MEMORANDUM

SUBJECT: Title V Program Approval Criteria for Section 112

Activities

FROM: John S. Seitz, Director

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

TO: Director, Air Division, Regions I-X

Under title V of the Clean Air Act (Act) and its

implementing regulations published at 40 CFR part 70, States are

required to submit operating permits programs to the

Environmental Protection Agency (EPA) by November 15, 1993. 

Section 112 of the Act (hazardous air pollutants) contains

several types of applicable requirements which are intended to be

carried out by States as a precondition of their title V program

approval. While the broad authority contained in most States

enabling legislation should support the mandated program for

section 112, States may find it necessary to take certain interim

steps in order to incorporate section 112 requirements into title

V permits. Although ongoing EPA rulemakings related to section

112 may ultimately affect the final response to such questions,

several Regions and States have asked for guidance now to direct

the development of title V operating permits programs submittals. 

This memorandum, with its attachment, is intended to respond to

these requests based on the part 70 regulations and the general

structure and requirements of section 112. However, the policies

set out in this memorandum and its attachment are intended solely

as guidance, do not represent final Agency action, and cannot be

relied upon to create any rights enforceable by any party.

This memorandum defines current Agency policy for evaluating

part 70 submittals with respect to section 112 requirements. 

Under this guidance, in order to obtain a full approval from EPA,

the part 70 submittal needs to contain authority and/or

commitments to assure the compliance of part 70 permits issued by

the State, or by independent permitting authorities therein, with

all applicable section 112 requirements. Specifically, the

Attorney General's statement should certify that the State has

authority to issue part 70 permits that assure compliance with

all currently applicable requirements (including section 112 of
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the Act), and that the State will expeditiously adopt any new

authority needed to implement future EPA section 112

requirements. Where general statutory authority to issue permits

implementing section 112 is present, but the Attorney General is

unable to certify explicit legal authority to carry out specific

section 112 requirements at the time of program submittal, the

Governor may instead submit commitments to adopt and implement

additional regulations as needed to issue permits that implement

applicable section 112 requirements. The EPA will rely on these

commitments in granting part 70 program approvals provided that

the underlying legislative authority would not prevent a State

from meeting the commitments.

As for part 70 program revisions, no formal amendment to the

initial title V program should typically be needed with respect

to section 112 requirements taking effect after the effective

date of the program. The State's up-front commitment and

demonstrations (i.e., legal authorities and mechanisms to adopt

additional section 112 requirements) coupled with EPA's ability

to review individual permits and to audit part 70 programs

periodically should provide reasonable assurance of adequate

State implementation. 

The EPA will make reasonable efforts to communicate to

States when additional legal, technical, and financial resources

may be necessary to implement new section 112 requirements as

they become applicable. The State, however, remains responsible

for maintaining and enhancing as necessary its authority to

implement section 112, including any new regulations. In light

of the demonstrations and/or commitments required for part 70

approval, the EPA will presume that a State's request for

approval of its operating permits program will be an implicit

request under section 112(l) for delegation of authority to

implement federally-promulgated section 112 requirements in the

same form in which EPA issues them. In lieu of this arrangement,

States can opt to establish specific delegations where needed. 

In the latter case, States should revise the implementation

agreement with a schedule for the timely adoption of all EPA

requirements promulgated after the time of program submittal.

Under the above approaches, there should be few concerns

which would require the process in 40 CFR 70.4(i) to revise the

part 70 program. This process involves public participation and

publication in the Federal Register. An example of where this

process might be needed would be a pattern of proposed permits

which fail to assure compliance with a certain section 112

requirements due to a lack of State authority. In such a case a

part 70 program revision may well be needed. The EPA will be

prepared to
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 veto any permit that does not assure compliance with the Act and

part 70, as required in section 70.8(c) and call for appropriate

correction to the State program. 

The attached information summarizes the guidance for Regions

to follow when reviewing State title V submittals for specific

section 112 concerns. The attachment also provides, where

indicated, the "current best advice" with respect to certain

future section 112 rulemakings as they may affect title V

programs. Please note that States are responsible for

implementing all applicable requirements of section 112,

including making and enforcing the case-by-case maximum

achievable control technology decisions under sections 112(i)(5),

112(g) and (j), as well as making any offset determinations

required under section 112(g). The attachment also summarizes

EPA's position regarding fee demonstrations and interim approvals

for section 112 activities.

