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. As


discussed below, traditional approaches to creating federally-


enforceable emissions limits may be unnecessarily burdensome and


time-consuming for certain types and sizes of sources. In


addition, they have been of limited usefulness with respect to


creating such limits for emissions of hazardous air pollutants


(HAP's). 

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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 federally


enforceable. 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.

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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 that


the specific criteria for what constitutes a federally-


enforceable 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 the


Act 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

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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 federally-


enforceable 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 Limits


State air program officials have highlighted specific types


of sources that are of particular administrative concern because

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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 describes


approvable processes by which States can create federally-


enforceable 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 adequate


for a State to apply these limits to individual sources through a

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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 federally-


enforceable 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 and

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regulatory 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. 

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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. Hoerath