1/25/95

MEMORANDUM

SUBJECT: Options for Limiting the Potential to Emit (PTE) of a

Stationary Source Under Section 112 and Title V of the Clean Air Act (Act)

FROM: John S. Seitz, Director

Office of Air Quality Planning and Standards (MD-10)

Robert I. Van Heuvelen, Director Office of Regulatory Enforcement (2241)

TO: Director, Air, Pesticides and Toxics

Management Division, Regions I and IV Director, Air and Waste Management Division, Region II Director, Air, Radiation and Toxics Division, Region III Director, Air and Radiation Division, Region V Director, Air, Pesticides and Toxics Division, Region VI Director, Air and Toxics Division, Regions VII, VIII, IX, and X

Many stationary source requirements of the Act apply only to "major" sources. Major sources are those sources whose emissions of air pollutants exceed threshold emissions levels specified in the Act. For instance, section 112 requirements such as MACT and section 112(g) and title V operating permit requirements largely apply only to sources with emissions that exceed specified levels and are thus major. To determine whether a source is major, the Act focuses not only on a source's actual emissions, but also on its potential emissions. Thus, a source that has maintained actual emissions at levels below the major source threshold could still be subject to major source requirements if it has the potential to emit major amounts of air pollutants. However, in situations where unrestricted operation of a source would result in a potential to emit above major-source levels, such sources may legally avoid program requirements by taking federally-2

enforceable permit conditions which limit emissions to levelsbelow the applicable major source threshold. Federallyenforceable permit conditions, if violated, are subject to enforcement by the Environmental Protection Agency (EPA) or by citizens in addition to the State or Local agency.

As the deadlines for complying with MACT standards and title V operating permits approach, industry and State and local air pollution agencies have become increasingly focused on the need to adopt and implement federally-enforceable mechanisms to limit emissions from sources that desire to limit potential emissions to below major source levels. In fact, there are numerous options available which can be tailored by the States to provide such sources with simple and effective ways to qualify as minor sources. Because there appears to be some confusion and questions regarding how potential to emit limits may be established, EPA has decided to: (1) outline the available approaches to establishing potential to emit limitations, (2) describe developments related to the implementation of these various approaches, and (3) implement a transition policy that will allow certain sources to be treated as minor for a period oftime sufficient for these sources to obtain a federallyenforceable limit.

Federal enforceability is an essential element of establishing limitations on a source's potential to emit. Federal enforceability ensures the conditions placed on emissions to limit a source's potential to emit are enforceable by EPA and citizens as a legal and practical matter, thereby providing the public with credible assurances that otherwise major sources are not avoiding applicable requirements of the Act. In order to ensure compliance with the Act, any approaches developed to allow sources to avoid the major source requirements must be supported by the Federal authorities granted to citizens and EPA. In addition, Federal enforceability provides source owners and operators with assurances that limitations they have obtained from a State or local agency will be recognized by EPA.

The concept of federal enforceability incorporates two separate fundamental elements that must be present in all limitations on a source's potential to emit. First, EPA must have a direct right to enforce restrictions and limitations imposed on a source to limit its exposure to Act programs. This requirement is based both on EPA's general interest in having the power to enforce "all relevant features of SIP's that are necessary for attainment and maintenance of NAAQS and PSD increments" (see 54 FR 27275, citing 48 FR 38748, August 25, 1983) as well as the specific goal of using national enforcement to ensure that the requirements of the Act are uniformly3

This is not an exhaustive list of considerations affecting 1 potential to emit. Other federally-enforceable limits can be used, for example, source-specific SIP revisions. For brevity, we have included those which have the widest applicability. implemented throughout the nation (see 54 FR 27277). Second, limitations must be enforceable as a practical matter.

It is important to recognize that there are shared responsibilities on the part of EPA, State, and local agencies, and on source owners to create and implement approaches to creating acceptable limitations on potential emissions. The lead responsibility for developing limitations on potential emissions rests primarily with source owners and State and local agencies. At the same time, EPA must work together with interested parties, including industry and States to ensure that clear guidance is established and that timely Federal input, including Federal approval actions, is provided where appropriate. The guidance in this memorandum is aimed towards continuing and improving this partnership.

Available Approaches for Creating Federally-enforceable
Limitations on the Potential to Emit

There is no single "one size fits all" mechanism that would be appropriate for creating federally-enforceable limitations on potential emissions for all sources in all situations. The spectrum of available mechanisms should, however, ensure that State and local agencies can create federally-enforceable
limitations without undue administrative burden to sources or the agency. With this in mind, EPA views the following types of programs, if submitted to and approved by EPA, as available to agencies seeking to establish federally-enforceable potential to
emit limits: 1

1. Federally-enforceable State operating permit programs (FESOPs) (non-title V) . For complex sources with numerous and varying emission points, case-by-case permitting is generally
needed for the establishment of limitations on the source's potential to emit. Such case-by-case permitting is often accomplished through a non-title V federally-enforceable State operating permit program. This type of permit program, and its basic elements, are described in guidance published in the Federal Register on June 28, 1989 (54 FR 27274). In short, the program must: (a) be approved into the SIP, (b) impose legal obligations to conform to the permit limitations, (c) provide for limits that are enforceable as a practical matter, (d) be issued in a process that provides for review and an opportunity for4

comment by the public and by EPA, and (e) ensure that there is no relaxation of otherwise applicable Federal requirements. The EPA believes that these type of programs can be used for both criteria pollutants and hazardous air pollutants, as described in the memorandum, "Approaches to Creating Federally-Enforceable Emissions Limits," November 3, 1993. This memorandum (referred to below as the November 1993 memorandum) is included for your information as Attachment 1. There are a number of important clarifications with respect to hazardous air pollutants subsequent to the November 1993 memorandum which are discussed below (see section entitled "Limitations on Hazardous Air
Pollutants").

2. Limitations established by rules. For less complex plant sites, and for source categories involving relatively few operations that are relatively similar in nature, case-by-case permitting may not be the most administratively efficient approach to establishing federally-enforceable restrictions. One approach that has been used is to establish a general rule which creates federally-enforceable restrictions at one time for many sources (these rules have been referred to as "exclusionary" rules and by some permitting agencies as "prohibitory" rules). A specific suggested approach for volatile organic compounds (VOC) limits by rule was described in EPA's memorandum dated October 15, 1993 entitled "Guidance for State Rules for Optional Federally-Enforceable Emissions Limits Based Upon Volatile Organic Compound (VOC) Use." An example of such an exclusionary rule is a model rule developed for use in California. (The California model rule is attached, along with a discussion of its applicability to other situations--see Attachment 2). Exclusionary rules are included in a State's SIP and generally become effective upon approval by EPA.

3. General permits . A concept similar to the exclusionary rule is the establishment of a general permit for a given source type. A general permit is a single permit that establishes terms and conditions that must be complied with by all sources subject to that permit. The establishment of a general permit provides for conditions limiting potential to emit in a one-time permitting process, and thus avoids the need to issue separate permits for each source within the covered source type or category. Although this concept is generally thought of as an element of a title V permit program, there is no reason that a State or local agency could not submit a general permit program as a SIP submittal aimed at creating potential to emit limits for groups of sources. Additionally, general permits can be issued under the auspices of a SIP-approved FESOP. The advantage of a general permit, when compared to an exclusionary rule, is that upon approval by EPA of the State's permit program, a5

general permit could be written for one or more additional source types without triggering the need for the formal SIP revision

process.

4. Construction permits . Another type of case-by-case permit is a construction permit. These permits generally cover new and modified sources, and States have developed such permit programs as an element of their SIP's. As described in the November 1993 memorandum, these State major and minor new sourcereview (NSR) construction permits can provide for federallyenforceable limitations on a source's potential to emit. Further discussion of the use of minor source NSR programs is contained in EPA's letter to Jason Grumet, NESCAUM, dated November 2, 1994, which is contained in Attachment 3. As noted in this letter, the usefulness of minor NSR programs for the creation of potential to emit limitations can vary from State to State, and is somewhat dependent on the scope of a State's program.

5. Title V permits . Operating permits issued under the Federal title V operating permits program can, in some cases, provide a convenient and readily available mechanism to create federally-enforceable limits. Although the applicability date for part 70 permit programs is generally the driving force for most of the current concerns with respect to potential to emit, there are other programs, such as the section 112 air toxics program, for which title V permits may themselves be a useful mechanism for creating potential to emit limits. For example, many sources will be considered to be major by virtue of combustion emissions of nitrogen oxides or sulfur dioxide, and will be required to obtain part 70 permits. Such permits could be used to establish federally-enforceable limitations that could ensure that the source is not considered a major source of hazardous air pollutants.

Practicable Enforceability

If limitations--whether imposed by SIP rules or through individual or general permits--are incomplete or vague or unsupported by appropriate compliance records, enforcement by the States, citizens and EPA would not be effective. Consequently, in all cases, limitations and restrictions must be of sufficient quality and quantity to ensure accountability (see 54 FR 27283).

The EPA has issued several guidance documents explaining the requirements of practicable enforceability (e.g., "Guidance on Limiting Potential to Emit in New Source Permitting," June 13, 1989; memorandum from John Rasnic entitled "Policy Determination on Limiting Potential to Emit for Koch Refining Company's Clean Fuels Project," March 13, 1992). In general, practicable6

enforceability for a source-specific permit means that the permit's provisions must specify: (1) A technically-accurate limitation and the portions of the source subject to the limitation; (2) the time period for the limitation (hourly, daily, monthly, and annual limits such as rolling annual limits); and (3) the method to determine compliance including appropriate monitoring, recordkeeping, and reporting. For rules and general permits that apply to categories of sources, practicable enforceability additionally requires that the provisions: (1) identify the types or categories of sources that are covered by the rule; (2) where coverage is optional, provide for notice to the permitting authority of the source's election to be covered by the rule; and (3) specify the enforcement consequences relevant to the rule. More specific guidance on these enforceability principles as they apply to rules and general permits is provided in Attachment 4.

Limitations on Hazardous Air Pollutants (HAP)

There are a number of important points to recognize with respect to the ability of existing State and local programs to create limitations for the 189 HAP listed in (or pursuant to) section 112(b) of the Act, consistent with the definitions of "potential to emit" and "federally-enforceable" in 40 CFR 63.2 (promulgated March 16, 1994, 59 FR 12408 in the part 63 General Provisions). The EPA believes that most State and local programs should have broad capabilities to handle the great majority of situations for which a potential to emit limitation on HAP is

needed.