I trust this guidance will be useful. If you have any

questions, please contact Karen Blanchard at (919) 541-5503 on

section 112 concerns, Michael Trutna at (919) 541-5345 on how

title V interfaces with section 112 requirements, and Kirt Cox at

(919) 541-5399 on general approval criteria for title V programs.

Attachment

cc: J. Beale, OPAR

K. Berry, AQMD 

E. Davies, OSWER

A. Eckert, OGC 

E. Gilberg, OE

B. Jordan, ESD 

J. Rasnic, SSCD

L. Wegman, OAQPS
ATTACHMENT - TITLE V APPROVAL CRITERIA FOR

SECTION 112 ACTIVITIES

The following information summarizes the Environmental

Protection Agency's (EPA's) guidance for evaluating title V

program submittals due on or before November 15, 1993 as well as

EPA's current best advice regarding future rulemakings under

section 112 in relation to title V programs. The result of

granting approval under title V is important because it confers

responsibility on the State for implementing all section 112 

requirements. Citations are to the regulations published at 40

CFR part 70.

SCOPE OF THE PROGRAM

States must issue part 70 permits to all major sources of

hazardous air pollutants (HAP's) regardless of whether there is

any section 112 standard or requirement which currently applies

to such sources (section 70.3(a)). A source meets the definition

of "major" in section 70.2 if its potential to emit is 10 tons

per year (tpy) or more of any pollutant listed in section 112(b),

or 25 tpy or more for a combination of these pollutants. A

source that reduces its potential to emit HAP's below the major

source threshold would eliminate the need to obtain a part 70

permit and to comply with section 112 requirements that apply

only to major sources. Future EPA rulemakings may identify

additional means beyond those identified in the proposed part 70

regulations (see 56 FR 21725 which identifies several mechanisms,

including SIP limits and permit conditions taken under EPA

approved new source review and operating permits programs) for

sources to reduce their potential to emit HAP's.

Under the final title V regulations, States may grant a

temporary exemption to nonmajor part 70 sources (other than acid

rain-affected sources and municipal waste incinerators) from the

requirement to obtain a part 70 permit, including any nonmajor

sources subject to section 112 standards in existence on July 21,

1992. The Agency intends to propose through rulemaking within 4

years of the first EPA-approved permit program whether to

continue some exemption opportunity for these sources. The need

to permit additional nonmajor sources which become subject to

section 112 standards promulgated after the final part 70

regulations will be determined at the time a new standard is

promulgated. In addition, EPA may at a later date establish

lesser quantity emission rates for some or all HAP's under

section 112(a) which increase the number of major sources which

are required to have part 70 permits.

LEGAL AUTHORITY
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Under this guidance, in order to obtain a full approval from

EPA, the part 70 submittal needs to contain authority and/or

commitments to assure the compliance of part 70 permits issued by

the State, or by independent permitting authorities therein, with

all applicable section 112 requirements. Specifically, the

Attorney General's statement should certify that the State has

authority to issue part 70 permits that assure compliance with

all currently applicable requirements (including section 112 of

the Act), and that the State will expeditiously adopt any new

authority needed to implement future EPA section 112

requirements. Where general statutory authority to issue permits

implementing section 112 is present, but the Attorney General is

unable to certify explicit legal authority to carry out specific

existing section 112 requirements at the time of program

submittal, the Governor in the part 70 program submittal may

instead submit commitments to adopt and implement additional

regulations as needed to issue permits that implement section 112

requirements. The EPA will rely on these commitments in granting

part 70 program approvals, provided that the underlying

legislative authority would not prevent a State from meeting the

commitments.

The approach with regard to part 70 approvals should

minimize the need for part 70 program revisions. Part 70 merely

requires States to have authority to incorporate applicable

requirements into part 70 permits, and to issue permits that

assure compliance with those applicable requirements. Part 70

does not, however, dictate or restrict the legal mechanisms by

which States may accomplish this result. The availability of

particular mechanisms will likely be determined by the legal

regime of the individual State. A State may, by virtue of its

own legal regime, be required to seek formal delegations from EPA

for each section 112 requirement before it can incorporate those

requirements into permits (this mechanism reflects the historical

practice in many States that have chosen to implement and enforce

section 112 standards). Where the State does make use of

recurring delegations from EPA in order to meet the part 70

requirement, these delegations will not in the normal course

require a concomitant revision to the part 70 program.

