Final Report: Assessing Compliance Burden from Implementation of CAAA Title V Permitting Rules and Regulations

EPA Grant Number: R824753
Title: Assessing Compliance Burden from Implementation of CAAA Title V Permitting Rules and Regulations
Investigators: Bozeman, Barry , DeHart-Davis, Leisha , Kingsley, Gordon
Institution: Georgia Institute of Technology
EPA Project Officer: Hunt, Sherri
Project Period: October 1, 1995 through September 30, 1997
Project Amount: $240,000
RFA: Incentives and Impediments to Pollution Prevention (1995) RFA Text |  Recipients Lists
Research Category: Sustainability , Pollution Prevention/Sustainable Development


Title V of the 1990 Clean Air Act Amendments sought to achieve many policy goals: to facilitate compliance with air quality regulations, strengthen their enforcement, and aid in stationary source emissions budgeting, among others. If Title V has little or no success in achieving these goals, then its associated compliance costs become compliance burden and the regulation itself is red tape. This project generates the first piece of information, compliance costs to industry, in making this assessment. The second piece of information - the goals achieved by Title V - is measured only indirectly, through the perception of benefits by industry representatives and state Title V officials. A more concrete evaluation of Title V achievements must be reserved for later, when state programs have been fully implemented and inspection and enforcement data are available.

The information required for Title V permits includes general facility information, a description of processes and products, emissions information, air pollution control requirements, a compliance plan and compliance certification. Consequently, we expected these considerable administrative requirements to motivate some firms to restrict their potential emissions below Title V threshold levels in exchange for the simpler Synthetic Minor permitting process. We also anticipated that some firms would choose to restrict emissions through innovative environmental technologies.

To test these hypotheses, mail surveys were mailed to representatives of Title V regulated firms in Georgia, Oregon, South Carolina, and Wisconsin. The research also involved intensive onsite case studies with these states' air agency officials and a national mail survey of state and local Title V officials. The industry surveys encompassed questions on cost estimates for Title V compliance, the benefits of Title V, barriers to application, and -- for synthetic minor applicants -- emission reduction strategies. The OR, WI, and SC agency case studies and the national state and local agencies survey focused on organizational structure, technology information dissemination, and pre- and post-Title V permitting processes.

Summary/Accomplishments (Outputs/Outcomes):

The political discourse over Title V that occurred late in the 1990 Clean Air Act amendment process provides an interesting contrast to the survey responses. At that time, industrial firms feared that Title V permits would limit production flexibility by requiring sources to revise their permits as they changed processes and materials. Cost was another major corporate issue, with warnings that Title V compliance would be costly and complicated even for smaller facilities. States and local regulators also feared a transformed permit process that could include EPA review and veto. In general, both regulators and company officials expressed major doubts in background interviews for this project that Title V would improve on existing permit processes.

As is often the case in life, prediction and reality can be two different things. Company representatives do see benefits in Title V, most notably operational flexibility (their biggest pre-legislation fear) and the application shield that protects companies from enforcement actions while their permit is being processed. Furthermore, the lion's share of state agency officials (80 percent-plus) named compliance and enforcement as benefits of Title V, a significant result given that these are the law's overarching goals. And state officials seem far less anxious over EPA participation, as suggested by the positive characterizations of their relationships with the EPA Regions and the majority who believe EPA review and input to be beneficial to the process.

So why are post-implementation views of Title V so different than from those espoused - on both sides of the regulatory fence -- when the legislation was being crafted? Significant changes in Title V implementation, the timing of the discussions, and whose doing the talking all play a role. Concerns over operational flexibility were later resolved by EPA White Papers clarifying that states could exempt minor process modifications from further permit review. Once operational flexibility was ensured by the Title V process, it transformed from a major sticking point to a perceived benefit.

As for whose doing the talking, it could be that survey respondents are a biased lot given their position as environmental guardians of the corporate fortress. These are largely middle environmental managers whose missions and corporate standings rely on the existence of regulations and who, therefore, may be more likely to say positive things about the rules with which they ensure compliance. Their views are easily distinguishable from the voices heard in early political debates over Title V formulation, the government affairs specialists and corporate lobbyists charged with fighting additional requirements for their industries. Thus, the differences in commentary may also be attributable to the nature and timing of the discussions - political rhetoric during policy formulation versus thoughtful reflection after policy implementation.