First, it is useful to note that the definition of potential to emit for the Federal air toxics program (see the subpart A "general provisions," section 63.2) considers, for purposes of controlling HAP emissions, federally-enforceable limitations on criteria pollutant emissions if "the effect such limitations would have on "[hazardous air pollutant] . . . emissions" is federally-enforceable (emphasis added). There are many examples of such criteria pollutant emission limits that are present in federally-enforceable State and local permits and rules. Examples would include a limitation constraining an operation to one (time limit specified) shift per day or limitations that effectively limit operations to 2000 hours per year. Other examples would include limitations on the amount of material used, for example a permit limitation constraining an operation to using no more than 100 gallons of paint per month. Additionally, federally-enforceable permit terms that, for example, required an incinerator to be operated and maintained at no less than 1600 degrees would have an obvious "effect" on the HAP present in the inlet stream.7

Another federally-enforceable way criteria pollutant
limitations affect HAP can be described as a "nested" HAP limit within a permit containing conditions limiting criteria pollutants. For example, the particular VOC's within a given operation may include toluene and xylene, which are also HAP. If the VOC-limiting permit has established limitations on the amount of toluene and xylene used as the means to reduce VOC, those
limitations would have an obvious "effect" on HAP as well.

In cases as described above, the "effect" of criteria pollutant limits will be straightforward. In other cases, information may be needed on the nature of the HAP stream present. For example, a limit on VOC that ensured total VOC's of 20 tons per year may not ensure that each HAP present is less than 10 tons per year without further investigation. While the EPA intends to develop further technical guidance on situations for which additional permit terms and conditions may be needed to ensure that the "effect" is enforceable as a practical matter, the EPA intends to rely on State and local agencies to employ care in drafting enforceable requirements which recognize obvious
environmental and health concerns.

There are, of course, a few important pollutants which are HAP but are not criteria pollutants. Example of these would include methylene chloride and other pollutants which are considered nonreactive and therefore exempt from coverage as VOC's. Especially in cases where such pollutants are the only pollutants present, criteria pollutant emission limitations may not be sufficient to limit HAP. For such cases, the State or local agency will need to seek program approval under section
112(l) of the Act.

Section 112(l) provides a clear mechanism for approval of State and local air toxics programs for purposes of establishing HAP-specific PTE limits. The EPA intends, where appropriate, that in approving permitting programs into the SIP, to add appropriate language citing approval pursuant to section 112(l) as well. An example illustrating section 112(l) approval is the approval of the State of Ohio's program for limiting potential to emit (see 59 FR 53587, October 25, 1994). In this notice, EPA granted approval under section 112(l) for hazardous air pollutants aspects of a State program for limiting potential to emit. Such language can be added to any federally-enforceable State operating permit program, exclusionary rule, or NSR program update SIP approval notice so long as the State or local program has the authority to regulate HAP and meets other section 112(l) approval criteria. Transition issues related to such section 112(l) approvals are discussed below.8

Determination of Maximum Capacity

While EPA and States have been calculating potential to emit for a number of years, EPA believes that it is important at this time to provide some clarification on what is meant in the definition of potential to emit by the "maximum capacity of a stationary source to emit under its physical and operational design." Clearly, there are sources for which inherent physical limitations for the operation restrict the potential emissions of
individual emission units. Where such inherent limitations can be documented by a source and confirmed by the permitting agency, EPA believes that States have the authority to make such judgements and factor them into estimates of a stationary source's potential to emit.

The EPA believes that the most straightforward examples of such inherent limitations is for single-emission unit type operations. For example, EPA does not believe that the "maximum capacity" language requires that owner of a paint spray booth at a small auto body shop must assume that (even if the source could be in operation year-round) spray equipment is operated 8760 hours per year in cases where there are inherent physical limitations on the number of cars that can be painted within any given period of time. For larger sources involving multiple emissions units and complex operations, EPA believes it can be more problematic to identify the inherent limitations that may
exist.

The EPA intends, within its resource constraints, to issue technical assistance in this area by providing information on the type of operational limits that may be considered acceptable to limit the potential to emit for certain individual small source categories.

Transition Guidance for Section 112 and Title V Applicability

Most, if not all, States have recognized the need to develop options for limiting the potential emissions of sources and are moving forward with one or more of the strategies described in the preceding sections in conjunction with the submission and implementation of their part 70 permit programs. However, EPA is
aware of the concern of States and sources that title V or section 112 implementation will move ahead of the development and implementation of these options, leaving sources with actual emissions clearly below the major source thresholds potentially subject to part 70 and other major source requirements. Gaps could theoretically occur during the time period it takes for a State program to be designed and administratively adopted by the State, approved into the SIP by EPA, and implemented as needed to9

cover individual sources.

The EPA is committed to aiding all States in developing and implementing adequate, streamlined, and cost-effective vehicles for creating federally-enforceable limits on a source's potential emissions by the time that section 112 or title V requirements become effective. To help bridge any gaps, EPA will expedite its reviews of State exclusionary rules and operating permit rules by, among other things, coordinating the approval of these rules with the approval of the State's part 70 program and by using expeditious approval approaches such as "direct final" Federal Register notices to ensure that approval of these programs does not lag behind approval of the part 70 program.

In addition, in such approval notices EPA will affirm any limits established under the State's program since its adoption by the State but prior to Federal approval if such limits were established in accordance with the procedures and requirements of the approved program. An example of language affirming such limits was recently used in approving an Illinois SIP revision (see 57 FR 59931, included as Attachment 5).

The EPA remains concerned that even with expedited approvals and other strategies, sources may face gaps in the ability to acquire federally-enforceable potential to emit limits due to delays in State adoption or EPA approval of programs or in their implementation. In order to ensure that such gaps do not create adverse consequences for States or for sources, EPA is announcing a transition policy for a period up to two years from the date of this memorandum. The EPA intends to make this transition policy available at the discretion of the State or local agency to the
extent there are sources which the State believes can benefit from such a transition policy. The transition period will extend from now until the gaps in program implementation are filled, but no later than January 1997. Today's guidance, which EPA intends to codify through a notice and comment rulemaking, provides States discretion to use the following options for satisfying potential to emit requirements during this transition period.

1. Sources maintaining emissions below 50 percent of all applicable major source requirements. For sources that typically and consistently maintain emissions significantly below major source levels, relatively few benefits would be gained by making such sources subject to major source requirements under the Act. For this reason, many States are developing exclusionary rules and general permits to create simple, streamlined means to ensure that these sources are not considered major sources. To ease the burden on States' implementation of title V, and to ensure that delays in EPA's approval of these types of programs will not10

cause an administrative burden on the States, EPA is providing a 2-year transition period for sources that maintain their actual emissions, for every consecutive 12-month period (beginning with the 12 months immediately preceding the date of this memorandum), at levels that do not exceed 50 percent of any and all of the major stationary source thresholds applicable to that source. A source that exceeds the 50 percent threshold, without complying with major source requirements of the Act (or without otherwise limiting its potential to emit), could be subject to enforcement. For this 2-year period, such sources would not be treated as major sources and would not be required to obtain a permit that limits their potential to emit. To qualify under this transition policy, sources must maintain adequate records on site to
demonstrate that emissions are maintained below these thresholds for the entire as major sources and would not be required to obtain a permit that limits their potential to emit that would be considered to be adequate during this transition period. Consistent with the California approach, EPA believes it is appropriate for the amount of recordkeeping to vary according to the level of emissions (see paragraphs 1.2 and 4.2 of the
attached rule).

2. Larger sources with State limits. For the 2-year transition period, restrictions contained in State permits issued to sources above the 50 percent threshold would be treated by EPA as acceptable limits on potential to emit, provided: (a) the permit is enforceable as a practical matter; (b) the source owner submits a written certification to EPA that it will comply with the limits as a restriction on its potential to emit; and (c) the source owner, in the certification, accepts Federal and citizen enforcement of the limits (this is appropriate given that the limits are being taken to avoid otherwise applicable Federal requirements). Such limits will be valid for purposes of limiting potential to emit from the date the certification is received by EPA until the end of the transition period. States interested in making use of this portion of the transition policy should work with their Regional Office to develop an appropriate certification process.

3. Limits for noncriteria HAP. For noncriteria HAP for which no existing federally-approved program is available for the creation of federally-enforceable limits, the 2-year transition period provides for sufficient time to gain approval pursuant to section 112(l). For the 2-year transition period, State restrictions on such noncriteria pollutants issued to sources with emissions above the 50 percent threshold would be treated by EPA as limiting a source's potential to emit, provided that: (a) the restrictions are enforceable as a practical matter; (b) the source owner submits a written certification to EPA that11

it will comply with the limits as a restriction on its potential to emit; and (c) the source owner, in the certification, accepts
Federal and citizen enforcement of the limits. Such limits will be valid for purposes of limiting potential to emit from the date the certification is received by EPA until the end of the transition period.

The Regional Offices should send this memorandum, including the attachments, to States within their jurisdiction. Questions concerning specific issues and cases should be directed to the appropriate Regional Office. Regional Office staff may contact Timothy Smith of the Integrated Implementation Group at 919-541-4718, or Clara Poffenberger with the Air Enforcement
Division at 202-564-8709.

Attachments

cc: Air Branch Chief, Region I-X Regional CounselsAttachment 1

November 3, 1993 memorandum November 3, 1993

MEMORANDUM

SUBJECT: Approaches to Creating Federally-Enforceable

Emissions Limits

FROM: John S. Seitz, Director

Office of Air Quality Planning and Standards (MD-10)

TO: Director, Air, Pesticides and Toxics

Management Division, Regions I and IV Director, Air and Waste Management Division, Region II Director, Air, Radiation and Toxics Division, Region III Director, Air and Radiation Division, Region V Director, Air, Pesticides and Toxics Division, Region VI Director, Air and Toxics Division, Regions VII, VIII, IX, and X

The new operating permits program under title V of the Clean Air Act (Act), combined with the additional and lower thresholds for "major" sources also provided by the 1990 Amendments to the Act, has led to greatly increased interest by State and local air pollution control agencies, as well as sources, in obtaining federally-enforceable limits on source potential to emit air pollutants. Such limits entitle sources to be considered "minor" for the purposes of title V permitting and various other requirements of the Act. Numerous parties have identified this as a high priority concern potentially involving thousands of sources in each of the larger States.

The issue of creating federally-enforceable emissions limits has broad implications throughout air programs. Although many of
the issues mentioned above have arisen in the context of the title V permits program, the same issues exist for other programs, including those under section 112 of the Act. Asdiscussed below, traditional approaches to creating federallyenforceable emissions limits may be unnecessarily burdensome and time-consuming for certain types and sizes of sources. Inaddition, they have been of limited usefulness with respect to

creating such limits for emissions of hazardous air pollutants
(HAP's).

