UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Office
of Air Quality Planning and STANDARDS Research
Triangle Park. North Carolina 27711
JUN 2 8 1994
MEMORANDUM
SUBJECT: Guidance for Initial Implementation of Section 112(g)
FROM: John S. Seitz, Director
Office of Air Quality Planning and Standards (MD-10)
TO: See below
The purpose of this memorandum is to provide guidance for
initial implementation of section 112(g) of the Clean Air Act
amendments. This guidance is needed because the Clean Air Act
(the Act) requires section 112(g) to be implemented as soon as a
State's title V program is approved, regardless of whether EPA
has yet promulgated a final section 112(g) rule. Therefore this
guidance addresses two critical time periods: (1) after approval
of a State's title V program, but before the promulgation of the
final section 112(g) rule, and (2) after promulgation of the
final section 112(g) rule but before establishment of a State
rule to implement the Federal rule.
While section 112(g) must be complied with during the transition
period, the guidance provided in this memorandum does not address in
detail the substance of what constitutes an acceptable case-by-case
MACT determination. Rather, the guidance contained in this memo sets
out the legal mechanisms that the EPA believes are available to States
in order to make their case-by-case MACT determinations or offsets
federally enforceable during the transition period. The guidance has
undergone extensive review and comment by appropriate regional staff.
Background
In a recent working meeting to discuss issues relative to the
implementation of Section 112 of the Act, it became clear that guidance
was needed regarding the implementation of section 112(g). This
guidance is important because many Regions are now processing Part 70
submittals, and because the rule implementing section 112(g)
(hereinafter the "subpart B rule") will not be promulgated until May
1995.
The general policy regarding the authority needed for title V
program approval is described in my previous memorandum of April 13,
1993. As noted in the attachment to the April 13 memorandum, the Clean
Air Act requires that State permitting
2
authorities take responsibility for implementation of section 112(g)
upon the effective date 1 of the program. The purpose of today's
memorandum is to address several legal and policy issues that arise
during the initial "transition period."
The transition period consists of two possible segments, as
displayed in Figure I. The first is the time period between the
effective date of the Part 70 approval, which triggers the
applicability of section 112(g), and the date of promulgation of the
subpart B rule (the rule covering section 112(g)). The second is the
time -period between the date of promulgation of the subpart B rule and
the completion of State rulemaking to implement section 112(g).
Figure 1
PERIOD 1 PERIOD 2
*_____________________________ * _______________________________*
Eff. Date of 112(g) rule State
Part 70 published rule
Approval
112(g) Transition Periods
Mechanisms for Federal Enforceability During the Transition Periods
An important need for both transition periods is the State's
ability to make use of existing regulatory mechanisms in their State
air programs to establish federally enforceable section 112(g) limits
or offsets. There are several interim mechanisms which can be used to
establish case-by-case MACT or make offset determinations:
(1) Approval of State preconstruction permit programs to
establish section 112(g~ limits. If a State has the
(As noted in the last paragraph of the April 13, 1993
memoranda, the "effective date" of a source category-limited
interim program triggers section 112(g) requirements only for
those sources covered by the interim program. However, interim-
approvals must expire in two years or less. Accordingly, the
section 112(g) requirements for all remaining sources will be
triggered no later than two years after the effective date of the
interim part 70 program.)
3
authority to write HAP limits pursuant to its existing State
preconstruction permit program, then, solely for the purposes of
section 112(g), and for a limited time, the EPA can recognize
these limits as federally enforceable. As noted in the April 13,
1993, memorandum, implementation of section 112(g) is a title V
requirement that becomes effective upon EPA's approval of a
State's title V program. The EPA believes that the linkage of
these two programs permits EPA to approve State procedures
necessary to implement section 112(g) during the transition
period as part of EPA's approval of a State's title V program.
Consequently, the EPA believes that approval of a State's
preconstruction program for section 112(g) purposes can occur as
part of the EPA's rulemaking on a State's Part 70 permit program.
Boilerplate language included in Part 70 approval notices can
make clear that EPA's approval of a Part 70 program also serves
to allow a State to rely on an existing State preconstruction
permit program for section 112(g) purposes. Boilerplate language
to this effect has been made available to the Regions.
