount which
represents the penalty asseEsTT ent as calculated by th Technical
Support Doc ent and the Instruction nual set forth in
Appendices A&B to the noncompliance penalty regulations with any
adjustment as appropriate, in accordance with t he merr orandum, dated
October 30, 1980, entitled Settlement of oncompllance.Penalties
Under Section 120 of the Clean Air Act. Subject to Agency
discretion, in lieu of a monetary payment, in whole or in part, a
noncomplying source ay corr it to an enforceable -credit program
which will yield an environmental benefit beyond what is requ red
under federal and state law. 9 The after tax value of the credit
programmust be equivalent in dollar imount to that portion of the
penalty settlement figure not remitted to the United States
Tr eesury. Where a penalty settle ent provices for a credit
program in lieu ofa monetary pay ent, the agreement shall provide
that failure by the source to comply with the program shall-.
subject the source to either monetaryliability 10 or an
enforcement action for injunctive x elief.requiring compliance with
the credit progr m, or both, at the election of the Agency.
Where there is particular reason to believe that-the-penalty
assessment figure as calculated by the Technical Support Docux ent-.
and ln&ttuction anual which initially forms the basis of settle—
went negotlation6 ay not accurately reflect economic.benefits
derived by a noncomplying source once final compliance with.-.
applicable legal requirements is ultirately- achieved, the penalty
settler ent agreement requiring monetary payment tothe United
States ‘rreasury should specifically provide for a final
accounting. Thus, the ag eement should require written notifica-
tion of compliance from tbe.source (includinc, supporting factual
8 usually, payment cZ a monetary penalty shall beduein one-.
lump sum six n onths subsequent to execution of the consent order
by the Regional Administrator.-.
9 The settlement agceement.rnust clearly delineate enforceable:.
increments of pcogcess’an4-final coTnpliance milestones;.Regional
Offices should consultChàpter VIZI-of the Civil Penalty Policy,
dated July 8, 1980, -regarding the -criteria for acceptable credit
programs. - -
10 The magnitude of monetary liability would be dependen :upOfl
the extent of compliance by.thesouccC with the credit- progra .
The order should provide that where a source abandons the-credit
program, the monetary liability would be equivalent tothe ful1
-penalty settlement figure initially agreed upon.by the Agency - and
the source. The order should further provide thatwhere.a source
misses rilestone dates ofthe credit-project which. causes
substantial delay in ultis ate completion of the project, the
source would be.subject toinonetary liability equivalent to.the
economic savings enjoyed bythe source as a ccsu1t of,itS.failUre
to timely comply with ccedit project milestones.

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— —
and analytical data). once final compliance with applicable legal
requLrer ents has been achieved on a continuous basis. Addition-
ally, a post compliance settle ent calculation as prov ded in the
Technical Support Docu ent and Instruction Eanual (sets forth in
Appendices A, Section V and , Section IV) together with data
necessary for independent verification z2 ust CCOTfl Afl A Source’s
. ritten notification of final compliance. Within 30 days from
receipt of a notification of c pliance, the Agency shall inform
the source, in writing, whether or not the source has achieved
final compliance ith.applic ble legal requirements. In the event
the Agency finds the source in compliance, the written
notification shall also specify any deficiency payment or
reimbursement 11 plus interest owed, The settlement agreement
shall require payn ent by a source of a deficiency or reimbursement
by the governm pt within 30 days of written notification from the
Agency specifying the amount of deficiency or reimbursement.
• Lastly, all noncompliance penalty settlementE shall expressly
‘&tate that failure by the source to seek judicial re ’iew bnder -
Section 307(b) o the Act of the eg1or a1 Administrator’socder.As
linal Agency action 12 thalipreclude review in ud1cial -
enforcement of the settlement of the terr a., the underlying legal
basis of settlement, and the Regional Administrators’ authority- to-
issue the consent order.
Fori s viU be prepared and forwarded to you shortly for uae
by the T egional Offices in all settlements of noncompliance
ei alties. Should you have any questions-regarding the foregoing,
please call Ed Reich at 755—2550 or Stu Silverman at 755—2570.
1 The dollar amount of a deficiency payment or penalty
e1mbursement shall be the difference between i) the ercent g ’-
ë cesenting the chance of success on the.mexits used for nitinl
réttlement of the penalty multiplied by the post onip1Lan -
revised penalty calculation -and ii) the initial noncornpIia sce’
penalty comprodse figure. egardles of the nature ‘of a ent ky
t7 e source in satisfiction of theinitiilnbrcomp iafl .e”penaltY..
ittlement figure (whether a onetary payment to Xhe Vnited Etate 5
‘Tieasury or an approved cr edit project), a penalty deficiency owed
a source is to be satisfied by a one Ary payment• to theVnited
States Treasury.
consent ordere shall be publt bed in the Pederal-
egLstec as final Agency actions, r v ewable in the ‘appropriate
United States Court of Appeals.

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while the deterrrtination of the category into b. Ich a case
uld fall is by its nature somewhat subjective, the following
analySIs will serve as guidance.. A Section 120 case will_usually
vemore_than one major legal Issue. % h ther the__probabili f
sucç sQ 3judged_tbeJ igh or low wilfdepend 6n the um r T
f ues and their cumulative impact on EPA’s case ‘Often, however,
the major issue least favorable to EPA would govern the category
into which the case falls. if all of the legal issues are
favorable to EPA it could be determined that EPA bad a high
probability of success, falling within the 90 to 75 percent
interval or, category A. A case placed within the 60 to 74 percent
interval, ‘in’ general, would havc at least one major issue with
strong arguments on both sides, but the outcome of that issue (and
the cas?) would be weighted to EPA’s advantage. Cenerally, for a
case to be played in category C, at least one major issue would
have strong arguments on both sides but the possible outcome would
be weighted slightly in favor of the source. Finally,:if:.there
were a clear likelihood that at least one major legal _issue would
be decided against EPA. the..case_would fall into category Dand.the
probability of. success wouldbe•s ewhere within the’30 to-44.. -
percent interval. The concurrence procedures.with the - Direetorof.
stationary SourceEnforcement Division will asaure that these
admittedly subjective determinations are made with a ‘base’ level of
consistency. More specific guidance will be developed as
experience varrantz.:
- Although asource’sclaim..to-an exemptibn.. der
Section 120(a)(’2)(B) should’ beana1yzed inthe same, way es-any.
bther iegal issue, the range’ . ithin ich an exemption could affect
robabll1ty,of success is r uch narrower. If the sOurce ‘is clearly
entitle to an exernption,it is w likely that the notice of”’ ’-
noncon -pliance would be issued. If the source clearly did - nOt have
such entitlement, exemption should r t become a factor -skzich’ -: -
reduces the penalty. - - Therefore, the exemption issue should.
influence the category selected in only ‘a limited nu nber : of cases.
As a final step indetermining a iñimt penalty whichtEPA- -
will accept in settling.en ncornpliance penalty clairn.;EPA -Will
reduce the figure calculatedby’the - econ ic value.of--any ±_
expenditures made for 1viranm tally- beneficial:.pzrposé8.ftb Ve--
and beyond expenditure.-ináde:to ccsnply -with..existing-leg&I-; - -‘
requirement.. This-is conceptually analogous to credits : allowed
under EPAa Civil Penalty Policy, dated July 8, 1980 ieee’.:...
particularly Section VIII ) . The ;criteria for acceptability of such
reductions are expected .to .be .comparab]e o those under -that poi icy
but will.be addressed, along ‘with t) à-’lT echanisras.fOr enauring-
enforceability, in a suppleIoent r)) document. •“
, .
js A_ —

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Deterrnining Probability of success in the
Settlement of Noncompliance.PenaltieB
EPA’aprobabllity of..,.auccess,in prevailing in n administrative
hear ng V3 ll deteru ine the minim penalty acceptable for settling
the Ar ount ofe noncorr pliance penalty. Where that probability is
low, the penalty ca.n be greatly re5uced. Where that prcb&bility is
Mgh. there is less reason to reduce the penalty. Legal issues ich
will be determinative in a. noncompliance penalty case are generally
the same ones which affect the outcome of any. enforcement case ere
EPA has to demonstrate that the source is not in compliance with, its
e i&sion limits a d the source defends against •the allegation.
In most cases the range of probability that EPA will win a case
can be estimated as between 30 to 90 percent. If the probability is
below 30 percent. it is unli cely t cat EPA would pursue the case. c
Even when all of the legal issues are favorable to EPA,- it is hard to
irr.agine a case where EPA’S probability of success would.be --•
significantly greater than 90 percent. This produces a 60% range
within which noncompliance penalties can be decreas during the
settlement process. , ,
For ease in administering the program, and to foster national
‘consistency, the reduction range will be divided into four,-
categories. Th R 9iOj a.l Enforcement .DivislOn .Dir c_tôr. ,,w ,
determine a baseline per a1ty figure for
Coççurrence from the Director of the Division of Statior ary.SOUTCe
tniórcement will be required an the category £r n which the
Eettlerneflt figure is to be drawn, and the concomitant reduction. -
-range. Once a range is agreed to. the Regional Enforcement t ivisiOn
Director is free to select the precise reduction percentage within
that range which he or she feels is appropriate without further
concurrence.
Category- Probability of Success Reduction Range
— Category A 90% to 751 10% to 25%
Category B 74% to 60% 26% tO 40%
Category C. 59% to 45%.. 41% to 5 .
— Category D 44% to 30% 56 to 70L

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Cardinar
5

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g7 q r k O S

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Adjudicatory Proceedings Under Section 120 of the Clean Air Act
(04/15/81)
File at Part G, Document #5

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APR 15
MEMORAN TJM
SUBJECT, Adjudicatory Proceedinos Under Section 120
of the Clean Air Act, As Ar ended (the Act)
FROM: Director
Division of Stationary Source Enforcement
TO: Reqional Administrators
Regional Counsels
Enforcement Division Directors
Regions r—x
Recently, Rerbert Penman, Chief Administrative L.aw TtIflrze,
expressed concern regarding the need to maximize the use of tire
available to the Agency given, the statutory tir e constraints under
Section 120 of the Act for adjwiicatory hearings.
With this in r irtd, I am requesting that members of your staff
phone Judge Penman (FTS 755—5509) immediately upon the granting
of a hearing under Section 120 by the Regional Administrator to
inform Judge Penman of the Regional Administrator ’s decision.
Additionally, the Regional Rearing Clerk should forward to Judge
Penman by express nail a request for appointment of an
Administrative Law Judge as well as ‘a copy of the official file,
including the letter from the Regional Administrator arantinq an
adjudicatory hearing.
All materials mailed to Ju e Penman should he addressed ac
fol1 :s:
Honorable Herbert Penman
Chief Administrative Law Judae
U.S. Environmental Protection Aaency
AllO
401 71 Street, S.W.
Washington, D.C. 20460
Should you have any auestions regarding the foregoinn, please
do not hesitate to call me at FT 755—2550 or Stu Silverman at
755—2570.
rdward E. Reich

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6

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Issuance of Notices of Noncompliance Under Section 120
of the Clean Air Act to Seasonal Sources
(04/30/81)
File at Part G, Document #6

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April 30, 1981
SUWICTs Issuance of Notices of Noncompliance Under
Section 120 of the Clean Air Act to Seasonal. Sources
FROM: Director
Division of !tationary Source Enforcement
Sandra S. Gardebrinq
Director, Enforcement flivision
Pegion V
This responds to your memorandum of April 7, l9 l, to the
Acting Assistant Administrator for Enforcement, in which you
asked for clarification of the Agency’s position on issuance of
Notices of ! oncoi pliance under Section 120 to seasonal sources
during off season ceasation of operations.
As you know, we discouraaed issuance of Notices to those
seasonal sources not in operation on January 1, 19R1. This
was not because we felt we were leaally precluded from issuance
of ?‘otices to those sources. Rather, we felt the fact of
compliance by sources by off—seaspn ceasation of operations
continually on and after January 1, 1981, constituted an
unnecessary complication in dealing with the initial
implementation of the program. We were particularly concerned
that the January 1, 1981, date could be misrepresented
successfully as being the date on (or after) which a violation
must occur. We continue to believe that we should avoid,
absent. compelling circumstances, issuing Notices to sources
which have not operated on or after January 1, 1981. However,
once such a source commences operation, a Notice could be
approoriate and could be based on data gathered durinc
operations prior to January 1, 19P1, if that data could he
shown to be art accurate representation of current operations as
well. I assume that most seasonal sources have, or will
shortly, recommenced operation.

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As to seasonal sources which have operated after anuary
, 19S1, but for which we wou}. he considering issuance of a
Notice durina the next (ot any subsequent) off—season, this is
a sor,ewhat easier situation to deal with. As your inenorandu
recoanizee, however, the fact that the source is in temporary
(although not final) compliance would still add a& itLonal
complexity. Obviously, it would be preferable to issue the
Notice while the source is still in operation. Rowever, we
agree that no absolute bar should exist and believe that these
cases should he evaluated on a case—by—case basis in
consultation with this Division. Where a sufficient tactical
advantage would accrue from the issuance of a t otice prior to
recoinnencement of operations, issuance of a T otice could be
appropriate.
If you have any c uestions concerning this pc licy, please
do not hesitate to call me at 755—2550 or Stu Si1verr an of my
staff at 755—2580.
Edward E. Reich
cc: Fnfoccement Division Directors
Regions I—IV, VI —X

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7

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Settlement of Section 120 Actions
(02/03/82)
File at Part G, Document #7

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- iA P OTFC7 ON AGtNCY
___ %SASHINGION,DC 20450
141P /
TEE 382
, , OF IC(OF
, fl” AIR. NO1S( AND RADIAT)ON
SUBJECTS Settlement of Section 12( V
PROMz Kathleen M. Bennett
Assistant Administra arid Radistiori
William A. Sullivan
Enforcement Counsel
10 1 Ur Division Directors
egione I X
The April 2.. 2981, guidance entitled Settlement of
oncor liance Per 1ty Assessments under Section 120 of tho
Clean Air Act ... (copy attached) states that except in
unusual circumstances, the Agency will not enter into
settlement of a Section 120 action without conc1udLng conserit
decree or order with the source requiring coz 1iance with, all -.
applicable legal requirements. Clarification of this
requirement has been requested and this memorandur is intended
to provide such elarjficat on.
The urpoee.of the previously cited requirement was to
ensure that £PA does not lose the leverage of the Section 120
penaity until it is assured that the violations giving ‘rise to
the action were resolved. Thus, the proper interpretation of
_t.he Section 120 guidance is that EPA should not ordinarily
conclude a Section 12 action tanless. it has reason’able—
assurance that the violation has been or will be remedió .
) ‘here the source has already brought itself into eon 2 nce and
is likely to’ remain in corr liance, no Section 113 action ir
aecessary. Further, if the State and source have a9reedil.pon
n order or consent decree which viii resolve the violations in.
sin acceptable manner, an independent. Section 113 action would. :
ot be required and uld ordinarily be ‘inappropriate. -.
owever, the Regional Office should Closely coordinat<i’ -
ction with that of.t3 e EtatI so thbtthSection12ctior1 is
u.ed.with the greatest strategic effect. In the a aenoe-of a
-Etate agreement and where a violation is continuing’, $
federally enforceable’ schedule shoult be established 1.b-
on unction with •ettie ent c i th. Section 120 action’.’-
I hope this clarifies àur position n this ‘ tatter. Zf you
iave any. questions, please call either tick Wilson atPTS’
?55—2977 or Ed Reich at ?TS 382—2807.
attachment

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8

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ll OL T/ T
\
—
-

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Use of Section 120 Noncompliance Penalties
to Promote Compliance of Stationary Sources
(04/30/82)
File at Part G, Document #8

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UNI 1 LO STAlLS ENVIRON ’iENT.AL PR0TECT ON AGENCY
WASHINGTON, D.C. 20460
April 3), 19B2
OFFICE OF
AIR. NOISE AND RADIATION
SUBJECT: Use of Section 120 Noncompliance Pena
to Promote Compliance by Stal
FROM: Kathleen M. Bennett
Assistant Administr t for Air, Noise and Radiation
TO: Regional Administrators, Regions I—X.
Directors, Air and Waste Management Divisions
Regions I—IV, VI —Vill, X
Directors, Air Management Divisions
Regions V and IX
Approximately one year has passed since the Agency began to
implement the Section 120 noncompliance penalty program under
the Clean Air Act. Section 120 was added to the Act as part of
the 1977 amendments and is designed to recapture, in an
administrative proceeding, the economic savings realized by
source owners in violation of applicable emission limits. At
this point, I would like to share with you some thoughts on how
we can use Section 120 more effectively..
To date, only 12 notices have been issued under Section
120, seven of them in Region II. The administrative complexity
of Section 120, involving a potential for multiple adjudicatory
hearings, has tended to discourage a wider use of Section 120.
Yet, as the Region II experience shows, Section 120 can be a
very effective tool in proper circumstances in resolving
long—standing instances of noncompiiance.
While Section 120 is, by its terms, a penalty provision
only, the prospect of a Section 120 penalty can serve as a
useful stimulant to prompt a source to come into compliance. As
the attached memorandum detailing Region II ’s experience with
the program shows, Section 120 can serve as a powerful tool for
promoting swift compliance. A Notice of Noncompliance can often
prove effective where other actions have not.
Even where a State is taking the lead in resolving a ôase,
a Notice of Noncompliance may sometimes provide the additional
leverage needed to prompt a source to agree to an apprppriate
compliance schedule. In discussions with States about the

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resolution of instances of noncompliance, you should discuss the
role of Section 120 and how it can be used to supplement other
actions to achieve compliance. .1 am convinced that we can be
more creative in its use than we have been to date. In
addition, if we can demonstrate that Section 120 can be both
effective and workable, I hope States will take a renewed
interest in delegation of the program. I look to you to promote
such delegation wherever possible.
Please review the attached memorandum and your Region’s
Section 120 program to date to see if your efforts can be
strengthened. I would be interested in obtaining your written
comments by June 1. on how you expect to be using the Section
120 program in the future. In the meantime, please feel free to
address any comments, questions, or problems to Ed Reich,
Director, Division of Stationary Source Enforcement at FTS
382—2807.
Attachment

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LJLU .L
Efficacy of Section 120 Actions in Achieving Proript Compliance Response
by Stationary Sources Violating Eaiission Limits
Walter Mugdan, Acting Chief
Certeral Enforcem -ent Branch
Stuart Silverman, Esq.
Division of Stationary Source Enforcement
At your suggestion, I haveprepared a brief synopsis of our several §120 cases,
with a focus on assessing the efficacy of these actions in achieving prompt com-
pliance response by stationary sources violating emission limits.
As I have told you in the past, we have been surprised and pleased at the value
of the §120 action as a tool for achieving swift compliance, while not resulting
in penalties which are overly burdensome. The following case histories illustrate
these attributes of the progrem, and demonstrate that a Notice of Noncompliance
under Section 120 is often far more effective in achieving prompt compliance than
a Notice of Violation under Section 113.
1. Niagara 1ohawk Power Corporation, Oswego , New York. ! tPC constructed a new
power generating plant subject to New Source Performance Standards. Imme-
diately after start—up, the NO, emission control system failed and its use
was discontinued. For some 14 months thereafter, discussions between EPA
and the company failed to produce an effective response to the problem, and
NMPC operated during this entire time while emitting at two to three
times the permitted rate. Conversations as late as October and November,
1980, in vhi J enforcement action was threatened, did not result in satis-
factory efforts to achieve compliance.
On January 1, 1981, we issued NMPC our first §120 Notice of Noncompliance.
The company immediately hired a consultant, and assigned an environmental
engineer to work on the problem on a priority basis. WithIn three weeks,
the plant was in compliance. iPC was, assessed a $O” penalty because of
the “grace period” built into the §120 ‘penalty calculation model.
2. Boise Cascade Corporation, Beaver Falls, New York. In June, 1980, we issued
a 113 Notice of Violation to 5CC for violation of the applicable opacity
standard in the New York State Implementation Plan. We suspected that there
was a significant mass emissions v o1ation as well, correction of which would
likely require the installation of control equipment. At the State’e re-
quest, we deferred to the New York Department of Environmental Conservation
in handling the enforcement acti-on. ZCC told the State that it believed
minor operating & maintenance corrections could achieve compliance, and
negotiated an order (providing for no civil penalties) establishing a
Schedule for implementing these corrections. The schedule called for a
stack test to be performed in October, 1980. That test showed that BCC
was emitting particulates at nearly twice the permissible rate.
. 1320.4 ( .v. 3.74)

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2
We had two conferences with BCC in late 1980 to discuss the compliance
schedule in the existing State order. We advised the company again that we
thought it would have to install control equipment, and that the existing
schedule was not adequate for this purpose. BCC continued to insist that
0&M corrections could resolve the emissions problems, but agreed to nego-
tiate a revised order with the State. This the company did, but the revised
order provided for what we believed to be an excessive amount of time for
achieving final compliance. (The schedule extended until late in 1983.)
On January 2, 1981, we issued a Notice of Noncompliance to Boise Cascade.
By March we had negotiated a compliance schedule providing for the company
to install the necessary equipment by January 15, 1983. The agreement also
provided for the payment of a $40,000 penalty to liquidate all liability
under S 11.3 and 1.20.
3. Anchor Hocking Glass Corporation, Salem, New Jersey. This glass company
is unable to meet New Jersey SIP particulate standards while burning high—
sulfur fuel oil in its #2 furnace. ormal1y it uses natural gas in that
furnace, but nearly every winter localized gas shortages result in the
company being “cut off” by the gas utility. During these cut off times
Anchor Hocking has switched to the use of fuel oil,, with a resulting
particulate violation. In 1979 EPA issued a Notice of Violation to the
company after a cut off period 1 but in. early 1980, and again St the begin-
ning of 1981, Anchor Hocking again used fuel oil during cut off times.
On January 5, 1981, we therefore issued a Notice • of Noncompliance ‘to the
source. Within one week, the source ceased burning fuel oil and 6UbSe
.quently gave us a commitment to secure an alternative source of gas (pto—
pane) which would be available at all, times on a standby basis to substitute
for the natural gas in the event of a cut off. Although the consent decree
formalizing this commitment has not yet been filed, during another cut off
of gas in December, 1981. Anchor Hocking did not use illegal fuel oil, but
used its propane. (Anchor Hocking has also completed stack tests to show
compliance while burning low sulfur fu ]. oil, i.e., 0.3%.)
The 1lO penalty in this case is difficult to calculate because of the
intermittent nature of the violation. Nevertheless, it is clear to us that
it was the 12O Notice which finally caught the company’s attention and
resulted in a responsive attitude concerning the need to make provisions
for future cut off e. (In the settlement, we are proposing to liquidate
both 1113 and fl20 liability with a penalty of $8500.)
4. National Cypsum Corporation, Cold Bond Division, Burlington, New Jersey.
This’ wall board manufacturer had performed a stack test in 1979 showing it
•to be in violation of New Jersey SIP particulate standards. At the request
of the New Jersey Department of Environmental Protection, it had purchased
a bag house to control the emissions in question. Although it received
delivery of the baghouse in early 1980, Gold Bond failed to install it;
it was left standing in a parking lot.

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-a
On Harch 13, 1981, we issued a Notice of Nonconpliartce to Cold Bond. The
company admitted the violation, and set about to install the baghouse. It
estimated the time needed for this.work —— 5 months —— and the cost, and
based on these factors it calculated the l20 penalty. On June 12 Gold
Bond submitted its check for $2,593.62.
In September Cold Bond advised EPA that it had achieved compliance two month
earlier than anticipated; a stack test confirmed this. It had also managed
to spend less money than anticipated in the effort. The company therefore
recalculated its penalty. We have processed the company’s request for
reimbursement, and a check for $1,250.72 is being prepared:
5. Perfect Finishing Corporation, ew York, New York. 1n 1979 EPA concluded
that this paper coating operation was in violation of New York State’s
original hydrocarbon emission reduction regulation, and issued a Notice
of Violation. During a confeñnce with the source after that Notice was
issued, the source agreed to commence work towards coming into compliance
with the recently promulgated New York RACT regulation for Volatile Organic
Compound (“VOC”) emission control.
By early 1981, however, Perfect Finishing had still not even submitted a
compliance plan to the State, required by the new regulation (6 NYCRR
Part 228) to be done by January 1, 1980. On April 15, 1981, we therefore
issued a Notice of Noncompliance. At a settlement conference held the
following month, the company advised us that after receiving the §120
Notice it had hired a consulting engineer and was embarking on a compliance
program. We have subsequently received a compliance schedule, calling for
the company to be in final compliance with the applicable emission limits
by February, 1982. S
We have calculated the company’s §120 penalty liability, using inputs pro-
vided by Perfect Finishing and reviewed by EPA, at about $4,000.00. We•
expect to execute a final settlement in the near: future providing for pay-
ment of this amount and requiring tlYe company to adhere to its compliance
schedule.
6. Rudd Plastic Fabrics Corporation, Brooklyn, New York. Another VOC source,
this coating operation did not admit it was subject to New York’s Par c 228
compliance deadlines applicable to major emitting sources. (The company,
however, also failed to initiate compliance work in time to permit it to
come into compliance with the relevant emission limits by the deadlines
specified in Part 228 for non—major sources.)
On June 2, 1981, we issued a N tice of Noncompliance. The company initially
denied it was a major source, and a hearing was granted on this question.
Subsequently Rudd admitted it had the potential to emit well in excess of
.100 tons of VOC per year, and agreed to immediately Commence work on a
compliance plan. In order to limit its 5120 liability, the company also
executed a stipulation with New York State on October 1 providing for an
enforceable limitation on its hours of operation such that its maximum
annual VOC emissions would be less than 100 tons. Under the terms of the
New York sip, this action had the effect of delaying the date for final
compliance with the emission limits until January 1, 1982.

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£4
The company was therefore able to reduce its period of noncompliance (as a’
major source) to three uonths, as ca1 ulated in the §120 nodel. Its non—
compliance penalty was deternined yCPA. based on inputs provided by Rudd,
to be $1,029.74. The company has agreed to pay this amount, and a proposed
Consent Order is now being reviewed by headquarters.
7. Chemprerie Division, Richardson Company, Beacon, New York. Another coating
operation, Chemprene had failed to comply with requests from the New York
State DEC to submit a compliance plan as required by Parc 228. In June,
1981, we requested concurrence from Headquarters in the issuance of a
Notice of Noncompliance. In November we received word that concurrence
had been given, and we issued the Notice that month.
At a subsequent conference, we learned chat the company has now developed
a preliminary compliance plan, and that it is actively exploring how to
achieve compliance as soon as possible. The’ schedule calls for ‘final
compliance to be achieved by June, 1983. The company has also indicated
a willingness to settle the §120 action, and has,provided us with inputs
for a penalty calculation. We have advised Chemprene that its penalty
liability is strongly dependent upon the time Out of compliance; .t would
therefore be wise for the company to reduce the length of the compliance
schedule if possible. The company ha agreed to reevaluate the schedule
to determine whether there is any room for reduction.
We feel that these case histories reflect a very definite pattern. Alrnost with-
out exception, the Notice of Noncompliance yielded more immediate and effective
responses from the recipients than resulted from a 5113 Notice of Violation or
from a State enforcement effort. This is espec à1ly important where (as has
been true for the last four cases we have sent to Headquarters, we are dealing
with a major source of air pollution operating out of compliance in a non—
attainment area.
Perhaps the best examples of instances where lengthy periods of ineffective
compliance activity by a source ¶ .zere’repladed, virtually overnight, by prompt
and effective compliance programs are Niagara Mohawk, Boise Cascade and Perfect
Finishing. In each case, the source had beez “working’ on achieving compliance
for an. extended period (from 9 months to 1 1/2 years) without success. These’
companies vera not acting in overt bad faith; on-the coatrar , they appeared to
be cooperative and desirous of achieving compliance. Nevertheless, they had
failed, presumably because corporate management had simply not assigned a
sufficiently high. priority to compliance efforts.
Yet within weeks of receiving the Not ice of Noncompliance, each company undertook
a completely new approach to the problem. Niagara Mohawk worked literally around
the clock to fix its NO control system; Boise Cascade ended 9 months of basically
useless playing about with O&M as a compliance tool; and Perfect Finishing, which
had for nearly 2 years been unable or unwilling to devise a compliance plan despite
steady contact with both the State and federal environmental agencies, devised the
plan for achieving compliance by February, 1982, within several weeks after the
Notice was issued.