The purpose of this memorandum is to respond to these needs by announcing the availability of two further approaches to creating federally-enforceable emissions limits: the extension of existing criteria pollutant program mechanisms for HAP program purposes, and the creation of certain classes of standardized emissions limits by rule. We believe that these options are responsive to emerging air program implementation issues and provide a reasonable balance between the need for administrative streamlining and the need for emissions limits that are technically sound and enforceable.

Background

Various regulatory options already exist for the creation of federally-enforceable limits on potential to emit. These were summarized in a September 18, 1992 memorandum from John Calcagni, Director, Air Quality Management Division. That memorandum identified the five regulatory mechanisms generally seen as available. These are: State major and minor new source review (NSR) permits [if the NSR program has been approved into the State implementation plan (SIP) and meets certain procedural requirements]; operating permits based on programs approved into the SIP pursuant to the criteria in the June 28, 1989 Federal Register (54 FR 27274); and title V permits (including general permits). Also available are SIP limits for individual sources and limits for HAP's created through a State program approved pursuant to section 112(l) of the Act.

Regional Office and State air program officials realize that these five options are generally workable, but feel that the programs emerging from the 1990 Amendments present certain further needs that are not well met. They note that NSR is not always available, title V permitting can be more rigorous than appropriate for those sources that are in fact quite small, and that general permits have limitations in their usefulness. The use of State operating permits approved into the SIP pursuant to
the June 28, 1989 Federal Register is generally considered to be a promising option for some of these transactions; however, these programs do not regulate toxics directly.

State Operating Permits for Both Criteria Pollutants

and HAP's

As indicated above, State operating permits issued by programs approved into the SIP pursuant to the process provided in the June 28, 1989 Federal Register are recognized as federallyenforceable. This is a useful option, but has historically been

viewed as limited in its ability to directly create emissions limits for HAP's because of the SIP focus on criteria pollutants.

Since that option was created, however, section 112 of the Act has been rewritten, creating significant new regulatory requirements and conferring additional responsibilities and authorities upon the Environmental Protection Agency (EPA) and the States. Section 112 now mandates a wide range of activities: source-specific preconstruction reviews, areawide approaches to controlling risk, provisions for permitting pursuant to the title V permitting program, and State program provisions in section 112(l) that are similar to aspects of the SIP program. A result of these changes is that implementation of toxics programs will entail the use of many of the same administrative mechanisms as have been in use for the criteria pollutant programs.

Upon further analysis of these new program mandates and corresponding authorities, EPA concludes that section 112 of the Act, including section 112(l), authorizes it to recognize these same State operating permits programs for the creation of federally-enforceable emissions limits in support of the implementation of section 112. Congress recognized, and longstanding State practice confirms, that operating permits are core-implementing mechanisms for air quality program requirements. This was EPA's basis for concluding that section 110 of the Act authorizes the recognition and approval into the SIP of operating permits pursuant to the June 28, 1989 promulgation, even though section 110 did not expressly provide for such a program. Similarly, broad provision of section 112(l) for "a program for the implementation and enforcement . . . of emission standards and other requirements for air pollutants subject to this section" provides a sound basis for EPA recognition of State operating permits for implementation and enforcement of section 112 requirements in the same manner as these permitting processes were recognized pursuant to
section 110.

In implementing this authority to approve State operating permits programs pursuant to section 112, it should be noted thatthe specific criteria for what constitutes a federallyenforceable permit are also the same as for the existing SIP programs. The June 28, 1989 Federal Register essentially addressed in a generic sense the core criteria for creating federally-enforceable emissions limits in operating permits: appropriate procedural mechanisms, including public notice and opportunity for comment, statutory authority for EPA approval of the State program, and enforceability as a practical matter. The EPA did this in the context of SIP development, not because these criteria are specific to the SIP, but because section 110 of theAct was seen as our only certain statutory basis for this prior

to the 1990 Amendments. Based on the discussion above, States can extend or develop State operating permits programs for toxics pursuant to the criteria set forth in the June 28, 1989 Federal Register . The EPA is also evaluating analogous opportunities to enhance State NSR programs to address toxics and will address this in future guidance.

This is a significant opportunity to limit directly the emissions of HAP's. It also offers the advantage of the administrative efficiencies that arise from using existing administrative mechanisms, as opposed to creating additional

ones.

States are encouraged to consult with EPA Regional Offices to discuss the details of adapting their current programs to carry out these additional functions. The EPA will consider State permitting programs meeting the criteria in the June 28,

1989 Federal Register as being approvable for HAP program functions as well. States may submit their programs for implementing this process with their part 70 program submittals, or at such other time as they choose. The EPA has various options for administratively recognizing these State program submittals. The EPA plans initially to review these State programs as SIP review actions, but with official recognition pursuant to authorities in both sections 110 and 112. Once rulemaking pursuant to section 112(l) of the Act is completed, EPA expects to use the process developed in that rule for approving State programs for HAP's. The section 112(l) process may be especially useful prior to EPA approval and implementation of the State title V programs. The reader may wish to refer to the process for certain section 112(l) approvals proposed on May 19, 1993 (58 FR 29296) (see section 63.91).

The General Provisions (40 CFR part 63) establish the applicability framework for the implementation of section 112. In the final rule, EPA will indicate that State operating permits programs which meet the procedural requirements of the June 28,

1989 Federal Register can be used to develop federallyenforceable emissions limits for HAP's, thereby limiting a source's potential to emit. In addition, after we gain implementation experience, EPA will be evaluating the usefulness of further rulemaking to define more specific criteria by which this process may be used in the implementation of programs under section 112 of the Act. Any such rulemaking could similarly be incorporated into the General Provisions in part 63.

State-Standardized Processes Created by Rule to Establish Source-Specific, Federally-Enforceable Emissions LimitsState air program officials have highlighted specific types

of sources that are of particular administrative concern because
of their nature and number. These include sources whose emissions are primarily volatile organic compounds (VOC) arising from use of solvents or coatings, such as automobile body shops. Another example is fuel-burning sources that have low actual emissions because of limited hours of operation, but with the potential to emit sulfur dioxide in amounts sufficient to cause them to be classified as major sources.

The EPA recognizes that emissions limitations for some processes can be created through standardized protocols. For example, limitations on potential to emit could be established for certain VOC sources on the basis of limits on solvent use, backed up by recordkeeping and by periodic reporting. Similarly,
limitations on sulfur dioxide emissions could be based on specified sulfur content of fuel and the source's obligation to limit usage to certain maximum amounts. Limits on hours of operation may be acceptable for certain others sources, such as standby boilers. In all cases, of course, the technical requirements would need to be supported by sufficient compliance procedures, especially monitoring and reporting, to be considered

enforceable.

The EPA concludes that such protocols could be relied on to create federally-enforceable limitations on potential to emit if adopted through rulemaking and approved by EPA. Although such an approach is appropriate for only a limited number of source categories, these categories include large numbers of sources, such as dry cleaners, auto body shops, gas stations, printers, and surface coaters. If such standardized control protocols are sufficiently reliable and replicable, EPA and the public need not be involved in their application to individual sources, as long as the protocols themselves have been subject to notice and opportunity to comment and have been approved by EPA into the

SIP.

To further illustrate this concept and to provide implementation support to the States, EPA has recently released guidance on one important way of using this process. This document, entitled "Guidance for State Rules for Optional Federally-Enforceable Emissions Limits Based on Volatile Organic Compound Use," was issued by D. Kent Berry, Acting Director, Air Quality Management Division, on October 15, 1993. It describesapprovable processes by which States can create federallyenforceable emissions limits for VOC for large numbers of sources in a variety of source categories.

States have flexibility in their choice of administrative process for implementation. In some cases, it may be adequatefor a State to apply these limits to individual sources through a

registration process rather than a permit. A source could simply submit a certification to the State committing to comply with the terms of an approved protocol. Violations of these certifications would constitute SIP violations, in the case of protocols approved into the SIP, and be subject to the same enforcement mechanisms as apply in the case of any other SIP violation. Such violations would, of course, also subject the source to enforcement for failure to comply with the requirements that apply to major sources, such as the requirement to obtain a title V permit or comply with various requirements of section 112

of the Act.

Some States have also indicated an interest in more expansive approaches to implementing this concept, such as making presumptive determinations of control equipment efficiency with respect to particular types of sources and pollutants. While such approaches are more complicated and present greater numbers of concerns in the EPA review process, they offer real potential if properly crafted. The EPA will evaluate State proposals and approve them if they are technically sound and enforceable as a practical matter.

States may elect to use this approach to create federallyenforceable emissions limits for sources of HAP's as well. Based on the same authorities in section 112 of the Act, as cited above in the case of operating permits, EPA can officially recognize such State program submittals. As with the operating permits option discussed in the preceding section, EPA plans initially to review these activities as SIP revisions, but with approval pursuant to both sections 110 and 112 of the Act, and approve them through the section 112(l) process when that rule is final.

Implementation Guidance

As indicated above, the creation of federally-enforceable limits on a source's potential to emit involves the identification of the procedural mechanisms for these efforts, including the statutory basis for their approval by EPA, and the technical criteria necessary for their implementation. Today's guidance primarily addresses the procedural mechanisms available and the statutory basis for EPA approval.

The EPA will be providing further information with respect to the implementation of these concepts. As described above, the first portion of this guidance, addressing limits on VOC emissions, was issued on October 15, 1993. My office is currently working with Regional Offices and certain States in order to assist in the development of program options under consideration by those States. We will provide technical andregulatory support to other State programs and will make the

results of these efforts publicly available through the Office of Air Quality Planning and Standards (OAQPS) Technology Transfer
Network bulletin board.

We will provide further support through the release of a document entitled "Enforceability Requirements for Limiting Potential to Emit Through SIP Rules and General Permits," which is currently undergoing final review within EPA. In addition, EPA will be highlighting options for use of existing technical guidance with respect to creating sound and enforceable emissions limits. An important example of such guidance is the EPA "Blue Book," which has been in use by States for the past 5 years as part of their VOC control programs.

States are encouraged to discuss program needs with their EPA Regional Offices. The OAQPS will work with them in addressing approvals. As indicated, additional technical guidance for implementing these approaches is underway and will be made publicly available soon. For further information, please call Kirt Cox at (919) 541-5399.

cc: Air Branch Chief, Regions I-X Regional Counsel, Regions I-X OAQPS Division Directors

A. Eckert
M. Winer

A. Schwartz

E. HoerathAttachment 2

California Example Rule

Background

State agencies and local agencies (such as the Air Pollution Control Districts in California) can adopt rules which place emissions limitations on a category of sources through a combination of limitations and compliance requirements. These rules, if practicably enforceable, adopted with adequate public process and approved into the SIP, can validly limit potential to emit. Moreover, because State or local rules can cover many sources with a single regulatory action, they are well-suited to cover large populations of smaller sources. Many States are finding that a combination of SIP rules or general permits for smaller sources combined with individual permits for larger sources provides the simplest means of ensuring that minor source emissions are adequately limited.