States may alternatively possess mechanisms to satisfy this

part 70 requirement that do not involve separate delegations from

EPA for each section 112 requirement. For instance, State law

may allow incorporation of a Federal standard directly into the

part 70 permit without any interim steps to adopt the standard as

State law or to seek formal delegation of that standard from EPA. 

The EPA would also consider this approach sufficient to meet the

ongoing part 70 obligation for States to have adequate authority
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to implement through permits the applicable requirements of

section 112. 

Delegation agreements for all section 112 requirements can

also be established on an automatic basis at the time of part 70

program approval. This approach can greatly improve the

efficiency of program transfer. Accordingly, EPA will presume

that in light of the required demonstration and/or commitments

required for part 70 approval, a State will automatically

implement each new requirement unless the State advises EPA to

the contrary. The EPA may request a review of individual State

actions to ensure that the needed legal authority and/or

technical capabilities are in place at the State level in time

for their use in the part 70 permit process. Such evaluations

should be limited to the exceptional case where EPA has strong

reasons to believe that legal and/or resource problems exist. In

lieu of general or automatic delegation arrangements, the State

could opt to meet its obligations under part 70 by establishing a

delegation agreement for each specific source category as

discussed above.

SECTION 112(d),(f),AND (h) - EPA EMISSIONS STANDARDS 

All National Emission Standard for Hazardous Air Pollutants

(NESHAP) standards, maximum achievable control technology (MACT)

standards, and residual risk standards must be incorporated and

implemented within the part 70 permit. When required under

specific standards, generally available control technology (GACT)

standards must also be implemented within the part 70 permit. As

described above, States are charged with acquiring all necessary

legal authorities in order to guarantee this result and

identifying a mechanism that ensures the timely acquisition of

authority for future EPA standards. Under the part 70 rules,

States must specifically agree: (1) not to issue any permit [or

permit revision addressing any emissions unit subject to a newly

promulgated section 112 standard] unless it would assure

compliance with all applicable section 112 standards [section

70.6(a)(1)], and (2) to reopen part 70 permits which have 3 or

more years remaining before their expiration date to incorporate

any newly promulgated standard [section 70.7(f)(1)(i)]. The

implementation agreement should be revised to contain specific

milestones for timely State acquisition of any needed authority

or capability to implement standards to prevent any unreasonable

delay in permit issuance (i.e., in no event longer than 18 months

after receipt of a complete application for any permit action).

GENERAL PROVISIONS
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____________________

 The preamble to the proposed operating permits rule stated 1

that States must have authority to "implement and enforce"

certain section 112 provisions, including authority to "develop

and enforce case-by-case determinations of MACT for new,

reconstructed, or modified sources where no applicable emissions

limitations have been yet established (112(g))." 56 Fed. Reg.

21722. The EPA believes that, for section 112(g), this is the

proper interpretation of the State's duty under section

502(b)(5)(A) to have authority to assure compliance with all

applicable requirements. The EPA interprets the phrase "the

Administrator (or the State)" (referring to the entity

responsible for making case-by-case determinations) in sections

112(g) and (j) to be a reference to the title V permitting

The implementation of all current NESHAP standards and

future MACT (and residual risk) standards includes the

implementation of any "general provisions" that EPA develops for

these standards. Initial title V approval must assure that

States will carry out these provisions as in effect at the time

of any permit issuance or revision. States should be aware that

EPA will soon be preparing revisions to the general provisions

and that they may have to update their implementation authorities

in accordance with EPA's rulemaking.

Revisions to the general provisions will contain (as do the

existing general provisions) compliance-related requirements that

supplement the compliance requirements specified in individual

standards. These general provisions will also establish

definitions and administrative procedures to make applicability

determinations, grant compliance extensions, and perform

preconstruction review and approval for new and reconstructed

sources to assure compliance with applicable, promulgated

standards, among other functions. Future EPA rulemakings may

supplement the general provisions for new section 112 standards

and programs by further clarifying how and when sources may limit

their potential to emit toxic pollutants below major source

threshold levels.