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In each of the other cases, the companies appear to have ignordd regulatory
requirements, although most produced detailed reasons for their extended
noncompliance. It would therefore be difficult to assert that these businesses
were actually dealing with us in Thad faith. In each instance, however, it
was the Notice of Noncompliance which provided the needed incentive for the
company to finally get down to work. National Gypsum/Gold Bond is the best
example of this: the company had purchased the baghouse over a year earlier 1
brit never got around to installing it. When the Notice arrived, it estimated
a 5—month installation period which it was able to reduce to 3 months.
None of our 5120 actions have resulted in a penalty which can be considered
large; Boise Cascade, the largest, was only $40,000. We believe there are two
other factors involved in a 5120 action which provide the incentive for prompt
compliance response: (1) the certainty of the penalty — if. the company is
indeed in violation, it will have to pay a penalty and cannot escape liability
by producing lengthy explanations of its past noncompliance; and (2) the direct
relationship between sire of penalty and duration of noncompliance. With respect
to this latter factor, we have learned that in a corporate structure, operating
personnel are often accountable for penalties resulting from their unwillingness
or inability to achieve compliance. It is therefore important for these indi-
viduals to limit any such liability to its lowest possible level, even if the
penalty is small in absolute terms.
Finally, we would note that our experience to date (which comprises about half
of the nation’s 5120 cases) has shown us that the program is much less resource—
intensive than a program oriented towards judicial litigation. In general, we
have tot found the administration of the program to be overly demanding, and we
have so far enjoyed great success in being able to achieve favorable settlements.
In no case have we yet settled an action for less than the calculated penalty
which has further enhanced the credibility of our program. (The penalties
themselves have nevertheless been quite modest.)
Based upon our understanding of the Agency’s present policies, we believe that
the §120 Notice of Noncompliance is an appropriate tool to be used in implementing
the enforcement goals of this administration. We fee]. that where, as in many of
the VOC cases, for example, a company has d layed for one to two years in making
plans to come into compliance, its belated efforts to do so — initiated only
after an EPA inspection or an EPA §113 Notice of Violation — do not represent
the sort of good faith compliance efforts which, under the administration’s
policies, might suggest a nonconfrontational approach to the problem.
If you have any additional questions about our experience with the §120 program,
please do not hesitate to call me at(FTS)2649858.

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9

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II OL fl T IL :

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Waiver of Consultation Requirements for Initiation of
Administrative Enforcement Under the Clean Air. Act and
Adjustments to Section 120 Penalties
(04/21/83)
File at Part G, Document #9

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASH PNGTON, DC 20460
PR 2 1 1983
QFFICC OF
MEMORANDUM ENFORCEMENT COUNSEL
SUBJECT: Waiver of Consultation Requirements for Initiation
of Administrative Enforcement Under Clean Air Act
and Adjustments to Section 120 Fe elties
FROM: Michael S. Alushin , 3 q.
Acting Associate Enforcement Counsel for Air
TO: Regional Counsels
Regions I-X
I hereby waive the requirement that Regions consult with me
prior to taking administrative enforcement action under Section
113(a) of the Clean Air Act and conducting review and adjustment
of penalties paid in a Section 120 proceeding.
On March 31, 1983, new delegations of authorities related to
the Clean Air Act became effective. At the sane time, a number
of authorities were redelegated by Courtney M. Price, ’- Acting
Associate Administrator and General Counsel.
Under, the terms of Delegation 7-6, authority to make
findings of violation, to issue notices of violation, to issue
orders, and to confer with violators is delegated to the Regional
Administrators and the Assistant Adm .nistrator-for Air, Noise
and Radiation. This delegation is limited by a requirement that
RA’s consult with the Associate Administrator for Legal and
Enforcement Counsel before exercising authorities other than
issuing notices of violation and making findings of fact.
Delegation 7-46 delegates authority to adjust the payment of
noncompliance penalties under Section 120 to the same persons
and subject to the same limitations.
Courtney Price has designated the Regional Counsels and the
Associate Enforcement Counsel for Air to perform the consultation
role for OLEC, with the restriction that Regional Counsels consult
with the AEC for Air. I am authorized to waive my consultation
role.

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-2—
The Regions have sufficient experience in exercising
administrative enforcement authorities to render consultation
with OLEC in Headquarters unnecessary. Moreover, the limited
duration of Section 113(a) administrative orders, discussed in
the attached guidance, makes it necessary that the Regions be
able to issue them on very short notice. Adjustment of Section
120 penalties is a computation which is unlikely to present any
legal or policy issue for which consultation would be helpful.
Therefore I hereby waive my consultation role regarding these
functions.
Attachment
cc: Ed Reich, SSCD
Jonathan Libber, OLEP

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IC

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flW11PO T
. 4

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Section 120 Consultation Policy
(04/13/84)
File at Part G, Document #10

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u: :. :T; i ; [ :) ..Ji : 1 . ;Er cy
V/A KFJ . •;Ci• , i C.
o ;c c;
Z JT AN
C M ’L:bI CL /.OTC iG
M2C Consultation Policy / /
/
iichae1 S. Alus’ni:i 7 / / 2 ’2’1
Associate nforcement Counsel :or Air
All Air Enforcement Division Attorneys
are hopeful that I PA s ef o t D increase Regional
se of the §120 administrative remedy w il result in a
:o able number o new §120 actions
In light of that’ possibility, please not. the
Li ies with respect to §120 cc sulto. ions between the
Ra ions and OECN, and between 0EC 1 attorneys.
1 . All Regions egion II are recuired to consult
with OECM before issuing a Notice of Noncompliance (‘NON’ t )
(Del, No. 7—45).
2. 11 Regions must consult with OECM prior to offering
settlement proposal (Del, No. 7—41-A).
3. With respect both to NONs and settlements, the
pertinent OECM Regional liaisèn attorney will serve as the
lead OECM attorney for each consultation, but must consult
wi Larry Groner before responding to the Region.
4. With respect to settlements only, the pertinent 0EC!
Regional liaison attorney and/or Larry Groner must obtain
final clearance for the recothmended OECM position from me as
the last step prior to responding to the Region. In the
case o f issuances of N0N , only those which appear cuestion-
able need be cleared by me.
Please continue to provide Larry Groner synopses of
: 2O actions, and updates of current actions, on the
ms provIded for that purpose.

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11

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More Effective Use of Clean Air Act Section 120
as an Enforcen ent Tool
(07/12/84)
File at Part G, Document #11

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, D.C. 20460
4 L ppOl
JUL 12
MEMORANDUM
SUBJECT: More Effective Use of Clean Air Act §120 as an
Enforcement Tool
FROM: Courtney M. Pric C 1 ’._ 1 ._
Assistant Administrator to Enforcement
and Corn liance Monitoring
Administrator
or Air and Radiation
TO: Regional Administrators
Regions I—X
Regional Counsel
Regions i—x
i. Introduction
We encourage you to increase use of the S120 program in
EPA Regional air entorcement eftorts tor the remaincer ot ty
84 and in future years. The purpose of this memorandum is
briefly to describe the substantive provisions and the
practical and policy advantages of S120, outline the probable
reasons for its underutiliZa iOfl py Regions-, and provide
guidance tor the most ettective use of this valuable entorce—
ment tool.
ii. Description of Section 120
Congress aaded §120 to the Clean Air Act in 1977 to
remove the economic benefit incident to violating air
pollution control standards. Regulations implementing this
provision were promulgated July 28, 1980 and became ertective
October 27, 1980, while actual implementation ot the §120
program began January 1, 1981. The D.C. Circuit upheld the
regulations, with minor exceptions, in Duquesne Light Co. V.
EPA , 698 F.2d 457, on January 7, 1983.

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—2—
Section 120 relies exclusively on economic incentives to
achieve environmental objectives, and in so doing constitutes
a significant theoretical and practical departure from tradi-
tional regulatory enforcement methods, in the words of the
statute, the sole measure of recovery is the “ecdnomic value”
of the ‘delay in compliance,’ S120(d)(2)(A), i.e. , the foregone
or delayed capital expenditures and operation and maintenance
costs.
Deprivation of this benefit accomplishes two important
objectives. First, by eliminating the unfair and distorting
economic advantage accruing to noncompliers, it restores equity
in the marketplace between sources which have timely installed
pollution controls and those which have not. Second, by
equaliziricj the costs of compliance and noncompliance, it
removes any economic incentive not to comply with the Clean
Air Act.
Therefore, in contrast to the other tools available for
air enforcement, Section 120 is fundamentally a corrective
market mechanism, not a sanction to punish wrongdoing. It is
to be distinguished in particular from §113 in this regard.
While the enforcement theory of civil judicial actions under
§113 also includes the economic costs o,f com liance, §113
penalties may in addition reflect mitigating and aggravating
factors incident to noncompliance. These latter factors are
no part of the calculus of §120.
Section 120 assessments are calculated from the date the
source owner receives the Notice of Noncompliance to the date
of compliance. Neither informal negotiations nor formal
administrative hearings nor appeal s tolls the running of the
assessment. In addition, it is difficult for sources to
argue over the calculations of these often—substantial assess-
ments. In the appropriate case, then, §120 can provide a
very strong incentive for early compliance.
In contrast to S].13 , §120 utilizes wholly administrative
proceedings, over whiàh EPA has exclusive jurisdiction.
Moreover, its drafters wrote tight time limits for action
under §120 right into the statutory text.
•The following four categories of noncomplying stationary
sources are subject to assessments under §120:
° major sources not in compliance with emission
limitations, emission standards or compliance
schedules under state implementation plans (“SIPs”);

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—3—
o sources not in compliance with New Source Performance
Standards (“NSPS”) or National Emission Standards
for Hazardous Air pollutants (“NESHAPs”);
o sources not in compliance with interim emission
control, requirements or schedules of compliance
under extensions, orders, suspensions, or Federal
or State consent decrees issued to enforce SIPs,
NSPS or NESHAPS; and
o nonferrous smelters not in compliance with interim
emission control requirements or schedules of
compliance under §119 administrative orders.
Section 120 awards are in addition to any civil or
criminal penalties which may be judicially imposed under the
Clean Air Act or under State or local law.
III. Reasons Given for Underutilization of Section 120 and
Responses to Those Reasons
A. Reasons for Underutilization
Despite the practical and policy advantages offered by
§120, EPA Regional Offices have used this provision only
rarely,*/ and no states have sought delegation of the program.
EPA Headquarters recently canvassed Regions to uncover
the causes of this underutilization. Those Regions which
were critical of the Sl20 program voiced one or more of the
following generic complaints.
1. EPA Accountability Systems : “A referral counts as a
‘bean,’ a §1.20 action does not,” or “referrals
count more.”
2. Resources : “S120 is too resource—intensive,” i.e. ,
significantly more resource—intensive than a referral.
3. Impact : Section 120 is “less effective” than a
referral; you “get more” with a referral.
B. Responses
We are hopeful that the following information will answer
these complaints.
*/ From January, 1981 thtough May, 1984, EPP had initiated
twenty—nine proceedings under §120.

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—4—
1. EPA Accountability Systems
EPA accountability measures recognize §120 actions as
fully equal to civil litigation referrals. Under SPMS, both
the Air Program Office (SSCD) and OECM (CAPO) count §120
actions and referrals equally for addressing Significant
Violators. In its workload model for Regional resource
allocation, the Air program Office examines each Region’s
past use of §120 as a guide to future resource allocations,
and a strong, committed effort is now underway to count §120
actions as outputs in OECM’S resource allocation model.
Finally, the Al Aim quarterly reports — perhaps recently the
most visible and closely—examined accountability documents ——
give §120 actions and civil referrals equal weight.
The Deputy Administrator has focused the Agency’s
attention on §120 in other contexts, as well. For example,
Mr. Aim has singled out Region II for praise for its extensive
use of §120, both in a March 12, 1984 memorandum to Joe
Cannon and in remarks prepared for delivery to the April 25
meeting of Regional Administrators. In addition, Mr. Alm has
emphasized the promotion of §120 in his Regional visits.
2. ResourceS
In the appropriate case, a §120 settlement or adjudication
requires approximately the same resources as a §113 settlement
or litigation.’ (We have provided case selection guidance at
part IV, below.)
In some cases, a §120 settlement may require less work:
a. Where §120 requiresdrafting a NON and conducting
a computer—generated assessment calculation,
§113 requires a more onerous and complex drafting
exercise, including, inter alia , a litigation
report, complaint, and consent decree;
b, §120 settlement negotiations can be less onerous
than those for §113 because §120 results only in
a relatively simple EPA order, not a more
elaborate District Court order; and
C. §120 is an administrative exercise, wholly
within EPA, with tight deadlines written into the
statute; §113 requires EPA dependence on another
pjgency —— DOJ —— where the timing and hand1in of
the case may be largely out of EPA hands.

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—5—
Section 120 actions ot course can be resource—intensive
if the case reaches the hearing stage, as can §113 actions
which go to trial.
3. Impact
The overarching goal of Clean Air Act enforcement is
compliance. Judiciously used, SS12O and 113 have the same
ultimate impact: to force the source to pay attention to
its obligation to comply with the Act in a timely way.
However, this is not to say that both provisions operate
the same way or are equally well—sui ted to all kinds ot
enforcement actions. In fact, there are three fundamental
distinctions between the enforcement mechanisms of §5120 and
113:
a. A §113 settlement typically results in a court—
approved corsent decree, a §120 disposition in
an admiiist ative agreement;
b. The Sli de ree is enforceable by the court
under i continuing jurisdiction; entorcernent
ot the § O agreement woulo require tiling a
new C V L. action;*/ and
*/ This distinction in e! forcement mechanisms —— which implies
a greater resource burden in the §120 action —— has in practice
proved less important than it might tirst appear.
Experience with §120 shows that there is at least one
administrative procedure which can be used instead of a
§113(b) court action to ensure effective compliance schedules
for §120 violators. Region II has rnaaesigniticant use of it
arid found that.it requires significantly fewer resources than
a §113 action. Under the administrative procedure, EPA sets
out the terms of a §120 settlement in a “Consent Agreement
and Final Settlement Order.” (See, for example, Attachii ent
1.) The Consent Agreement document, executed by both parties,
contains both 1) a Preliminary Statement, which sets forth
the procedural and substantive history of the case dating
from issuance ot the Notice of Noncompliance, and 2) the
Consent Agreement itself, which recites the obligations of
the parties to the Agreement, incluoing in particular the
obligations of the source to reach or maintain compliance
with applicable legal requirements ana to pay a noncompi.iance
assessment. In the “Final Settlement Order,” the Regional
Administrator concurs in the Consent Agreement ana orders the
source to comply with it.
(tootnote cont’a on next page)

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—6—
C. The §113 decree generally contains stipulated
penalties for its breach; breach of a §120
agreement would result in larger assessments
pursuant to the underlying statute.
In practice, however, these often prove to be distinctions
without a difference. Judging by Region II’S experience, it
is likely that you would achieve the same result —— i.e. ,
compliance and an adequate penalty/assessment —— using either
provision.
Therefore, what really should be at issue is which
provision will most effectively ensure compliance. In our
view, it would be appropriate -to use a “resource—balancing”
procedural test in choosing between 5S120 and 113 in any
given case, as follows:
a. Determine whether each action reasonably can be
expected to achieve a satistactory result,
i.e. , an appropriate penalty/assessment and
compliance schedule;
b. If both carl, make a reasonable projectiçn as to
which would ’consuxne tewer resources considering,
.tor example, speed of comp)4ance and likelihood
• •ot’ litiga-t-idn; and
c. choose the action.that you project to consume
fewer resources.
IV. Best Candidates for 5120 Action
Careful case selection is essential for effective use
of the §120 remedy.
(rootnote cont’o)
The inclusion of a compLiance schedule in the §120 order,
which establishes a compliance date in the reasonably near
future, e.g. , within six totwelve months from the date of V
settlement, comports with the L ebruary3, l9 2 guidance
document on settlement at §120 actions (Attachment 2).
While, strictly speaking, entorcement of the Order woulo
require filing a new civil action, Region II thus far has not
tound it necessary to institute litigation to entorce these
oroers. You should also note that, the order is rattea 50
that failure by the source to seek jucicial review ot the
oroer as final Agency action under §307(b) of Act precludes
review in judicial enforcement of the settlement or the terms,
and underlying legal basis ot settlement, and the Regional
Administrator’s authority to issue the Order.

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—7—
In the abstract, a §120 action will provide the greatest
pressure tor quick compliance where a large capital investment
and a reasonably long compliance schedule (i.e., months or
more) are required. Operation and Maintenance (“O&M”) costs
typically are not dispositive unless signiticant post—compliance
O&M expenditures are required.
However, such cases can prove the most contentious and
resource—intensive. Theretore, we recommend focusing initially
on cases which:
A. present clear and uncontestable violations, there
being no significant question of,e.y., regulatory
interpretation;
B. offer the possibility of reasonably quick compliance;
and
C. seek sizeable assessments, but not so large that the
source likely will exhaust all available procedures
to fight them.
In some cases against sources subject to the post—1982
enforcement policy, a state enforcement proceeding will
succeed in placiny the source on an expeditious compliance
scheaule but tail to obtain a substantial cash penalty.
These cases are likely to be excellent candidates for §120
actions it the three criteria above are met.
The following cases from Region II, which together
incorporate these qualities, help demonstrate the utility ot
S 120.
° Boise Cascade Corporation (Beaver Falls, New York).
The primary purpose of this enforcement action was
to shorten the source’s proposed. compliance schedule.
In June 1980, EPA issued a 5113 Notice of Violation
to BC for violation of the SIP opacity limit. EPA
suspected significant mass emissions violations, as
well, probably requiring installation of costly
control equipment. For six months, BC told EPA and
the State that it could achieve compliance through
minor operating and maintenance changes. The State
executed a consent order (imposing no penalties),
setting a timetable for these changes and calling for
a stack test by October 1980. This test showed that
BC was emitting particulates at twice the permitted
rate.

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—8—
Two conferences between BC and EPA in late 1980
tailed to produce a commitment by the company to
proceed with control equipment insta).laLion. A
revised State consent order provided for an
excessive period of time for study ot the problem
and implementation of corrective action.
On January 2, 1981 EPA issued. a §120 Notice of
Noncompliance to BC. By Ilarch, EPA and the source
had negotiated a federal consent decree calling ror
installation of control equipment by January 15,
1983, six months earlier than provided for in the
revised State consent order. BC also agreed to
pay a $40,000 penalty. (This figure exceeded
the S120 liability, but also liquidated SC’s §113
liability.) BC has complied witri the consent
decree.
° R.B. Newman Fuel Corporation (Tonawanda, New York).
Here, §120 provided su ticient incentive tor
compliance because of the expertse.of the control
equipment together with its availability and ease of
installation. Newman owned a gasoline loading
terminal which had tailed to install a vapor recovery
system by mid—1982 as required by the. SIP. purchase
costs of the system were substantial, installation
costs were low and installation could take place
quickly because the equipment constituted “ott—the—shelf”
technology. The company had received a State consent
order providing for compliance by July 1983, and
imposing no penalties. This source was also
subject to the Administrator’s enforcement policy
pertaining to sources in non—attainment areas with
attainment dates of December 31, 1982.
EPA issued a §120 Notice on January 3],, 1983. At
that time, the company had not yet even purchased
the necessary control equipment. Faced with the
§120 action, the company acceleratea its com 1iance
schedule to achieve compliance by June 1983, and
paid the full calculated §120 penalty of $6,150.
V. Worst Candidates for §120 Action
0
A. Where compliance costs are very large and the governing
state regulation is ambiguous.
Section 113 is a more etficient remedy here; it allows
EPA to settle tor a penalty amount wr ich takes into
account the equities or the case, and makes less
likely the possibility of protracted litiç ation.

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—9—
B. Where the source’ is so recalcitrant that it likely will
not. respona to anything Dut a contempt ooer.
In this case, EPA probably would be torcea to enrorce
a S120 oroer in court. Theretore, it would be preter—
able to avoid the intermediate step by instituting a
S113 action instead.
C. Where the sum o the capital costs or compliance ‘and
0&M expenditures is so small that it alone provides
very little incentive tor compliance.
vi. Conclusion
Congress enacted Section 120 to provide EPA ‘an additional
enforcement tool with which to address air pollution sources
stil.l out of compliance with Clean Air Act requirements.
Although §120 can provide a very ettective complement to §113
of the Act t used judiciously, the provision has been
underutilized.
• Headquarters commenced its current effort to expand the
Regions’ use Ot S120 in March or this year. since that time,
Regions III, IV, •V, VI and VIII have shown renewed interest
in the noncompli anca remedy, Region II has maintained its
exemplary performance in this area, and the rate ot §120
actions brought in 1984. is now well, ahead of that in 1982 and
1983.
Despite.these positive trends, S120 requires continued
attention and support. We urge IOU tO increase use ot this
erfective remedy.
Attachments
CC: Enforcement Contacts

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U J1TED STAT .S E?1vIP.ONtILNTAL PR0TECTIO ACENC’f
REGION IL
— —. — x.
Zn the Matter of CONSENT ACREE!IENT
UDD PLASTIC FABRICS CORPORATION : . and
(Brooklyn, flew York)
: FINAL SETTLE !ENT ORE .
Proceeding Under Section 120 of
the Clean Air Act .
• Index No. 120—102C
x
PRELIMINARY STATEMENT
R.udd Plastic Fabrics Corporation (hereinafter Rudd àr
Respondent) owns and Dperates a fabric coating plan: in Brook
11ev York. Pursuant to Section 120 of the Clean Air Act (the
42 U.S.C. S7420, and the regulations pronulgated thereunder,
CFR Part 66 (published July 28, 1980 a.: 45 Fed. Reg . 50110 e:
the Regional Ad .inistrac .or of the United States Environnencal
tection Agency (EPA) Region II issued a Notice of Uonconpli;
on June 2, 1981 to Respondent. The Notice cited Rudd for via:
of Titif 6, Official Compilation of Codes, Rules and egu1ati
of the State of New York (NYCRR.), Part 228, a portion of th
federally—approved State I p1enentation Plan for the air qual:
/
control region in which Respondent’s Brooklyn facility is loc
The Notice also advised Rudd of its liability for paynent of
nonco pliance penalty pursuant to Section 120(a)(2)(A) of the
________ Act.
E Y—GE:W!Mucda nfwer x4? 5E cW!NCES _________
2END- 2 J2R
JPNAME MVtDAN 3ONQIONSXY L’ • ( S 1 # ii 4 ., Dz ç ;
DATt .. , “;, j;; ; .....
C...... . — OFFiCA IL.E

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P ..rond.n tilad a ?.t.1 ..&.”. -
L98Z. d.cyL3g P t vjO1*tiCQs 1S5Ud. tha R.gtoQa
alter CO si4Srar.io of espo OeAt’ Petitiob, gra ted aU ad udt a
tory hearing pursuant to the provisions of 40. CPR S66.41 (45 Fed.
Reg . 50ll4) in lieu of adjudication of these issues, however
the partieB have agreed that settlenent of this proceeding a d
execution of this Coàaent A ree eat without adjudication arid
further delay is appropriate and in the public interest.
Rudd baa, fiJrther ore, taken steps sufficient to terninate
any violation alleged in tThe Notice of Nonccnpliance, and thus
to terninate any further accrual of liability for norico p1iance
penalties under Section 120 of the Act arid che. regulations ther
under.
Without a4j dicaiOn of any issue of fact or law, the part
brtbeirat’corneys and authorized officia .s , therefore consent
the following:
CONSENT ACREEN!NT
1. Respondent adrnits the jurisdictional allegations set
forth in the notice of Noncompliance issued to it by the EPA C
June 2, 1981 (Index No. 120—10204).
2. Respondent neither adnita nor denies that it is 1ia
for paynen of noncompliance penalty pursuant to Section 12C
of the Clean Air Act and the regulationS pro u1gated thereund
40 CTR parr 66 (45 Fed 1 50110 et as asserted in r
above—referenced Notice.

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3. y na ch. .t t 1 . day. .1 r t b
h.raiz , R.upond nt .b.11 r.ait to cb. P.egioo l Beating
I Region l l, by cashiera or certified check made payabls. to Unite
States Treasurer, * oncoap1iancs penalty in the imount of
$1,029.71.
4. The United State. T Iionmental rotaction Agency-,— Re
gioa II, agree. to accept the pay ent provided for in Parag:epb
3, above, in full, and final aettlenent of a12 liability, obliga
tion or duty of any kind of the Respondent under Section 120 of
the Clean Air Act arising out of or connected with any aspect a
•:Respond ?s operation of its fabric coating plant in violatiot
jof 6 YCR& Part 228 prior Co the date of the Order herein.
5. Until such tine as Rudd ha. reduced its enissioca of
volatile organic compounds to or below the maxinum levels per ’
nittéd uno.r6 N ’ fCPR Part228, Respondent will not operate eith
coating nachineat its Brooklyn, New York facility for more tha
total of 6,132 hours during any one calendar year.
Dated: Zi- ‘. RUDD PLASTIC PA3RICS coa oa io
620 62nd Street
ro.oklyn, t1 ‘fork 1l2 20
It
II
Dated: 7-,i- !z
:
:1
alter E. Mug an (1 -
Chief
General Enforcement Branch
Enf orcement D tvisioe.
B
By:
.IJNITJZD STATES ENVIRONMENTAL
4R0TECTI0N AGENCT, REGION II
26 Federal Plaza
Nay ‘fork, Nay ‘fork 10278
By:
£chael P’ onchons y
Acting Director
Enforcement Div is ion

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ORDER ,
The Regional Adniniatrator of the United States nvironnen
a]. Protection Agency ,.Region II, hereby concurs in the foregoin
Consent Agreement. and orders Respondeflt to conply therewith.’
This order represents final-Agency action under S ction 12
of the Clean Air Act, 42 U.S.C. §7420, and 1 as such, is reviec
under Section 307(b) of the Act, 42 U.S.C.. 57607(b), in the U :
Stares Court of Appeals for the Second Circuit. Respondent’s
ia li re to seek judicial review under Section 307(b) of the A
shall preclude review in judicial nIorcenent of this Order of
the validity, penalty anou t, and propriety of the rerns an.
conditions of the foregoing Consent Agreement.
Dated: ev York, New York
/4 , 1982
R fonal Adninistretor
United Stares Environnental F:
tection Agency
26 Federal Plaza
New York, Nev York 10278

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12

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Permissible Grounds for Settlement of Noncompliance Penalties
Under Section 120 of the Clean Air Act
(03/19/85)
File at Part G, Document #12

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• itO S 4.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
• WASHINGTON, D.C. 20460
\ /
4tpg 1t .
MEMORANDUM
SUBJECT: Permissible Grounds for Settlement of Noncompliance
Penalties Under Section 120 of th Clean Air Act
FROM: ‘Courtney M. Price
Assistant Administrator for Enforcement
and Compliance Monitoring
Charles Elkins, Acting Ass ta Admi9str to
for Air and Radiation _____
TO: Regional Administrators, Regions t—X
Regional Counsels, Regions I—X
Attached for your information and use •is the revised
S120 policy governing permissible grounds for settlement.
This document supersedes the October 30, 1980 memorandum
which previousl regulated this subject. You will note that
the sole determining factor in calculating the proper minimum
settlement amount is the probability of success of the Agency
in prevailing in art administrative hearing under Section 120
were one to be held. This includes a consideration of the
likelihood of proving a violation and, in a limited number of
cases, the probability of refuting a claim for an exemption
where the Agency does not believe one is warranted.
We have attempted to make the policy as easy to administer
as possible. While there is a requirement for Headquarters
concurrence to ensure national consistency, it should not
prove onerous. Regions need only obtain the concurrence of
the Director of the Stationary Source Compliance Division and
the Associate Enforcement Counsel for Ai’r, or their designees.
LMoreover, concurrence is required only with respect to the
p, 1 .f’general range of penalty reduction sought; the Regional
Administrator is free to select’ any precise reduction percent—
age within the reduction range which he or she determines is
“1 j appropriate without the need for further concurrence. As
with the civil penalty policy, this process establishes a
minimum settlement figure only; it does not compel the Agency
to settle at that figure.