Discussion of California Rule

The EPA, the California Air Pollution Control Officers Association and the California Air Resources Board recently completed development of a model rule for use by the California
Air Pollution Control Districts. Because the rule contains several innovations, including covering all source categories, and should prove to be an inexpensive and efficient means of limiting the potential emissions of thousands of sources in California, the EPA believes that parts of the rule may be helpful for other States to review and consider.

The proposed rule is designed to place smaller sources under annual emissions limits which restrict their "potential to emit" and thus their exposure to "major source" requirements of the Clean Air Act. The rule ensures compliance with the annual limit through a series of recordkeeping and reporting requirements. These requirements are tapered to reduce burdens as source size decreases. The rule creates three levels of responsibility. The first tier requires both recordkeeping and reporting. The second tier requires only recordkeeping with no reporting. For instance, sources that emit only attainment pollutants which limit their emissions to below 25 tons per year have no reporting requirement. For sources under 5 tons per year (or 2 tons per year for a single hazardous air pollutant), there is no specified recordkeeping or reporting requirements although these sources
must still maintain sufficient records to demonstrate their compliance with the rule.

To the extent possible, the recordkeeping requirements are itemized by source category and are designed to take advantage ofrecords that sources are already likely to maintain. Through

these measures, the rule should assure the public that the sources subject to the rule are properly maintaining their emissions below major source levels, while maximizing source flexibility and minimizing paperwork.

There are other safeguards built into the rule and in California's overall regulatory scheme which add to the EPA's confidence that the proposal can work. The rule applies only to sources that agree to limit their emissions to 50 percent or less of the major source threshold. Sources with emissions above this level must either comply with all applicable "major source" requirements or secure a source-specific, federally-enforceable Air Pollution Control District permit that properly limits emissions to levels below major source thresholds. Some sources may be able to qualify for an "alternative operation limit" which places simple operating limits on a source's combustion of fuel, sale of gasoline or use of a solvent. Because of the ease with which compliance can be tracked with operational limits, the rule allows sources using these limits to go up to 80 percent of the major source threshold. Either way, EPA believes that the rule creates a sufficient compliance buffer.

Moreover, California has an extensive permit and inspection
infrastructure that increases EPA's confidence that the rule will prove adequate for limiting emissions. California law requires that, upon annual renewal, each permit be reviewed to determine that the permit conditions are adequate to assure compliance with district rules and other applicable requirements. In addition,
most California Air Pollution Control Districts have an extensive inspection program which means that compliance with the rule will be spot checked by inspectors visiting the source.

Finally, the rule is designed to provide smaller sources with a federally-enforceable means of limiting their potential emissions. The rule excludes sources that already have a federally enforceable operating permit, and it cannot be used to avoid complying with an permit required by the Air Pollution
Control Districts.

Aside from these general observations, EPA did have a number of comments regarding specific language included in the rule. The three most significant comments are set forth below. However, States interested in using this rule as a model should be aware that it was specifically designed to fit with California State law and existing SIP provisions and that States may wish to consider making other changes to reflect their individual needs and requirements.Section 2.7: In a PM-10 nonattainment area, PM-10

precursors may need to be included when determining whether a source is major as required by section 189(e) of the Clean Air Act. Districts adopting this model rule should consider whether the definition of "Major Source" in section 2.7 should be augmented to include sources of PM-10 precursors.

Section 4.2(D): The rule allows sources using air pollution control equipment to demonstrate compliance through the maintenance of general records on the unit and its operations. EPA has always been concerned with this provision since many pollution control units are only effective if specific operating procedures are followed.These specifics are best set and tracked in a sourcespecific, federally enforceable permit. For this reason, section 1.3 sunsets the applicability of the draft rule, after January 1, 1999, to pollution control equipment. For the coverage to continue beyond that date, a district must extend the provision. The EPA will disapprove the extension if the experience with the rule demonstrates that more specific conditions are needed to ensure that pollution control devices are being used properly and continuously.

Section 4.2(E): In general, EPA does not favor the use of generic or catch-all recordkeeping requirements for compliance purposes. There is a fear that the records necessary to show compliance for individual source categories will not be specified by the generic provision and thus will not be maintained. For this reason, EPA urges the Board and the Districts to evaluate regularly whether specific recordkeeping requirements should be developed for additional categories. As we noted during our negotiations, EPA will evaluate this question after the rule is in effect for three years and the EPA may seek -- through a SIP call or through other mechanisms -- to require additional recordkeeping requirements if there are implementation problems with this generic category. The districts may wish to add to the rule a provision which would authorize them to add recordkeeping requirements for additional source categories without a further SIP revision.State of California Proposed Rule to Limit

Potential to Emit
January 11, 1995

1.0 APPLICABILITY

1.1 General Applicability: This rule shall apply to any stationary source which would, if it did not comply with the limitations set forth in this rule, have the potential to emit air contaminants equal to or in excess of the threshold for a major source of regulated air pollutants or a major source of hazardous air pollutants (HAPs) and which meets one of the following conditions:

A. In every 12-month period, the actual emissions of the stationary source are less than or equal to the emission limitations specified in section 3.1 below; or

B. In every 12-month period, at least 90 percent of the emissions from the stationary source are associated with an operation limited by any one of the alternative operational limits specified in section 6.1 below.

1.2 Stationary Source with De Minimis Emissions: The recordkeeping and reporting provisions in sections 4.0, 5.0 and 6.0 below shall not apply to a stationary source with de minimis emissions or operations as specified in either
subsection A or B below:

A. In every 12-month period, the stationary source emits less than or equal to the following quantities of
emissions:

1. 5 tons per year of a regulated air pollutant (excluding HAPs),

2. 2 tons per year of a single HAP,

3. 5 tons per year of any combination of HAPs, and

4. 20 percent of any lesser threshold for a single
HAP that the United States Environmental Protection Agency (U.S. EPA) may establish by

rule.

B. In every 12-month period, at least 90 percent of the stationary source's emissions are associated with an operation for which the throughput is less than orTo be determined based on district SIP rules 2 equal to one of the quantities specified in subsections

1 through 9 below:

1. 1,400 gallons of any combination of solventcontaining materials but no more than 550 gallons of any one solvent-containing material, provided that the materials do not contain the following: methyl chloroform (1,1,1-trichloroethane), methylene chloride (dichloromethane), tetrachloroethylene (perchloroethylene), or trichloroethylene;

2. 750 gallons of any combination of solventcontaining materials where the materials contain the following: methyl chloroform (1,1,1- trichloroethane), methylene chloride (dichloromethane), tetrachloroethylene (perchloroethylene), or trichloroethylene, but notmore than 300 gallons of any one solventcontaining material;

3. ____ gallons of solvent-containing (or volatile organic compound containing) material used at a paint spray unit(s); 2

4. 4,400,000 gallons of gasoline dispensed from equipment with Phase I and II vapor recovery

systems;

5. 470,000 gallons of gasoline dispensed from equipment without Phase I and II vapor recovery

systems;

6. 1,400 gallons of gasoline combusted;

7. 16,600 gallons of diesel fuel combusted;

8. 500,000 gallons of distillate oil combusted, or

9. 71,400,000 cubic feet of natural gas combusted.

Within 30 days of a written request by the District or the U.S. EPA, the owner or operator of a stationary source not maintaining records pursuant to sections 4.0 or 6.0 shall demonstrate that the stationary source's emissions or throughput are not in excess of the applicable quantities
set forth in subsection A or B above.1.3 Provision for Air Pollution Control Equipment: The owner or

operator of a stationary source may take into account the operation of air pollution control equipment on the capacity of the source to emit an air contaminant if the equipment is required by Federal, State, or District rules and regulations or permit terms and conditions. The owner or operator of the stationary source shall maintain and operate such air pollution control equipment in a manner consistent with good air pollution control practice for minimizing emissions. This provision shall not apply after January 1, 1999 unless such operational limitation is federally enforceable or unless the District Board specifically extends this provision and it is submitted to the U.S. EPA. Such extension shall be valid unless, and until, the U.S. EPA disapproves the extension of this provision.

1.4 Exemption, Stationary Source Subject to Rule ____ (District Title V rule): This rule shall not apply to the following stationary sources:

A. Any stationary source whose actual emissions, throughput, or operation, at any time after the effective of this rule, is greater than the quantities specified in sections 3.1 or 6.1 below and which meets both of the following conditions:

1. The owner or operator has notified the District at least 30 days prior to any exceedance that s/he will submit an application for a Part 70 permit, or otherwise obtain federally-enforceable permit limits, and

2. A complete Part 70 permit application is received by the District, or the permit action to otherwise obtain federally-enforceable limits is completed,
within 12 months of the date of notification.

However, the stationary source may be immediately subject to applicable federal requirements, including but not limited to, a maximum achievable control technology (MACT) standard.

B. Any stationary source that has applied for a Part 70 permit in a timely manner and in conformance with Rule ____ (the District's Title V rule), and is awaiting final action by the District and U.S. EPA.

C. Any stationary source required to obtain an operating permit under Rule ____ (the District's Title V rule) for any reason other than being a major source.For example, PSD, NSR, and ATC 3 D. Any stationary source with a valid Part 70 permit.

Notwithstanding subsections B and D above, nothing in this section shall prevent any stationary source which has had a Part 70 permit from qualifying to comply with this rule in the future in lieu of maintaining an application for a Part 70 permit or upon rescission of a Part 70 permit if the owner or operator demonstrates that the stationary source is in compliance with the emissions limitations in section 3.1 below or an applicable alternative operational limit in
section 6.1 below.

1.5 Exemption, Stationary Source with a Limitation on Potential to Emit: this rule shall not apply to any stationary sourcewhich has a valid operating permit with federallyenforceable conditions or other federally-enforceable limits limiting its potential to emit to below the applicable threshold(s) for a major source as defined in sections 2.7

and 2.8 below.

1.6 Within three years of the effective date of Rule ____ (District Title V rule), the District shall maintain and make available to the public upon request, for each stationary source subject to this rule, information identifying the provisions of this rule applicable to the

source.

