09/26/86

Penalties under "Timely and Appropriate" Guidance

                               SEP 26 1986

MEMORANDUM

SUBJECT: Penalties under "Timely and Appropriate" Guidance

FROM:    Director
         Stationary Source Compliance Division
         Office of Air Quality Planning and Standards

TO:      Air Management Division Directors
         Regions I, III, V and IX

         Air and Waste Management Division Director
         Region II

         Air, Pesticides, and Toxics Management Division
          Directors
         Region IV and VI

         Air and Toxics Division Directors
         Regions VII, VIII and X

    During the two years since the "timely and appropriate" ( T&A ) guidance
was first implemented, two questions on interpretation of the guidance
with respect to penalties have arisen through the Regional evaluation
program and routine contact between SSCD and the Regional Offices.  Below
are these questions and SSCD's responses.

Question 1:   Do penalties have to be addressed for T&A sources that have
              come into compliance within 120 days?

Answer:       Yes.  Section IV and T&A guidance states that penalties are
              required as an element of the resolution of the following
              classes of violations:  Class A SIP violators, sources
              which violate Part D, PSD, and NSPS requirements, NESHAPs
              violators, sources which violate State or Federal
              administrative or judicial schedules, and repeat violators.
              As stated in the guidance, this requirement would not be

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              applicable to de minimus violations or violations arising
              from force majeure circumstances.

              If a State fails to obtain penalties as required, as EPA
              action should be brought.  However, an EPA action for
              penalties in cases where a source has come into compliance
              within 120 days may not be possible in cases requiring an
              NOV since the requisite NOV may not have been issued by that
              point.  If a particular State repeatedly fails to exact
              penalties from sources that come into compliance within 120
              days, EPA should remind the State of the T&A penalty
              requirement and consider issuing an NOV earlier than 120
              days to establish a basis for a later penalties only action.
              Resource constraints would likely prevent EPA referrals in
              every such case but one or more EPA "example" actions should
              be initiated in States where penalties are continually
              ignored.  This would reaffirm the validity of the policy
              and continue to exert some pressure on the State to begin
              seeking penalties in its own actions.

Question 2:   Do penalties have to be addressed for T&A sources that
              become EPA-lead ( after 120 days ) but come into compliance
              via stack test or inspection ( i.e., not through an
              enforcement action )?

Answer:       Yes.  Again, Section IV of the T&A guidance specifies when
              penalties are required, as pointed out in the previous
              answer.  It is expected that EPA would issue an NOV on
              or shortly after day 120 when it takes over the lead from
              the State.  Due to the limited availability of
              administrative enforcement mechanisms, EPA usually initiates
              a civil referral after assuming the lead with the intent of
              forcing the source to commit to an expeditious compliance
              schedule in the form of a consent decree with civil
              penalties for past violations.  Where a source comes into
              compliance via a stack test or inspection during the
              development of an enforcement action, EPA should consider
              initiation of a penalties only referral.  Such referrals are
              in conformance with Agency goals, and serve to both deter
              other sources from delaying compliance and help maintain
              equity.  We recognize that resource limitations and
              competing priorities may preclude bringing an action in
              every case, but it should at least be given serious
              consideration.

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    Please contact Kevin Bell of my staff ( 382-2869 ) if you have further
questions in this matter.

                             Edward E. Reich