Attachment 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 - X




Enforceability 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:

     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
     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 source
qualifies under the applicability requirements of the source-
category 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 a
permit 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 general
permits should be significantly less burdensome and time-
consuming 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-specific
limits 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 the
source'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 of
source 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; and
clarify 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 major
source 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 and
comment.  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.