1.7 This rule shall not relieve any stationary source from complying with requirements pertaining to any otherwise applicable preconstruction permit, or to replace a condition or term of any preconstruction permit, or any provision of a preconstruction permitting program. This does not preclude 3 issuance of any preconstruction permit with conditions or terms necessary to ensure compliance with this rule.2.0 DEFINITIONS

All terms shall retain the definitions provided under 40 CFR Part 70.2 [alternatively, the District Title V rule] unless
otherwise defined herein.

2.1 12-month period: A period of twelve consecutive months determined on a rolling basis with a new 12-month period beginning on the first day of each calendar month.

2.2 Actual Emissions: The emissions of a regulated air pollutant from a stationary source for every 12-month period. Valid continuous emission monitoring data or source test data shall be preferentially used to determine actual
emissions. In the absence of valid continuous emissions monitoring data or source test data, the basis for determining actual emissions shall be: throughputs of process materials; throughputs of materials stored; usage of materials; data provided in manufacturer's product specifications, material volatile organic compound (VOC) content reports or laboratory analyses; other information required by this rule and applicable District, State and Federal regulations; or information requested in writing by
the District. All calculations of actual emissions shall use U.S. EPA, California Air Resources Board (CARB) or District approved methods, including emission factors and assumptions.

2.3 Alternative Operational Limit: A limit on a measurable parameter, such as hours of operation, throughput of materials, use of materials, or quantity of product, as specified in Section 6.0, Alternative Operational Limit and Requirements.

2.4 Emission Unit: Any article, machine, equipment, operation, contrivance or related groupings of such that may produce and/or emit any regulated air pollutant or hazardous air pollutant.

2.5 Federal Clean Air Act: The federal Clean Air Act (CAA) as amended in 1990 (42 U.S.C. section 7401 et seq.) and its implementing regulations.

2.6 Hazardous Air Pollutant: Any air pollutant listed pursuant to section 112(b) of the federal Clean Air Act.

2.7 Major Source of Regulated Air Pollutants (excluding HAPs): A stationary source that emits or has the potential to emit a regulated air pollutant (excluding HAPs) in quantities equalto or exceeding the lesser of any of the following

thresholds:

A. 100 tons per year (tpy) of any regulated air pollutant;

B. 50 tpy of volatile organic compounds or oxides of nitrogen for a federal ozone nonattainment area classified as serious, 25 tpy for an area classified as severe, or 10 tpy for an area classified as extreme;

and

C. 70 tpy of PM for a federal PM nonattainment area 10 10 classified as serious.

Fugitive emissions of these pollutants shall be considered in calculating total emissions for stationary sources in accordance with 40 CFR Part 70.2 "Definitions- Major
source(2)."

2.8 Major Source of Hazardous Air Pollutants: A stationary source that emits or has the potential to emit 10 tons per year or more of a single HAP listed in section 112(b) of the CAA, 25 tons per year or more of any combination of HAPs, or such lesser quantity as the U.S. EPA may establish by rule. Fugitive emissions of HAPs shall be considered in calculating emissions for all stationary sources. The definition of a major source of radionuclides shall be specified by rule by the U.S. EPA .

2.9 Part 70 Permit: An operating permit issued to a stationary source pursuant to an interim, partial or final Title V program approved by the U.S. EPA.

2.10 Potential to Emit: The maximum capacity of a stationary source to emit a regulated air pollutant based on its physical and operational design. Any physical or operational limitation on the capacity of the stationary source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored, or processed, shall be treated as part of its design only if the limitation is federally enforceable.

2.11 Process Statement: An annual report on permitted emission units from an owner or operator of a stationary source certifying under penalty of perjury the following: throughputs of process materials; throughputs of materials stored; usage of materials; fuel usage; any available continuous emissions monitoring data; hours of operation;and any other information required by this rule or requested

in writing by the District.

2.12 Regulated Air Pollutant: The following air pollutants are regulated:

A. Oxides of nitrogen and volatile organic compounds;

B. Any pollutant for which a national ambient air quality standard has been promulgated;

C. Any Class I or Class II ozone depleting substance subject to a standard promulgated under Title VI of the
federal Clean Air Act;

D. Any pollutant that is subject to any standard promulgated under section 111 of the federal Clean Air

Act; and

E. Any pollutant subject to a standard or requirement promulgated pursuant to section 112 of the federal Clean Air Act, including:

1. Any pollutant listed pursuant to section 112(r) (Prevention of Accidental Releases) shall be considered a regulated air pollutant upon promulgation of the list.

2. Any HAP subject to a standard or other requirement promulgated by the U.S. EPA pursuant to section 112(d) or adopted by the District pursuant to 112(g) and (j) shall be considered a regulated air pollutant for all sources or categories of sources: 1) upon promulgation of the standard or requirement, or 2) 18 months after the standard or requirement was scheduled to be promulgated pursuant to section 112(e)(3).

3. Any HAP subject to a District case-by-case
emissions limitation determination for a new or modified source, prior to the U.S. EPA promulgation or scheduled promulgation of an
emissions limitation shall be considered a regulated air pollutant when the determination ismade pursuant to section 112(g)(2). In case-bycase emissions limitation determinations, the HAP shall be considered a regulated air pollutant only
for the individual source for which the emissions
limitation determination was made.3.0 EMISSION LIMITATIONS

3.1 Unless the owner or operator has chosen to operate the stationary source under an alternative operational limit specified in section 6.1 below, no stationary source subject to this rule shall emit in every 12-month period more than the following quantities of emissions:

A. 50 percent of the major source thresholds for regulated air pollutants (excluding HAPs),

B. 5 tons per year of a single HAP,

C. 12.5 tons per year of any combination of HAPs, and

D. 50 percent of any lesser threshold for a single HAP as the U.S. EPA may establish by rule.

3.2 The APCO shall evaluate a stationary source's compliance with the emission limitations in section 3.1 above as part of the District's annual permit renewal process required by Health & Safety Code section 42301(e). In performing the evaluation, the APCO shall consider any annual process statement submitted pursuant to Section 5.0, Reporting Requirements. In the absence of valid continuous emission monitoring data or source test data, actual emissions shall be calculated using emissions factors approved by the U.S.
EPA , CARB, or the APCO.

3.3 Unless the owner or operator has chosen to operate the stationary source under an alternative operational limit specified in section 6.1 below, the owner or operator of a stationary source subject to this rule shall obtain any necessary permits prior to commencing any physical or operational change or activity which will result in actual emissions that exceed the limits specified in section 3.1

above.

4.0 RECORDKEEPING REQUIREMENTS

Immediately after adoption of this rule, the owner or operator of a stationary source subject to this rule shall comply with any applicable recordkeeping requirements in this section. However, for a stationary source operating under an alternative operational limit, the owner or operator shall instead comply with the applicable recordkeeping and reporting requirements specified in Section 6.0, Alternative Operational Limit and Requirements. The recordkeeping requirements of this rule shall notIn some cases it may be appropriate to keep records on groups of emission units which are 4 connected in series. Examples are internal combustion engines in the oil fields with a common fuel line, or a series of paint spray booths with a common feed. replace any recordkeeping requirement contained in an operating permit or in a District, State, or Federal rule or regulation.

4.1. A stationary source previously covered by the provisions in section 1.2 above shall comply with the applicable provisions of section 4.0 above and sections 5.0 and 6.0 below if the stationary source exceeds the quantities specified in section 1.2.A above.

4.2 The owner or operator of a stationary source subject to this rule shall keep and maintain records for each permitted emission unit or groups of permitted emission units 4

sufficient to determine actual emissions. Such information shall be summarized in a monthly log, maintained on site for five years, and be made available to District, CARB, or U.S. EPA staff upon request.

A. Coating/Solvent Emission Unit

The owner or operator of a stationary source subject to this rule that contains a coating/solvent emission unit or uses a coating, solvent, ink or adhesive shall keep and maintain the following records:

1. A current list of all coatings, solvents, inks and
adhesives in use. This list shall include: information on the manufacturer, brand, product name or code, VOC content in grams per liter or pounds per gallon, HAPS content in grams per liter or pounds per gallon, or manufacturer's product specifications, material VOC content reports or laboratory analyses providing this information;

2. A description of any equipment used during and after coating/solvent application, including type, make and model; maximum design process rate or throughput; control device(s) type and description (if any); and a description of the coating/solvent application/drying method(s) employed;

3. A monthly log of the consumption of each solvent (including solvents used in clean-up and surface preparation), coating, ink and adhesive used; and4. All purchase orders, invoices, and other documents to support information in the monthly log.

B. Organic Liquid Storage Unit

The owner or operator of a stationary source subject to this rule that contains a permitted organic liquid storage unit shall keep and maintain the following

records:

1. A monthly log identifying the liquid stored and monthly throughput; and

2. Information on the tank design and specifications including control equipment.

C. Combustion Emission Unit

The owner or operator of a stationary source subject to
this rule that contains a combustion emission unit shall keep and maintain the following records:

1. Information on equipment type, make and model, maximum design process rate or maximum power input/output, minimum operating temperature (for thermal oxidizers) and capacity, control device(s) type and description (if any) and all source test
information; and

2. A monthly log of hours of operation, fuel type, fuel usage, fuel heating value (for non-fossil fuels; in terms of BTU/lb or BTU/gal), percent sulfur for fuel oil and coal, and percent nitrogen

for coal.

D. Emission Control Unit

The owner or operator of a stationary source subject to
this rule that contains an emission control unit shall keep and maintain the following records:

1. Information on equipment type and description, make and model, and emission units served by the
control unit;

2. Information on equipment design including where applicable: pollutant(s) controlled; control effectiveness; maximum design or rated capacity; inlet and outlet temperatures, and concentrations for each pollutant controlled; catalyst data(type, material, life, volume, space velocity, ammonia injection rate and temperature); baghouse data (design, cleaning method, fabric material, flow rate, air/cloth ratio); electrostatic precipitator data (number of fields, cleaning method, and power input); scrubber data (type, design, sorbent type, pressure drop); other design data as appropriate; all source test information;

and

3. A monthly log of hours of operation including notation of any control equipment breakdowns, upsets, repairs, maintenance and any other deviations from design parameters.