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—2—
The attached policy would be applicable to any State to
which EPA delegates Section 120 authority. The precise nature
of any State—EPA coordination would be addressed in t..he
particular State delegation notice.
Credit Authority Withdrawn
This revised settlement policy also deletes authority
for EPA to accept “credits” as part of a §120 settlement.
Credits represented set—offs from the calculated §120 penalty
for costs borne by. the respondent for environmentally bene-
ficial projects beyond those required to comply with the
law.: Authority for credits had been provided both in the
October 30, 1980 memorandum and in one of April 2, 1981.
(The April 2, 1981 memorandum also provides guidance on
several aspects of §120 settlements other than credit projects;
the settlement policy issued today has no effect on the
April 2, 1981 memorandum other than to delete its authority
to use credits.)
Based on a reevaluation of the language and objectives
of §120, we are convinced that credit projects do not comport
with Congress’ intent in enacting the noncompliance penalty
program. Congress’ purpose was to craft a simple administrative
tool with which EPA could speedily recapture in toto the
economic benefits derived from respondent’s noncompliance.
In stark contrast to §113 civil actions, Congress prescribed
in §120 an unadorned arithmetic calculation as the sole
determinant of the penalty amount and directed that “all
penalties (so) assessed . . . be paid to the United States
Treasury.”
As a matter of policy, credit pr’ojects are inconsistent
with the objectives of §120. Section 120 contemplates speedy
penalty assessments and payments. The noncomplier is expected
to pay in full, and quickly. Credit programs, on the other
hand, often consist of drawn—out projects and expenditures;
the. result may be that respondent can draw out his credit
expenditures many months •or even years beyond the date he
would have had to pay that same amount if instead it had been
styled a penalty.
Section 120 is in its essence a mechanism to recoup the
economic benefits of noncompliance. We encourage negotiation
of acceptable compliance schedules to accompany the penalty
payment, but it is the penalty payment itself which serves as
the primary thrust of the program.

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‘—3—.
Elimination of this credit authority should have little
impact on Regions in an operational sense. Our discussiorcs
with Regions have revealed that the Regions have exercised it
only infrequently, and have found that negotiatin credits
can absorb substantial resources which are better expended
elsewhere in the Regional enforcement program.
Thank you for your continuing support in this most
important §120 program. If you have any questions about the
settlement policy or this memorandui , you may wish. to contact
Laurence Groner, an attorney in the Air Enforcement Division
of OECM, at FTS382—2820.
Attachment
cc: Air and Waste Management Division Directors
Regions I ’I and VI
Air Management Division Directors
Regions I, 1.11, V 1 and IX
Air, Pesticidei, and Toxics Management
Division Director, Region IV
Air and Toxics Management DivisiOn Director
Regions VII, VIII, and X
Regional Counsel Air Enthrcement
Contacts

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SECTION 120 SETTLEMENT POLICY
I. Determining Probability of Success in the Adrninistra’cive
Hearing
EPA’s probability of success i.n prevailino in an
administrative hearing will determine the minimum amount
acceptable for settling a S120 case.. Where that probability.
is low, the penalty can be greatly reduced. Where that
probability is high, there is less reason to reduce the
penalty. Leaal issues which will be determinative in a
noncompliance penalty case are generally the same ones which
affect the outcome of any enforcement case where EPA has to.
demonstrate that the source i5 not in compliance with its
emission limits and the source defends against the allegation.
In most cases the range of probability that EPA will win
a case can be estimated as between 30 to 90 percent. If the
probability is below 30 percent, it is unlikely that EPA would
pursue the case. Conversely, even when all the legal issues
are favorable to EPA, i.t is unlikely, that EPA ’s probability
of success would be much greater. than 90 percent.. This
produces a 60% range within which noncompliance penalties can
be decreased during the settlement process.
To foster national consistency, the reduction range will
be divided into four categories. The Regional Administrator
will determine a baseline penalty ficure for settlement neco—
tiations. Concurrence from the Director of the Stationary
Source Compliance Division and the Associate Enforcement
Counsel for Air Enforcement, or their designees, will be
required on the category from which the settlement figure is
to be drawn and the concomitant retuction range. Once a
range is agreed to, the Regional Administrator, is free to
select the precise reduction percentage within that range
which he or she feels is appropriate without further
concurrence.
Category Probability of Success Reduction Range
A 90% to 75% 10% to 25%
B 74% to 60% 26% to 40%
C 59% to’ 45% 41% to 55%
D 44% to 30% 56% to 70%

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—2—
While the determination of the cateqory into which a case
would fall is by its nature somewhat subjective, the followina
analysis will serve as cuidance. A Section 120 case will
usually have more than one major legal issue. Whether the
probability of success is judged to be hiqh or low will depend
on the number of issues and on their cumulative impac.t on EPA’S
case. Often, however, the major issue least favorable to EPA
would’ govern the category into which the case falls. If all of
the legal issues are favorable to EPA it could be determined
that EPA had a high probability of success, falling within the
90 to 75 percent,range, or category A. A ‘case placed within
the 60 to 74 percent range, in general, would have at least one
major issue with strong argumeflts on both sides, but the outcome
of that issue (and the case) would be weighted to EPA’s advantage.
Generally,, for. a case to be placed in cateaory C, at least one
major issue’ would have strong arguments on both sides but the
possible outcome would be weighted slightly in favor of th
source. ‘ Finally, it there were a clear likelihood that at
least one major legal issue would be decided against EPA, the
case would fall into category D and, the probability of success
would be within the 30 to 44 percent range. The ’requirements
for concurrence by OAR and OECM will assure that these admittedly
subjective determinations are made with a reasonabl’e’l’evel of,
consistency.
Although a source’s claim to an exemption under” Sect ion
120(a)(2)(B) should be analyzed in the same way as any other
legal issue, the range within which an exemption could affect
probability of success is much narrower. If the source is
clearly entitled to an exemption, it is unlikely that the notice
of noncompliance would have been Issued. If the source clearly
did not have such entitlernent,exemption should not become a
factor which’reduces th,e penalty. Therefore, the exemption
issue should influence the category selected in only a limited
number of cases.
II. Credits
The use of credits,’ i.e . , set—offs from the calculated
§120 penalty for costs borne by respondent for environmentally
beneficial projects beyond those required to comply with law,
is not permitted in §120 settlements.

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13

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Rules Governing Conclusion of Clean Air Act Section 120 Actions
(05/15/85)
File at Part G, Document 4 13

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tO
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
____ WASHINGTON, D.C. 20460
“ (
t ’tAY15 5
MEMORANDUM
SUBJECT: Rules Governing Conclusion of Clean Air Act
Section 120 Actions
FROM: Michael .S. Alushin 1
Associate Enforcement Counsel
Air Enforcement Division
Edward C. Reich, Director
Stationary Source Compliance Div fon
TO: Addressees
Several Regions have raised questions abouthow to
conclude Clean Air Act Section 120 (“5120”) actions, where
1) EPh has also filed a Clean Air Act Section 113(b)
(“5113(b)”) action against the same underlying violation;
and 2) the source agrees to sufficient penalties and to an
acceptable compliance schedule prior to a trial or hearing.
A few Regions have asked whether It is ever possible in this
situation simply to dismiss the §120 action in exchange for
obtaining penalties and a compliance schec u1e under S113(b).
Section 120. its implementing regulations and Agency
policy provide an answer to this issue. A 5120 action once
instituted, whether alone or in conjunction with a 5113(b)
action, must be properly concluded under the authority of
S120. No legal basis exists for dismissing or settling a
5120 action under the authority of 5113(b) or of any pro-
vision of law other than S120.
Indeed, Congress directed in the statutory text of 5120
that any payments calculated under 5120 “shall be in addition
to” any otherpayn ents or requirements established under the
Clean Air Act, and “shall in no way affect any (other) enforce-
ment proceedings . . . brought under [ the Act] or state or
local law.” 5120(f), 42 U.S.C. 57420(f).

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—2—
The reason for this treatment Is that the purpose and
theory of S120 are different from the purpose and theory of
S113(b). The single purpose of 5120 is recoupment, S120(d)(.2),
42 U.S.C. S7420{d)12); i.e. , the 5120 remedy recoups from the
violator the economic benefit of his noncompliance, no more
and no less. Therefore, strictly speaking the S120 remedy
Imposes no wpenalty whatever, and the amount of recoupment
is derived solely from arithmetic calculation. The theory is
that, as a matter of deterrence and fairness, the law ought
to extract this economic benefit from violators in order that
they not obtain a better relative economic position than
those who do comply.
On the other hand, Imposition of a S113(b) civil penalty
has several purposes; among others, this penarty serves as a
kind of civil sanction for noncompliance. While not criminal
in dimension, a penal——not recoupment——theory in part underlies
the 5113(b) remedy.
It follows that S113(b), unlike S120, permits EPA to
consider a variety of, aggravating and mitigating factors in
fixing a penalty amount. S113(b),42 U.S.C. S7413(b).
fact, the Agency requires consideration of such factàrs in
Sll3(b) actions as a matter of policy. See Cleàn Air Act
Stationary Source Civil Penalty Policy,’ dated September 12,
1984. While the process of determining the proper 5113(b)
penalty amount should include a rough calculation of economic
benefit of noncompliance 1 that calculation provides merely a
standard against which to measure a S113.civil penalty the
basis of which differs Importantly from that of ’5120 ..
1 Therefore, in the case outlIned in the first paragraph
jabove, EPA requires that the Agency recoup, under theauthority
of S120 , an amount equal to the f i1l economic benefit. (EPA
“ may reduce the economic benefit recovery amount for settlement
purposes only to the extent that the Agency’s prospects for
success on the merits at an administrative hearing are less
than 100%. See memorandum dated March19, 1985, and entitled
PerxnissIble Grounds for Settlement of Noncompliance Penalties
under Section 120 of the Clean Air Act.) EPA may collect
penalties imposed for’aggravating factors under the authority
of .5l13(b)j that section also provides the legal authority
necessary to memorialize agreements governing compliance
schedules and other injunctive relief.
In these unusual two—track cases, we suggest that the
consent agreement reached pursuant to 5113(b) include a
/ recitation of Defendant’s specific commitment to pay a non—
1 compliance penalty. under 5120. The S120 payment may serve as
a credit under the 5113(b) action.

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—3—
Please direct any question or comirient regarding this
policy to Laurence Groner, Esq., of the Air Enforcement
Division, at FTS 382—2820.
Addressees:
Regional Counsel
Regions I—X
Air and Waste Management Division Directors
Regions II and VI
Air Management Division Directors
Regions I, III, V 1 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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14

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Impact of Intermittent Source Operations on Clean Air Act
Penalty Calculations
(07/02/8 5)
File at Part C, Document #14

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EO S? 4
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
JIL -2 1985
MEMORANDUM
SUBJECT: Impact of Intermittent Source Operations on Clean
Air Act Penalty Calculations
FROM: Michael S. Alushin ‘ 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 §S113 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 S120 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, Rot the. periods within that time when the source
is operating. Therefore, the time boundaries that mark the
statute’s “period of covered noncompliance,” Section
120(d)(3)(C)(ii) of the Act, 42 U.S.C. §7420(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 sou ce 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
r r,onses 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
nbtice 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, b.e a reduction in. the amount of O&M penalty
reflecting the source’s intermittent operation.
45 Fed. Reg . 50102 (July 28, 1980).
Comment : The model should take account of fact
(sic I that source (sicj may shut down temporarily
and should recognize that no 0&M expenditures are
being avoided in that periäd.
Response : The model only seeks to recover O&M
expenses 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, Pile 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 §120 calculation described above, the §113
economic benefit calculation focuses on the delay of expamlitures
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 isoperating.
The exception to the rule just stated is the. same as for
§120: we will not try to recover pollution control operating
and maintenance expenses for a period of shutdown, because
during that period no O&M expenditures are being avoided.
Gravity Component
Please note that the gravity component of the §113 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), only months of actual operation
in violation should be counted. This is because this gravity
factor relates to harm from the emissions themselves.
Penalty May Not Exceed S113 Recovery Limit
There is one more, overargj ing;considerat-ion. Under
§113(b) of the Act, EPA has authority to seek up to S25,000
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 operatir 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 arnountderived 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
S120 instead would increase the amount of the economic benefit
that the.Governmertt could recover.

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—4—
PROCEDURE
we suggest using the following procedure to calculate
the O&M component of either a §113(b) or §120 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, Ear 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 Croner, Esq., of the Air Enforcement
Division, at ETS 382—2820, if you have any legal questions on
this issue, or Howard Wright, of SSCD, at. FTS 382—2831, in
conn c•tion 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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15

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Availability of LST Schedules in Clean Air Act
Section 120 Enforcement Actions
(12/23/86)
File at Part G, Document #15

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON. D.C. 20460
+, /
DEC 23 jg
MEMORANDUM
: , _
3 —__
SUBJECT: Availability of Low-Solvent Technology (“LST”) IT’
Schedules in Clean Air Act Section 120 Enforcement
Actions
FROM: Michael S. Alushin
Associate Enforcement Counsel —
Air Enforcement Division
• John B. Rasn.ic, Acting Directo? -7 ” -
Stationary Source Compliance. DivIsion
TO: Addressees
On August 7, 1986, EPA issued a “Policy on the Availability
of Low-Solvent Technology Schedules in Clean Air Act Enforcement
Actions” against Volatile Organic Compound (“VOC”) emission
sources. (the “LST Policy”) (attached). The purpose of the LST
Policy is to ensure compliance with VOC emission limitations as
expeditiousLy as practicable. It does so by mandating that such
schedules meet five conditions in order to receive EPA approval.
The purpose of this memorand .zn is to answer the question,
posed by one Office of Regional Counsel, whether and, if so, how
the 1ST Policy applies to Section 120 administrative actions.
The brief answer is that major elements of the LST Policy do
apply to such actions, and thatSection 120 can serve asa useful
tool in implementing that policy.
EPA drafted the LSTPolicy with Section 113 civil actions --
in which EPA has injunctive authority-. in mind; the Policy
speaks in terms of conditions and requirements which LST compliance
schedules auat meet inorder to be acceptable to EPA. For example,
the LST Policy defines “expeditiousness’ so as to require that an
LST schedule provide for compliance no later than three months
from the date on which the government files a civil complaint.
Section 120 on the other hand does not provide injunctive
power as such; by. its terms, it authorizes EPA only to recoup
from a source the economic benefit of its noncompliance.

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-2—
Howevet in conformity with the structure of the Clean Air
Act, EPA require under S120 that a source demonstrate compli-
ance with icable law as expeditiously as practicable. Indeed,
to read Si ‘. therwige would defeat its purpose, for a central
concern of Congress propelling enac ent of S120 was that existing
civil remedies were not effecting compliance expeditiously enough.
A key feature of 5120 -- its “penalty clock” which won’t stop
“ticking” until a source achieves compliance -- is intended to
spur speedy compliance by eliminating incentives to delay. In
addition, Congress wrote into the text of 5120 itself tight
deadlines for the administrative resolution of challenges to
Agency determinations of liability and penalty amount, so as to
speed the process leading to compliance.
Moreover, the same compliance considerations which led to
the •LST policy apply whether the enforcement vehicle is civil or
administrative. These considerations include unacceptable levels
of VOC noncompliance and real. concern over the prospects for
meeting deadlines for attainment of the National Ambient Air
Quality Standard for Ozone.
Therefore, it is the Agency’s intention that the LST Policy
guide, to the extent possible, enforcement actions brought under
5120 as well as under 5113. This, has the following consequences,
among others. . ‘
First, Regions may import into S120 the LST Policy’s
definition of.”expeditious’.*/ This means that EPA may require
that a source which proposes to comply by LST base its S120
penalty calculation on a compliance schedule no more than three
months long. (The schedule begins on the date the source receives
the 5120 Notice of Noncompliance.) For sources which intend to
comply by LST, but which cannot do so within the three-month
period, the calculation shouldbe based instead on the costs to
install “add-on” pollution control equipment, over the normal
period required for that installation.
*1 The L& Policy sets out several other enumerated elements
which a ci consent decree must contain in order to win EPA
approval. ese elements include provisions for civil penalties,
stipulated penalties, and specified increments of progress incident
to compliance schedules. While it certainly is acceptable to
include some of these elements in a S120 administrative consent
agreement, it is not appropriate as a matter of S120 policy to
require it.

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-3—
Second,.. legions should be mindful of limitations which this
approach m - esent, given the nature of the §120 remedy. For
exanple, 11 requires two calculations of the noncompliance
penalty, on. b.efore and one after compliance is achieved. The
second “revises” the first, based on the costs of compliance
actually incurred, which in turn depend on the means of compliance
actually chosen. Therefore, in a §120 action where compliance by
LST is not achievable within three months, but is achievable in
the same time it would take to install add-on controls, or sooner,
a source may choose to continue its LST compliance program even
in the face of the LST Policy, in the belief that that choice
would result in a sinali.er §120 penalty. To enforce the “expedi-
tious” compliance required by the LST Policy in sucha-case, EPA
might need to bring a civil action under §113 for specific
injunctive relief and expanded penalties.
Third, it is important to remember that §120 actions once
instituted must be properly concluded. For example, a §120
action cannot be brought merely as leverage in enforcementefforts
against a source, then dismissed once it has helped induce com-
pliance or once a S113 action bec’oines necessary. A §120 action
must be concluded pursuant to §120 and its implementing regula-
tions and interpretative policies. See especially “Permissible
Grounds for Settlement of Noncompliance Penalties Under Section.
120of the Clean Air Act” (March 19, 1985) (governing reductions
in penalties) , and “Rules Governing Conclusion of. Clean Air Act
SectiQn 120 Actions” (May15, 1985) (governing settlements of
§S113 and 120 actions against same violation). (These dóc .znents
are set out in the Clean Air Act Compliance/Enforcement Guidance
Manual at Vlt.L. and V1I.M., respectively.)
The prospect of being subject. to simultaneous enforcement
actions under Sections 120 and 113 8hould provide a source strong
incentive to comply promptly in response to •the S120 action alone.
However., if it appears likely that a Section 120 action would not
by itself induce compliance, it may be preferable to bring a §113
civil action instead, so as to minimize the burden on EPA enforce-
ment resources.
.We are hopeful that this guidance will clarify the appropriate
role for $i20 in VOC enforcement actions against sources proposing
compliance by conversion to low-solvent technology coatings.
Should you have any questions or comments concerning this guidance,
please contact Laurence Groner of the Air Enforcement Division
at flS 382—2820.
Attachment

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-“-
Addressees:
Regionat Counsels
Region IX
Air and Waste Management Division Director
Region II
Air Manageinent Division Directors
Regions I, III, V, and IX
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X
Regional Counsel Air Contacts
Regions I-X
David Buente, Chief
Environmental Enforcement Section
DOJ

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H

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— 12 —
H. Section 167: Prevention of Significant Deterioration
1. Guidance on Enforcement of Prevention of 12/14/83
Significant Deterioration Requirements
Under the Clean Air Act
2. Procedures for EPA To Address Deficient New 07/15/88
Source Permits Under the Clean Air Act
3. Guidance on Limiting Potential to Emit in 06/13/89
New Source Permitting
Related documents
a. Federal Enforceability Under PSD 04/28/82
-- filed at Part E, document #11

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I

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II 2

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Guidance on Enforcement of Prevention of Significant
Deterioration Requirements Under the Clean Air Act
(12/14/83)
File at Part H, Document #1

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çtD Sr
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, D.C. 20460
LPqO
MEMORANDUM
SUBJECT: Guidance On Enforcement of Prevention of Significant
Deterioration Requirements Under the. Clean Air Act
FROM: Michael S. Alushin ‘ ‘ - -
Associate Enforcement counsel for Air
Edward E. Reich, Director c
Stationary Source Compliance Division
TO: Regional.Counsels
Regions I-X
Directors, Air Management Divisions
Regions I, V and IX
Directors, Air and Waste Management Divisions
Regions II-IV, VI-VII1, and X
This guidance discusses enforcement of Part C of Title I of
the Clean Air Act, dealing with the prevention of significant
deterioration (PSD) of the ambient air quality. The guidance
explains the use of Section 167 of the Clean A r Act as an
enforcement tool and provides assistance in choosing between
§167 and the alternatives available for. enforcing against PSD
violations. Violations of Part C include construction or
operation of a PSD source (as defined under the Act and the PSD
regulations) without a permit, construction or operation with an
invalid permit, and construction or operation in a manner not
consistent with a validly issued permit.
We believe that §167 of the Act provides EPA with a
significant enfàrcement mechanism in addition to §113, the
Agency’s main enforthement tool, but it does not preclude resort
to any remedies available under § 1l3 or 120. Section 167 should
be used in situations where a source is constructing or operating
without a valid permit or in violation of a valid, permit and
EPA’s main interest is a quick imposition of injunctive relief to
stop the violation. Where time is not of the essence and/or the
Agency wishes to collect penalties in addition to exacting injunc-
.tive relief, § 113 or 120 provide, more appropriate remedies.

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-2-
Thus, depending upon the circumstances of a particular case, EPA
may commence one or more of the following actions against a
source that is in violation of PSD requirements:
(a) Issue an order or seek injunctive relief under
§167 to prevent the source from constructing or
operating in violation of the PSD requirements;
(b) Issue an order to comply under §113(a);
(c) Seek civil remedies under §113(b);
(d) Seek criminal penalties under §113(c);
(e) Assess and collect noncompliance penalties under
§120.
I. Analysis of Section 167
Section 167 of the Clean Air Act provides:
The Administrator shall, and a State may, take such
measures, including issuance of an order, or seeking
injunctive relief, as necessary to prevent the
construction of a major emitting facility which does
not conform to the requirements of this part, or which
is proposed to be constructed in any area included in
the list promulgated pursuant to paragraph (1)(D) or
(E) of subsection.(d) of Section 107 of this Act and
which is not subject’ to an implementation plan which
meets the requirements of this part.
42 U.S.C §7477(1978)
Depending upon whether or not EPA has approv d a State’s
Part C (PSD) State Implementation Plan (SIP) provisions under
Section 1lO(a)(2) of the Clean Air Act or delegated the PSD
program to the State, Section 167 creates two separate and
distinct enforcement obligations for EPA. This is consistent
with EPA ’s policy of allowing the States primacy where they have
‘the main responsibility for a’program. In those States that
have not been delegated the PSD program or do not’have approved
SIP PSD provisions as required by §161 (PSD requirements for
SIPs), EPA has the authority to regulate the construction of
all’ majo.r emitting Bources that are subject to. PSD review under
the Act. Any person wishing to construct. such a source in one
of those States will be require4 by §165 (preconstruction require-
ments) to obtain a PSD permit from EPA. If the proposed source
would violate the provisions., of the PSD regulations, EPA must
deny the permit. If EPA issues a. permit, the Agency will be

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—3-
responsible for initiating appropriate proceedings should the
source subsequently violate any .permit provisions. Likewise, the
Agency is° responsible for taking enforcement action against a.
source which commences construction without first obtaining a PSD
permit.
Once its PSD SIP provisions have been approved or delegated,
pursuant to §l1O(a)(2) and 40 CFR 51.24, the State, rather than
EPA, assumes primary responsibility for administering the PSD
program. The Agency does not completely relinquish its obli-
gations, however. Rather, it assumes an oversight function.
PSD permits issued by the State remain federally enforceable.
40 CFR § 52.O2(d.), 52.21(r), and 52.23. If the State takes
appropriate enforcement action, it is unnecessary for EPA to
initiate enforcement proceedings. If the State fails to take
appropriate action, however, Section 167 provides that EPA must
take measures adequate to prevent the construction of the noncom-
plying source. EPA can take such action at any time the Agency
deems it necessary. The Agency is not forestalled by any action
initiated by the State from simultaneously or subsequently taking
action against a source that already had commenced construction
or operation. Thus, EPA retains, PSD enforcement authority and,
where appropriate, is expected to initiate PSD enforcement pro-
ceedings bqth before and after the PSD SIP revisions have been
approved. 1/
Additionally, §167 requires EPA to take action directly
against a source found being constructed or operating pursuant
‘to a PSD permit that conflicts with the requirements of the
Clean Air Act, implementing regulations, or approved SIP require-
ments. This provision gives the Administrator authority similar
to that possessed under §113(a ’)(S) and (b)(5) ‘to prevent illegal
construction or operation of new sources in nonattainment areas.
1/ Senator Muskie noted this ‘continuing Federal enforcement
— obligation. He stated: “(o]nce the State adopts a permit
process in compliance with this provision, the Environmental
Protection Agency role is to seek injunctive or other judicial
relief to assure compliance with the law.” 123 Cong. ’Rec. S
9169 (daily ed June 8, 1977) (remarks of Senator Muskie).
Senator Muskie’s reference to “injunctive or other judicial
relief” should not be construed as precluding resort to an
administrative order mechanism. Such an. interpretation would
conflict with the clear wording of §167. Rather, we believe
that Senator Muskie’s reference to “other judicial relief”
provides clear support for the proposition that EPA may resort
to the civil and. criminal penalties provisions of §113(b) and
(c). ‘ . .. . .

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Under Delegation Number 7-38, the Administrator has
delegated authority to issue §167 administrative orders to the
Regional A4ministrators and to the Assistant Administrator for
Air and Radiation. The Regional Administrators will, in most
instances, be the parties to issue §167 orders and, pursuant to
Delegation No. 7-38, must consult with the Associate Enforcement
Counsel for Air and the Director of the Stationary Source
Compliance Division before issuing such orders. The Assistant
Administrator for Air and Radiation may issue §167 orders in
multi-Regional cases or cases of national significance. In
addition, the Assistant Administrator for Air and Radiation must
consult with the Associate Enforcement Counsel for Air and must
notify any affected Regional Administrators or their designees
before issuing such drders.
II. Enforcement Actions Under §167 and §113(b)
A. Construction Without a PSD Permit
Construction Not Consistent with a Validly Issued Permit
1. Pre-Operation.Remedies
Section 167 will provide a particularly effective, enforcement
tool against an owner or operator that has commenced construction
without havtng obtained a PSD permit or is constructing in a
manner not consistent with a validly issued permit. In this
situation, EPA should take action to halt construction of the
source immediately. This may be accomplished most quickly under
§167 by means of an adminstrative order or by obtaining judicially-
imposed injuctive relief.
When using §167, EPA. should normally fjrst issue an
administrative order. The Agency should then file a civil
action if ‘a violating source does not immediately comply with
the order. In cases where EPA has good reason to believe that
the order would not be obeyed, however, we ihould file a civil
action for injunctive relief immediately, without first issuing
anorder. , .
In appropriate’ instances, EPA may issue an order or file a
complaint under §167 while proceeding concurrently, through §. 113
or 120 actions, to collect civil and/or noncompliance penalties.
Section 167 gives the Administrator the authorit 1 _ ,to_take
1mm è ’diate a i tI i ’thoiit ’b thg nsrrtdt Th he_pro üral
cases where possi Th7
howévér, EPA ’ihould iiiiie ’ ’thTé ’ source a
with a copy bethg 8 t ’tbth Thppropriate State agency . The NOV
d ès not h ’b è iiIü d ü ‘Iy I tTh a §Ibl order , but

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-5-
the §167 order should be followed up as soon as practical with
the NOV. This notice àhould explain the full range of possible
EPA enforcement actions. Even if circumstances require a §167
court filing before meeting NOV procedural requirements, prompt
issuance of the NOV will allow EPA to take action under §113 at
t detf—the Agency decides toT do so.
In many instances, EPA learns that a source is constructing
without a PSD permit or in violation of a validly issued permit
early enough in the source’s construction schedule to allow the
agency time to. act solely under §113. In these cases, the Agency
may choose to commence a civil action under §113 for injunctive
relief and/or monetary penalties instead of acting under §167
i here remedies are limited to injunctive relief.
ç .vii 1tie are available against a source for violations
even prior to the time it has coinmenc d operation. One type of
case occurs _a cons tru ted in violation cf
the terms of its PSD permit. For example, if the owner delays
in meeting a schedule to install control equipment or seeks to
install equipment that will, not meet the emission limits in the
PSD permit, the Agency should take action to require the necessary.
injunctive relief and to recover monetary penalties. Penalties
are appropriate even if no pollutants actually have been emitted
because the .PSD permit is issued pursuant to the SIP, and thus a
requirement of the SIP has been violated. EPA should seek
penalties for each day that the so.urce is in violation of PSD
permit requirements, commencing on the date on which the source
began to install the non-conforming equipment, or August 7,
1977, whichever is later, and continuing until the source satisfies
the com ],iance schedule specified in a judgment or in a consent
decree.’/ . .
Another type of case arises when a source is being c onstructed
without a permit. Here, also, injunctive relief and penalties
óiát1. The penalty period begins with the date that
construction began. “Construction” for the purpose of this
2/ Even if the source has derived no economic benefit by
— .. installing the nonconforming equipment, EPA still should
seek penalties under §113(b). The Penalty Policy provides
for other factors which guide the choice of penalty figures.
In addition, EPA has promulgated a specific guideline for
permit violation penalty settlements. That gui eline is
àontained in Appendix I to this guidance. The guideline was
issued on February 1, 1981, by Jeffrey Miller, then Assistant
Administrator for Enforcement. Appendix I updates the 1981
guideline to reflect organizational changes,and to elaborate
upon some of the examples. .