SECTION 112 (g) - CASE-BY-CASE MACT FOR MODIFIED/CONSTRUCTED AND

RECONSTRUCTED MAJOR TOXIC SOURCES

The EPA anticipates that section 112(g) will involve a

preconstruction review program with the subsequent incorporation

of its results into the part 70 permit. The EPA expects States

to implement this program fully. Therefore, in order to obtain 1
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authority. That section 112(g) is triggered on the effective

date of the title V program further supports this reading of

Congressional intent. This interpretation also is reasonable in

that the title V permitting process will provide important

information to the permitting authority implementing section

112(g). The EPA expects this benefit will begin to manifest

itself even before sources are issued permits, as they will be

required to assess and report emissions-related data in their

permit applications.

approval of a title V program, a State must commit to have

authority to make all required section 112(g) determinations as

well as subsequently to incorporate them into the part 70 permit. 

In addition, the State must, on the effective date of the

program, be able to implement section 112(g) in accordance with

EPA regulations. If EPA's rulemaking to implement section 112(g)

is not then final, the State must still implement section 112(g)

since this program is triggered by the effective date of the part

70 program. In such cases, EPA expects to work closely with the

State in making required section 112(g) determinations, including

providing to the State the use of centralized EPA data bases and

exploring with the State the possible use of general permits to

establish a presumptive MACT for certain qualifying source

categories.

SECTION 112 (i)(5) - EARLY REDUCTIONS

Each State must have adequate legal authority upon the

effective date of its part 70 program to carry out EPA's final

rule to implement section 112(i)(5) within the part 70 program. 

Section 112(i)(5) requires that States implement fully the

requirements of the provision as part of its title V program. In

the absence of an approval of a more stringent program under

section 112(l), in designing federally enforceable permit

conditions under the early reductions program, States may be more

stringent only to the extent that requiring a greater than 90

percent emissions reduction for organic HAP's or 95 percent

emissions reduction for particulate matter HAP's. The State may

also opt to take temporary delegation of EPA's program for

permitting sources that have entered into enforceable commitments

under section 112(i)(5), if such a program is promulgated prior

to the effective date of the part 70 program.

SECTION 112(j) - CASE-BY-CASE MACT HAMMER
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Section 112(j) requires that the permitting authority

perform case-by-case MACT determinations in the context of

issuing title V permits to categories of sources for which EPA

has failed to meet by more than 18 months the regulatory schedule

established under section 112(e). Therefore, to obtain approval

of a part 70 program, States must first have authority upon

submittal of their part 70 program to require applications from

sources subject to section 112(j) within 18 months after a missed

deadline. A commitment is also needed from each State that it

will obtain sufficient legal authority in a timely manner to make

any required section 112(j) case-by-case determination and to

incorporate it into a part 70 permit. Specific legal authority

to implement and enforce limits as needed can be obtained on a

source category basis for those sources and pollutants which are

subject to the section 112(j) hammer requirement before permit

issuance is required of the State under part 70. A revision to

the part 70 program would not be necessary, provided that the

State has made the general commitment to issue permits which

assure compliance with section 112 and any implementing

regulations. States can, of course, also meet their part 70

responsibility by adopting a general legal authority to establish

case-by-case MACT consistent with any final EPA rulemaking

setting for the requirements of section 112(j). 

SECTION 112(l) - STATE AIR TOXICS PROGRAMS

The applicable requirements, including those of section 112,

must each be included in part 70 permits and enforced (as

necessary) by the State. States are free under sections 116,

506(a), and 112(d)(7) to be more stringent than Federal

requirements as a matter of State law. However, any additional

State restrictions will in general be identified in the part 70

permit as not being federally enforceable [section 70.6(b)(2)]. 

Future rulemaking under section 112(l) could allow States to

establish alternative terms in the part 70 permit which would be

no less stringent than the corresponding requirement in section

112 and, once approved, would be federally enforceable in lieu of

the section 112 requirement.

Future guidance to implement section 112(l) will provide

additional insight into the available options for delegation of

section 112 standards, including where the State proposes to

implement the Federal standards exactly as promulgated by EPA

(see previous discussion in Legal Authority).

SECTION 112(r) - ACCIDENTAL RELEASE PLANS
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____________________

 States must identify the group in the State (if not the 2

permitting authority) which has been designated to receive the

risk management plans for part 70 sources in accordance with

section 112 (r).