E. General Emission Unit

The owner or operator of a stationary source subject to this rule that contains an emission unit not included in subsections A, B or C above shall keep and maintain the following records:

1. Information on the process and equipment including the following: equipment type, description, make and model; maximum design process rate or throughput; control device(s) type and description (if any);

2. Any additional information requested in writing by the APCO;

3. A monthly log of operating hours, each raw material used and its amount, each product produced and its production rate; and

4. Purchase orders, invoices, and other documents to support information in the monthly log.

5.0 REPORTING REQUIREMENTS

5.1 At the time of annual renewal of a permit to operate under Rule _____ (the District's general permitting rule), each owner or operator of a stationary source subject to this rule shall submit to the District a process statement. The statement shall be signed by the owner or operator and certify that the information provided is accurate and true.5.2 For the purpose of determining compliance with this rule,

this requirement shall not apply to stationary sources which emit in every 12-month period less than or equal to the following quantities:

A. For any regulated air pollutant (excluding HAPs),

1. 25 tons per year including a regulated air pollutant for which the District has a federal area designation of attainment, unclassified, transitional, or moderate nonattainment,

2. 15 tons per year for a regulated air pollutant for which the District has a federal area designation of serious nonattainment,

3. 6.25 tons per year for a regulated air pollutant
for which the District has a federal area designation of severe nonattainment,

B. 2.5 tons per year of a single HAP,

C. 6.25 tons per year of any combination of HAPs, and

D. 25 percent of any lesser threshold for a single HAP as the U.S. EPA may establish by rule.

5.3 A stationary source previously covered by provisions in section 5.2 above shall comply with the provisions of section 5.1 above if the stationary source exceeds the quantities specified in section 5.2.

5.4 Any additional information requested by the APCO under
section 5.1 above shall be submitted to the APCO within 30 days of the date of request.6.0 ALTERNATIVE OPERATIONAL LIMIT AND REQUIREMENTS

[The District may propose additional alternative operational limits]

The owner or operator may operate the permitted emission units at a stationary source subject to this rule under any one alternative operational limit, provided that at least 90 percent of the stationary source's emissions in every 12- month period are associated with the operation(s) limited by the alternative operational limit.

6.1 Upon choosing to operate a stationary source subject to this rule under any one alternative operational limit, the owner or operator shall operate the stationary source in compliance with the alternative operational limit and comply with the specified recordkeeping and reporting requirements.

A. The owner or operator shall report within 24 hours to the APCO any exceedance of the alternative operational
limit.

B. The owner or operator shall maintain all purchase orders, invoices, and other documents to support information required to be maintained in a monthly log. Records required under this section shall be maintained on site for five years and be made available to District or U.S. EPA staff upon request.

C. Gasoline Dispensing Facility Equipment with Phase I and
II Vapor Recovery Systems

The owner or operator shall operate the gasoline dispensing equipment in compliance with the following requirements:

1. No more than 7,000,000 gallons of gasoline shall be dispensed in every 12-month period.

2. A monthly log of gallons of gasoline dispensed in the preceding month with a monthly calculation of the total gallons dispensed in the previous 12 months shall be kept on site.

3. A copy of the monthly log shall be submitted to the APCO at the time of annual permit renewal. The owner or operator shall certify that the log
is accurate and true.

D. Degreasing or Solvent-Using UnitTo be determined based on District SIP rules 5 The owner or operator shall operate the degreasing or

solvent-using unit(s) in compliance with the following requirements:

1. a. If the solvents do not include methyl

chloroform (1,1,1-trichloroethane), methylene chloride (dichloromethane), tetrachloroethylene (perchloroethylene), or trichloroethylene, no more than 5,400 gallons of any combination of solvent-containing materials and no more than 2,200 gallons of any one solvent-containing material shall be used in every 12-month period,.

b. If the solvents include methyl chloroform (1,1,1-trichloroethane), methylene chloride (dichloromethane), tetrachloroethylene (perchloroethylene), or trichloroethylene, no more than 2,900 gallons of any combination of solvent-containing materials and no more than 1,200 gallons of any one solvent-containing material shall be used in every 12-month period.

2. A monthly log of amount and type of solvent used in the preceding month with a monthly calculation of the total gallons used in the previous 12 months shall be kept on site.

3. A copy of the monthly log shall be submitted to the APCO at the time of annual permit renewal. The owner or operator shall certify that the log
is accurate and true.

E. Paint Spraying Unit 5

The owner or operator shall operate the paint spraying unit(s) in compliance with the following requirements:

1. The total usage rate of all VOC-containing materials, including but not limited to, coatings, thinners, reducers, and cleanup solution shall not exceed _____ gallons in every 12-month period.

2. A monthly log of the gallons of VOC-containing materials used in the preceding month with amonthly calculation of the total gallons used in the previous 12 months shall be kept on site.

3. A copy of the monthly log shall be submitted to the APCO at the time of annual permit renewal. The owner or operator shall certify that the log
is accurate and true.

F. Diesel-Fueled Emergency Standby Engine(s) with Output Less Than 1,000 Brake Horsepower

[Depending on the District's federal ozone attainment status, the District will adopt either subsection 1.a, 1.b, or 1.c below.]

The owner or operator shall operate the emergency standby engine(s) in compliance with the following requirements:

1. a. For a federal ozone area designation of

attainment, unclassified, transitional, or moderate nonattainment, the emergency standby engine(s) shall not operate more than 5,200 hours in every 12-month period and shall not use more than 265,000 gallons of diesel fuel in every 12-month period.

b. For a federal ozone nonattainment area classified as serious, the emergency standby engine(s) shall not operate more than 2,600 hours in every 12-month period and shall not use more than 133,000 gallons of diesel fuel in every 12-month period.

c. For a federal ozone nonattainment area classified as severe, the emergency standby engine(s) shall not operate more than 1,300 hours in 12-month period and shall not use more than 66,000 gallons of diesel fuel in every 12-month period.

2. A monthly log of hours of operation, gallons of fuel used, and a monthly calculation of the total hours operated and gallons of fuel used in the previous 12 months shall be kept on site.

3. A copy of the monthly log shall be submitted to the APCO at the time of annual permit renewal. The owner or operator shall certify that the log
is accurate and true.6.2 The owner or operator of a stationary source subject to this

rule shall obtain any necessary permits prior to commencing any physical or operational change or activity which will result in an exceedance of an applicable operational limit specified in section 6.1 above.

7.0 VIOLATIONS

7.1 Failure to comply with any of the applicable provisions of
this rule shall constitute a violation of this rule. Each day during which a violation of this rule occurs is a separate offense.

7.2 A stationary source subject to this rule shall be subject to applicable federal requirements for a major source, including Rule ____ (District Title V rule) when the conditions specified in either subsections A or B below,

occur:

A. Commencing on the first day following every 12-month period in which the stationary source exceeds a limit specified in section 3.1 above and any applicable alternative operational limit specified in section 6.1,
above, or

B. Commencing on the first day following every 12-month period in which the owner or operator can not demonstrate that the stationary source is in compliance with the limits in section 3.1 above or any applicable alternative operational limit specified in section 6.1

above.Attachment 3

November 2, 1994 Letter Describing Use of Minor NSR Programs

Mr. Jason Grumet Executive Director, Northeast States for Coordinated Air Use Management

129 Portland Street Boston, Massachusetts 02114

Dear Mr. Grumet:

This is in response to Mr. Michael Bradley's March 22, 1994 letter to Mary Nichols seeking clarification of the Federal enforceability of State's existing minor new source review (NSR) programs. It is my understanding that some of the NESCAUM States are interested in using their existing minor NSR programs to limit a source's potential to emit so as to allow sources to legally avoid being considered a major source for title V

purposes.

In my November 3, 1993 memorandum entitled "Approaches to Creating Federally-Enforceable Emission Limits," I described approaches that States could use to limit a source's potential to emit for title V purposes. While a number of approaches are acceptable, the Environmental Protection Agency (EPA) has promoted the use of State operating permits programs approved under sections 110 and 112(l), pursuant to the criteria set forth in the June 28, 1989 Federal Register . Among other things, these criteria include an opportunity for public and EPA review and require that permit conditions be practically enforceable.
Several States have followed EPA's recommendation and have either adopted these requirements or are in the process of doing so.

The Agency recognizes the use of other approaches as well. In response to your question, EPA's position is that minor NSR permits issued under programs that have already been approved into the State implementation plan (SIP) are federally enforceable. Thus, EPA allows the use of federally-enforceable minor NSR permits to limit a source's potential to emit provided that the scope of a State's program allows for this and that the minor NSR permits are in fact enforceable as a practical matter. Because minor NSR programs are essentially preconstruction review programs for new sources and modifications to existing sources, minor NSR programs can generally be used to limit a2

source's potential emissions when such limits are taken in conjunction with a preconstruction permit action. In addition, please note that the term "modification" generally encompasses both physical changes and changes in the method of operation at an existing source (see Clean Air Act section 111(a)(4)). Thus, the scope of some, though not all, minor NSR programs is broad enough to be used to also limit a source's potential to emit for
nonconstruction-related events. This occurs where the modification component of State programs extends to both physical changes and changes in the method of operation. In these cases, where a voluntary reduction in the method of operation (e.g., limit in hours of operation or production rate) by itself is considered a modification for minor NSR permitting, a source may reduce its hours of operation or production rate and make such a change federally enforceable through limits in its minor NSR permit.

Some States' minor NSR programs are written so as to preclude a source from limiting its potential to emit absent an increase in emissions. There may be other limitations on the scope of these programs as well. Since there is considerable variation among State minor NSR programs, a review of any individual State program would be necessary to determine its ability to limit a source's potential to emit. It may be beneficial for States to contact the appropriate EPA Regional Office if there are questions about the scope of the SIP-approved minor NSR program.

Minor NSR programs have generally been used in the past to limit a source's potential to emit for criteria pollutants. There is a growing need for sources to limit their potential to emit for toxic pollutants as well. The EPA is currently considering ways in which a State may limit the potential to emit of toxic pollutants, including possible uses of existing minor NSR programs. I plan to keep you and others aware of our efforts in this regard.

You should also be aware that a recent court ruling has called into question the Federal enforceability of a State minor NSR permit that does not meet the public participation requirements of current EPA regulations despite SIP approval of the State's program [see United States v. Marine Shale

Processors , No. 90-1240 (E.D. La.) (bench ruling), June 15, 1994]. In that case involving extensive alleged violations of the permit terms, the court held that EPA could not enforce the terms of the minor NSR permit. The court subsequently ruled that the company could not rely on the permit to limit its potential to emit, and thus was liable for having failed to obtain a major3

NSR permit. The outcome of this case suggests that States should proceed cautiously in relying on minor NSR programs to limit potential to emit where the program does not actually provide public participation.

In summary, EPA has provided guidance on approaches that are available to limit a source's potential to emit. The Agency recommends approaches that meet the criteria set forth in the
June 28, 1989 Federal Register . Many States are taking action to adopt such programs. With respect to minor NSR permits, EPA believes that permits conditions issued in accordance with existing State minor NSR programs that have been approved into the SIP, and which are enforceable as a practical matter, are federally enforceable and can be used to limit potential to emit. Caution is advised, however, with respect to permits that do not meet procedural requirements. These programs are primarily preconstruction review programs although in many cases they can also limit a source's potential to emit in conjunction with operational changes.