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-6-
determination is defined as activity beyond that permitted under
the policy enunciated in the December 18, 1978 memorandum from
Ed Reich to the Regional Offices entitled, “Interpretation of
‘Constructed’ as it Applies to Activities Undertaken Prior to
Issuance of a PSD Permit.” (Copy attached as Appendix II.) The
penalty period ends when the permit is granted or is scheduled
by EPA to be granted. Even if the source is put on a compliance
schedule in a consent decree before then it should not be allowed
to enjoy the economic advantage of its violation of PSD requirements.
It is important to note that even if construction is halted,
the violation continues. Naturally, though, priority should be
given to cases where injunctive action is required. Equally
important, the Agency should not delay issuance of PSD permits
for sc urces of which illegal construction has begun. In SUCh a
case, the penalty period is dependent on the speed of EPA’s own
action. For this reason, the Permit Penalty Policy states that
the Agency may.consider mitigation of the calculated civil penalty
if a source ceases construction within a reasonable time aft r
being notified of the violation and does not ‘resume construction
until a valid permit is ‘issued. ‘
2. Post-Operation Remedies
Civil actions under §113(b) will constitute the primary
enforcement mechanism against sources that have a lreády’commenced
operation without obtaining a PSD permit ôr in vO T TS t
permit. However, in cases where ‘Expeditious’ action is necessary,
orders issued pursuant to §167 are available to achieve immediate
cessation of operation. They should only be used for operating
sources which have failed to get a permit ,or are committing a
violation so egregious that ‘they must be shut down immediately
(e.g., failure to install the control equipment or start-up’
prior to installation of control equipment or where operation
causes an increment to be exceeded). Even in these instances,’
the action under §167 should be accompanied by a §113 action to
collect penalties. ‘ :
When using §167, EPA should normally first issue an
administrative order. The Agency should then file a civil action
if a violating source does not immediately comply with the order.
In cases where EPA has good reason to believe that the order would
not be obeyed, however, we should file a civil action for injunctive
relief immediately, without first issuing’ an order.
We believe that a PSD source which is not known to be in ’
violatIon can be gra € ” iSO days after start-up in which
to del n ”trati tiiñ ithlTã flcable emission limitations .
This rovide’i or ’ttnity’ for ’the TOPe t to make
necessary modifications or correct minor equipment defects ,that
‘are not apparent prior to start-up. The expectation is that the

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—7—
source will be in compliance as soon as possible, and the decision
as to how much time is necessary for fine tuning is. to be made on
a case by case basis. (The period of 180 days is analogous to
the time allowed a source to demonstrate compliance after start-
up under the New Source Performance Standard regulations, 40
C.F.R. §60.8.) During the 180-day period, a source should be
required, to the extent practicable, to maintain and operate the
source including the associated air pollution control equipment
in a manner consistent with good air pollution control practice.
B. Construction With an Invalid Permit
EPA will a180 be able to utilize the provisions of §167 to
prevent a source from constructing with a State-issued permit
that E ’A feels is invalid. There are basically two types of
situations involving construction with an invalid permit. In the
most common situation, the source can be expected to obtain a
valid permit quickly. In ‘other circumstances, however, it cannot
be expected that a valid permit can isBue ‘soon. Before deciding
on a’ course of action to be taken with a source constructing
pursuant to an invalid permit, an EPA Regional Office needs to
make a probability assessment as to the likelihood that a source
will be able to obtain a valid permit quickly. For the purposes
of allowing construction pursuant to an invalid permit, the
period of thirty (30)’ days (the period analogous to that allowed
under a ‘Section 113(a) order) should be considered to be “quickly.”
In the situation where EPA believes a valid permit will
issue quickly, the pro édiires to be followed should be similar
to those used under §113(a)(5) to prevent the construction of
new’ sources in ‘nortéttainment areas. “Sà ir s ’ihbüId be issuèd
an order, specif ing precisely ”thë na , u e_of-the -defect in the
permit, and given 30’ days in which to obtain.a valid permit
while é rdcëê ’d with’ ôbn8ttüction. I8Iüànce”oU.añ ’i1 diate
cëãse c ist±d t ’i ’ dei ”,’while ’avairable, usually would be an
unnecessary sanction. A source that has obtained a PSD permit,
even though invalid, has presumably undergone some preconstruction
review. Moreover, State, rather than the source,
itself, that is primarily at fault, immediate sanctions mig1it’iie
inappropriate.
In some situations, however, such as those where EPA
believes that a_source cannot be operated, without violating an
increment or yhere óñ i&uction will forecroie” EPA ’ ns iti
. what.BACTreq 1reme s,, ,will app1 to a source, an
immediate cease_construction order under l67 shoul be , , ,Ts sued
ati d construction should not be allowed tb—commence or continue
until a valid permit is issued. ‘ ‘

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-8-
In cases against sources constructing pursuant to an invalid
permit, the error is presumed to have b inthe State’s. Therefbré,
even though construction may be halted, nope’naItyii ppropr iate’
unless the source is somehow at fault orihe’source does not
cooperate after the discovery of the violation. For no-penalty
actions, §167 is an effective enforcement tool.
C. Consent Decrees
In civil actions filed under both §167 and §113, against pre-
opetational as well as post-operational sources, a likely outcome
of the actions’will be consent decrees. Allowing a violating
source to continue construction or commence operation under the
provisions of a consent decree lies within the discretion of the
court, though the court’s decision can be affected, of course,
by the recommendation of EPA and the Department of Justice. The
terms EPA should seek in actions under both §167 and §113 will
vary according to the nature of the violation and the time that
will be required to correct it
There are two types of situations in which consent decrees
would be appropriate. The first occurs when the source’s viola-
tion causes or contributes to levels of pollution that exceed
those allowed under l63 of the Act (which establishes the PSD
increments). The other situation arises when the source’s vio-
‘lation does not cause or contribute to increased levels of
pollution beyond those allowed by §163.
When the pollution increments established by §163 would be
or are being exceeded, EPA should immèdiatelyééék thjtthcti é
relief to p.réventthe source from starting up or continuing in
violation of its emission limitations. EPA should determine
the nature of the violation and the amount of time that will be
needed to correct it. A source should not be.permitted to
commence or, continue o iiitiöriuntil”it i ’ thp f:anc.e through
enforceable emission limitations. To allow commèncemé t I
continuation of operation out of compliance would’ defeat the
,intent’of the Act by sanctioning levels of pollution in the PSD
area greater than those established by Congress as the maximum
allowable limits. . .
If the source is exceeding or will exceed its own emission
limitation but the increment set forth in §163 is not being or
will not be exceeded, EPA has more flexibility in devising a
consent decree. While it need not adhere to ,a strict rule of no.,
start-upuntil a source is in compliance, the Agency still must
take all necessary action to ensure that’ corrections are’ made as
quickly as possible’ and must not allow a source to commence
‘operation ‘unless start-up is pursuant to a consent decree.

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The actual terms of a consent decree will vary from case to
case. The only provisions that must be contained in every decree
are a schedule that requires compliance as expeditiously as
pr’cticable, monitoring and reporting procedures, and a stipulated
contempt fine provision. These fines should be established at a
level sufficiently high to ensure compliance with the terms of
the decree. (More detailed guidance on provisions to be included
in consent decrees is contained in the October 19, 1983 memorandum
from Courtney Price, GM-16.)
III. Additional Enforcement Remedies
A. Criminal Penalties Under ll3(c )
Section 113(c) is available, where appropriate, against all
types of PSD violations, both pre- and post-operation.
Section 113(c) authorizes the Administrator to comm nce a
criminal action to seek monetary penalties and/or imprisonment
for knowing violations of applicable regulations and EPA orders.
The key requirement is that the Administrator must be able to
demonstrate that the violation was “knowing.”
A distinction should be drawn between a source that refuses
to comply with applicable requirements and one that merely has
failed to comply. Refusal to meet any increments of progress of
the final compliance date of an administrative order or to meet
consent decree or permit requirements should be considered for
criminal referral to DOJ. If the source merely is late in com-
plying, however, criminal penalties would not generally be
apprOpriate. Additionally, it is our belief that resort to
criminal penalties does not preclude the initiation of concurrent
or subsequent civil proceedings for monetary penalties and/or
injunctive relief. Question.s concerning the possibility of
criminal action should be referred to Peter Beeson, Associate
Enforcement Counsel for Criminal Enforcement (FTS 382-4543).
B. NoncompliaflCe Penalties Under §120
By the terms of §120, noncompliance penalties can be
assessed whenever a source is in violation of ‘an emission limi-
tation, etnission.standard, or compliance schedule under an
applicable SIP. These penalties are based upon the economic
benefit the source has derived from noncompliance. Section 120
penalties can be assessed regardless of whether civil and/or
criminal sanctions available under §113 are also sought. More
discussion of, the use of noncompliance penalties appears in
regulations published July 28, 1980 (45 F 50086)..
• If you have a question about this’ guidance, please call Judy
Katz’of the AirEnforcement Division (382-2843) if it is a legal
question or Rich Biondi of the Stationary Source Compliance
Division (382-2831) if it ‘is a technical question.

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3
APPENDIX I
Penalty Policy for Violations of Certain Clean Air Act
Permit Requirements for the Construction and/or
Modification of Major Stationary Sources of Air Pollution
I. Introduction
EPA*S existing Civil Penalty Policy, dated July 8, 1980,
applies inter alia , to stationary sources of air pollution which
violate requirements enforceable under Section 113 of the Clean
Air Act w ten such violations are the result of a failure to make
capital expenditures and/or failure to employ operation and
maintenance procedures which are necasary to achieve initial
compliance. The Civil Penalty Policy does not, however, speci-
fically address violations of permit requirements related to the
construction or iodification of major stationary sources under
the prevention Of iig iffcii t
the noi ittáir entirè& i c i (iü iü dthgt he
Offset Interpretative Ruling and Section 173).
This document outlines, a penalty policy which applies to
certain permit-related violations of the Clean Air Act and is
intended to establish a method of calculating a minitnumsettle-
merit amount for such violations. The “Permit Penalty Policyir
does not replace or limit the present Civil Penalty Policy in
any way, but has been developed to deal with a subject area not
covered by the existing policy. As illustrated by the following
examples, the failure of a source to satisfy a new Bource requir-
ement may result. in one violation subject to this Permit Penalty
Policy, and a second violation subject to the Civil Penalty
Policy.
It is important to àote that this Permit Penalty Policy is
intended, to provide guidance on determining a minumum civil
penalty settlement figure, as opposed to penalty requests in
complaints. As a general rule, civil complaints alleging Clean
Air Act violations, including permit-related violations, should
always request the statutory maximum penalty of $25,000 per day
of violation. In addition, the policy is not intended to suggest
that civil penalties are the only, or even the primary, remedy
where a source is in violation of Clean Air Act requirements. ‘In
such cases, a claim for civil penalties is an adjunct to seeking
appropriate injunctive relief. . A claim for costs should also be
considered. .• V
It is also important to note that the policy outlined in
this document, like the 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 P50 permit, as well as those which construct or
operate in violation of such valid permits. Construction pro-
ceedthg in compliance with an invalid permit is considered to
be, in the context of this penalty policy, construction without
a permit. A primary motivation behind the Permit Penalty Policy
has been the recognition that economic savings can be difficult
to quantify when the violation involves permit requirements.
The Permit Penalty Policy has been designed to provide a method
for determining a penalty amount which will be sufficient to
deter illegal construction or other permit violations, and yet
not be so highas to be unreasonable or unrealistic.
The policy is built around use of a matrix for calculation
of the minimum settlement amount. Construction in the absence of
a permit or in violation of a permit has been assigned a scale of
dollar values. The matrix also provides for the assessment of an
additional penalty for certain specified violatio,ns of substantive
permit pre-conditions or requirements. The appropriate dollar
value for a violation is dependent on an estimate of the totaF
cost of air pollution control at those fac l .tteáof the source
fàrwhièh the permit is req ired .’1 is value is then multiplied
by the number of months of. violatThn. I When there are thuitiple
permit-related violations, a penalty !igure is calculated for
each violation and the individual penalty figures are added
together to produce one minimum settlement figure. In those cases
where a source subject to a valid permit violates only the require-
ments of Section 173(1) and/or Section 173(3) (requirements for
1/ cost of air pollution control” should include, where
relevant, pollution control equipment costs, design costs,
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 is done in phases, the operative.
amount is the total cost of air pollution controls for the entire
project.
2/ Month-by-month accrual of penalties was selected for purposes
f convenience and for consistency with the Civil Penalty Policy.
Any fraction of a month in violát ion is counted as a full month
of violation unless circumstances present a case for mitigation
of this rule.

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construction permits in nonattainment areas) or the corresponding
requirements under the Offset Policy, the appropriate penalty
amount is determined by reference only to the matrix column(s)
citing the violation(s).
The sum produced through use of the matrix represents the
minimum amount for which a case normally can be settled. However,
it is recognized that equitable considerations, includjqg but not
limited to recalcitrance, degree of environmental and
likelihood of success should the case be filed, may ma1 e an
increase or decrease in the matrix figure appropriate. Similarly,.
a source owner who agrees to make approved expenditures for
pollution control above and beyond expenditures made to comply
with all existing legal requirements may reduce the amount of
the penalty owed. Any such additional expenditures designed as
credits to satisfy or offset civil penalties will be evaluated
in accordance with the provisions of the Civil Penalty Policy.
Regional Offices wishing to modify the figure indicated by the
matrix in consideration of the total equities presented by a
case or to reduce the penalty because of a credit should do so
in accordance with the procedures discussed n Section III of
this. Policy.
It is recognized that there may also be cases where the
economic value of a violation covered by this policy is reasonably
quantifiable. Where the quantifiable economic savings figure
exceeds the penalty amount established by the attached matrix,
the Regional Office should negotiate for the higher calculated
econcomic savings figure rather than the matrix 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 inval&d permit, the penalty period begins on
the date the source began construction and continues either until
the source obtains a valid permit or notifies the State or EPA
that it has perm4nently ceased construction.and the project has
been abandoned. 4 ’ A temporary cessation in construction does not
3/ E.g., significant consumpt .Ofl of a PSD increment by a source
Ehat has not received a permit, violation of a Class I increment
or serious aggravation of a nonattainment problem.
4/ The period of liability is not to be confused with the period.
f 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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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 reasonable time after being notified
of the violation arid does not resume construction until a valid
permit is.issued. If a source violates a permit condition, the
period of penalty liability for purposes of calculating a settle-
ment figure begins on the first date the violation can be docu-
mented and will cease when the violation is corrected.
III. Procedure
Authority to approve minimum settlement figures calculated
for cases covered ‘by this Permit Penalty Policy rests with the
Assistant Administrator T i EnforcementindCompliance M riitôring.
(Delegation 7-22-C) The Assistant Administrator has, in p’ractice,
called upon the Associate Enforcement Counsel for Air to review
settlement figures. Therefore, an indication’ of the minirnum
settlement figure, including an explanation of the derivation
cf”thi’ figure ‘obtained from the matrix and any modification of
that figure based upon subjective factors, should either be
included in the litigation report covering t,he facility or’ hould
be forwarded by memorandum to the Associate Enforcement Counsel
for Air.
if a case involves violations that are within the existing
Civil Penalty Policy’s coverage, as well as a permit-related
violation, the Permit Penalty Policy should be used to find the
minimum settlement figure for the permit violation(s) and the
Civil Penalty Policy 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.

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PERMIT PENALTY POLICY MATRIX
MINIMUM SETTLEMENT PENALTIES
(per month of violation)
PSD SOURCES
TOTAL COST OF AIR
POLLUTION CONTROL
FOR NEW OR MODIFIED
SOURCE ($ THOUSANDS)
CONSTRUCTION OR
OPERATION WITHOUT
A PERMIT OR IN
VIOLATION OF A
VALID PERMIT
INCREMENT
EXCEEDED
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
$ 2,000
4,000
7,000
11 , 000
16,000
22,000
29,000
37 ,000
$ 7,000
11,000
16,000
22,000
29,000
37,000
46,000
56,000
PART D OR OFFSET INTERPRETATIVE RULING SOURCES
TOTAL COST OF AIR
POLLUTION CONTROL
FOR NEW OR MODIFIED
SOURCE ($ THOUSANDS)
less than 50
50-150
150-500
500-1 ,500
1,500-5000
5000-15,000
15,000-50 ,000
over 50,000
CONSTRUCTION
OR OPERATION
WITHOUT A
PERMIT OR
IN VIOLATION
OF A VALID
PERMIT
$2,000
5,000
• 9,000
14,000
20,000
27,000
35,000.
44,000
FAILURE TO
SATISFY
§173(1) OR
OBTAIN
OFFSETS
$ 9,000
14,000
20,000
27 ,000
35,000
44,000
54,000
65,000
VIOLATION OF
SECTION 173(3)
OR CONDITION 2
$ 5,000
9,000
14,000
20,000
27,000
35,000
44,000
54,000
(Add numbers when multiple
categories apply)

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EXAMPLE CASES
The following hypothetical cases illustrate how the matrix is
used to continue to calculate a minimum settlement figue.
PSD Source
On. July 1, 1980, an existing major source began actual
construction of a modification to its plywood manufacturing plant.
The modification will result in a significant net emission
increase of particulate mater. The source had not obtained or
filed for a. PSD permit as of the date actual construction began.
On July 2, 1980, EPA investigators discovered the construction
duringa 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, 1980. The NOV
cited the PSD regulations and outlined possible enforcement
alternatives. .
The source received the NOV on August 5, 1980, and contacted
the Regional Office on August 10, 1980. On August 30, 1980, the
Region and the source held a conference at which the source stated
that it had not been aware of the need for PSD review and permitting
prior to construction. The source also stated that it would file
an application for review but that it would not cease construction
during the review process.
On October 1, 1980, 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 excèedance of the particulate matter
increment in the source’s area of impact. The source, when
informed of the BACT problem, indicated it would install the
necessary controls. .
However, throughout the review process the source continued
construction of the modification. On December 1, 1980, the source
began operation of the modified source without the required permit
and without controls.
On January 15, 1981, the source was issued a PSD permit. On
February 28, 1981, the source ceased operation of the plywood
plant to install the pollution control equipment celle.d for in
the PSD permit. The source resumed operation on March 15, 1981,
in a manner consistent with the PSD permit conditions.

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The penalty calculation for this example begins with an
assessment of the total cost of air pollution control equipment at
the modification. For purposes of this example, assume BACT
costs $140,000.
Next, the type and number of matrIx categories, must be
determined. In this example the source (1) began actual con-
struction 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.”
In addition to the permit violations described above,
commencement of operation prior to the installation of BACT
constitutes a separate violation subject to the Civil Penalty
Policy. (The Civil Penalty Policy should be used to determine an
additional appropriate minimum settlement amount for the period
of time the source operated without BACT.)
Once the type, number and.dollar values of the penalty are
determined, these figures are multiplied by the number of months
in violation. The sums are then added together, to produce the
matrix penalty amount.
In this example, the source’s period of construction without
a permit runs from July 1, 1980, until the valid permit was issued
in January of 1981 (7 months). The period of operation at variance
with the BACT permit condition runs from the time the permit was
issued in January 1981, to the date the source ceased operation
on February 28, 1981 (2 months). The source also exceeded the
area growth increment for particulate matter during the period of
operation from December 1, 1980, to February 28, 1981 (3 months). 1
1/ it is important to note that some of the considerations
etailed in the matrix do not necessarily track the statutory,
provisions regarding violations. ‘ For example, there is no Clean
Air Act provision which makes increment exceedance, in and of
itself, a violation by an individual source. (The SIP must
protect the increment. The method used is PSD review with permit
‘conditions such as BACT, fuel use limitations, etc.) However, as
a consideration of environmental harm, and in considering the
seriousness of the violation if a source operates and thereb.y
violates a State’s increment due to failure to, go. through PSD.
review as or when required, an ad4ed penalty is appropriate.

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-3-
The matrix penalty figure for this source’s PSD related
violations, based on a $140,000 total cost of control estimate, is:
- for the 7 month period of construction without a permit,
7 x $4,000 $28,000
- 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
$28,000 + $8,000 + $33,000 $69,000
As noted in this policy, this figure represents a minimum
settlement figure. EPA may, at any time, negotiate for a higher
settlement figure. A lower minimum settlement figure may also be
available depending on the circumstances of the particular case.
See the. policy. for procedures regarding possible reductions.
In addition to the permit violations described above,
commencement of operation prior to the installation of BACT
constitutes a separate violation subject to the Civil Penalty
Policy. (The Civil Penalty Policy should be used to determine an
additional appropriate minimum settlement amount for the period
of time the source operated without BACT).
Section 173 or Offset Policy Sources
On December 1, 1980, a plywood manüfacturing’company began
operation of a modification at its plant which ..is located in a
nonattainment area for particulate matter. The modification is
subject to Section 173 review permitting and, in fact, the source
has obtained a valid Section 173 permit from the State. The
permit specifies 1) that the applicant has deinonètrated 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) would be required
to be obtained prior to start-up.or commencement of operation.

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In March of 1981, the Regional Office learned that the source
did not install controls on a certain Fiece of process equipment
and therefore did not actually “obtain’ the offsets as specified
in the State permit. On April 1, 1981, the Region issued an NOV
for failure to comply with the terms of the permit by not
obtaining offsets prior to start-up. At an April 15, 1981,
conference between EPA and the source, the source agreed to meet
the terms of its permit and to certify compliance. On May 15,
1981, the offsets were finally obtained.
In this example, the violation covered by the matrix is the
source’s failure to obtain the required offsets (because the
source had obtained the requisite permit and its only violation
of the permit consisted of a failure to obtain the offsets by
start-up). The failure to obtain offsets, however, is covered by
both the Permit Penalty Policy (for the failure of the new source
to obtain offsets prior to start-up) and the Civil Penalty Policy
(for the failure of the existing source to comply with the ‘offset
requirement).
The calculation of the minimum settlement figure in this
case under the Permit Penalty Policy begins with an assessment of
the total cost of air pollution control equipment at the modification.
For purposes of this example, assume LAER costs $110,000. Since
the source operated from start-up on December 1, 1980, until
May 15, 1981, without the necessary offsets, the period of
violation was six months. Under these circumstances the matrix
yields a penalty figure of $84,000. (6 x $14,000 = 484,000).
As in the PSD example above, this matrix figure is a minimum
settlement number. EPA’ is free to negotiate for a higher amount.
There is also the opportunity for a reduction of this figure
based upon the surrounding circumstances in accordance with the
procedures outlined in the policy.
• The calculation of a minimum settlement figur.e under the
Civil Penalty Policy is dependent upon the economic benefit to
the source of delaying.the capital costs necessary to satisfy the
offset requirement for a period of six months, and upon the other
factors set out ‘in the policy. Because the offsets were obtained’
from a facility owned by the new source, a total minimum civil
penalty settlement figure is calculated by adding the amounts
obtained under the Permit Penalty Policy and the Civil Penalty
Policy. (If the offsets were obtained from a facility not owned
by the new source, once the offset, is established and made part.
of the SIP, the existing source is subject to the amount calcu-
lated under the Civil Penalty Policy added to the amount calcu-
lated under the Permit Penalty Policy). . ‘. ‘. .

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APPENDIX 11
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\ / WASHINGTON. D.C. 20460

DEC 181918
OFFICE OF ENFORCEMENT
IEMORA D
SUBJECT: Interpretation of ‘Constructed” as it Applies to
Activities Undertaken Prior to Issuance of a PSD
Permit
FRO 1: Director
Division of Stationary Source Enforcement
TO: Enforcement Division Directors
Regions I—X
Air and Hazardous Materials Division Directors
Regions I—X
The issue addressed in this memorandum is where on the
continuum from planning to operation of a major emitting
facility does a coa pany or other entity violete the PSD
regulations if it has not yet received a PSD permit. (It is
assumed here that such a permit is required by the PSD
regulations.) This question has arisen several times in
particular cases and general guidance now appears necessary.
The statute arid regulations do not answer this
question. The Clean Air Act states simply that, ‘ [ n3o najo’
emitting facility... may be constructed... unless— l)
a permit has been issued... (and various other conditions
have been satisfied).’ Section 165(a). Similarly, the PSD
regulations state that, ‘ [ n]o najor stationary source or
major modification shall be constructed unless the (various
PSD requirements are net).’ 40 CFR 52.2 1(i) (1), 43 FR
26406. ‘Construction” is defined in the regulations as
“fabrication, erection, installation, or modification of a
source.” 40 CFR 52.21(b) (7), 43 FR 26404. This accords
with Section 169(2) (C) of the Act, but it does riot explicitly
answer the question posed above. To our knowledge, the
legislative history of the Act does not treat this issue.
Thus the terJt “constructed’ seems to be open to further
interpretation by EPA.

