12/23/86

Availability of Low-Solvent Technology ( "LST" ) Schedules In Clean Air Act Section 120 Enforcement Actions

                            December 23, 1986


MEMORANDUM

SUBJECT:      Availability if Low-Solvent Technology ( "LST" )
              Schedules in Clean Air Act Section 120 Enforcement Actions

FROM:         Michael S. Alushin
              Associate Enforcement Counsel
              Air Enforcement Division

              John B. Rasnic, Acting Director
              Stationary Source Compliance Division

TO:           Addressees


    On August 7, 1986, EPA issued a "Policy on the Availability of Low
Solvent Technology Schedules in Clean Air Act Enforcement Actions" against
Volatile Organic Compound ( "VOC" ) emission sources ( the "LST Policy" )
(attached).  The purpose of the LST Policy is to ensure compliance with
VOC emission limitations as expeditiously as practicable.  It does so by
mandating that such schedules meet five conditions in order to receive EPA
approval.

    The purpose of this memorandum is to answer the question, posed by
one Office of Regional Counsel, whether and, if so, how the LST Policy
applies to Section 120 administrative actions.  The brief answer is that
major elements of the LST Policy do apply to such actions, and that
Section 120 can serve as a useful tool in implementing that policy.

    EPA drafted the LST Policy with Section 113 civil actions -- in which
EPA has injunctive authority -- in mind; the Policy speaks in terms of
conditions and requirements which LST compliance schedules must meet in
order to be acceptable to EPA.  For example, the LST Policy defines
"expeditiousness" so as to require that an LST schedule provide for
compliance no later than three months from the date on which the
government files a civil complaint.

    Section 120 on the other hand does not provide injunctive power as
such, by its terms, it authorizes EPA only to recoup from a source the
economic benefit of its noncompliance.

                                   -2-

    However, in conformity with the structure of the Clean Air Act, EPA
does require under Section 120 that a source demonstrate compliance with
applicable law as expeditiously as practicable.  Indeed, to read Section
120 otherwise would defeat its purpose, for a central concern of Congress
propelling enactment of Section 120 was  that existing civil remedies were
not effecting compliance expeditiously enough.  A key feature of Section
120 -- its "penalty clock" which won't stop  "ticking" until a source
achieves compliance -- is intended to spur speedy compliance by
eliminating incentives to delay.  In addition, Congress wrote into the
text of Section 120 itself tight deadlines for the administrative
resolution of challenges to Agency determinations of liability and penalty
amount, so as to speed the process leading to compliance.

    Moreover, the same compliance considerations which led to the LST
policy apply whether the enforcement vehicle is civil or administrative.
These considerations include unacceptable levels of VOC noncompliance and
real concern over the prospects for meeting deadlines for attainment of
the National Ambient Air Quality Standard for Ozone.

    Therefore, it is the Agency's intention that the LST Policy guide, to
the extent possible, enforcement actions brought under Section 120 as well
as under Section 113.  This has the following consequences, among others.

    First, Regions may import into Section 120 the LST Policy's definition
of "expeditious."  */

  */ The LST Policy sets out several other enumerated elements which a
    civil consent decree must contain in order to win EPA approval.  These
    elements include provisions for civil penalties, stipulated penalties,
    and specified increments of progress incident to compliance schedules.
    While it certainly is acceptable to include some of these elements in
    a Section 120 administrative consent agreement, it is not appropriate
    as a matter of Section 120 policy to require it.

This means that EPA may require that a source which proposes to comply by
LST base its Section 120 penalty calculation on a compliance schedule no
more that three months long.  ( The schedule begins on the date the source
receives the Section 120 Notice of Noncompliance )  For sources which
intend to comply by LST, but which cannot do so within the three-month
period, the calculation should be based instead on the costs to install
"add-on" pollution control equipment, over the normal period required for
that installation.

                                   -3-

    Second, Regions should be mindful of limitations which this approach
may present, given the nature of the Section 120 remedy.  For example,
Section 120 requires two calculations of the noncompliance penalty, one
before and one after compliance is achieved,  The second "revises" the
first, based on the costs of compliance actually incurred, which in turn
depend on the means of compliance actually chosen.  Therefore, in a
Section 120 action where compliance by LST is not achievable within three
months, but is achievable in the same time it would take to install add-on
controls, or sooner, a source may choose to continue its LST compliance
program even in the face of the LST policy, in the belief that choice
would result in a smaller Section 120 penalty.  To enforce the
"expeditious" compliance required by the LST Policy in such a case, EPA
might need to bring a civil action under Section 113 for specific
injunctive relief and expanded penalties.

    Third, it is important to remember that Section 120 actions once
instituted must be properly concluded.  For example, a Section 120 action
cannot be brought merely as leverage in enforcement efforts against a
source, then dismissed once it has helped induced compliance or once a
Section 113 action becomes necessary.  A Section 120 action must be
concluded pursuant to Section 120 and its implementing regulations and
interpretative policies.  See especially "Permissible Grounds for
Settlement of Noncompliance Penalties Under Section 120 of the Clean Air
Act ( March 19, 1985 ) ( governing reductions in penalties), and "Rules
Governing Conclusion of Clean Air Act Section 120 Actions" ( May 15, 1985 )
( governing settlements of Sections 113 and 120 actions against same
violation ).  ( These documents are set out in the Clean Air Act
Compliance/Enforcement Guidance Manual at VII.L and VII.M, respectively. )

    The prospect of being subject to simultaneous enforcement actions
under Sections 120 and 113 should provide a source strong incentive to
comply promptly in response to the Section 120 action alone.  However, it
appears likely that a Section 120 action would not by itself induce
compliance, it may be preferable to bring a Section 113 civil action
instead, so as to minimize the burden on EPA enforcement resources.

    We are hopeful that this guidance will clarify the appropriate role
for Section 120 in VOC enforcement actions against sources proposing
compliance by conversion to low-solvent technology coatings.  Should you
have any questions or comments concerning this guidance, please contact
Laurence Groner of the Air Enforcement Division at FTS 328-2820.

Attachment


                                   -4-


Addressees:

    Regional Counsels
    Region I-X

    Air Division Directors
    Regions I-X

    Regional Counsel Air Contacts
    Regions I-X

    David Buente, Chief
    Environmental Enforcement Section
    DOJ