As you have noted, title V issues are complicated and resource intensive. In order for the title V program to be successfully implemented, it is important that States and EPA work cooperatively in developing operating permits programs. Your comments and recommendations on program development issues

are welcome.

We appreciate this opportunity to be of service and trust that this information will be helpful to you.

Sincerely,

John S. Seitz
Director Office of Air Quality Planning

and Standards

cc: Air Division Director, Regions I-XAttachment 4

January 25, 1995 Guidance on Practicable Enforceability

SUBJECT: Guidance on Enforceability Requirements for Limiting

Potential to Emit through SIP and §112 Rules and
General Permits

FROM: Kathie A. Stein, Director

Air Enforcement Division

TO: Director, Air, Pesticides and Toxics

Management Division, Regions I and IV Director, Air and Waste Management Division, Region II Director, Air, Radiation and Toxics Division, Region III Director, Air and Radiation Division, Region V Director, Air, Pesticides and Toxics Division, Region VI Director, Air and Toxics Division, Regions VII, VIII, IX, and X

Attached is a guidance document developed over the past year by the former Stationary Source Compliance Division in coordination with the Air Enforcement Division, Office of Air Quality Planning and Standards, OAR's Office of Policy Analysis and Review, and the Office of General Counsel, as well as with significant input from several Regions.

A number of permitting authorities have begun discussions with or have submitted programs for review by EPA that would provide alternative mechanisms for limiting potential to emit.
Several authorities have submitted SIP rules and at least one State has been developing a State general permit approach. We believe that this guidance is important to assist the EPA Regions as well as States in approving and developing such approaches.

For additional information regarding this guidance, please contact me or Clara Poffenberger of my staff at (202) 564-8709.

cc: John Rasnic, Director Manufacturing, Energy, and Transportation Division Office of Compliance

Air Branch Chiefs, Regions I - XEnforceability Requirements for Limiting Potential to Emit Through SIP and §112 Rules and General Permits

Introduction

As several EPA guidances describe, there are several mechanisms available for sources to limit potential to emit. EPA guidances have also described the importance of practical enforceability of the means used to limit potential to emit. This guidance is intended to provide additional guidance on practical enforceability for such limits. We provide references for guidances on practical enforceability for permits and rules in general and provide guidance in this document for application of the same principles to "limitations established by rule or general permit," as described in the guidance document issued January 25, 1995, entitled "Options for Limiting Potential to Emit (PTE) of a Stationary Source under section 112 and Title V of the Clean Air Act (Act)." The description is as follows:The EPA prefers the term "exclusionary rule" in that this 1 phrase is a less ambiguous description of the overall purpose of

these rules. Limitations established by rules. For less complex plant sites, and for source categories involving relatively few operations that are similar in nature, case-by-case permitting may not be the most administratively efficient approach to establishing federally enforceable restrictions. One approach that has been used is to establish a general rule which creates federally enforceable restrictions at one time for many sources (these rules have been referred to as "prohibitory" or "exclusionary" rules ). The concept 1 of exclusionary rules is described in detail in the November 3, 1993 memorandum ["Approaches to Creating Federally Enforceable Emissions Limits," from John S. Seitz]. A specific suggested approach for VOC limits by rule was described in EPA's memorandum dated October 15, 1993 entitled "Guidance for State Rules for Optional Federally-Enforceable Emissions Limits Based Upon Volatile Organic Compound (VOC) Use." An example of such an exclusionary rule is a model rule developed for use in California. (The California model rule is attached, along with a discussion of its applicability to other situations--see Attachment 2). Exclusionary rules are included in a State's SIP or 112 program and generally become effective upon approval by the EPA.

General permits . A concept similar to the exclusionary rule is the establishment of a general permit for a given source type. A general permit is a single permit
that establishes terms and conditions that must be complied with by all sources subject to that permit. The establishment of a general permit could provide for emission limitations in a one-time permitting process, and thus avoid the need to issue separate permits for each source. Although this concept is generally thought of as an element of Title V permit programs, there is no reason that a State or local agency could not submit a general permit program as a SIP submittal aimed at creating synthetic minor sources. Additionally, FESOP [Federally Enforceable State Operating Permit, usually referring to Title I State Operating Permit Programs approved under the criteria established by EPA in the June 28, 1989 Federal Register notice, 54 FR 27274] programs can include general permits as an element of the FESOP program being approved into the SIP. The advantage of a SIP general permit, when compared to an exclusionary rule,is that upon approval by the EPA of the State's general

permit program , a general permit could be written for an additional source type without triggering the need for the formal SIP revision process. (January 25, 1995, Seitz and Van Heuvelen memorandum, page 4.)

SIP or § 112 Rules

Source-category standards approved in the SIP or under 112, if enforceable as a practical matter, can be used as federally enforceable limits on potential to emit. Such provisions require public participation and EPA review. Once a specific sourcequalifies under the applicability requirements of the sourcecategory rule, additional public participation is not required to make the limits federally enforceable as a matter of legal sufficiency since the rule itself underwent public participation
and EPA review. The rule must still be enforceable as a practical matter in order to be considered federally enforceable. A source that violates this type of rule limiting potential to emit below major source thresholds or is later determined not to qualify for coverage under the rule, could be subject to enforcement action for violation of the rule and for constructing or operating without a proper permit (a part 70 permit, a New Source Review permit, or operating without meeting §112 requirements, or any combination thereof).

General Permits

The Title V regulations set out provisions for general permits covering numerous similar sources. The primary purpose of general permits is to provide a permitting alternative where the normal permitting process would be overly burdensome, such as for area sources under section 112. General permits may be issued to cover any category of numerous similar sources, including major sources, provided that such sources meet certain criteria laid out in 40 CFR part 70. Sources may be issued general permits strictly for the purpose of avoiding classification as a major source. In other words, general permits may be used to limit the potential to emit for numerous similar sources. However, general permits must also meet both legal and practical federal enforceability requirements.

With respect to legal sufficiency, the operating permit regulations provide that once the general permit has been issued after opportunity for public participation and EPA and affected State review, the permitting authority may grant or deny a source’s request to be covered by a general permit without further public participation or EPA or affected State review. The action of granting or denying the source’s request is not subject to judicial review. A general permit does not carry apermit shield. A source may be subject to enforcement action for

operating without a part 70 permit if the source is later determined not to qualify for coverage under the general permit. Sources covered by general permits must comply with all part 70 requirements.

State SIP or 112(l) General Permits

Another mechanism available to limit potential to emit is a general permit program approved into the SIP or under section 112(l), the hazardous air pollutant program authority. This mechanism allows permitting authorities to issue and revise general permits consistent with SIP or 112(l) program requirements without going through the SIP or 112(l) approval process for each general permit or revision of a general permit. The program is also separate from title V, like title I state operating permits, and issuance and revisions of the permits are not required to comply with title V procedures.

Once a program is approved, issuing and revising generalpermits should be significantly less burdensome and timeconsuming for State legislative and rulemaking authorities. The EPA review should also be less burdensome and time-consuming. After a program is approved, permitting authorities have the flexibility to submit and issue general permits as needed rather than submitting them all at once as part of a SIP submittal. Given the reduced procedural burden, permitting authorities should be able to issue general permits to small groups or categories or sources rather than attempt to cover broad categories with a generic rule. We anticipate that specific permit requirements for general permits may be readily developed with the assistance of interested industry groups.

The State general permit approach may allow sources to meet the federal enforceability requirements more easily than other approaches. However, to use this approach, States must have a federally enforceable program that provides the State the authority to issue such permits; to accomplish this, EPA must approve the program into the SIP or pursuant to section 112(l) of
the Clean Air Act.

Enforceability Principles

In 1989, in response to challenges from the Chemical Manufacturers Association and other industry groups, EPA reiterated its position that controls and limitations used to limit a source's potential to emit must be federally enforceable. See 54 FR 27274 (June 28, 1989). Federally enforceable limits can be established by Clean Air Act programs such as NSPS, NESHAPs, MACTs, and SIP requirements. However, source-specificlimits are generally set forth in permits. Generally, to be

considered federally enforceable, the permitting program must be approved by EPA into the SIP and include provisions for public participation. In addition, permit terms and conditions must be practicably enforceable to be considered federally enforceable. EPA provided specific guidance on federally enforceable permit conditions in a June 13, 1989 policy memo ? Limiting Potential to Emit in New Source Permitting” from John Seitz and in the June 28, 1989 Federal Register notice (54 FR 27274). Additional guidance can also be found in United States v. Louisiana Pacific

, 682 F. Supp. 1122 (D. Colo. 1987), 682 F. Supp 1141 (D. Colo. 1988), which led to these guidance statements and a number of other memoranda covering practicable enforceability as it relates to rolling averages, short-term averages, and emission caps. See

? Use of Long Term Rolling Averages to Limit Potential to Emit,” from John B. Rasnic to David Kee, February 24, 1992; ? Limiting Potential to Emit” from Mamie Miller to George Czerniak, August
5, 1992; ? Policy Determination on Limiting Potential to Emit for Koch Refining Company’s Clean Fuels Project”, from John B. Rasnic to David Kee, March 13, 1992; and ? 3M Tape Manufacturing Division Plant, St. Paul, Minnesota” from John B. Rasnic to David Kee, July 14, 1992.

In 1987, EPA laid out enforceability criteria that SIP rules

must meet. See ? Review of State Implementation Plans and Revisions for Enforceability and Legal Sufficiency” from Michael Alushin, Alan Eckert, and John Seitz, September 3, 1987 (1987 SIP memo). The criteria include clear statements as to applicability, specificity as to the standard that must be met, explicit statements of the compliance time frames (e.g. hourly, daily, monthly, or 12-month averages, etc.), that the time frame and method of compliance employed must be sufficient to protect the standard involved, recordkeeping requirements must be specified, and equivalency provisions must meet certain requirements.

Based on these precedents, this guidance describes six enforceability criteria which a rule or a general permit must meet to make limits enforceable as a practical matter. In general, practical enforceability for a source-specific permit term means that the provision must specify (1) a technically accurate limitation and the portions of the source subject to the limitation; (2) the time period for the limitation (hourly, daily, monthly, annually); and (3) the method to determine compliance including appropriate monitoring, recordkeeping and reporting. For rules and general permits that apply to categories of sources, practical enforceability additionally requires that the provision (4) identify the categories of sources that are covered by the rule; (5) where coverage is optional, provide for notice to the permitting authority of thesource's election to be covered by the rule; and (6) recognize

the enforcement consequences relevant to the rule.

This guidance will address requirements (4) and (5) first as they are concepts that are unique to rules and general permits.