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—2-
Coi encement of construction Is quite soecifically
defined in both Section 169(2) (A) of the Clean t ir Act and
40 CFR 52.21(b) (8), 43 FR 26404. However, that definition
is for the purpose of deciding the threshold question of the
applicability of the PSD regulations. Therefore, we are not
bound. by it in deciding what activities may be conducted
prior to receiving a necessary PSD permit.
DSSE’s response to date has been that the permitting
authority should make the determination ona case—by—case
basis, after considering all the facts of the individual
situation. For example,. we said that site clearing might be
inappropriate for a source proposed to be constructed in a
heavily forested Class I area, but permissible for a source
proposed to be constructed on a junk—strewniot in a heavily
industrialized Class III area.
After consulting with the Office of General Counsel, we
are now a iiending this policy in order to minimize the
administrative burden on the permitting authority and to
adopt what we believe now to be the better legal interpreta-
tion. The new policy is that certain limited activities will
be allowed in all cases. These allowable activities are
planning, ordering Of equipment and materials, site—clearing,
grading, and on—site storage of eguipc ent and materials.
Any activities undertaken prior to issuance of a PS permit
would, of course, be solely at the owner’s or operator’s
risk. That is, even if considerable expense were incurred
in site—clearing and purchasing eguipr ent, for example,
there would be no guarantee that. a PSO permit would’be
forthcoming. . . -
All on—site activities of a permanent nature aimed at
coxnpl ii 8PSD EOurce for which a permit has yet to be
Obtithe date prohibited under all circumstances. These
OhibiteJ activities include installation of building
supports and foundations, paving, laying of underground pipe
work, construction of permanent storage structures, and
activities of a sirtilar nature.
The new policy has several advantages. First, it will
be easy to administer, since case—by—case determinations
will not be required. Horeover, it assures national consis-
tency and permits no abuse of discretion. Finally., it
appears to be the most legally correct position. The policy
has the undeniable disadvantage of allowing a good dealof

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—3.-
activity at. sites which i ay be highly susceptible to envi—
ronmerital impact. We feel that on balance, however, the
advantages of the policy outweigh the disadvantage.
If you have any questions, please feel free to contact
David Rochlin of my staff, at 755—2542.
Edward E. Reich
cc: Peter Wyckoff, OGC
Richard Rhoad.S, OAQPS
Linda •l’ urphy, Region I
Ken Eng, Region II
3i Sydnor, Region III
Winston Smith, Region IV
Steve Rothblatt., Region V
Don Earvey,.RegiOfl VI
Bob Chanslor, Region VII
Dave Joseph, Region VIII
Bill Wick, Region IX
Mike Johnston, Region X

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UH TED STATES ENVIRONMENTAL PROTECTION AGENCY
pso
.?R 28 19E2
StJ3JECT: Pederal Enforceability under PSD
}Zathleen N. [ acnnett I
Assistant Adr inistrator for A4i iUoise and Radiation
Directors, Air & Waste t anagernent tivisiori
1 e ions I—IV, VI—Vill. X
Directors, Air Managei ent Divisions
Regions V and IX ’
This ne oraMur is proii te by a request for clarification of
the status of the rcquirercent that to be co nizab1e under P D for
cffsct and applicability purposes, emission 1ir itatior.s r st be
fedcr 1ly enthrcea ble.
On August 7, 19 0, EPA published anendnenta to the PSD nd
on—attainrnent re 1ations which included a provision that.
enission liritations must be federally en orccable in order to be
taken into account for offsets or applicability purposes.. The
a iendinents went on to define federally enforceable ass
all limitations an4 conditions which are
enforceable by the Mrinistrator, including
those re uires ents developed pursuant to
40 CFI parts 60 and 61, requirerents within
any applicable State Irnp1er er tation Plan, and
any ‘periit requirei et ts established pursuant
to 40 dR 52.21 or under regulations approved
purauant to 40 dR 51. 1C and 40 dR 51.24.
(40’ d i 52.21(b ) (17)) ‘
Under a petition for rGconsideration of the August 7 rules,
which was submitted by several parties, this concept of fedcraUy
enforceable lir itations was challenged. The petitioners
maintained that the rcquirer tent of federally enforceable
linhitationewab unnecessary. ., “
COP CURRE$CE5 ‘ ‘
nE I *t ‘ ‘

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The ?.gency decided to reconsider the require rent of federally
enforceable en ission limitations. In a& ition to reconsidering
the issue, EPA temporarily stayed the federally enforceable
uireItc:r ts (eec Federal T eçister July 15, 19E1) . The s y
:ircd on October , I E1 i the A6ministrator declined an
nsion of the stay, thus once again reçuiring fe erelly
nforceablc eir.iseion lirritations.
At the present time, the 6mendn’c-nts, as published on
? 1 ucust 7, l9 O, are in effect end binding. The definition of
fedcr 1iy enforceable still stands: emission lirritations n ust be
federally cnforceable in order to be taken into account for
offcets or PSD applicability. As to the definition of federally
enforceable, the Agency continues to aintain the position thet
operating permits not incorporated into a SIP under an approved
general bubble rule are not federally enforceable.
During the past six months the gency has been in the process
f neçotiating a settlement of the industry challenges to the
ugust 7, 19C0 endn’ents, including the issue of Federal
enforceabflity.
The Agency has offered a settlement proposal, which has been
accepted by the industry petitioners, that i rculd change the
federally enforceable concept. EPA has agreed to propose
cccpting eniscion 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
rui ‘federally enforceable’ as used in the regulations. At the
e tirre the term ‘enforceable’ will be defined as ‘enforceeLle
..der Fec5erol, State, or local law and, discoverable by the
. dmrinistrator and any other person.’ This change will most likc-ly
have the result of making operating permits acceptable for offsets
and• applicability.
Changes in Federal enforceability, as well as other changes
that result frow the settlement agreement, must go through general
rulemaking procedures. Rulemaking procedure will follow the
outline in the February 22, 1982 settlement agreement. The
rulemaking ay also include cone type of grandfathering provisions
for the period of the temporary stay’. The grandfathering
provisions may focus on the c nmencemerit of construction during
the period of the stay.
Please note that until the rulemaking processes are completed
the existing rules are still in effect. If any specific prob1en’ s
concerning Federal enforceability and applicability arise,,
questions should be referred to Ed Rcich at 3 2—28O7.

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2

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llO d b b L OU

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Procedures for EPA To Address Deficient New Source Perinits
Under the Clean Air Act
(07/15/88)
File at Part H, Document #2

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,D 97
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
jjL5 88
MEMORANDUM
SUBJECT: Procedures for EPA to Address Deficient New Source
Permits Under the Clean Air Act
FROM: Michael S. Alushiri
Associate Enforcement Counsel for Air
Office of Enforcement a çompliance Monitoring
John S. S e i t z, D i r e Ct a r / j4’L ’ ,) eL IA
Stationary Source Compliance Division /
Office of Air Quality Planning and Standards,
TO:
INTRODUCTION
This memorandum transmits the final guidance for
in addressing deficient new source permits. After we
the draft guidance for comment on December 16, 1987,
Regional Offices tok action on deficient new source
The events surrounding those permit actions, as.well as your
thoughtful comments on the draft guidance, have shaped the final
policy. :
RESPONSE TO COMMENTS
We have incorporated most of your comments into the final
guidance. As you requested, we have included examples of forms
showing a request for permit review under 40 C.F. ’R. 5124.19, a
S167 order, and a S113(a)(5) finding of violation.
Addressees
your use
distributed
several
permits.

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—2—
Some commenters suggested that we include a section on
actions that can be taken, not against the source, but against
the state issuing the deficient permit. We agree that this topic
should be included in the guidance because it surfaces repeatedly
in individual cases. Therefore, we have added. a section on
possible actions against states for issuing deficient permits.
We have also clarified the guidance to indicate that EPA should
send a state written comments at both the draft and final permit
stage when a state is issuing what EPA considers a deficient
permit.
Some reviewers requested further elaboration of when to use
alternative enforcement responses. We have indicated relevant
considerations in determining which action to take. One commenter
pointed out that the guidance did not defiie what was meant by a.
“deficient permit.” This involves a determination that requires
the exercise of judgment. However, we have tried to list most of
the criteria that will support a finding of deficiency. We
realize, however, that we may not have anticipated every deficiency
that may present itself to every Regional Office in the future.
Concern was expressed over the requirement to respond to a
deficient permit within thirty days. We realize that this is an
ambitious objective, but it is a legal requirement for permit
review under 40 C.F.R S124, and greatly enhances EPA’S equitable
position in challenges under S167 and S113(a)(5). It will be
easier to meet this deadline if Regional Offices have routine
procedures in place for prompt receipt of all permits from their
states and for thorough review of permits as they are received.
A few commeriters wanted the guidance expanded to apply to
“netting” actions and “synthetic minor” sources. We agree that
guidance in this area would be useful, but the topic is too broad
to be folded ‘into the same document as the guidance on deficient
permits. We have begun work to address appropriate enforcement
action for improper “synthetic minors” in the context of the
Federal Register notice announcing the program for federally
enforceable state operating permits. If you think that separate
enforcement guidance is needed on this subject, please let us
know. .
Finally, a few reviewers questioned the guidance regarding.
EPA directly—issued permits. We agree that, in all cases where
we find a deficiency, it is preferable to changethe permit by
modifying its terms. If the source is amenable, we should do so.
‘However, if EPA cannot get the source to accept new permit condi-
tions, our only options are review under S124.,19(b), revocation
of the permit, and/or enforcement action. A S124.19(b) review
must be taken within 30 days after the permit was issued.. The

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regulations are unclear on EPA’s authority to revoke PSD permits.
In an enforcement action to force a source, involuntarily, to
accept a permit change when the source has not requested the change
or made any modification to its facility or operations, EPA must
always keep in mind the litigation practicalities and equities.
These make enforcing against a permit we have issued when we are
not basing our action on any new information a difficult
proposition.
CONCEJ US IQt
We hope that this guidance will help EPA Regions act to
challenge deficient new source permits. Many of the practices
advocated in this document may be litigated in pending or future
cases. We will amend the guidance as necessary in light of
judicial developments. If you have any questions, please contact
attorney Judith Katz at FTS 382—2843.
At tachment
Addressees:
Regional Counsels
Regions I —K
Regional Counsel Air. Branch Chiefs
Regionx I-X
Air and waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation Division Direc.tor
Region V
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI .
Air and ‘roxics Division Directors
Regions VII, VIII, and K
PSD Contacts
Regions I—X

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Alan.Eckert
Associate General Counsel
Greg Foote, 0CC
Gary McCutchen
NPPB, AQMD (MD—15)
Ron McCallum
Chief Judicial Officer
EPA
David Buente, Chief
Environmental Enforcement Section
DOJ

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
PQO
MEMORANDUM
SUBJECT: procedures for EPA to Address Deficient New
Source Permits Under the Clean Air Act
FROM: Michael S. AluShin
Associate Enforcement Counsel for Air
Office of Enforcement and Compliance Monitoring
John S. Seitz,
Stationary Source Compliance D siori
Office of Air Quality Planning arid Standards
TO: P ddressees
I. Introduction
This guidance applies to permits issued for major new
sources and major modifications under both the prevention of
significant deterioration (PSD) program and the rionattainment
new source review (NSR) program. It contains three sets of
procedures -— one for permits issued pursuant to EPA—approved
state programs (NSR permits and PSD permits in more than half
the states). one for permits issued by states pursuant to dele-
gations of authority from EPA, and one for instances where EPA
issues the permit directly. An appendix of model forms
appears at the end.
Th need for this guidance has become increasingly evident
in the last two years. Before then, EPA had attempted only once,
in 1981, tà enforce against sources constructing or operating
with new source permits the Agency determined to be deficient.
In 1986, EPA litigated Greater Detroit Recovery Facility V.
AdamkuS et al . No. 86—CU—72910—DT (October 21, 1986). In that
case, EPA wanted to enforce against a major stationary source
constructing with a PSD permit issued by Michigan under a dele-
gation agreement with EPA. The. Agency had first determined that
the best available control technology (BACT) determination for
SO 2 in the permit was inadequate. Before EPA started formal
enforcement action, the source filed suit against the Agency,

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arguing that EPA had no authority to “second guess” the BACT
determination and that, in any event, we should be equitably
foreclosed from challenging the, permit because we had remained
silent dur’ing the two years since we had failed to comment on the
permit. The court agreed and granted the source’s motiOn for
summary judgment.
The Detroit case was an example of the need for prompt and
thorough EPA review of and written comments on new source permits.
Our ability to influence the terms of a permit, both informally
and through legal procedures, diminishes markedly the longer EPA
waits after a permit is issued before objecting to a specific
term. This is due both to legal constraints, that is, tight time
limits for comments provided in the regulations, and to equitable
considerations that make courts less likely to require new sources
to accept more stringent permit conditions the farther planning
and cqnstruction have progressed. Accordingly, as a prerequisite
to successful enforcement action, it is imperative that EPk
review all major source permit ’packages on a timely basis and
provide detailed comments on deficiencies. If EPA does not
obtain adequate consideration of those comments, it is also
important for EPA to protect air quality by prompt and consistent
enforcement action against sources whose permits are found lacking.
Because PSD permits’ are issued on a case—by—case basis,
taking irtto consideration individual source factors, permitting
decisions involve the exercise of j .idgi erit . However, although
not an exhaustive list, any one of the following factors will
normally be sufficient for EPA to find a permit “defici nt”
and consider enforcement action:
.1. BACT determination not using the “top—down” approach.
2. BACT determination not based on a reasoned analysis.
3. o consideration of unregulated toxic pollutants in
BACT determination.
4. Public notice problems — no public notice & comment
period or deficiencies in the public notice.
5. Inadequate air quality modeling demonstrations.
6. Inadequate air quality analysis or impact analysis.
7. Unenforceable permit conditions.
8. For sources that impact Class I areas, inadequate
notification of Federal Land Manager or inadequate
consideration of impacts on air quality related
values of Class I areas.

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In NSR permitting, each of the following factors, while not
necessarily an exhaustive list, are grounds for a deficient
permit:
1. Incorrect IJAER determination, i..e., failure tu u at
least as stringent as the most stringent level achieved
in- practice or required under any SIP or federally
enforceable permit.
2. No findi ng of state—wide compliance.
3. No emissions offsets or incorrect offsets.
4. Public notice problems —‘ no public notice and comment
or deficiencies in. public notice.
5.. &nenforceable permit conditions.
II. Timing of EPA Response
A. Comment
Although EPA should know about every permit, at least by the
time it is published as a proposal, the Agency sometimes does not
learn about a permit during its development prior tothe time the
final permit is issued. If we do become aware of the permit and
have objections to any of itsterit s, we should comment during the
relopmental stage before the permit becomes final.
State agencies should send copies of all draft permit public
notice packages and all final permits to EPA immediately upon
issuance. (The requirements. for contents of public notice packages
are set forth at 40 C.F.R. S51.166(q)(2)(iii).) The Regional Office
should review all draft permit public notice packages and final
perm .t during the 30 day comment periods provided for in the
federal regulations. It should write detailed comments whenever
Agency staff does not agree with the terms of a draft or final
permit. To make sure they get permits in time for review, Regional
Offices should consider requiring states with approved new source
programs, through SectiOn 105 Grant Conditions, to notify them of
the receipt of all major new source permit applications. They
should also require states to send them copies of their draft
permits at the beginning of the public comment period.
Final perm ts should be required to be sent to EPA immediately
upon issuance. (Note that the requirement for Regions to review
draft and final permits is contained in guidance issued by Craig
Potter on DeceTnberl, 1987.) Regions should carefully check
their agreements with delegated states. These agreements require

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states to send draft permits to EPA during the comment period.
in addition, 40 C.F.R. S52.21(u)(2)(ii) requires delegated agencies
to send a copy of any public comment notice to the appropriate
regional o ffice. Pursuant to 40 C.F.R. S124.15, a final permit
does not become effective until 30 days after issuance,unless
there are no comments received during the comment period, in
which case it becomes effective immediately. Regions should make
sure that delegated states know about permit appeal procedures at
40 C.F.R. S124 and, if necessary, issue advisory memoranda
notifying them that EPA will use these procedures if the Agency
determines a permit is deficient.
B. Formal Enforcement Action
If the permit was issued under a delegated program, it is
imp rtant to initiate formal review or appeal within 30 days after
the final permit is issued. (This response is set forth in
Section IV below. The 30 day period is required by the regula —
tions at 40 C.F.R. S124.19). When enforcing against permits
issued under state programs, the same legal requirement to initiate
enforcement within 30 days does not exist, but it is still
extremely important to act expeditiously.
III. Enforcement Against the Source V. Enforcement Against
the state
Lf a state.has deznonstrated a pattern of repeatedly issuing
deficient permits, EPA may consider revoking the delegation for a
delegated state or acting under Section 113(a)(2) of the Act to
assume federal enforcement for an approved state. It is not
appropriate to issue a S167 order to a state. Revocat ions of
delegated authority as to individual permits and revocations of
actual permits are theoretically possible, but they are unrieces—
sary where EPA can. act under Part .124 (i.e.. within 30 days of
issuance). Revocation may be appropriate where Part 124 appeals
are unavailable, but likely will be subject to legal challenge.
iv. procedures to Follow When Enforcing Again3t
Deficient Permits in Delegated Programs
A. If possible, the following actions before construction
commences: .
1. Take action under 40 C.F.R. S124.19(a).or (b) within
30 days of the date the final permit was issued to
review deficient provisions of the permit.
a. S124.19 a) is an appeal, which may be taken by
any person who commented during the public comment
period.. .

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b. S].24.19(b) is a review of the terms of the permit
by the Administrator under his own initiative.
Regional Offices informally request the Admini-
strator to take this action. They need not have
commented during the public comment period. The
Administrator has demonstrated a preference for
using Sl24.19(b) over S124.19(a). tn the four
instances thus far when he was given the choice
of acting under (a) or (b), he chose (b). However,
the Administrator may not have sufficient time to•
act within 30 days in every situation in the
future.
2. In the majority of situations, it is more appropriate
for the Agency to act as one body to initiate review
under S124.19(b). In some instances, however, the
third party role for a Regional Office, through 40
C.F.R. §124 .19(a) may be preferable. Regions should
pick (a) or (b). However, if both provisions are
legally available, they should request, in the
alternative, that the Administrator act under the
provision other than the one chosen by the Region
should he-deem it more appropriate. In particular,
if a Region requests the Administrator to act under
S124.19(b), it should ask that its memorandum be
considered as a petition for review under S124.19(a)
should review under S124.19(b) not be granted within
30 days. This is to protect the Regions’ right to
appeal a. permit if the Administrator does not have
sufficient time to act. Therefore, all memoranda
- requesting review should be written to withstand
public scrutiny if considered as petitions under
S124. 19(a). -
3. If the 30 day period for appeal has run and strong
equities in favor of enforcement exist, issue a S167
order and be prepared to file a civil action to
prohibit commencement of construction until the
source secures a valid permit. (See SectionIVB(2))
below.
3. For sources where construction has already commenced:
1. If the permit was issued less than 30 days previously
take action under 40 CFR’S124.19.
2. If the permit was issued more than 30 days previously,
issue a 5167 order requiring immediate cessation of
construction until a valid permit is obtained. This

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step should only be taken if extremely strong equities
in favor of enforcement exist. Regions should be
keeping state and source informed of all informal
efforts to change permit terms before the S167 order
is issued. S167 orders may be used both •fôr sources
which have and have nat commenced construction.
However, because the S124.19 administrative appeal
and review process is available in delegated programs,
it is greatly preferred for challenging deficient
permits in states where it can be used.
3. If EPA determines that penalties are appropriate,
issue a NOV under Section 113(a)(1) of the Act for
commencement of construction of a major source or
major modification without a valid permit. This is
necessary because S167 contains no penaltyauthority.
Note that strong equities for enforcement must exist
before taking this step. EPA can issue both a S167
order requiring, immediate injunctive relief and a
NOV if we decide that both are appropriate.
4. Follow up with judicial action under 5167 and S113(b)(2)
if construction continues without a new permit.
C. Note that the appeal provisions of 40 C.F.R. 5124.19
apply to all delegated PSD progr.ams.’even if 5124.19
is not specifically referenced in the delegation.
V. Procedures to Follow When Enforcing Against Permits in
EPA—Approved State Programs (All NSR and More Than
Half of the PSD Programs )
A. Issue Sl13(a)(5) order (for NSR) or 167 order (for
PSD) as expeditiously as possible, preferably within
30 days aft ’er’the permit is issued, requiring the
source not to commence construction, or if already
started, to cease construction (on the basis that it
would be constructing with an invalid permit), and to
apply for a new permit. Note,that EPA should issue
‘a S167 order if it has determined that there is a’
reasonable chance the source will comply. Otherwise,
the’ Region should move directly to section V.D below.
B. From the outset, of EPA ’s involvement, keep the
source informed of all EPA’s attempts to convince
the permitting agency to change the permit.
C. :Issue an NOV. (113(a)) as soon as construction commences
if EPA. determines penalties are appropriate.

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D. If source does not comply with order, follow up with
judicial action under S167, S113(b)(5), or, if NOV
issued, S113(b)(2). If penalties are appropriate,
issue NOV and later amend complaint to adda Sl13
count when 30 day statutory waiting period has run
after initial action is filed under S167.
VI. For EPA—issued Permits (Non—delegated )
A. If source submitted inadequate information
(e.g., misleading, not identifying all options)
and EPA recently found out about it,
1. If within 30 days of permit issuance, request
review by the Administrator under 40 C.F.R.
S124. 19(b).
2. If permit has been issued for more.than 30 days,
issue S167 or S113(a)(5) order preventing start-
up or, if appropriate, immediate cessation of
construction.
3. Issue NOV if construction has commenced and EPA
determines penalties to be appropriate.
4. If necessary, request additional information from
source; if source cooperates, issue new permit.
5. Consider taking judicial action if appropriate.
EPA recognizes the distinction between permits based on
faulty and correct information only for EPA directly—issued
permits. This distinction is necessary for EPA permits due
to equitable considerations.
B. If source submitted adequate information and EPA
issued faulty permit, we should attempt to get source
to agree to necessary changes and accept modification
of its permit. However, if source will not agree,
only available options are, revoking the permit and
enforcing. Consolidated, permit regulations are
unclear about EPA’S authority to revoke PSD permits.
Because of this and the equitable problems associated
with enforcing against our own permits, unless new
information about health effects . or other significant
findings is available, we may choose to accept the
permit. If faulty permit produces unacceptable
environmental risk, act under 40 C.FSR. S124.19, if
possible.. If action under 40 C.F.R. S124.19 not
possible, first revoke permit and then act as set
forth in Section IV. ‘

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Addressees:
Regional Counsels
Regions I—X
Regional Counsel Air Contacts
Regions .I—X
Air and Waste Management Division Director
Region It
Air Management Division Directors
Regions I, III , and IX
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
PSD Contacts
Regions I-X
Alan Ecker
Associat.e General Counsel
Greg Foote, OGC
Gary McCutchen
NPPB, AQMD (MD—is)
Ron McCailum
Chief Judicial Officer
Bob Van Heuvelen
Environmental Enforcement Section
Department of Justice..
David Buente, Chief
Environaentai. Enforcement Section
Departaent of Justice

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Appendix
1. Request for Review under 40 C.F.R.S124.19
•2. S167 Order
3. S113(a)(5L) finding of violation and accompanying S113(a)(l)
Notice of violation

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
nrt REGION II
.)ATE: £ 1 f
Request for Administrator to Initiate Review of
RCT: PSD Permit for Cam en County Resource Recovery Faci.]4ty.
FROM: RjalAdJ L ilL ’
TO Lee M. Thomas
Administrator
I am requesting that, pursuant to 40 CF.R. 124.19,. you
review the PSI) portion of the air pollution permit issued
to Camden County Energy Recovery Associates for construction
of the Camden County Resource Recovery Facility in Camden,
New Jersey (CCRRF). The failure of the New Jersey State
Department of Environmental Protection (DEP) to include an
emission limit for PM 10 in the permit, to address BACT
adequately for PM 10 and to provide for public comment on PM 10
as a PSD affected pollutant’ are grounds for reviewing the DEP’s
actions in issuing the permit and for staying the effective-
ness of the permit until all PSD requirements have been
met. As explained below,, if you agree that review of this
permit is appropriate, you will have to notify the permittee
by January 11, 1988, that you are initiating review of the
PSD portion of the permit.
This permit was issued under various authorities including
EPA’S PSI) permit authority, 40 C.F.R. 52.21, which is dele-
gated to DEP. Due to the promulgation of the new NAAQS for
PM 10 on July 1, 198?, the emissions of particulate matter
from the CCRRF became subject to the PSD rules. Particulate
matter was not previously subject to PSD because the area
was ‘classified as nonattainment for the now withdrawn NAAOS
for total suspended’ particulate (TSP). My staff has
concluded that the permit and the permit review procedures
do not, adequately address PM 10 under the applicable PSD.
regulations.
DEP was aware several months before it issued the permit
that the new PM 10 NAAOS for particulate matter would require
PSD,review. Nevertheless, the permit does not include an
emission limitation for particulate matter expressed as
PM 10 emissions frocn the facility. Also, the analysis, of the
control technology fails to demonstrate that the system
selected would provide the best degree of emission control
currently available for PM 10 particulates. Finally, there is
a procedural problem with the permit as well. DEP did not
provide notice and an opportunity for the public’ tocomment
on the PM 10 aspect of the permit’, contrary to the regulatory
requirements and t,he express advice’ of Region II.
•qg-o
RM 1320-1 (.Fe5). ‘

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The Delegation of PSD Authority to DEP
EPA Region II delegated PSD new source review authority to
DEP pursuant to 40 C.F.R. 52.21(u). The PSD permitting
authority delegated to the DEP is not restricted in any
way. Thedelegation is general in nature and includes all
PSD requirements as they are from time to time revised by
rulemaking.
Applicability of PM 1 p Requirements to CCRRF Permit
The application for the CCRRF air pollution control permit
was submitted on April 30, 1986. The DEP required the
application to be augmented until the application was
considered complete and the DEP noticed the permits for
public comment on April 28, 1987. A publi’ hearing was
held on May28, 1987, in Camden, New Jersey, and the public
comment period ended on June 12, 1987.
PSD requirements are applicable to this permit for particulate
matter because it is not in the class of permits and permit
applications that are covered by the grandfathering exemptions
of the PM 10 promulgation. No PSD application addr ssing partic-
ulate matter was submitted for the CCRRF before July 31, 1987.
At the tiu e of the notice period, the facility was required
to undergo preconstruction review under the SIP for TSP
because the area was nonattainment (secondary,) for TSP but
Federal and State permits were not issued until December 7,
1987. Only sources with PSD applications for particulate
matter or with all Federal and State preconstructiOn approvals
or permits before July 31, 1987, are exempt from PSD review
for PM 10 . See , 40 C.F.R 52.21(c)(4)(1X) and (x) (52 Fed.
Reg . 24714,July 1,1987).
We reminded the DEP, both orally and in writing, of the need
to satisfy the PSD requirements at 40 C.F .R. 52.21 for
sources of particulate matter as a result of the PM 10 pro-
mulgation. The DEP was informed that the CCRRF was not
grandfathered and required additional PSD review to account
for PM 10 .
BACT Emission Limit Necessary for PMlfl
The permit has no emission limitation for PM 10 . BAC’l’ is, by
definitipn, an emissions limitation rather than merely specified
types.of equipment. 40 C.F.R. 52.2](b)(12). (The only exception
is when there are technological or economiclimitationS on the
application of measurement methodology.) Clearly the grand—
fathering provisions were meant to limit the class of major new
sources for which the particulate emission limit is expressed

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as TSP under the Clean Air Act. Without an express limit
on PM 10 as a permit condition, we are concerned that there
will be no sufficiently stringent, enforceable limit on.
particulate matter for this facility.
Even if the difference between the actual rate of particulate
matter emissions smaller than 10 microns in size occuring as
a result of the TSP limit now in the permit and the PM 10
limit that should be in the permit proves to be small or
nonexistent, failing to correct this permit will leave a
muddled and uncertain basis for future enforcement. EPA
regulations clearly require that particulate matter emissions
be addressed under. the PSD regulations for this permit and
that an emission limit be expressed in terms of PM 10 .
Region II is concerned that a TSP emission limit in an instance
where PM 10 was the PSD regulated pollutant may be unenforceable
especially in light of EPA’s conclusion that the NAAQS Which
triggers PSD for particulate matter in the case of CCRRF’s
permit is the new PM 10 NAAQS. See , 52 Fed. Reg. 24694.
The State BACT Analysis
The DEP’S Hearing Officer found that there is no predictable
difference between a baghouse and an electrostatic precipitator
(ESP) with respect to PM 10 collection efficiency and, there-
fore. concluded that the ESP determined adequate for TSP is
also adequate as BACT for. PM 10 . Region II considers the
BACT analysis by which the DEP reached its conclusion to be
unacceptably thin in its review of available, data. The
only analysis which appears to be available is in a report
submitted by letter from th,e permittee dated November 16,
1987, responding to a November 2, 1987, request from DEPS
Our review of the BACT analysis shows that it is incomplete
and an inadequate basis for making necessary technical
judgments. Some questions are so fundamental that we
cannot make meaningful technical comments. .For example:
1. What are the sources of the engineering
and economic data?
2. Why is there no comparison of the particulate
size and garbage characteristics at the
cited facilities and what is anticipated
at CCRRF? .
3. What werethe test methods employed in
obtaining the emissions data from the
cited failities? . .
4. Why were three: United States facilities
referenced but not considered in the
‘analysis?

