Title V Planning: Audit Result Disclosures Of New Source Review Or Prevention Of Significant Deterioration Violations Merit Reduced Penalties


On September 30, 1999, EPA's Director of the Office of Regulatory Enforcement issued a memorandum entitled: "Reduced Penalties for Disclosures of Certain Clean Air Act Violations" (Air Audit Memorandum"). A step-child of its Audit Policy, the memorandum details a program whereby companies can review their prior decisions regarding the application of New Source Review (NSR) and Prevention of Significant Deterioration (PSD) programs and if they determine that, despite being made in good faith, they were in violation of the air rules, they may avoid penalties, except for the economic benefit of noncompliance. To be eligible, the company must agree to correct the situation prior to Title V permit issuance and otherwise meet the conditions of conditions 3 through 9 of the EPA Audit Policy. (The Audit Policy was issued at 60 Fed. Reg. 66706, 12/2/95.)

Previously, EPA established a "no look back" policy in its "White Paper for Streamlined Development of Part 70 Permit Applications" that allowed companies to avoid reconsideration of previous applicability determinations as part of their Title V permit preparations. The new policy would encourage PSD and NSR reviews and require companies to correct violations, generally by installing state-of-the-art pollution controls.

In a related matter, EPA has announced that it signed a multi-facility agreement with a large manufacturing company requiring the company to conduct Clean Air Act NSR audits at 40 of its facilities over the next three years and address any violations found under the Air Audit Memorandum. EPA has refused to release the name of the manufacturer citing a Freedom of Information Act exemption. EPA says the name will be released once the audits are complete and any enforcement action resolved.