States must demonstrate adequate legal authority to assure

compliance with the applicable requirements of section 112(r) for

any source subject to part 70. In order to qualify for full

approval of their part 70 submittal with respect to section

112(r), a State must have legal authority sufficient to: (1)

determine whether a part 70 source is obligated to register and

submit a risk management plan; (2) secure verification from part

70 sources that any required submittal was prepared and submitted

to appropriate authorities (permit authority, EPA, and/or another

State authority); (3) obtain annual certifications from these 2

sources as to whether their risk management plans are being

properly implemented; and (4) include the obligation to submit

such a plan in accordance with a compliance schedule in the part

70 permit for any source failing to make its required plan

submittal. 

States can opt to implement more of this program through

part 70 permits, but States are not encouraged to put the actual

plan in the part 70 permit. In its demonstration of adequate

resources, a State must account for the costs associated with the

requirements listed above. The costs incurred from any other

permit review and subsequent oversight of these plans that is

accomplished within the permit program must also be addressed. 

RESOURCE ADEQUACY

A State's submittal must contain demonstrations that

adequate resources will be available to implement its part 70

program [section 70.4(b)(8)]. In general, section 112

requirements, to the extent they are carried out through title V

permiting, must be supported by title V permit fees. These

requirements would include activities related to determinations,

incorporation and implementation of any standards under section

112(d), (f) and (h), and case-by-case MACT requirements under

sections 112(g) and 112(j), and oversight of accidental release

plans (to the extent required in the permit). The test for

initial approval of a part 70 program is that sufficient fees

must be collected to cover the costs of program implementation,

including all section 112 requirements (section 70.9(b)). The

EPA in reviewing a State's permit fee program submittal will

generally presume that it is adequate if the State would collect
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in aggregate, revenues greater than the $25/tpy (1989 basis)

presumptive fee schedule. After the program is launched,

adjustments to any approved fee schedule can be required by EPA

if poor implementation is linked to inadequate resources.

Some States may, instead of relying on the presumptive

approach, opt to make a detailed showing that the indirect and

direct costs of their permits program will be offset from fee

revenues. Other States may be required to do so if compelling

evidence exists that the presumptive fee schedule is inadequate

(i.e., prediction of actual program costs are higher than the

revenue programs which would be obtained using the presumptive

fee schedules). In addition, a detailed demonstration would be

required where a State is trying to demonstrate the adequacy of a

fee schedule which is less than the presumptive one. States, in

making detailed fee demonstrations, should be aware of the

additional complexity associated with toxics programs. For

example, development of emissions estimates, measurement

strategies, and control technologies is much more contaminant

specific. For further discussion, please contact Karen Blanchard

at (919) 541-5503. 

INTERIM APPROVAL

Other issues dealing with title V program approval concern

when and how the concept of interim approval would be

appropriate. Under part 70, the State may be able to defer

applicability of the part 70 program to certain source categories

and obtain interim approval. However, the EPA views the source

category-limited option as a grant of extraordinary relief

available only for States that substantially meet the source

coverage requirements of part 70 but that, for compelling

reasons, fall short of the source coverage necessary for full

approval. All permits that are issued within the interim program

must address all applicable requirements, including all section

112 requirements [section 70.4(d)] [but not title VI

requirements] that apply to sources subject to the interim

program. Therefore, a source must be totally exempted from title

V coverage under an interim program to avoid incorporation of

section 112 requirements into a title V permit. 

(Notwithstanding, any exempted source would remain subject to

applicable MACT and NESHAP standards.) Of course, this could

occur only the extent that the interim program nevertheless

"substantially meets" the source coverage requirements of part

70.
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Another issue related to interim approval concerns the

trigger for making section 112(g) determinations. Section 112(g)

provides that such determinations must be made for source

modifications upon the effective date of a title V program,

including interim programs. States should assume, in the case of

interim programs, that the section 112(g) responsibility is

triggered for only those sources covered by the interim approval. 

This is consistent with the obligation of only sources covered by

the interim program to submit applications. However, EPA will

not grant interim approval where the proposed program would fail

to cover certain major source categories solely on the grounds

that applying section 112(g) to these sources would be too

burdensome.