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5.. Was the removal efficiency data based on
a system comparable to CCRRF’s which I
includes a dry scrubber before the
electrostatic precipitator or baghouse?
These are just some of the questions that we have and which
we would normally review with a PSD permit applicant before
public comments are solicited. With the date of the submission
being november 16, 1987, and the permit issuance date being
December 7, 1987, we do not believe that any meaningful
questioning of the permittee’s analysis was done by the
DEP. The mere three weeks between the submission of the
report and permit issuance did not allow the Region a
meaningful ojportunity to resolve EPA concerns.
Public Comment on PMi PSD Review
In early November, 1987, DEP informed Region II that it had
completed the necessary PSD analysis for PM 10 but needed to
issue the permit with little or no time for a public comment
period with respect to PM 10 because of an impending financing
deadline. On the basis of DEP assurances that PM 10 had
been adequately addressed, Region II staff suggested to DEP
staff that DEP might be able to justify a shortened public
comment period, but emphasized that an opportunity for
public c iiment to review the PM 10 analysis was necessary.
(EPA’S OGC and OAQPS orally concurred with Region II ’s pos—
ition.) DEP acknowledged the need for public comment and
agreed to follow appropriate, but shortened, procedures.
Region II received a copy of and began to review the
permittee’s November 16, 1987, submission. With no notice
for publià comment and no further notice to EPA, DEP issued
the air permits toCCRRFalong with SPDES and solid waste
permits on December 7, 1987.
Region Ii’s advice with respect ‘to the comment period
assumed adequate treatment of PM 10 under PSI) requirements.
Having subsequently’revi’ewed the BACT analysis and the
permit Itself, we now believe that these do not meet the
requirements of PSD and any reason to allow less than 30
days for public comment •on the PM 10 analysis would be
unjustified.
Recommendation ‘
I am asking that you initiate review of the CCRRF permit
with respect to compliance with PSD review procedures
applicable, to PM 10 . Specifically, the review should address:
1.’ The fail re to include BAC expressed as a PM 10
emission limit in the permIt.

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2. The adequacy of the review of available technology
in establishing BAcr.
3. The failure to provide for public comment regarding
the PMj limitations.
A December 1, 1987, memorandum from Craig Potter, Assistant
Administrator for Air and Radiation, calls for regional offices
to monitor state compliance with preconstruction reviews to
prevent instances such as this. We have done so in this case
but were not consulted by the DEP, when it decided to reject
EPA’s direction and issue the permit. We expect that the DEP
and the permittee will correct this action rather than go
through the entire review process but the issuance of the
permit leaves us with no choice but to seek to commence review
to prevent the action taken by DEP from becoming final action.
We are prepared to continue working with the DEP to act on the
permit expeditiously should the DEP and the permittee agree to
remedy the deficiencies discussed above. We have also explained
to the DEP that, if appropriate, Region II could request a stay
of EPA’S permit review proceedings in the interim. In this
regard, the DEP has contacted Region I I and is’ exploring way.s
to take valid legal action on their own which would eliminate
the need for you to act on this request for review by January 11.
If the DEP should take such action, we will notify you immediately.
I request that ‘you alert me before you issue an order under
§124.19(c).
Procedures and Time Limitations
We are concerned that review procedures be initiated within’
the time period allowed by the regulations, 40 C.FR. Part 124,
so that we are not ‘foreclosed from raising these important
issues. Under S124.19(a), if this is construed as a petition
for review, the petition must be filed within 30 days of service
of the notice by ‘the DEP of its final permit decision and the
Administrator must issue an order granting the review within a
reasonable time. S124 .19(c). If for any reason you determine
that S124.19(a) is not the proper procedure, we would request
you to initiate review on your own initiative under S124. 19(b),
which appears to require you to act within the initial 30 days.
Based on the issuance of the permit on December 7, 1987, we
calculate that the 30 day period from the issuance of the
permit will end on January 11, ‘1988. Pursuant to S124.20(a),
the time began’ to run on the. day after permit issuance. Since
service of the DEP notice was by mail, we have added three, days
to the prescribed time in accordance with S124.20(d). The
thirty—third day after December 7, 1987, is January 9, 1988,
which is a Saturday, and S124.20(c) provides that the time
period is extended to the next working day which is Monday,
January 11, 198 If this is construed as a review on’ your

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own initt ttve, notice must be given by this date and we recommend
that ncticé granting review in either case be provided by
January 11, 1988.
The regional office filed comments on the draft permit
within the DEP’s public comment period. See , Hearing
Officer’s Report, December 7, 1987, Appendix B. We construe
the definition of person.in S124.41 to include an EPA
regional office. Therefore the Region, as a person who filed
comments, is a proper party to file a petition for review under
S124.19(a).
By whichever means review is initiated, the review procedure
is intended to prevent raising facts or issues on appeal that
were not raised in the public comment period. See , 45 Fed .
33411, Col. 3 (May 19, 1980). Section 124.19(a) requires
a statement that the issues being raised for review were raised
during the comment period to the extent required by Part 124.
A person’s obligation is to “raise all reasonably ascertain-
able issues and submit all reasonably available arguments
by the close of the public comment period.” S124.13.
The issues raised herein were not required to be raised earlier
since these issues could not have been known at the time the
comment period closed on June 12, 1987. Indeed, we had advised
the DEP that a public comment period should be provided so that
public comments could be received on the PM 10 permit decision.
Notice of the initiation of the review procedures should be
sent to:
• Mr. Robert Donahue
President
Camden County Energy Recovery Associates
110 South Orange Avenue
Livingston, New Jersey 07039
Mr. Richard T. Dewii’ng
• Commissioner
New Jersey State Department of•
• Environmental Protection
401 East State Street
CN—027
Trenton, New Jersey 08625
Mr. Gary Pierc,e
Chief
Bureau of Engineering and
Regulatory Development •
Division of Environmental Quality
New ‘Jersey State Department of
Environmental Protection
401 East State Street
CN-027 •
Trenton,’ New 1 Jersey 08625

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—7 —
Enclosed arq copies of the following documents upon which this
request is based:
1. PERMIT TO COI STRUCT, INSTALL, OR ALTER
CONTROL APPARATUS OR EQUIPMENT AND TEMPORARY
CERTIFICATE TO OPERATE CONTROL APPARATUS OR EQUIPMENT
• AND PREVENTION OF SIGNIFICANT DETERIORATION PERMIT
December 7, 1987
2. HEARING OFFICER’S REPORT FOR THE
APPLICATION BY CAMDEN COUNTY ENERGY RECOVERY ASSOCIATES
TO CONSTRUCT AND OPERATE
A SOLID WASTE RESOURCE RECOVERY FACILITY
December 7, 1987
3. Letter from Robert F. Donahue, President, Camden
County Energy Recovery Associates to Jorge H.
Berkowitz, New Jersey State Department of Environmental
Protection, Subject: Camden County Resource Recovery
Facility PM 10 BACT Anhlysis, with enclosure
November 16, 1987
Enclosures (3)
cc: Thomas L 0 Adams, LE-133 ”
Francis S. Blake. LE—130
J. Craig Potter, ANR—443
Ronald L. MeCallum, A—1O1

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U IITED STATES EnVIRONMENTAL PROTECTION AGENCY
REGION IV
In the matter of:
LAKE COUNT? WASTE TO ENERGY FACILITY
Order
OKAFIUMP 
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—2—
dibenzoturans, and hydrogen chloride. All ot U1L . z rc--
mentioned pollutants are regulated by the Act xce ’t J OXiflS,
dibenzofurans, and hydrogen chloride.
2. The area ot construction of the Lake ‘ J MLy Waste to
Energy Facility is loc ted in an attainmen ’area or all
pollutants regulated by’the Act. (40 Code of Federal Regulations
(C.!.R.) S81.310) The facility is considered a major stationary
source ocause its potential emissions (which are subject
to regulati ris under the Act) are above the Prevention of
Signiticant Deterioration (PSD) of Air Quality threshold
level. Consequently, this facility is regulated under the
P 50 rules and regulations.
3. On March 11, 1986, the NRC/Recovery Grou applied to
the ‘loriua Departnent o Environmental Regulation (DER) for
a PSI) permit to construct anu operate two 2 0 tons per day
r unicipa1 solid waste energy recovery units at its Lake Count
rac ity located on Jim Ro ers Road in Okahurnpka, Florida,
pursuant to the Floriaa State Implementation Plan (SIP)
[ Florida Administrative’Code (F.A.C.) Rule . ,17—2.500 et g .].
4. On. May 20, 1986, in response to said PSD application,
the Florida DER issued a Preliminary Determination which
contained, in the State s judgrnent,.the Best Available
Control Technology (BACT) for the proposed’ incinerators.
The BACTDetermination’COfltaifled emission limits for all
applicable pollutants regulated ‘by the Act and contemplated
that a baghouse (to’ control particulates) in’ combination
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- .3—
with a scrubber (to control acid gases) constituted BACT.
5. On July 2, 1986, EPA notified the Florida DER that
the SO 2 emission limit contained in the Florida DER CT
Determination may not adequately reflect BACT (i.e., 0r02’SCd
502 emission limit not sufficiently stringent) and that the BACT
Determination should also consider the effect of controlling
502 on unregulated pollutants such as hydrogen chloride arid
dioxin. Furthermore, EPA informed DER that it was EPA policy
that the control of nonregulated air pollutants may be
considered in imposing a more stringent BACT -limit on regulated
pollutants, if there is a reduction in the nonregulated air
pol1utar ts which can be directly attributed to the control
device selected for the abatement of the regulated rollutants.
6. Or August 15, 1986, DER issued a second PSD Prelir iriary
Determination with a modified BACT fletermination. The modified
BACT Determination no longer contained the requirement for acid
gas controls, but only required that the applicant leave
space for the acid gas control equipment in the event there
would be a future state rule change for resource recovery
facilities. Removal of the requirement tà employ acid gas
control meant the i odified BACT Determination could not
adequately address EPA’S concernabout a more stringent SO 2
emission limit.
7. On September 19, 1986, EPA notified DER that EP L was
not persuaded by Lake County’s contention that municipal
solid waste incineration with acid gas control is not
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—4—
economically feasible.
a. On September 24, 1986, the Florida DER issued its
Final Determination and PSD permit to the NRG/Recovery Group
for the proposed Lake County facility. The Final Determination
and State PSD permit did not require the installation of acid
gas control.
9. On October 23, 1986, EPA notified the Florida DER
that EPA did not concur with DER’S Final DetermittatiOfl
regarding the issue of BACT. EPA recommended that the Final
Determination and the Florida DER nermit be reissued with a
BACT Determination which reflects state—of—the—art technology
(acid gas control and more stringent emission limitations
for particulate matter and SO 2 ).
10. On January 30, 1987, EPA—Region IV prepared an
independent BACT analysis, which varied from DER’S Final
Deternination, in that it contained i tore stringent emission
limitations for particulate,.Jflatter and SO 2 (achieved through
the use of high efficiency particulate emission and acid
gas controls).
11. On February 11, l987,EPA notified Florida I DE ?. that
the DER PSD permit issued to the NRG/Recovery Group for the
Lake County facility on September 24, 1986, was deficient and
that EPA may initiate appropriate enforcement action against
the Lake County facility to prevent or delay the construction
of the facility.
12. On February 11, 1987, EPA notified the NRG/Recovery
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—5-.
Group that the Florida DER PSD permit was deticient and that
unless the DER PSD permit was modified to reflect what EPA
considers BACT, EPA may initiate appropriate enforcement
actionto prevent or delay the construction of the facility;
CONCLUSIO 4S OF LAW
1. The Administrator of the EPA pursuant to his authority
underSection 109 of the Act, 42 U.S.C. §7409, promulgated
National Primary and Secondary Ambient Air Quality Standarcis
(NAAQS) for certain cr .teria pollutants, including total suspended
particulate matter, sulfur oxides (SO 2 ), nitrogen oxides,
carbon rnonoxiue, ozone, and lead. (40 C.F.R. § 5U.4 — 50.12)
2. Purs\.iant to Section 110 of the Act, 42 U.S.C. 74l0,
the Acmlnistrator of EPA, iii 45 Federal R! 9 ister 52 7
(August 7, l9 0). , pror iulga ed amended regulations for PSD
in areas where the existing air quality is better. than
saià ambient st ndarcJs and tncorporated said. regulations
into the various implementation plans of. each state. The
relevant.reguIatiOfls árecoditie.d at. 40 C.F.R. §51.24.
3. The Florida SiP contains federally approved PSD
regulations, based on the above—referenced PSD regulations,
for such attainemènt or “clean air” areas. (F’.A.C. Rule
17—2.500)
• 4. The area of construction for the Lake County Waste to
Energy taci1it ’ is n attainment area for NAAQ for all
pollutants. (40 C..F.R. §81.310)
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—6—
5. •NRG/Recovery Group is the owner and operator ot the
major emitting resource recovery facility in Lake County,
Florida, and proposes to construct at that site pursuant
to the PSD permit issued to the Lake County Waste to
Energy facility by Florida DER on September 24, 1986.
6. EPA tinds the Florida DER PSD permit issued to
the Lake County Waste to Energy facility to be deficient
in that it tails to require the installation of acid
gas control. The Florida DEk PSD permit also tails to
require more stringent emission limitations tor particu—
lat matter and SO 2 . These deficiencies invalidate the
State—issued PSD permit.
7. Tne construction ot the Lake County Waste to
Energy tacility pursuant to an invalid permit will violate
Section 1c 5(a) ot the Act, 42 U.S.C. §7475(a), and 40 C.F.R.
§51.24. Consequently, the issuance of this order, pursuant
to Section 167 of the Act, 2 U.S.C. §7477, is required
to prevent such construction.
8. The authority ot the Adrtinistrator at EPA pursuant
to §113(a) of the Act, 42 U.S.C. 57413(a), to make findings
ot violation of the Florid SIP, to issue notices ot violation
and to confer with the alleged violator has been delegated,
first, to the Regional Administrator [ earlier delegation
consol datedtP Delegations Manual, No. 7-6 (July 25, 1 84)]
andsecond, to the Director, Air, Pesticides, and Toxics
Management Di iSiOfl, Region IV [ earlier delegation consolidatec
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in Region IV Delegation Manual, No. 4— (March 15, 1985)].
9. The authority of the Administrator at EPA to issue
orders pursuant to Section 167 of the Act, 42 U.S.C. 7477,
was delegated to the Regional Administrator earlier delegation
consolidated to Delegations Manual, No. 7—38 (July 25, 1984)1.
The Regional Administrator, Region IV, has also consulted
with the Associate Enforcement Counsel far Air and the Director
of th Stationary Source Corr p1iance Division pursuant to
delegation’ requirement.
ORDER
Consequently, base. upon investigation and analysis at
all relevant facts, including any good taith ettorts to
comply 1 and pursuant to Section 167 ot the Clean Air Act,
42 U.S.C. S74 , the NRC/Recovery Group, Inc. (Lake County
Wast to Energy facility), is hereby ORDERED:
1. et ective immt diate1y upon receipt ot this Order,
not to coru ence any on—site construction activity of a
permanent. nature oh its two 25U tons per day unicipai solid
waste energy recovery units, including, but not limited to,
installation of building supports and foundations, paving,
laying of underground pipe, construction of permanent storage
structures and activities at a similar nature.
2. not tocornJT ence any on—site construction activity
until it hasreceived a Prevention of Significant Deterioration.
(PSD) permit and Final Determination that •incorpOratt S al].
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—B—
trQ requirements or PSD pursuant to ariu in accorcancc with
the provisions o Part C, Subpart I ot the Clean Air Act, as
amended, 42 J.S.C. §7470 et. the regulations promulgated
thereunder at 40 C.F.R. $51.24 and/or the regulations of the
federally enforceable Florida State implementation Plan, Rule
17-2.500 of the Florida Administrative Code, and Chapter 403
ot the Florida Statutes including EPA’S Best Available Control
Technology analysis, dated .January 30, 1987 (which addresses
ado gas control anC r ore stringent emission limitations tor
suirur dioxide and particulate matter), and;
3. to submit, no later than ten (10) days atter receipt
ot this Order, certitication that the prohibition in paragraph
one (1) ot this Order has been observed an will continue to
be obsL rve.d until the perrrtit referenced in paragraph two
(2) ot this Orcer has. been i sueo., ‘Such certitication
snail he su rnitted to;
• Winston A. Smith, Director
Air, Pesticides, and Toxics
f1anagernent 1)ivision
United States Environmental
Protection Aqency
3’5 Courtland Street, N.E.
Atlanta, Georgia 30365
(404) 347—3043
J UN • 31987 —
Date Jack E. Ravan
Regional Administrator
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UNITED STATE ENVIRONMENTAL PROTECTION AGENCY
REGION V
IN REGARDING: )
)
Indiana Depv tment of Environmental ) FINDING OF VIOLATION
Management ) LPA—5-86-A-50
St. Joseph County Health )
Department )
Air Pollution, Permit to Operate )
Dated February 6, 1986, to )
A.M. General Coporatlon
)
A PROCEEDING PURSUANT TO )
SECTION 113(a)(5) OF THE )
CLEAN AIR ACT, AS AMENDED )
( 42’U.S.C. Section 7413 (a))
INTRODUCTION
On February 6, 1986, the St. Joseph County Health Department, as
duly authorized delegate of the State of Indiana, issued. a permit to
operate several air pollution sources operated by AM General Corporation
located at 13200 McKinley, Mishawaka, Indiana.
FINDING OF VIOLATION
For reason.s set forth below, the Administrator finds that the permit
to operate, issued by the St. Joseph County Health Department on February 6,.
1986, to AM General Corporation, (AMS) failed to comply with the requirements
of Indiana Air Pollution Control Regulation APC-19 Section 4 and P that the
St. Joseph County Health Department, as duly authorized delegate of the
State of Indiana, did not act In compliance with those requirements.
• The permit to operate issued by St. Joseph County Health Department on
February 6, 1986, to A p I General Corporation increased the Volatile Organic
Compounds (VOC) emissions from 197.3 tons per year to 377.0 tons per year.
This VOC emission increase of 179.7 tons pe’r yea.r allowed to AMG, subjects
the facility to Regulation APC—19. . .
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2
I egulatlon APC-19Section 4 b(4) requires any person proposing the
construction, modification or reconstruction of a major facility which will
impact on the air quality of a nonattainment area or which will be located
In a nonattainment area, shall comply with the requirement of Section 8of
this regulation, as applicable.
Regulation APC—19 Section 8 requires the same person to demonstrate
along with other requirements:
(.1) Increased emissions of the pollutant are to be offset and
are equal to 90 percent or less of the offsetting emissions.
(2) Application of emissions limitation devices or techniques
such that the Lowest Achievable Emission Rate (LAER) for
the pollutant will be achieved.
This document serves as notification that the Administrator, by duly
delegated authority, has made a finding under Section 113(a)(5) of the Clean
Air Act, as amended, 42 U.S.C 7413(a)(5), and is served on both the State
of Indiana and Its delegate, the St. Joseph County Health Department, as
well as AM General Corporation to provide an opportunity to confer with
the Administrator prior to initiation of a civil action pursuant to Section
L13(b)(5). By offering the opportunity for such a conference or participating
in one, the Administrator does not waive his right to comence a civil action
imediately under Section 113(b).
Date:•___ ______
Dav d Kee, Director
Air Management flivision
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION V
)
In the Mdtter of: )
)
AM GENERAL CORPORATION ) NOTICE OF VIOLATION
MISHAWAKA, iNDIANA ) EPA-5-86-A-49
Proceedings Pursuant to )
Section 113(a)(1) of the
Clean Air Act, as amended )
[ 42 U.S.C. Section 7413(a)(1)] )
STATUTORY AUTHORITY
This Notice of Violation is isstted pursuant to Section 113(a)(1) of the
Clean Air Act, as amended, [ 42 U.S.C. Section 7413(a)(1)); iereafter
referred to as the “Act”.
FINDINGS OF VIOLATION
•The Administrator of the United States Environmental Protection Agency
(U.S. EPA), byauthority duly delegated to the undersigned, finds:
1. Indiana Air Pollution Control Board (IAPCB) Regulation
APC—19 dealing with Permits, PSO, Emission Offsets, is
part of the applicab1e Implementation plan for the State
of Indiana approved by U.S. EPA on February 16, 19R2,
at 47 Federal Register 6621 and establish operating and
construction permit requirements pertaining to AM General
Corporation’s facility located at 13200 McKinley Highway,
Mishawaka, Indiana.
2. As indicated more specifically below:
AM General Corporation (AMG) operates a miscellaneous metal part
coating facility In Mishawaka, Indiana which is in violation
of IAPCB regulation APC—19 as given below:
(a) On February 6, 1986 AM General Corporation was Issued a
permit to operate, by St. Joseph County Health Department.
This permit to operate allows AMG, to Increase Its volatile
organic compounds (VOC) emissions from 197.3 tons per year
to 377 tons per year. This VOC emission increase of 179.7
tons per year áll’owedto AuG subject the facility to IAPCB
• • .regulaton APC-19. •
(b) This per1 t to operate issued to AMG, failed to comply
with re ijrements of IAPCB regulation APC—19, SectIon
4 and
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2
(1) the applicant did not apply emission limitation
devices or techniques such that the Lowest
Achievable Emission Rate (LAER) for VOC was
not achieved.
(ii) the increased VOC emissions were not offset by
a reduction In VOC emission by ex1st ng facilities.
NOTICE OF VIOLATION
The Administrator of the U.S. EPA, by authority duly delegated to the under—
signed, notifies the State of Indiana and the AM General Corporation, that
the facility described above is in violation of the applicable Implementation
plan as set forth In the Finding of Violation.
DATE 19 6
David Kee, flirector
Air Management Division
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3
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CROSS REFERENCE SLIPSHEET
Document Description:
Is (Are) Filed Under:
69
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-. ii
UNiTED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON, D.C. 20460
\ ,, I
J11I3
MEMORANDUM
SUBJECT: Guidance on Limiting Potential to Emit in Ne Source
FROM:
Associate Enforcement Counsel
Air Enforcement Division
Office of Enforcement and. Compliance onitoring
John S. Seitz, Director
Stationary Source Complia e Division•
Office of Air Quality Planning and Standards
TO: Addressees
This memorandum transmits the final guidance on conditions
in constructio ..permits which can legally limit a source’s
potential to emit to minor or de minimis - levels. We received
many helpful comments ori’the January 24, 1989 draft of this
guidance, and have incorporated the comments into the final
document wherever possible.. - A summary of themajor changes which
have been made to the guidance in response to these comments is
provided below.
Several conunenters noted that, the draft guidance used the
term “federally enforceable” to mean both federally enforceable
as defined in the new source regulations (40 C.F.R. §
52.21(b) (17), 51.165(a) (1) (xiv), 51.166(b) (17)),. and enforceable
as.a practical matter. We have tried to distinguish the places
where each term should be used, explained the relationship
between the two terms, and indicated that in order to properly
restrict potential to emit, limitations must be both federally
enforceable as defined in the regulations and practically
enforceable.
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Reserved
2.30
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—2—
Some commenters requested that the section on averaging
times for production limits be more specific as to when it is
appropriate to use limitations which exceed a one month time
basis. We have tried to explain why it is not possible to
develop generic criteria for making this distinction, and to
indicate situations where exceptions to the policy that
production and operation limitationB not exceed one month may be
warranted.
There were some requests for a section on enforcement. We
have included a new Section VI which addresses this topic. We
also received many good suggestions on the example permit
limitations. The section on examples has been substantially
reworked to reflect your comments.
Finally, we learned through the comments that in two
specific circumstances, short term emission limits are the most
useful and reasonable way to restrict and verify limits on
potential to emit. These circumstances are: 1) when control
equipment is installed but control equipment operating parameters
are difficult to measure during eñforcèment inspections; and 2)
in surface coating operations with numerous and unpredictable use
of coatings containing varying voc content, where add—on control
equipment is not employed. Therefore, we have made a narrow
exception to the. flat prohibition on use of emission limits to
restrict potential toemit for these specific circumstances, and
only when certain additional conditions have been met.
Again, we appreciate the thoughtful comments we have
received on this guidance. Please insert this document into your
Clean Air Act Compliance/Enforcement Policy compendium as Item
Number H.3. If you have any questions, please contact Judith
Katz in the Air Enforcement Division at FTS 382—2843, or Sally
Farrell in the stationary Source compliance Division at FTS 382-
2875.
Addressees:
Regional Counsels
Regiona.I-X
Regional Counsel Air Branch Chiefs
Regions I-X
Air Management Division Directors
Regions I, III, and IX
Air and Waste Management Division Director
Region II
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2.31
—3—
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
Air Compliance Branch Chiefs
Regions I-X
New Source Review Contacts
Regions I-X
Alan Eckert
Associate. General Counsel
Greg Foote, OGC
Gary McCutchen, NSRS, AQMD
David Solomon, NSRS, AQMD
Sally Farrell, SSCD
Judy Katz, AED
David Buente, Chief
Environmental Enforcement Section
DOJ
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LIMITING POTENTIAL TO EMIT IN NEW SOURCE PERMITTING
JUNE 13, 1989
AIR ENFORCEMENT DIVISION
OFFICE OF ENFORCEMENT AND COMPLIANCE MONITORING
STATIONARY SOURCE COMPLIANCE DIVISION
OFFICE OF AIR QUALITY PLANNING AND STANDARDS
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Limiting Potential to Emit in New Source Permitting
I. Introduction
II. The Louisiana-pacific Case
III. Types of Limitations that will Limit Potential to Emit
LV. Time Periods for Limiting Production and Operation
V. Sham Operational Limits
A. Permits with conditions that do not reflect a source’s
planned mode of operation are void ab initio and cannot
act to shield the source from the requirement to
undergo preconstruction review.
1. Sham permits are not allowed by 40 CFR 52.21(r) (4)
2. Sham permits are not allowed by thedefinition of
potential to emit: 40 CFR 52.21(b) (4),
51.165(a) (1) (iii), 51.166(b) (4)
3. Sham permits are not allowed by the Clean Air Ao
B. Guide 1ines for determining when minor source
Construction permits are shams.
1. Filing a PSD or nonattainment HSR application
2. Applications for funding
3. Reports on consumer demand and projected
productions levels
4. Statements of authorized representatives of the
source regarding plans for operation
VI. Enforcement Procedures
VII. Exa p1es
VIII. Conclusion
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Limiting Potential to Emit in New Source Permitting
I. Introduction
Whether a new source or modification is major and subject to
new source review under Parts C and D of the Clean Air Act is
dependent on whether that source or modification has or will have
the potential to emit major or significant amounts of a regulated
pollutant. Therefore, the definition of “potential to emit”
under the new source regulations is extremely important in
determining the applicability of new source review toa
particular source. The federal. regulations define “potential to
eInitt as:
the maximum capacity of a stationary source to emit a
pollutant under its physical and operational design. Any