Title V compliance costs is another area in which the survey results shed some light on the pre-legislative discourse. The estimated per capita cost, based on the survey responses, is $113 per employee. This figure translates to $33,900 for a company with 300 employees, an estimation that falls on the low end of National Association of Manufacturers (NAM) assertions of $30,000 to $85,000 for a small to medium size firm. The survey results also contrast with one projection, supplied by an experienced engineering consultant, that a 300-employee company with 75 to 100 emission points would pay on average $100,000 for consulting assistance. In contrast, the average consulting fee for companies with over 300 employees is $51,9751 . While these comparisons are problematic - our estimates don't consider emission points, the basis for the NAM estimate is unclear, and the consultants calculations neglect internal costs for dealing with consultants - they suggest that actual Title V costs were far lower than projected.

The survey information also yielded some interesting insights into Title V's potential achievements, beyond mental calculations of benefit and cost. We say potential because many Title V programs are still in the implementation stage, with permits just being issued. Determining Title V's ultimate achievements, in terms of the legislation's initial goals of improving compliance and enforcement, will require additional time for states to figure out how to use more and arguably better quality permit information. Nonetheless, the survey results told us three things about Title V. First, the law has stimulated communications between state agencies and regulated companies. Second, Title V has a questionable influence on environmental technology adoption. And third, most states anticipate little change in inspection numbers as a result of the new information.

The survey results suggest that, if nothing else, Title V has stimulated talk between regulators and regulatees. On average, responding companies contacted their state agency on average 11 times; the states, in turn, initiated contact on average 7 times. Furthermore, companies indicated that interaction with agency officials made the compliance process easier. While EPA did not name improved industry-state communications as a Title V goal, the task was implicit: facilitating corporate compliance and state enforcement requires a better information flow between the regulated and the regulator. Thus, we have evidence that there is a new information flow; it's too early to determine whether it's a higher-quality flow.

The role of expanded permit information in enforcement is also unclear from the survey results. The average agency anticipated no change in the number of inspections conducted after Title V. This result is an issue only if better enforcement requires more inspections, a relationship which is far from certain. Title V was based on the assumption that states lacked compliance data on which to base enforcement. It is not clear whether crafters of the legislation hypothesized that (1) more permit information would trigger more audits; (2) more permit information would trigger the same number of audits, but of a higher quality; or (3) more permit information would make the inspection process more efficient by generating better information for a reduced number of audits. If policymakers sought to spur inspections, the data suggests that Title V programs may fall short. However, if policymakers envisioned better-quality inspections in the same or fewer visits, then state plans for Title V programs appear consistent with projections.

Title V's influence on technology adoption is even harder to assess. Agency officials were pessimistic in their beliefs, with the vast majority agreeing that Title V had no significant influence on technology adoption. However, sixty-eight percent of the 129 companies applying for synthetic minor permits had employed, at least in part, a technological fix to restrict emissions. Finding the truth in these results is difficult. The corporate responses may be more reliable than the opinions of state permit officials, who may not be well-placed to know the true impacts on innovation. However, the industry survey results could be biased towards assertive companies more likely to innovate in their quest for synthetic minor status. Alternatively, the synthetic minor permitting process may have simply formalized technological approaches to restricting emissions that were already in place prior to Title V implementation.


This study sought three goals in examining implementation of Title V of the 1990 Clean Air Act Amendments: to estimate average Title V compliance costs, to tap perceived benefits of Title V implementation by regulators and regulatees, and to test for technology adoption effects. Information for these research tasks was gathered via mail surveys to industry representatives and state agency officials. The survey results suggest that Title V compliance costs - on average $113 per employee -- were lower than industry or government estimates. Both regulated firms and regulating agencies perceived Title V to be beneficial, albeit in different ways: company officials cited operational flexibility and the application shield as key benefits whereas state agencies named stronger compliance with and enforcement of air quality regulations. Title V's influence on technology adoption is less clear: the vast majority of agency officials asserted that Title V had no significant influence on technology adoption, whereas 68 percent of 129 companies applying for synthetic minor permits had employed some technological fix to restrict emissions. These conflicting results may be attributable to a survey sample biased towards innovators, underestimates by state agency officials, or permitting that simply formalized technologies already in place.

Journal Articles on this Report : 1 Displayed | Download in RIS Format

Other project views: All 4 publications 1 publications in selected types All 1 journal articles
Type Citation Project Document Sources
Journal Article Bozeman B, hart-Davis L. Red Tape and Clean Air: Title V Air Pollution Permitting Implementation as a Test Bed for Theory Development. Journal of Public Administration Research and Theory 1999;9(1):141-177 R824753 (Final)
not available

Supplemental Keywords:

Scientific Discipline, Geographic Area, Sustainable Industry/Business, cleaner production/pollution prevention, State, Social Science, Georgia (GA), case studies, permitting rules, cost benefit, Syntehtic Minor Approach, statistical modeling, Clean Air Act, Georgia Environmental Technology Consortium, compliance burden, regulations

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Progress and Final Reports:

Original Abstract
  • 1996