The EPA currently anticipates being able to approve these State
preconstruction programs for the transition period whether or not
they include all of the procedural requirements generally deemed
necessary for federal enforceability. The normal benchmark for
federal enforceability is the criteria established in 40 CRF
51.160 through 51.166 regarding requirements that a State or
local program must meet in order to be approved as part of a SIP
and recognized as federally enforceable. The proposed section
112(g) rule would establish a similar set of requirements for
section 112(g) reviews. The EPA believes that the limited
departure from this policy is appropriate because of the urgency
created by the timelines for implementation of section 112(g).
Accordingly, the EPA expects that any approval of existing
preconstruction permit programs for the purpose of implementing section
112(g) during the transition period would be limited by a sunset
provision, such that each State would be required after a specified
time period to adopt a program for implementation of section 112(g)
that is consistent with the final Subpart B rule. The EPA believes
that this sunset period should be no longer than necessary for the
State to adopt regulations following promulgation of the Subpart B
rule. As a general matter the EPA expects that States will adopt a
specific section 112(g) rule no later than 12 months after promulgation
of EPA's section 112(g) rule. Consequently, the EPA intends the
States' authority to use existing preconstruction permit programs
4
for implementation of section 112(g) to end 12 months after
promulgation of EPA's section 112(g) rule.
(2) Use of Section 112(l) Authority. Section 112(l) provides
authority for the EPA to allow a State to use its own
preconstruction permit program to establish control technology
requirements for HAPs or approve offsets during the transition
period. Where a State has the authority to write HAP limits in
its existing State preconstruction permits, section 112(l) could
be used as authority to make those limits federally enforceable
for HAPs. In the same way as described above for option 1, the
EPA expects that the length of time that section 112(l)
authority could be used for purposes of implementing section
112(g) during the transition period would be limited by a sunset
provision of 12 months. Section 112(l) thus provides an
alternative pathway, in addition to Part 70, for EPA to allow a
State to use its own preconstruction permit program to implement
section 112(g) for a limited time.
(3) Use of Part 70 permit conditions. Sources proposing
changes that would be subject to section 112(g) could be
issued a Part 70 permit which would include all requirements
applicable under the Act, including the section 112(g)
requirements. For example, most States are requiring some
of the Part 70 permit applications within 6 months of
program approval, in order to meet the requirement to issue
one-third of the Part 70 permits within 1 year after
approval. For such Part 70 applications, it may be feasible
in some cases to "piggy-back" the section 112(g)
preconstruction review onto the Part 70 process. (Note: the
EPA is also taking comment in the section 112(g) proposal on
whether section 112(g) requires the creation of a short-
lived, single-purpose "specialty" operating permit.]
Finally, it should be noted that, since section 112(g)
prohibits modifications from occurring unless case-by-case MACT
is met or offsets are provided, one means of "implementing"
section 112(g) during the transition period is to simply prohibit
section 112(g) modifications beginning on the effective date of
the title V program. EPA does not encourage this approach as a
desirable means for implementing section 112(g); nonetheless,
this approach is acceptable for purposes of obtaining approval of
the title V program. Such an approach may be necessary ~w here
the State does not have a federally enforceable mechanism to
establish case-by-case MACT or provide offsets at the time of
title V program approval, or where such a mechanism exists, but
is not available in every situation where a modification may
occur. EPA expects that the majority of states will provide some
mechanism for approving modifications or offsets during the
transition period.
5
Transition Period I--Before the Final Section 112(g) Rule is
Published
The EPA anticipates that the first transition period, the
time period between the effective date of a part 70 program and
the subpart B promulgation, will be relatively short, possibly
less than 6 months. In any given State, the number of
modifications for which applications will be received and issued
during this period will probably be few in number. There are,
however, a number of issues to consider when such situations do
arise:
-- what kind of case-by-case determination would be acceptable
to ensure that MACT "will be met"?
-- what HAP de minimis values would be acceptable during this
period?
-- what is a State's criteria for decision making if an
applicant proposes offsets in lieu of MACT?
-- is it acceptable for a State to not allow for offsets during
this period?