physical or operational limitation on the capacity of the
source to emit a pollutant, including air pollution control
equipment and restrictions on hours of operation or on the
type or amount of fuel combusted, stored or processed, shall
be treated as part of its design if the limitation or.the
effect it would have on emissions is federally enforceable.
40 C.F.R.SS 52.21(b) (4) , 51.165(a) (1) (iii), 51.166(b) (4).
• Permit limitations are very significant indetermining
whether a source is subject to major new source review. This is
because they are the easiest and most common way for a source to
obtain restrictions on its potential to emit. A per it does not
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2
have to be a major source permit to legally restrict potential
emissicn . A minor source construction permit issued pursuant to
a state program approved by EPA as meeting the requirements of 40
C.F.R. § 51.160 is federally enforceable. In fact, any permit
limitation can legally restrict pàtential to emit if it meets two
criteria: 1) it is federally enforceable as defined by 40 C.F.R.
§ 52.21(b) (17), 51.165(a) (1) (xiv), 51.166(b) (17), i.e. ,
contained in a permit issued pursuant to an EPA—approved
permitting program or a permit directly issued by EPA, or has
been submitted to EPA as a revision to a State Implementation
Plan and approved as such by EPA; and 2) it is enforceable as a
practical matter. The second criterion is an implied requirement
of the first criterion. A permit requirement may purport to be
federally enforceable, but, in reality cannot be federally
enforceable if it cannot be enforced as a practical matter.
Non-permit limitations can also legally restrict potential
to emit. These limitations include New Source Performance
Standards codified at 40 C.F.R. Part 60 and National Emission
Standards for Hazardous Air Pollutants codified at 40 CIF.R.
Part 61.
• ‘ The appropriate means of’ restricting’ ‘potential to emit
through permit conditions has been an issue in recent enforcement
cases. Through ‘these’cases and thtough guidance issued by EPA,
‘the Agency has àddresáed three questions: “what types of permit
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2.31
3
limitations can legally limit potential to emit; whether long
averaging tjmes for production limitations are enforceable as a
practical matter; and whether sources may limit potential to emit
to minor source levels asa means of circumventing the
preconstruction review requirements of major source revjew.
II. The Louisiana-Pacific Case
In United States v. Louisiana-Pacific Corroration , 682 F.
Supp. 1122 (D. Cola. Oct. 30, 1987) and 682 F. Supp. 1141 (D.
Cob. March 22, 1988), Judge Alfred Arraj discussed the type of
permit restrictions which can be used to limit a source’s
potential to emit. The Judge concluded that:
not all federally enforceable restrictions are properly
considered the calculation of asource’s potential to
emit. While restrictions on hours of operationand on the
amount of materia1 combusted or produced are properly
included, blanket restrictions on actual emissions are not.
682 F. Supp. at 1133.
The Court held that Louisjana-PacifiC’ s. permit conditions
which limited carbon monoxide emissions to. 78 tons per year and
volatile organic compounds to 101.5 tons per yearshould not be
considered in,d.etermining “potential to emit” because these
blanket emission limits did. not reflect the type of permit
conditions which restricted operations or production such as
limits on hours of operation, fuel consumption, or final product.
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4
The Louisiana—? cifiC court was guided in its reasoning by
the D.C. Circuit’s holding in Alabama Power v. Costle , 636 F. 2d
323 (D.C. Circuit l 79). Before Alabama Power 1 EPA regulations
required potential to emit to be calculated according to a
source’s maximum uncontrolled emissions. In Alabama Power , the
D. C. Circuit remanded those regulations to EPA with instructions
that the Agency include the effect of in-place control equipment
in defining potential to emit. EPA went beyond the minimum
dictates of the D.C. Circuit in promulgating revised regulations
in 1980 to include, in addition to control equipment, any
federally enforceable physical or operational limitation. The
Louisiana—Pacific . court found that blanket limits on emissions
did not fit within the concept of proper restrictions on
potential to emi . as set forth by Alabama Power .
Moreover, Judge Arraj found that:
...a fundamental distinction can be drawn between the
federally enforceable limitations which are expressly
included in the definition of potential to emit and
(emission) limitations.... . Restrictions’ onhours of
operation or on the amount of material which may be
combusted or produced ... are, relatively• speaking, much
easier to “federally enforce.” Compliance with such
conditions ‘could be easily verif ed throuqh the testimony of
officers, all manner of internal correspondence and
accounting, purchasing, and production records. In
contrast, compliance with.blanket restrictions on actual
emissions would be virtually impossible to verify or
enforce.
Id. Thus, Judge Arraj found that blanket emission limits were
not enforceable as a practical matter.
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2.31
5
Finally, the Court reasoned that allowing blanket emission
limitations to restrict potential to emit would violate the
intent of Congress in establishing the Prevention of Significant
Deterioration (PSD) program.
III. Types of Limitations that will Restrict Potential to Emit
As an initial matter in this• discussion, a few important
terms should be defined. Emission limits are restrictions over a
given period of time on the amount of a pollutant which may be
emitted from a source into the outside air. Production limits
are restrictions on the amount of final product which can be
manufactured or otherwise produced at a source. Operational
limits are all other restrictions on the manner in which a source
is run, including hours of operation, amount of raw material
consumed, :f el combusted, or conditions which specify that the
source must install and maintain add-on controls that operate at
a specified emission rate or efficiency. All production and
operational limits except for hours àf operation are limits on a
source’s capacity utilization. Potential emissions are defined
as the product of a source’s emission rate at maximum operating
capacity, capacity utilization, and hours of operation.
To appropriately limit potential to emit consistent with the
opinion in i uisiana—Pacific , all permits issued pursuant to 40
C.F.R. §S51.160, 51.166, 52.21 and .51.165 must contain a
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production or operational limitation in addition to the emission
limitation in cases where the emission limitation does not
reflect the maximum emissions of the source operating at full
design capacity without pollution control equipment.
Restrictions on production or operation ,that will limit potential
to emit include . limitations on quantities of raw materials
consumed, fuel combusted, hours of operation, or conditions which
specify that the source must install and maintain cOntrols that
reduce emissions to a specified emission rate or to a specified
efficiency level. Production and operational limits must be
stated as conditions that can be enforced independently of one
another. For example, restrictions on fuel which relates to
both type and amount of fuel combusted should state each as an
independent condition in the permit. This is necessary for
purposes of practical enforcement so that, if one of the
conditions is found to be difficult to monitor for any reason,
the other may still be enforced.
When permits contain production or operational limits, they
should also have recordkeeping re iireme ts that allow a
permitting agency to verify a source’s compliance with its
limits. For example, permits with limits on hours of operation
or amount of final product should require an operating log to be
kept in which the hours of operation and the amount of final
product produced are recorded. These logs should be available
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for inspection should staff of a permitting agency wish to check
a source’s compliance with the terms of its permit.
When permits require add-on controls operated at a specified
efficiency, level, permit writers should include, so that the
operating efficiency condition is enforceable as a practical
matter, those operating paraneters and assumptions which the
permitting agency depended upon to determine that the control
equipment would have a given efficiency.
An emission limitation alone would limit potential to emit
only when it reflects the absolute maximum that the source could
emit without controls or other operational restrictions. When a
permit contains no limits on capacity utilization or hours of
operation, the potential to emit calculation should assume
operation at maximum design or achievable capacity (whichever, is
higher) and continuous operation (8760 hours per year).
The particular circumstances of some individual sources make
it difficult to state operating parameters for control equipment
limits in a manner that is easily enforceable as a practical
matter. Therefore, there aze two exceptions to the absolute
prohibition on using blanket emissiOfl limits to restrict
potential to emit. If the permitting agency determines that
setting operating parameters” for control quipment is infeasible
‘in a particular situation, a federally enforceable permit
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containing short term emission limits ( e.a . lbs per hour) would
be sufficient to limit potential to emit, provided that such
limits reflect the operation of the control equipment, and the
permit includes requirements to install, maintain, and operate a
continuous emission monitoring (CEM) system and to retain CEI(
data, and specifies that cEl4 data may be used to determine
compliance with the emission limit.
Likewise, for volatile organic coi pound (VOC) surface
coating operations where no add-on control is employed but
emissions are restricted tt rough limiting VOC contents and
quantities of coatings used, emission limits may be used to
restrict potential to emit under the following limited
circumstances. If the permitting agency determines for a
particular surface coating operation that operating and
production parameters ( e.g. , gallons of coating, quantities
produced) a e not readily limited due to thewide variety of
coatings and products and due to the unpredictable nature of the
operatioh, emission limits coupled with a requirement to
calculate daily emissions may be used to restrict potential to
emit. The source must be required to keep the records. necessary
for this calculatjon, including daily quantities and the VOC
content of. each coating used. Emission limits may be used in
this limited circumstance to restrict potential to emit since, in
this case, emission limits are more easily enforceable than
operating or production limits.
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9
IV. Time Periods For Limiting Production and Operation
As discussed above, a limitation specifically recognized by
the regulations as reducing. potential to emit is a limitation on
production or operation. However, for these limitations to be
enforceable as a practical matter, the time over which they
extend should be as short term as possible and should generally
not exceed one month. This policy was explained in a March 13,
1987 memorandum from John Seitz to Bruce Miller, Region IV. The
requirement for a monthly limit prevents the enforcing agency,
from having to wait for long periods of time to establish a
Continuing violation before initiating an enforcement action.
EPA recognizes that in some rare situations, it is not
reasonable to hold a source to a one month limit. In these
cases, a limit spanning a longer time is appropriate if it is a
rolling limit. However, the limit should not exceed an annual
limit rolled on a monthly basis. EPA cannot now set out all-
inclusiv. categories of sources where a production limit longer
than a month will be acceptable because every situation that may
arise in the future cannot now be anticipated. However, permits
where longer rolling limits are use4 to restrict production
should be issued only to sources with substantial and
unpredictable annual variation in production, such as emergency
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10
boilers. Rolling limits could be used as well for sources which
shut down or curtail operation during part of a year on a regular
seasonal cycle, but the permitting authority should first explore
the possibility of imposing a month—by-month limit. For example,
if a pulp drier is periodically shut down from December to April,
the permit could contain -A zero hours of operation limit for each
of those months, and then the appropriate hourly operation limit
for each of the remaining months. Under no circumstances would a
production or operation limit expressed on a calendar year annual
basis be considered capable of legally restricting potential to
emit.
V. Sham OperatiQnal Limits
In the past year, several sources have obtained purportedly
federally enforceable permits with operating restrictions
limiting their potential to emit to minor or de minimis levels
for the purpose of allowing them to commence construction prior
to receipt of a major source permit. In such cases where EPA can,
demonstrats an intent to operate the source at major source
levels, EPA considers the mindr source construction permit void
ab initio and will take appropriate enforcement action to prevent
the source from constructing or operating without a major source
permit.
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11
The following example illustrates the kind of situation
addressed in this section: An existingmajor stationary source
proposes to add a 12.5 megawatt electric utility steam generating
unit, and applies for a federally enforceable minor source permit
which restricts operation at the unit to 240 hours per year.
Because the project is designed as a baseload facility, EPA does
not believe that the source intends to operate the facility for
only 240 hours a year. Further investigation would probably
uncover documentation of the source’s intent to operate at higher
levels than those for which it is permitted.
This situation raises the question of whether a source can
lawfully bypass the preconstruction or premodification review
requirements of Prevention of Significant Deterioration (PSD) and
nonattaininent New ource Review by committing to permit
conditions which restrict production to a level at which the
source does not intend to operate for any extensive time.
If, after constructing and commencing operation, the source
obtains a relaxation of its original permit conditions prior to
exceeding. them, does this constitute a violation of the
preconstruction review requirements? This section discusses why
• it is improper to construct a source with a minor source permit
when there js intent to operate as a major source, and provides
guidelines for identifying these “sham” permits.
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A. Permits with conditions that do not reflect a source’s
planned mode of operation are void initio and cannot act to
shield the source from the requireinentto undergo preconstruction
review.
1. Sham permits are not allowed by 40 CFR §52.21(r) (4)
Section 52.21(r) (4) states:
At such time that a particular source or modification
becomes a major stationary source or major modification
solely by virtue of a relaxation in any enforceab1 e
limitation which was established after .August 7, 1980 on the
capacity of the source or modification otherwise to emit a
pollutant, such as a restriction on hours of operation, then
(PSD) shall apply to the source or modification as though
construction had not yet commenced on the source or
modification.
When a source that is minor because of operating
restrictions ma construction permit later applies for a
relaxation of that construction permit which would make the
source major, Section 52.21(r) (4) prescribes the methodology for
determining best available control technology (BAcT). However,
it does not foreclose EPA’s ability, in addition to the
retroactive application of BACT and other requirements of the PSD
program, to pursue enforcetnent where the Agency believes that the
initial minor source permit was a sham. EPA wil1 limit its
activity to requiring application of 40 CFR 52.21(r) (4) only for
the cases where a source legitimately changes a project after
finding that the operating restrictions which were taken in good
faith cannot be compiled with. Whether a source has acted in
good faith is a factual question which is answered by avai1ab1
evidence in the particular case.
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2. Sham permits are not allowed by the definition of
potential to emit: 40 C.F.R. § 52.2l(b)(4),
51.165(a) (1) (iii), 51.166(b) (4).
The definition of potential to emit enables sources to
obtain federally enforceable permits with operational
restrictions as a means of limiting emissions to minor source
levels. However, implicit in the application of these
limitations is the understanding that they comport with the true
design and intended operation of the project.
3. Sham permits are not allowed by the Clean Air Act
Parts C and ID of the Clean Air Act exhibit Congress’s clear
intent that new major sources of air pollution be subject to
precortstruction review. The purposes for these programs cannot
be served without this essential element. Therefore, attempts to
expedite construction by securing minor source status through the
receipt of operational restrictions from which the source intends.
to free itself shortly after operation are to be treated as
circumvention of the préconstruction review requirements.
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14
B. Guidelines for determining when minor source constructror
permits are shams.
EPA’s determination that a purportedly federally enforceable
construction permit is a sham is made based on. an evaluation of
specific facts and evidence in each individual case. The
following are criteria which should be scrutinized when making
such a determination:
1. Filing a PSD or nonattainntent NSR permit application
If a major source or major modification permit application
is filed simultaneously with or at approximately the same ti
the minor source construction permit, this is strong evidence ot
an intent to circumvent the requirements of preconstruction
review. Even a major source application filed after the minor
source application, but either before operation has commenced or
after less than a year of operation should be looked at closely.
2. Applications for funding
Applications for commercial loans or, for public utilities,
bond issues, should be scrutinized to see if the source has
guaranteed a certain level of operation which is higher than that
in its construction permit. If theproject would not be fun
or. if it would not be economically viable if operated on an
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15
extended basis (at least a year) at the permitted level of
production, this should be considered as evidence of
:cjr vantj
3. Reports on consumer demand and projected production
levels.
Stockholder reports, reports to the Securities and Exchange
Cominission,.utility board reports, or business permit
applications should be reviewed for projected operation or
production levels. If reported levels are necessary to meet
projected consumer demand but are higher than permitted levels,
this is additional evidenceof circumvention.
4. Statements of authorized representatives of the source
regarding plans for operation.
Statements by representatives of the source to EPA or to•
state or local permitting agencies about the source’s plans for
operation can be evidence to show intent to circumvent
preconstruction review requirements.
Note that if a determination is made that a permit is a
“sham” for one pollutant and, therefore, the source is a major
source or máj or modification, the permit may possibly still
contain valid limits on.potential to emit for other. pollutants.
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16
In such Cases, the entire source must still go through new sourc
review, during which, for PSD review, all pollutants for which
there is a net significant increase must be analyzed for BP CT.
In nonattairnnent new source review, new sources must have LAER
determinations only for pollutants for which they are malor.
Major modifications, however, must have LAER determinations for
all nonattainment pollutants emitted in significant amounts. If
the valid limits in a partially void minor source construction
permit keep certain pollutants below significance levels, then
those pollutants would not have to be analyzed for BACT or LAER.
However, if a source or modification is determined to be major
for PSD or NSR because part of its minor permit is deemed void,
it would have to undergo BACT or LA.ER analysis for all
significant pollutants.
VI. Enforcement Procedures
This guidance has discussed permitconditions which will
legally restrict potential to emit, shielding, a source from the
requirem.nt.to comply with major new source permitting
regulations. Failure by a permitting agency to adhere to these
guidelines may result in a permit that does not legally restrict
potential’ to” emit, thereby subjecting a source to maj or new
source rev jew . If that source has not gone through
preconatruction review, it is a significant violator of the Clean
Air Act and is subject to enforcement for constructing or
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17
modifying without a major new source permit.
The enforcement options available to .:EPA in these situations
include administrative action under § 167 or 113(a) (5) of the Act
or federal judicial action under li 113(b) (2), 113(b) (5), 113(c),
or 167. Which enforcement option is selected depends on the
facts of the particular situation. (See July 15, 1988 guidance
on EPA Procedures for Addressing Deficient New Source Permits.)
VII. Examples
The following examples are provided to illustrate the type
of permit restriøtions which would and would not legally limit
potential to emit to less than major source thresholds. These
examples are provided for purposes of clarifying the potential to
emit and averaging time guidance only. They are not intended to
reflect all the permit conditions necessary for a valid permit.
Specific test methods, compliance monitoring and recordkeeping
and reporting requirements are necessary to make permit
limitations enforceable as a practical matter. The use of
examples where averaging times are the longest times allowed
under EPA policies is not intended to necessarily condone the
selection of the longest averaging times; averaging times should
in practice be as short as possible.
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1. The minor source construction permit for a boiler
contains the following restrictionS: 250, 000 gal• fuel/month;
0.8% S fuel; 8000hours/year.
These conditions are federally enforceable production and
operation limits, but do not limit potential to emit because one
of them does not meet EPA policies on enforceability as a
practical matter. The averaging time for hours of operation, one
of the operational limits necessary to restrict emissions to less
than 250 tpy, exceeds a monthly or rolling yearly limit. If,
instead of 8000 hours/year, the hourly restriction were stated as
666 hours/month, the permit would serve to keep the source a
minor source, assuming the permit contains appropriate
recordkeeping prp visions.
2. A waferboard plant which has the physical capacity to
emit over 300 tpy of carbon monoxide in the absence of using
specific combustion techniques has the following permit
restriction as the sole emission limitation: 249 tpy.
Thiedoes not limit potential to emit since an operational
or production restriction is necessary for. the. source to be
restricted to 249 tpy. The permit must contain a restriction on
hours of operation or capacity utilization which, when multiplied
by the maximum emission rate for the Co sources at the plant,
results in emissions of 249 tpy. Additionally, while the
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19
e isiion i*it alone cannot restrict potential to emit, the
e isiion Ii it is unenforceable as a practical matter since it is
limited on ai annual basIs. The permit should contain a short
term emission limit (in addition to the annual emission limit),
consistent with the compliance period or parameter in the
applicable test method for determining compliance.
3. A small scale rock crushing plant that cannot emit more
than 240 tpy under maximum operation without controls (including
plant-wide particulate emissions from transfer and storage
operations) has the following permit restriction as the sole
emission limitation: 240 tpy particulate matter.
Since no o erationa1 limitations are necessary for the
source to emit below 250 tpy, no operational restrictions need be
in the permit to limit potential to emit. However, although this
is not a major source, the state agency should express the
emission limit in this permit as a lb/hour measure or gr/dscf so
that it will be enforceable as a practical matter.
4. A plant consisting solely of a small rock crusher has
the following permit restrictions: 005 lb gr PN/dscf; fabric
filter mustbè employed and maintained at 99% efficiency.
Assuming that maintaining the fabric filter at 99%
efficiency will result in ernissions of less than 250 tpy, this
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20
permit Would limit potential to emit if it also contained either
1) paramstsrs that allowed the permitting agency to verify the
fabric filter’s operating efficiency or 2) a requirement to
install and operate continuous opacity monitors (COMe) and a
specification that COM data may be used to verify compliance with
emission limits. Note that if this second alternative were
adopted, it would not be necessary to require that the fabric
filter be maintained at 99% efficiency.
To determine potential to emit, the efficiency rate of the
fabric filter would be multiplied by the maximum uncontrolled
emission rate, the maximum number of operating hours and maximum
throughput capacity since there are no other operating or
production liinits. However, the efficiency rate of the fabric
filter would not be enforceable as a practical matter unless
there were an enforceable means to monitor ESP performance on a
short term basis. The two alternatives mentioned above would
satisfy this requirement.
5. A surface coating operation has the capability of
utilizing 15,000 gal coating/month, with the following permit
restrictions: 3.0 lb VOC/gal coating minus water; 20.5 tons
VOC/month; monthly VOC emissions to be determined from records
of the daily volumes of coatings used times the manufacturers
specified VOC content.
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21
This does not limit potential to emit since the source has
the physical capacity to exceed 250 tpy of VOC, and the permit
does not contain a production or an operational limitation. A
monthly limit on gallons of coating used which when multiplied by
3.0 lb/gal equates to less than the 250 tpy threshold ( e.g .
13,500 gallons/month), with appropriate recordiceeping, would
generally be necessary to limit potential to emit. If, however,
the permitting agency determines, due to the wide variety of
coatings employed and products produced, that restrictions n
operation or production are not practically enforceable, then the
above emission limits could restrict potential to emit if there
are requirements that the source calculate emissions daily, and
keep the appropriate records.
If the source • was alternatively to meet the 20.5 ton/month
limit by employing add—on controls, the permit would need to
contain an operational limit, such as the requirement to install
and operate an incinerator at 99% efficiency. A requirement to
monitor incinerator effidiency (either directly or indirectly via
temperature monitoring for example), and appropriate
recordkesping requirements to verify compliance with each of the
permit conditions would also be necessary to make the permit
conditions enforceable as a practical matter. Note, however,
that in the case where add-on controls are employed, the source
may be able to meet a shorter term emission limit than the ton
per month figure.
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VIII . Conclusion
We hope this guidance will help EPA Regions identify sources
which have the potential to emit • ajor amounts of an air
pollutant which will subject those sourceg to the requirements of
preconstruction new source review. Every source which is
subject to these requirements but has not obtained a major new
source permit should be seriously considered for enforcement
action.
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I. Section 303: Emergency Powers
1. Guidance on Use of Section 303 of the Clean 09/15/83
Air Act
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I
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7T
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Guidance on Use of Section 303 of the Clean Air Act
(09/15/83)
File at Part I, Document l
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I D P 7%
UNITED STATES ENVRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460