A. Specific Applicability

Rules and general permits designed to limit potential to emit must be specific as to the emission units or sources covered by the rule or permit. In other words, the rule or permit must clearly identify the category(ies) of sources that qualify for the rule’s coverage. The rule must apply to categories of sources that are defined specifically or narrowly enough so that specific limits and compliance monitoring techniques can be identified and achieved by all sources in the categories defined. A rule or general permit that covers a homogeneous group of sources should allow standards to be set that limit potential to emit and provide the specific monitoring requirements. (Monitoring is more fully addressed in section D.) The State can allow for generic control efficiencies where technically sound and appropriate, depending on the extent of the application and ability to monitor compliance with resultant emission limits. Similarly, specific and narrow applicability may allow generic limits on material usage or limits on hours of operation to be sufficient. For example, a rule or general permit that applies to fossil-fuel fired boilers of a certain size may allow for limits on material usage, such as fuel-type and quantity. A rule or general permit that applies only to standby diesel generators or emergency generators may allow restrictions on hours of operation to limit potential to emit. The necessary compliance terms (i.e., monitoring or recordkeeping) associated with any of these limits, such as with hours of operation, can readily be specified in the rule or the general permit itself.

General permits under Title V are assumed to include this enforceability principle because the Part 70 regulations set out specific criteria that States should consider in developing their general permit provisions (See 57 FR 32278). These factors include requirements that

? categories of sources covered by general permits should be generally homogenous in terms of operations, processes, and emissions. All sources in the category should have essentially similar operations or processes and emit pollutants with similar characteristics.”

Another factor stated is ? sources should be subject to the same or substantially similar requirements governing operation, emissions, monitoring, reporting, or recordkeeping.” Examples ofsource categories appropriate for general permits include:

degreasers, dry cleaners, small heating systems, sheet fed printers, and VOC storage tanks (see 57 FR 32278).

B. Reporting or Notice to Permitting Authority

The rule or general permit should provide specific reporting requirements as part of the compliance method. Although the compliance method for all sources must include recordkeeping requirements, the permitting authority may make a determination that reporting requirements for small sources would provide minimal additional compliance assurance. Where ongoing reporting requirements are determined not to be reasonable for a category of sources, the rule or general permit should still provide that the source notify the permitting authority of its coverage by the rule or the permit. In the limited situation where all the sources described in a source category are required to comply with the all of the provisions of a rule or general permit, notice is not needed. However, where there are no reporting requirements and no opt-in provisions, the permitting authority must provide the public with the names and locations of sources subject to the rule or permit.

For Title V general permits, Part 70 requires sources to submit an application for a general permit which must be approved or disapproved by the permitting authority. For SIP or §112 rules and SIP or §112 general permits, in response to receiving the notice or application, the permitting authority may issue an individual permit, or alternatively, a letter or certification. The permitting authority may also determine initially whether it will issue a response for each individual application or notice, and may initially specify a reasonable time period after which a source that has submitted an application or notice will be deemed to be authorized to operate under the general permit or SIP or
§112 rule.C. Specific Technically Accurate Limits

The rule or general permit issued pursuant to the SIP or §112 must specify technically accurate limits on the potential to emit. The rule or general permit must clearly specify the limits that apply, and include the specific associated compliance monitoring. (The compliance monitoring requirements are discussed further in the next section.) The standards or limits must be technically specific and accurate to limit potential to emit, identifying any allowed deviations.

The 1987 policy on SIP enforceability states that
limitations ? must be sufficiently specific so that a source is fairly on notice as to the standard it must meet.” For example,

? alternative equivalent technique” provisions should not be approved without clarification concerning the time period over which equivalency is measured as well as whether the equivalency applies on a per source or per line basis or is facility-wide.

Further, for potential to emit limitations, the standards set must be technically sufficient to provide assurance to EPA and the public that they actually represent a limitation on the potential to emit for the category of sources identified. Any presumption for control efficiency must be technically accurate and the rule must provide the specific parameters as enforceable limits to assure that the control efficiency will be met. For example, rules setting presumptive efficiencies for incineration controls applied to a specific or broad category must state the operating temperature limits or range, the air flow, or any other parameters that may affect the efficiency on which the presumptive efficiency is based. Similarly, material usage limits such as fuel limits, as stated above, require specifying the type of fuel and may require specifying other operating

parameters.

A rule that allows sources to submit the specific parameters and associated limits to be monitored may not be enforceable because the rule itself does not set specific technical limits. The submission of these voluntarily accepted limits on parameters or monitoring requirements would need to be federally enforceable. Absent a source-specific permit and appropriate review and public participation of the limits, such a rule is not consistent with the EPA’s enforceability principles.

D. Specific Compliance Monitoring

The rule must specify the methods to determine compliance. Specifically, the rule must state the monitoring requirements, recordkeeping requirements, reporting requirements, and test methods as appropriate for each potential to emit limitation; andclarify which methods are used for making a direct determination

of compliance with the potential to emit limitations.

? Monitoring” refers to many different types of data collection, including continuous emission or opacity monitoring, and measurements of various parameters of process or control devices (e.g. temperature, pressure drop, fuel usage) and recordkeeping of parameters that have been limited, such as hours of operation, production levels, or raw material usage. Without a verifiable plantwide emission limit, verifiable emission limits must be assigned to each unit or group of units subject to the rule or general permit. Where monitoring cannot be used to determine emissions directly, limits on appropriate operating parameters must be established for the units or source, and monitoring must verify compliance with those limits. The monitoring must be sufficient to yield data from the relevant time period that is representative of the source’s compliance with the standard or limit. Continuous emissions monitoring, especially in the case of smaller sources, is not required.

E. Practicably Enforceable Averaging Times

The averaging time for all limits must be practicably enforceable. In other words, the averaging time period must readily allow for determination of compliance. EPA policy expresses a preference toward short term limits, generally daily but not to exceed one month. However, EPA policy allows for rolling limits not to exceed 12 months or 365 days where the permitting authority finds that the limit provides an assurance that compliance can be readily determined and verified. See June
13, 1989 ? Guidance on Limiting Potential to Emit,” February 24,

1992 Memorandum ? Use of Long Term Rolling Averages to Limit Potential to Emit” from John Rasnic to David Kee, and March 13,

1992 ? Policy Determination on Limiting Potential to Emit for Koch Refining Company’s Clean Fuels Project” from John B. Rasnic to David Kee, stating that determinations to allow an annual rolling average versus a shorter term limit must be made on a case by case basis. Various factors weigh in favor of allowing a long term rolling average, such as historically unpredictable variations in emissions. Other factors may weigh in favor of a shorter term limit, such as the inability to set interim limits during the first year. The permitting agency must make a determination as to what monitoring and averaging period is warranted for the particular source-category in light of how close the allowable emissions would be to the applicability

threshold.

F. Clearly Recognized Enforcement

Violations of limits imposed by the rule or general permit that limit potential to emit constitute violations of majorsource requirements. In other words, the source would be

violating a ? synthetic minor” requirement which may result in the source being treated as a major source under Titles I and V. The 1989 Federal Register Notice provides for separate enforcement and permitting treatment depending on whether the source subsequently chooses to become major or remain minor. Thus, violations of the rule or general permit or violation of the specific conditions of the rule or general permit subjects the source to potential enforcement under the Clean Air Act and state law. The operating permit rule states that notwithstanding the shield provisions of part 70, the source subject to a general permit may be subject to enforcement action for operating without a part 70 permit if the source is later determined not to qualify for the conditions and terms of the general permit. Moreover, violation of any of the conditions of the rule or general permit may result in a different determination of the source’s potential to emit and thus may subject the source to major source requirements and to enforcement action for failure to comply with major source requirements from the initial determination.

Rule Requirements for State General Permit Programs

As discussed above, general permit programs must be submitted to EPA for approval under SIP authority or under section 112(l), or both, depending on its particular pollutant application. SIP and 112(l) approval and rulemaking procedures must be met, including public notice and comment. The specific application of the enforceability principles for establishing State SIP or §112(l) general permit programs require that the rule establishing the program set out these principles as rule requirements. In other words, these principles must be specific rule requirements to be met by each general permit.

The rule establishing the program must require that (1) general permits apply to a specific and narrow category of sources; (2) sources electing coverage under general permits, where coverage is not mandatory, provide notice or reporting to the permitting authority; (3) general permits provide specific and technically accurate (verifiable) limits that restrict the potential to emit; (4) general permits contain specific compliance monitoring requirements; (5) limits in general permits are established based on practicably enforceable averaging times; and (6) violations of the permit are considered violations of the State and federal requirements and may result in the source being subject to major source requirements.

In addition, since the rule establishing the program does not provide the specific standards to be met by the source, each general permit, but not each application under each general permit, must be issued pursuant to public and EPA notice andcomment. The 1989 Federal Register notice covering

enforceability of operating permits requires that SIP operating permit programs issue permits pursuant to public and EPA notice and comment. Title V requires that permits, including general permits, be issued subject to EPA objection.

Finally, sources remain liable for compliance with major source requirements if the specific application of a general permit to the source does not limit the source’s potential to emit below major source or major modification thresholds. (The limits provided in these mechanisms may actually limit the potential to emit of sources but may not limit the potential to emit for some sources to below the threshold necessary to avoid major source requirements. For example, a general permit for industrial boilers may in fact provide limits that are sufficient to bring a source with only two or three boilers to below the subject thresholds, but a source with more than three boilers may have a limited PTE but not limited below the major source threshold.) Also, where the source is required to use another mechanism to limit potential to emit, i.e., a construction permit, the general permit may not be relied upon by the source or the State to limit potential to emit.

Permits issued pursuant to the approved program, meeting the above requirements, are adequate to provide federally enforceable limits on potential to emit for New Source Review, title V, and section 112 programs as long as they are approved pursuant to SIP (section 110) and section 112(l) authorities.Attachment 5

Example Language for Affirming Limits

[Note: the following language is taken from the Thursday
December 17, 1992 Federal Register , page 59931. To place this excerpt into context, readers are encouraged to obtain the entire Federal Register notice]

"The USEPA today finds the existing Illinois SIP regulations to be consistent with federal requirements. If the State followed its own procedures, each permit issued under this regulation was subject to public notice and prior USEPA review. Therefore, USEPA will consider all operating permits issued which were processed in a manner consistent with both the State regulations and the five criteria to be federally enforceable with the promulgation of this rule provided that any permits that the State wishes to make federally enforceable are submitted to USEPA and accompanied by documentation that the procedures approved today have been followed. USEPA will expeditiously review any individual permits so submitted to ensure their conformity to the program requirements."