-- if applications are processed during this time period which
turn out to be inconsistent with the subpart B rule when it is later
promulgated, must these applications be revisited?
The Regions should allow States considerable flexibility during
this relatively short time period. However the States are still
required to do a control technology determination consistent with
case-by-case MACT unless offsets are approved. The proposed subpart B
rule should be considered guidance for States as they make decisions
regarding program implementation.
De Minimis. The EPA recommends that States use the ~ minimis
values in the proposed subpart B rule as guidance during the period
prior to promulgation of the final rule. States wishing to use lower
values may do so. The EPA does not believe that interim de minimis
values or de minimis values substantially greater than those in the
proposed rule would be appropriate.
Offsets. The EPA recognizes that without the relative -hazard
ranking system contained in the final subpart B rule, it may be
difficult for many States to ensure that any proposed offset will
produce an equal or greater decrease that would be deemed "more
hazardous." On the other hand, the EPA believes that in some cases
offsets can provide a greater environmental benefit than the
imposition of MACT. The proposed regulation can be used by States as
interim guidance on the relative hazards of HAPs which States may use
if they so choose. The Regions should not, however, dispute a
State's judgement in approving such offsets during Transition Period
1 unless there are compelling reasons to believe that the approved
offset is unacceptable from a hazard standpoint. Similarly, a State
is free to impose more
6
stringent offsetting conditions (such as greater offset ratios,
more restrictive creditability rules, or a requirement for a risk
assessment) during the transition period.
In most States, the Part 70 program submittals contain broad
statements of legal authority that would permit a State to grant a
sources s request for an offset to comply with section 112(g).
However, the EPA is aware of one State rule that would not allow such
offsets, and which would impose "state-of-the-art" control technology
requirements for constructed or modified emission units, even if
those emission units would be exempt from MACT under section 112 (g)
by virtue of having provided offsets. Such a prohibition on use of
offsets in place of control technology requirements is acceptable
only if the requirement for application of technology is based on an
independent State regulation, and not on authority of section 112
(g).
Need for Revisiting Approvals Based Upon Final Rule.
Given that facilities subject to section 112(g) will eventually be
required to comply with MACT standards under sections 112(d 112(h),
the EPA recommends that applicability determination other approvals
(i.e. case-by-case MACT determinations) during this interim period
not be revisited. Accordingly, if the issues a final, federally
enforceable preconstruction permit before the final section 112(g)
rule is promulgated, the EPA recommends relying on that permit rather
than requiring the permit to be reopened as a result of the final
rule, so long the permit reflects compliance with the requirements of
sect 112(g).
Transition Period 2--After the Final Section 112(g)
Rule is Published
It is possible in some cases that the "interim"
procedures approved by virtue of the Part 70
mechanism discussed above satisfy the procedural
requirements of the final subpart B and that the
State could thereby continue to rely on the Ste
preconstruction permit process to meet section 112(g)
requirements after the subpart B rule is promulgated.
In other cases, States may need to undertake
rulemaking to ensure consistency with the final rule.
Where such rulemaking is c necessary, the EPA
believes that the specific steps in the adoption
process, consistent with the limited duration of' t~
interim procedures approved for the transition
period, shou) agreed upon in an implementation
agreement or memorandum of understanding between the
EPA and the State.
7
The EPA believes that there are a number of steps that can be taken to facilitate this
process even before the final rule is promulgated. For example, States may want to
develop draft model rule language that incorporates broad references to the
requirements of subpart B into their existing rules. A State s development of such draft
language, including workshops with interested parties on how language could be
structured, may speed the process of adopting any needed state rule later.
While such draft language should probably avoid details [for example,
it may not be desirable to include the exact de minimis table from
the proposed regulation], it could, for example, include draft
references to subpart b rule passages that would be suitable for a
final state rule [for example, a reference to the de minimis table in
section 63.44 of subpart B].
ADDRESSEES
Director, Air, Pesticides and Toxics management Division, Regions I, IV
Director, Air and Waste management Division, Region II
Director, Air, Radiation and Toxics Division, Region III
Director, Air and Radiation Division, Regions V
Director, Air, Pesticides and Toxics Division, Regions VI
Director, Air and Toxics Division, Regions VII, VIII, IX, X
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