SEP I5 3
NEMORAN DUN
SUBJECT: Guidance on Use of Section 303 of the Clean Air Act
FROM: Edward E. Reich, Director c.— S’ /&.._> —._.
Stationary Source Compliance ivision
Michael S. Alushin’ 1 d.
Actthg Associate Enforcement Counsel for Air
TO: Directors. Air Management Divisions
Regions I. V, and IX
Directors, Air and Waste Management Divisions
Regions I L -tV, Vi-Vill, and X
Regional Counsels
Regions I-X
Attached are two doc ents regarding procedures to be
followed during emergency situations covered by Section 303 of
the Clean Air Act. One is the final guideline explaining the
statutory requirements of Section 303 and the relief available
in a legal action taken under that section. The second is a
manual outlining the services that can be proviaed through the
contract mechanism of the Stationary Source Compliance Division
of OA1 R providing technical support in a y emergency episode
that arises.
After we distributed draft versions of these documents to
you last April we received some comments and have tried to
incorporate them into the final guidance being distributed today.
Thank you for all the comments we received.
• We hope that this guidance will encourage greater use of
Section 303. If you have any questions about these materials,
please contact Mark Antell at 382-2883 concerning the technical
manual or Judy Katz at 382-2843 concerning the legal guidance.
Attachments
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• INITLATION OF AD 1LNLSTRATIVE AND CIVIL ACTION
UNDER SECTION 303 OF THE CLEAN AIR ACT
DURING MR POLLUTION EMERGENCIES
The purpose of this guideline is to explain the statutory
requirements and resource needs which must be met in order to
take action under Section 303 of the Clean Air Act 1 J in the
event of an air pollution emergency. This guideline is directed
towards both meteorological episodes (e.g., thermal inversions)
1 /Section 303, as amended in 1977 and codified at 42 U.S.C.
Section 7603, reads as follows:
(a) Notwithstanding any other provision of this chapter, the
Administrator, upon receipt of evidence that .a pollution: source
or or combination of sources (including moving sources) is pre-
senting an imminent and substantial endangermentto the health
of persons, and Chat the appropriate State or local authorities
have not acted to abate such sources., ay bring suit on behalf
of the United_States in the appropriate United States District
court to immediately restrain any person causing or contribut-
ing to the alleged pollution to stop the emission of air
pollutants causing or contributing to such pollution or to take
such other actions as may be necessary. If it is not practicable
to assure prompt protection of the health of persona solely by
commencement of such a civil action, the Admini strator may
issue such orders as may be necessary to protect the health of
persons who are, or may be, affected by such pollution source
(or sources). Prior to taking any action under this section,
the Administrator shall consult with the State and local
authorities in order to confirm the correctness of the infor-
mation on which the action proposed to be taken is based and
to ascertain the action which such authorities are, or will
be, taking. Such order shall be effective for a period of not
more than twenty-four hours unless the Administrator begins an
action under the first sentence of this subsection before the
expiration of such period. Whenever the Administrator brings
such an action within such period, such orders shall be.
effective for a period of forty-eight hours or such a longer
period as may be authorized by the court pending litigation or
thereafter.
(b) Any person who willfully violates, or fails or refuses to
comply with, any order issued by the Administrator under
subsection (a) of this section may, in an action brought in the
appropriate United States District Court to enforce such order,
be fined not more than $5,000 for each day during which such
violation occurs or failure to comply continues.
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involving dangerously high levels of criteria or non-criteria
pollutants: 8ituatLons in which chronic exposure to air pollution
causes endangerment by cumulative effect, and incidents involving
industrial accidents or malfunctions (e.g., breakdown of po].lu—
tion control devices) resulting in the release of air pollutants
in hazardous concentrations.
STATUTORY PREQUISITES
1 • An Imminent and Substantial Endangerment to Health
The threshold prerequisite is th e existence of “evidence
that a pollution source or combination of sources ( including
moving sources) is presenting an imminent and substantial risk
of harm. It should be emphasized that endangerment means a
risk or threat to ht.an health, and that EPA should not delay
action until actual injury occurs. Such delay would thwart the
express intent of the Clean Air Act to protect the nation’s air
quality in the interest of the public health. Section303 is a
precautionary provision, aimed at the avoidance of potential
harm. This is best illustrated by the House Report on the
Clean ActAmend ents of 1977:
In ‘retaining the words “imminent and substantial
endangerment to the health of persona”, the committee
ineendsthat the authority of this section not be used
where the risk of harm is completely speculative in
nature or where. the harm threatened is insubstantial.
However,.., the committee-inte ds that this language
be constructed by the courts and the Administrator 80
as to give paramount importance to the. objective of
protection of the public health. Administrative and
judicial implementation of this authority must occur
early enou h to prevent the. potential hazar.d from
materializing .
H.R. Rep. No. 95—294, 95th Cong., Sess. 328 (1977) (emphasis added).
There is also some judicial opinion 8upporting an
interpretation of the endangerment standard as being merely•
precautionary, and permitting remedial action prior to the
occurrence of any actual harm. In Ethyl Corporation v.
Environmental Protection Agency , 541 F.2d 1 (D.C. Cit. 1976),
the Court ruled that EPA had properly acted to regulate lead in
gasoline upon finding, under Section 211 of the Clean Air Act,
that lead emissions would “endanger” as requiring only a finding
Only a finding that lead emissions presented a “significant
risk” of injury to the public. There were no findings of the
presence of actual harm. In upholding the Agency’s, view of the
‘endanger” standard in Section 211, the Court explained:’
When one is endangered, harm is threatened; ’
no actual injury need ever occur.. A’
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statute allowing for regulation in the face
of danger is, necessarily, a precautionary
statute. Regulatory action may be taken
before the threatened harm occurs; indeed,
the very existence of such precautionary
legislation would seem to demand that
regulatory action precede, and, optiomally,
prevent, the perceived threat.
541 F.2d at 13. In Reserve Mining Coin ,any v Environmental
Protection Agency , 514 F.Zd 492 (8th Cir. 1975), the Court had
similarly interpreted an endangerment standard in the Federal
Water Pollution Control Act in a case involving asbestos
discharges into Lake Superior. The court stated that “Congress
used the term “endangering” in a.precautionary or preventive
sense, and, therefore, evidence of potential harm as well as
actual harm comes within the purview of that term.” 514 F.2d
at 528.
An important question for purposes of Section 303 of the
Clean Air Act, however, concerns the effect of the modifying
phrase “imminent ‘and substantial” upon the meaning of
‘endangerment.” In Reserve Mining , the Court stated that the
“term ‘endangering’.., connotes a lesser risk of harm than the
phrase ‘imminent and substantial endangerment to the health of
persons.” 514 F.2d at 528. Accord, Ethyl Corporation v.
Enviror.menta]. Protection Agency , 541 F.2d at 20 n.36. This
rssue is particularly important to EPA’s ability under Section
303 to abate suspected carcinogens, the harm from which might
take many years to manifest itself.
It is our position that in order to adequately safeguard
public, health by being in a position to preclude Gn air pollution
emergency at its inception, the phrase “imtninent and substantial
endangerment” must be interpreted to refer to an imminent and
substantial risk of harm, no matter how distant the manifestion
of harm may be. If there exists a non-speculative risk of
harm, the agency may properly act under Section 303. This is
consistent with the legislative history quoted previously, and
with the established definition of “endangerment t ’ as referring
to the risk of harm, not actual harm itself. This is also
consistent with the 1970 Senate Report on Section 303, which
states:
The levels of concentration of air pollution agents or’
combination of agents which substantially endanger
health are levels which should never be reached in any
community. When the prediction can reasonably be made
that such elevated levels could be reached even for a
short period of time--that it La that they are imminent
—-an emergency action plan should be implemented...
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S. Rep. No. 91—1196, 91st Cong., 2d Sess. 36 (1970). Thus., EPA
may properly take action to abate air emissions when a substantial
risk of harm is about to arise. This is several steps prior to
the occurrence of any actual harm, but is appropriate in view
of the precautionary nature of Section 30 3 ,L/
This approach is alsocrucLal to the Agency’s ability to
abate emissions which are believed to be but which are yet not
confirmed as dangerous to h znan health. In United States
v. Vertac Chemical Corporation , 489 F. Supp. 870 (E.D. Ark.
f980). the Court found the chemical dioxin, widely believed but
not fully proven to be hazardous, to be presenting a “reasonable
medical concern over public health” and to be thereby constituting
an imminent and substantial endangerment to health under Section
7003 of the Resource Conservation and Recovery Act. Id. at
885. An Agency response under Section 303 of the Clean Air Act
would be appropriate in the presence of pollutants reasonably
oelieved to be dangerous to hi nan health. As with regard to any
pollutants sought to be abated under Section 303, EPA must be
prepared to doct nent the basis of its belief in the danger of
these pollutants. If the Agency can show a “reasonable edica1
concern” created by the suspect emissions, it will have met the
“imminent and substantial endangerment” test of Section 303.
Appendix L of the State Implementation Plan regulations
(40 CFR Part 51) outlines a phased emission reduction program
for air. pollution emergencies involving criteria pollutants.
In increasing degrees of seriousness, t he levels are “alert”,
“warning”, “emergency”, and “significant harm to health. t ’ The
“significant harm to health” levels are levels at which actual
injury occurs and are levels that should never be reached. It is
not consistent with the intent of the Act for the Regional
Offices to wait until the levels of “significant harm to health,”
specified in 40 CFR51.16(a), are reached prior to initiating a
Section 303. action. The “ezuérgency” Level is intended to be
the level at which action must be taken to avoid reaching levels
of significant harm. Generally speaking, it is at these
designated emergency levels that an imminent and substantial
endangerment, i.e.. an imminent and substantial risk to public
health, is. deemed to exist.. The “warning” and “alert” levels
specified in Appendix L are designed to ameliorate situations
before the emergency stage by application of moderate controls.
2 ] This permits the Agency to actto seek abatement of emissions
reasonably believed to be carcinogenic but for which a harmful
level, and the time for harm from such emissions to become
apparent, are both uncertain.
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Under.certain circuinstances an imminent and substantial
endangerment to health may exist even thoughthe Appendix L
emergency levels have not been reached. Accordingly, the
concentrations outliped in Appendix L as the “emergency levels”
are only to be considered as a guide in determir ing when an.
imminent and substantial endangerment to health e ista. Flexi-
bility is essential and appropriate action must be taken pursuant
to Section 303 whenever it is necessary to prevent the signifi-
cant harm to health levels from being reached. For example, if
review of forecasted meteorological conditions indicate that a
situation is likely to deteriorate so rapidly that any action
started. at the emergency level in Appendix L would come too
late to be etrective in preventing the significant harm to
health level from being reached, the Agency should act at ouch
earlier time as is necessary to allow for enforcement action
to be effective. Moreover, emergency conditions can be present
even if there. is no clear’prediction that specified endangerment
levels will be reached. An imminent and substantial endangerment
to health may exist, for example, where pollutant concentrations
lower than, established emergency levels occur or are predicted
to occur for an extended period of time.
With regard to non-criteria pollutants, sources of
information on dangerous concentrations may vary. Among these
are standards established by the Occupational Safety and Health
Administration (OSHA) for exposure to air pollutants inside
the workplace. Although not directly related to ambient air,
these standards might provide a starting point for assessing
.the risk to the public when such-pollt tants, e.g., various,
organics, become airborne in a community. Computerized health
effects data bases, such as Toxline and Cheniline, might also be
helpful. (These data bases are run by the National Library of
Medicine and may be accessed through the EPA Headquarters or
regional office libraries.) It will be necessary to gather
scientific and medical data, in addition to meterological
data, in order to find an’ imminent and substantial endangerment
to public health as a result of emissions of non-criteria
pollutants. The role of experts for this purpose is discussed
below,
2. State or Local Authorities Have Not Acted to Abate Pollution
Source(s) .
A second prequisite to initiating a Section 303 action is
that the Administrator receive evidence “that appropriate State
or local authorities have not acted to abate such sources.”
Section 51.16(a) of 40 CFR requires that each State Implementation
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Plan for a Priority I region include a contingency plan which,
as a minimum, provides for taking any emission control. actions
necessary to prevent ambient air pollutants conc ntrat oris of
criteria pollutants from reaching levels which could cause
significant harm to the health of persons. More specifically,.
the State Implementation Plans submitted to the Administrator
were: (1) to specify two or more stages of episode criteria; ’ (2)
to provide for public announcements whenever any specific stage
has been determined to exist; and (3) to specify emission
control actions to be taken at each episode stage. (Section
51 .16(g) of the Implementation Plan regulations requires that
the State Implementation Plans for Priority II regions include,
as a minimum, requirements (1) and (2);) Although Section
51.16 addresses only SIP contingency plans for criteria
pollutants, the requirement of State or local failure to abate
applies also to conditions involving non-criteria pollutants.
The issue for purposes of implementing Section 303 is at what
point it becomes the duty or the prerogative of EPA to act to
abate an air pollution emergency.
Prevention and curtailment of an air pollution emergency
is initially the responsibility of State and local governments.
EPA has secondary responsibility for taking steps to avert
emergency conditions. The Regional Office’s initial duty,
therefore, is to observe State and local abatement efforts
(e.g., monitoring implementation of an emergency episode plan)
and to render assistance should a State or locaLity request it.
The Regional Office should take attion. under Section 303 only
if State and local action is either unsuccessful or not forth-
coming, as where a State lacks adequate abatement resources or
simply refuses to attempt to abate the emergency. Under such
circumstances, the Regional Office may asstn e primary responsi-
bility for curtailing the emergency or, preferably, render
technical assistance to the State’s abatement efforts.
Thecime allowed for State and local government to take
adequate action prior to EPA’S assuming primary responsibility
will obviously depend on thenature of the potential or actual
emergency. The more the endangerment would be increased by
delay, the shorter this lead-time should be. All that is
required by Section 303, however, is that State or local action
be thsufficiertt to abate or preclude the emergency conditions,
and that the appropriate State or local agency be consulted in
order to determine what action it intends to take, and whether
the information upon which EPA intends to act is accurate.
The ‘requirement of consultation should not be viewed as an
obstacle to effective action by EPA. As explained in the
House Report on the 1977 Clean Air Amendments:
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The consultation requirement is in furtherance
of the coi’nmjttee’a inCent that the Administrator
not supplant effective State or local e ergency
abaterient action. However,.., if State and local
efforts are not forthcoming in tii ely fashion
to abate the hazardous condition, this provision
would permit prot pC action by the Administrator.
HR. Rep. 95—294, 95th Cong., 1st Sess. 328 (1977). The
consultation requirement is therefore not a concurrence
requirement, but rather one of notification and corroboration
prior to taking action. The.scope of action taken by EPA
should be restricted to what is necessary as a supplement to
any action taken by State or local authorities, as, e.g., where
a State is able to implement only portions of its SIP emergency
episode. plan, yet further action is needed to curtail the episode.
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RELIEF AVAILABLE UNDER SECTION 303
The foregoing ‘statutory prerequisites apply to both the
initiation of a civil action to abate an air pollution emergency
and to the issuance of an order by the A ministrator directly
to the source of the hazardous air ‘emissions, demanding a
curtailment of those emissions. These two forms of relief--the
civil action for an injunction and- the administrative order--
are briefly discussed below.
1. Injunctive Relief
Section 303 permits the Administrator to seek injunctive
relief in a federal district court “upon receipt of evidence
that a pollution source or combination of sources (including
moving sources) is presenting an imminent and substantial
endangerment to the health of persons, and ‘that the appropriate
State or local authorities have not acted to abate such sources...”
Pursuant to the Memorandum of Understanding between EPA and the
Department of Justice, codified in’Section 305 of the Clean Air
Act, the action would be filed on behalf of the Administrator
by the United States Attorney for the appropriate federal court
district. EPA Regional and Headquarters Offices, however, have
the responsibility of providing all data and evidentiary material
to the Department of Justice.
As will be discussed more fully below, it is essential to
a successful civil action that expert testimony be elicited,
either in the form of affidavits or through expert appearances
at depositions or ‘trial, regarding the risk of harmful effects
to the health of persons from exposure to the relevant pollutant.
This is especially so in the case of an emergency involving a
non-criteria pollutant, the harmful. levels or effects of which
have not already been established by ‘EPA or other agencies. A
diligent effort should be made to obtain evidence, perhaps from
citizen complaints or hospital records, that the particular
emission sought to be controlled has in fact already caused
adverse effects to the health of some individuals. Such evidence,
while not essential to’a Section 303 action, could be helpful
in substantiating an imminent and substantial endangerment.
Among the experts to be consulted concerning hazardous pollutants
and the presence and extent of any adverse health effects are
physicians, epidemiologists, and toxicologists.
‘In’additton, expert meteorological testimony is needed
in order to assess the magnitude of hazardous pollutant
concentrations and to pinpoint the source of the dangerous
emissions, if not already known (as in an area of numerous
industrial point sources), and to ascertain the expected
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geographical breadth of the emergency, based apon such parameters
as current and forecasted wind speed, wind direction, atmospheric
stability, temperature, and precipitation. 3 / The meteorological
expert may also be able to predict the duration of an emergency
episode by determining the time which will elapse before changed
meteorological conditions might substantially improve the
dispersion of the hazardous pollutant concentrations.
Also, experts in industrial processes and pollution controls
will be needed in order to explain to a court the nature of the
polluting process and what abatement options are available,
e.g., plant shutdown versus reduced production. In any action
for an injunction, a court can be expected to provide no more
relief than is necessary, and place as light a burden as possible
on the emitting source, in providing for effective curtailment
of the air pollution emergency. The industrial expert will
thus play a crucial role in the shaping of judicial relief in a
Section 303 action. S
This testimony--medical, scientific, meteorological, and
technical-- is essential to prevailing in a Section 303 suit.
The burden of proof will, be on the Government, which must show
by a preponderance of the evidence that the defendant is the
source of air pollutants which, by their very nature or because
of existing meteorological conditions, Shave. caused harm to
individuals or are presenting animminent and substantial risk
of such harm. In order to assure the credibility of this
testimony, sai pling personnel should be prepared to testify
to the reliability and quality assurance of the air samples
evaluated by the experts.
The procedure for seeking an injunction are set forth in
the Federal Rules of Civil Procedure, Rule 65 (copy attached).
In the event that immediate relief is needed, Rule 65 provides
for temporary injunctive relief in the form of a preliminary
injunction which can be obtained from a federal district court,
after a hearing, in order to reduce further emissions of the
suspect pollutant below emergency levels until a full trial can
be held. The government should be prepared to have its experts
testify in court if preliminary or permanent injunction is sought.
I Atomospheric stability refers the degree of turbulence in
the atmosphere.
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The following should be kept in mind aa.elements of proof
necessary to obtaining a preliminary injunction:
1. Absent immediate injunctive relief, irreparable harm will.
be cauaedby the polluting source(s); 2) this harm would
outweigh any harm to the source(s) from the granting of relief
requiring the source(s) to abate emissions; 3) the risk to
public health is sufficient to make success on the merits and
the granting of a permanent injunction likely; and 4) the public
interest necessitates irnraediat.e relief. See 7—pt. 2 Moores
Federal Practice para, 65.04 (1980); See also United States
v. Midwest Solvent Recovery, Inc. , 484 F. Supp. 138. 144 (N.D.
md. 1 980)
In addition, Rule 65 provides for injunctive relief in the
form of ten-day temporary restraining order (TRO), which can be
granted without a hearing while a motion for preliminary
injunctiort is prepared. 4 ! Expert testimony in the form of
affidavit should suffic for the purpose of obtaining a TRO.
The proof necessary to obtain a TRO is that immediate
and irreparable injury will. occur if injunctive relief is
withheld until the defendant can be given notice and an
opportunity to appear.. Rule 65 implies that a hearing on •a
•motion for preliminary injunction should take place as soon as
possible after the granting of a TRO. Id., Para. 65.05-65.08; see
also 4 West’s Federal Forms S5297 (197 .
2. Administrative Order
Prior to the 1977 Clean Air Act Amendments, the only method
of enforcement provided in Section 303 was injunctive relief
from a federal district court upon a showing of imminent and
substantial endangerment from air pollutant emissions. The
1977 Amendments left this authority in place and added a provision
authorizing the Administrator to issue an order to a source to
take steps to curtail its emissions in the event “it is not
practicable to assure. prompt protection of the health of persons
solely by commencement of... a civil action.” Within twenty-four
4/ Only once has a TRO been requested under Section 303. The
incident occurred in 1971, inBirmingham, Ala. After local
efforts to curtail emissions from several sources failed, a TRO
was requested and granted under Section 303, requiring various
process modifications and cessations.
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hours of isauthg the order, however, the Administrator must
file a 8uit for .injunctive.relief, or the order will expire.
Upon such filing,, the court may then extend the Life of the
order pending litigation. Violation of the order may be
penalized up to $5,000 per dày per violation. This penalty may
be sought in a civil action brought to enforce the order. 5 /
Also in such an action, a sourcc may challenge the Administrator’s
basis for issuing.the order.
This administrative order mechanism was intended by Congress’
to enhance EPA’s emergency response capability even beyond that
provided by the TRO process previously discussed. As explained
in the 1977 House Report:
Even more prompt action may be necessary
where pollution levels exceed the never to be
exceeded levels without prior forecast that
this may occur... The committee bill reflects
the committee’s determination to confer
completely adequate authority to deal promptly
and effectively with emergency situations
which jeopardize the health of persons. Thus,
the section provides that if it is not
practicable to assure prompt protection’ of health
solely by commencement of a civil action, the
Adninistrator may issue such orders as may be
necessary for this purpose.
H.R. Rep. No.95—294, 95th Cong., 1st Seas. 327—28 (1977)
(emphasis added). The administrative order is thus an available
enforcement mechanism in those instances where even a TRO might
be issued too late to effectively curtail an endangerment to
public health. Such situations might be those i.nvolving emissions
that are hazardous even in very limited duration of exposure,
rendering a TRO too late to be fully effective, or situations
which, although potentially quite harmful, are expected to be
of very short duration, such that the emissions would cease
before the TRO could issue (e.g., the demolition of an asbestos—
lined building). In such situations, the time required to
gather the expert evidence in support of a TRO might defeat.
efforts to avert adverse public health effects, absent a more
immediate enforcement mechanism.
1 This is analagous to the provision in Section 113(b) of the
Clean Air Act for a civil action to enforce, and seek penalties
for violation of, an order issued under Section 113(a) to comply
with emission limitations.
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The administrative order is just such a mechanism. Expert
testimony La not requirEd for issuance of an administrative
order. What is needed, ho ’ever, is evidence which reasonably
leads the Administrator to believe that certain air emissions
from particular sources are creating an imminent and substantial
endangerment to public health. This evidence might be in the
form of emissions data combined with adverse meteorological
reports and medical ulletLns. Prävided the informal consul-
tation requirement has been met, the Administrator may issue
an order calling for abatement of emissions by whatever means
the Adninistrator determines arenecessary under the circum-
stances of the case. Because of the potential adverse economic
impact of such an order upon the source, the order should
require no more than what is clearly necessary to curtailing
hazardous emissions. The fact that the order may only last
twenty-four hours, during which time a TRO application and
civil suit can feasibly be filed, and that the basis of. the
order may be challenged by any source subjectto it in a pro-
ceeding to enforce the order, are indicative of Congress’
intent that the order be immediately available although not
necessarily supported by the best possible expert credible
evidence. . . .
Note that the administrative order may.also be used to
require additional sampling or monitoring by the suspected
source with a view towards abating its emissions. This addi-
tional data can then by utilized in a subsequent civil action,
if such an action La necessary to abatement. Additional sampi—
trig and monitoring may also be required of a source through
the use of Section 114 of the Clean Air Act Act. Section
113(a) (3) permits EPA to issue an order to a source if its
fails to comply with a requirement of 114. Such an order is
not effective until the person to whom it is issued has had an
opportunity to confer with EPA.
Thus, Section 114 provLdes a mechanism for requiring
source sarnplthg and monitoring with a much lower standard of
proof of violation than that required by Section 303. EPA may
issue an order requiring sampling and monitoring under Section
114 for the purpose “(i) of developing or assisting in the
development of any implementation plan under section 110 or
111(d), any standard of performance under section 111, (Li) of
determining whether any person La in viOlation of any such
standard or any requirement of such a plan, or (iii) carrying
‘out any provision of this Act...” This is contrasted with the
requirement under section 303 that EPA have evidence that a
source “is preàentthg an imminent and subtantial endangerment
to the health of persons, arid that appropriate State or local
auhorittea have not acted to abate such sources.” However,
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while the standard for issuing a 114 order is lower, a 114 test-
ing order takes longer to enforce because it iu8t be enforced
by the issuance of a 113(a) (3) order after the source has been
offered an opportunity to confer.
Delegations for Issuing Administrative Orders
and Judicial Complaints Under Section 303
I. Administrative Orders
Pursuant to Delegation 7-49, authority to issue adtninis—
trative order3 under Section 303 rests with the Regional
Administrators and the Assistant Administrator for Air, Noise,
and Radiation. The Regional Administrators must consult with
the Associate Enforcement Counsel for Air before issuing such
orders. The Assistant Administrator for Air, Noise and
Radiation Dust consult in advance with the Associate Enforcement
Counsel for Air and notify any affected Regional Administrator
or their designees before issuing orders. Because speedis of
the essence_inissuing administrative orders under Section
303, the Headquarters coricurrences can be issued by telephone
and followed up later in writing.
II. Referral of Civil Actions for Injunctive Relief
Pursuant to Delegation 7-22-k, all. referrals to the
Department of Justice of requests for civil actions for emergency
TRO’s must be made by the Special Counsel for Enforcement. The
Special. Counsel for Enforcement must notify the Assistant
Administrator for Air, Noise and Radiation and the appropriate
Regional Administrator when a case is referred to the Department
of Justice.
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FORMS FOR 3BTAINING I JUMCTIVE RELIEF
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MOTION FOR TE ORARY RESTRAINING ORDER
The United States of Arnerica, by its undersigned attorneys,
by. authcrization of the Attorney General and acting at the
request of the Administrator of the Environmental Protection
Agency, moves that this Court, in order to prevent irreparable
injury to the United States and its citizens, enter immediately
an order to restrain temporarily the defendatne set for thi n
the compalint from discharging excessive ( pollutant ) into the
ambient air pending action by this Court on te complaint filed
this day by the United States in.this cause, and in support of
the motion, states:
Defendants are discharging from their plants and/or
installations at ( city, state) , substantial amounts
of ( o.llutant) ,.into the arnbi. nt air. Such discharges (in
comb .nation with adverse weather conditions) have caused or
are contributing to, concentrations of ( pollutant) , in the
ambient air exceedthgs a level of ( number) ( units ) of
( pollutant .‘ This level presents an imminent and substantial
endangerment to the health of persons.
The appropriate 8tate and local authorities have diligently
attempted to decrease the level of contamination in the atmo-
sphere. However, defendants continue to discharge ( pollutant
into the ambient atmosphere causing imminent and.. substantial
endangerment to the health of persons;
The presense of such levels of ( pollutant is a present
and continuing danger to htan health. Unless the.discharges
of ( pollutant are immediately restrained,- the health of people
in the area will continue, to ‘sufier immediate and irreparable
harm.
Plaintiff further moves for iaid Temporary Restraining
Order to be issued forthwith and without notice, on the ground.
that the dischazge constitute,and imminent and substantial
endangerment’ to the health of persons.
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Therefore, in view of the immediate danger to public health
that the defendants are contributing to by the release of
( pollutants ) into the a mbien air, plaintiff prays that the
Court enter a temporary restraining order immediately.
Respectfully submitted,.
Assistant Attorney General
United States Attorney
By ( signature )
Assistant United States Attorney
(signature)
Attorney
Department of Justice
Washington, D.C. 20530
Attorneys for Plaintiff
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TEZ ORARY RESTRAINING ORDER
This cause came to be heard onthe motion of plaintiff.
upon the complaint herein and affidavits attached thereto, for
a temporary restraining order; and, it appearing to the court
therefrom that immediate and irreparable Lnjury, loss and
damage will, result to the plaintiff before ntice can be given
and the defendant or his attorney can, be heard in opposition to
the granting of a temporary restraining order for the reason
that continued levels of pollution by ( pollutant ) will cause
irreparbie damage to the health of persons, it is
ORDERED, that defendants set out in the complaint filed
herein, their agents, servants, employees and attorneys andall
persons in active concert or participation with them. are hereby
restrained from causing or contributing the alledged pollution
and each defendant separately gust take the following action:
(List each defendant separately and state what immediate
action that defendanit ust take).
ORDERED, that this order expire within 10 days after entry,
unless’within satdtitne it is for good cause shown extended for
a longer period, and it is further
ORDERED, that plaintiff’s complaint be set for hearing on
preliminary injunction on ( date ) at ( time ) of that
day or as soon thereafter as counsel can be heard, in the United
States District courtroom in the City of - , State
of ______________•
This order issued at city, state , this day of
( month) , ( year )
United States District Juege
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CO LAINT
(for Civil. Action)•
The United Statc.s of America, by its undersigned attorneys and
by authority of the Attorney General alleges that:
1. This isa civil action to enjoin the above names
defendant(s) from discharging any ( pollutant ) into the ambient
atmosphere from their manufacturing operations in the (city,
state) area. Such discharges contribute to the imminent and
substantial endangerment to the health of persons as determined
by the Administrator of the Environmental Protection Agency.
Authority to bring this action is in the Department of Justice
by 42 USC 7605.
2. This court has jurisdiction of the subject matter of
this action pursuant to 28 Usc 1345.
3. Defendant(s) are corporations doing business in ( city,)
state ) within the __________ District of ( Federal district court) .
4. During normal operation of the defendants’ plants the
defendants discharge ( pollutant ) into the ambient air.
5. The Administrator of the Environmental Protection
Agency has received evidence that a combination of pollution
sources, including the defendant’s plants, are presenting, an
imminent and substantial endangerment to the health of persons
of discharging matter into the ambient air.
6. The appropriate State and local authorities have
diligently attempted to decrease the level of contamthation in
the atmosphere. However, the various sources emitting ( pollutant )
in significant quantities, including the defendants plants,
continue to discharge (pollutant)into the ambient atmosphere to
levels that cause significanc harm to the’health of human beings.
7. The average ( ‘pollutant ) level in the ambient air for
the past forty-eight (68) hours is approximately ( number) ( units )
Such levels for such periods of time are harmful to the health
of human beings.
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8. The discharges of matter by the defendants should be
eliminated pursuant to Section 303 of the Clean Air act which
provides:
(a) Notwithstanding anyother provisions of this Act, the
Administrator upon receipt of evidence that a pollution
source or combination of sources (including coving sources)
i8 presenting an imminent and substantial endangerment to
the health of persons, and that appropriate State or local
authorities have not acted at abate such sources, may bring
on behalf of the United States in the appropriate
United States district court to immediately restrain
any person causing or contributing to the alleged
pollution to atop the emission of air pollutants
causing or contributing to such pollution or to
take such other action as maybe necessary. If
it is not practicable to assure prompt protection
of the health of persons solely by ccmmencei ent
of such a civil action, the Administrator cay issue
such orders as may be necessary to protect the
health of persons who are or may be, affected by such
pollution source (or sources). Prior to taking
any action under this section, the Administrator shall
consult with the State and local authorities in order to
confirm the correctness of the irformation on which
the action proposed to be taken is based and to
ascertain the action which such authorities
are, or will, be, taking. Such order shall be
effective for a period of not more than twenty—four
hours unless the Administrator brings an action
under the first sentence of this subsection before the
expiration of such period. Whenever the Administrator
brings such an action within such period, such
order shall be effective for a period of forty-eight
hours or such longer period as may be authorized
by the court pending litLgation or thereafter.
(b) Any person who will fully violated or fails or refuses
to comply with, any order issued by the Administrator under
subsection (a) may, in an action brought in the appropriate
United States district court to enforce such order, be
fined not more than $5,000 for each day during which
such violation occurs or, failure to comply continues.
9. The continuous emission of (pollutant) into the ambient air
by the defendants contributes to the present situation which,
if allowed to continue, will cause significant harm to the
health of persons in the city area.
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10. The United States of Ax ertca and its citizens will
suffer immediate and irreparable harm to their health unless
the defendants are immediately restrained from discharging
(pollutant) into.
WHEREFORE, THE UNITED STATES PRAYS:
a. Than the defendants, their officiers, directors, agents,
servants, employees, attorneys, auccessors, and assigns, and
each of them cease the discharge of (pollutant) into the ambient
air in a manner prescribed by this Court and not discharge such
matter thereafter unless pursuant to instruction to do so from
this Court.
b. That costs and disbursements of this action be awarded
to the plaintiff; and
c. That this Court grant such other and further relief as
it seem j .tst and proper.
(no signa cure necessary)
Assistant Attorney General
(no signature necessary)
Unjced States Attorney
By _______________________________
Assistant United States Attorney
Attorney, Department of Justice
WaShington, D.C. 20530
Attorneys for Plaintiff
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION
(Address)
IN THE MATTER OF - )
( source ) )
) DOGKETNO( )
)
PROCEEDINGS PURSUANT TO )
SECTION 303 OF THE CLEAN )
AIR ACT, AS AMENDED, )
42 U.S.C. S7401 et seq. , )
42 U.S.C. S7603 )
)
________________ )
The Regional Administrator for Region ( ) of the United
States Environmental Protection Agency (EPA) makes the following
Findings of Fact, reaches the following Conclusion of Law and
Issues the following Order:
FINDINGS OF FACT
1. The Administrator of EPA his delegated the authority vested
in him by Section 303 of the Clean Air Act (the Act) as amended,
42 U.S.C. §7401 et seq. , 42 U.S.C. §7603, to the Regional
Administrator for Region ( ).
2. Section 303 of the Act,’ 42 U.S.C. §7603 provides that, upon
receipt of evidence that a pollution source or combination of
sources is presenting an imminent and substantial endangerment
to the health of persons and .that appropriate State or local
authorities have not acted to abate such sources, the Administrator
may issue such orders as may be necessary to protect the health
of persons who are, or may be, affected by such pollution source
or sources.
3. Defendants are discharging from their plants and/or
installations at ( city/state) , substantial amounts of (pollutant),.
into the ambient air. Such discharges (in combination with
adverse weather conditions) have caused or are contributing to,
concentrations of ( pollutant)) , in the ambient air exceeding a
level of ( number) (units ) of (pollutant). This level presents
an imminent and substanElal endangerment to the health of persons.
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—22-
4. ( source ) is a source which is presenting an imminent
and substantial endangerment to the health of persons.
5. ( state ) and ( local jurisdiction) ) authorities have not
acted o abate ( list sources) .
OR
( state ) and ( local jurisdiction )L ) authorities have dililently
attempted to decrease the level of contamination in the atmosphere.
However, defendants continue to discharge ( pollutant ) into the
ambient atmosphere causing imminent and substantial endangerment
to the health of persons.
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—23-
CONCLUSION OF LAW
1 • The Regional Administrator for Region () (The Regional
Administrator, is vested with the authority of the Administrator
under Section 303 of the Act, 42 U.S.C. S 7603.
2. (Source(s) have been found by the Regional Administrator
to be presenting an imminent andaubstantial endangerment to
the health of persons and to be an appropriate subject for the
issuance of an order under Section 303 of the Act.
ORDER
The Regional Administrator for Region •( ) hereby orders
that defendants set out inthisorder, their agents, servants,
employees and attorneys and all persons in active concert or
participation with them are hereby ordered to refrain from
causing or contributing to levels of pollution that will cause
irreparbie damage to’the health of persons and eachdefendant
separately must take the following action:
1. (List each defendant separately and state what immediate
action that defendant must take.)
2. This order shall be effective for a period of not more than
twenty-four hours unless the RegionaL Administrator files a
civil action on behalf of the United States in the appropriate
United States district court to immediately restrain any person
causing or contributing to the alleged pollution to stop the
emission of air pollutants causing or contributing to such
pollution or to take such other actions aà may be necessary.
3. This Order La effective immediately upon receipt by
defendants. The Regional Administrator for Region ( ) hereby
issues the above-identified Order which shall become effective
as provided therein.
date Regional Administrator
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