ENFORCEMENT RESPONSE POLICY
TOR SECTION 313 OF TEE
EXER6ENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT (1986)
And
SECTION 6607 OF TEE
TEE POLLUTION PREVENTION ACT (1990)
Issued by the
Office of Compliance Monitoring
of the
Office of Prevention/ Pesticides and Toxic Substances
United States Environmental Protection Agency
August 10, 1992
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TABLE OF CONTENTS
SUBJECT PAGE
INTRODUCTION 1
LEVELS 07 ACTION 2
No Action 2
Notices of Noncompliance 3
Civil Administrative Complaints 4
Civil Judicial Referrals 7
Criminal Sanctions 7
ASSESSING A CIVIL ADMINISTRATIVE PENALTY 7
Summary of the Penalty Policy Matrix 7
Extent Levels 9
Penalty Matrix 11
Circumstance Levels 11
Multiple Violations 13
Per Day Assessments 13
Per Day Penalty Formula 13
Caps on Penalties 14
ADJUSTMENT FACTORS 14
Voluntary Disclosure 14
History of Prior Violations 16
Del isted Chemicals 17
Attitude 18
Other Factors As Justice May Require 18
Settlement with Conditions 19
Ability to Pay 19
SETTLEMENT 20
AMENDMENT for Reporting Year 1991 21
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INTRODUCTION
On December 2, 1988, the U.S. Environmental Protection
Agency (EPA) issued an Enforcement Response Policy for addressing
violation* of Section 313 of the Emergency Planning and Community
Right-to-Know Act. Since that time, EPA has identified
opportunities for refining and adding clarity to that policy.
This revised enforcement response policy incorporates three years
of enforcement experience with Section 313 of the Emergency
Planning and Community Right-to-Know Act.
;ies for all •<3ptjpistrative actions concerning
EPCRA flection 313 issued after the date of this policy.
regardless of the date of the violation.
The Emergency Planning and Community Right-to-Know Act,
(EPCRA), also known as Title III of the Superfund Amendments and
Reauthorization Act of 1986, contains provisions for reporting
both accidental and nonaccidental releases of certain toxic
chemicals. Section 313 (§313) of EPCRA requires certain
manufacturers, processors, and users of over 300 designated toxic
chemicals to report annually on emissions of those chemicals to
the air, water and land. The Pollution Prevention Act (PPA) of
1990 requires additional data and information to be included
annually on Form R reports beginning in the 1991 reporting year,
for reports which are due on July 1, 1992. These reports must be
sent to the U.S. Environmental Protection Agency (EPA) and to
designated state agencies. The first reporting year was 1987,
and reports were due by July 1, 1988, and annually by July 1
thereafter. The U.S. EPA is responsible for carrying out and
enforcing the requirements of §313 of EPCRA and the PPA and any
rules promulgated pursuant to EPCRA and the PPA.
Section 325(c) of the law authorizes the Administrator of
the EPA to assess civil administrative penalties for violations
of §313. Any person (owner or operator of a facility, other than
a government entity) who violates any requirement of §313 is
liable for a civil administrative penalty in an amount not to
exceed $25,000 for each violation. Each day a violation
continues may constitute a separate violation. The Administrator
may assess the civil penalty by administrative order or may bring
an action to assess and collect the penalty in the U.S. District
Court for th« district in which the person from whom the penalty
is sought resides or in which such person's principal place of
business is located.
The purpose of this Enforcement Response Policy is to ensure
that enforcement actions for violations of EPCRA §313 and the PPA
are arrived at in a fair, uniform and consistent manner; that the
enforcement response is appropriate for the violation committed;
and that persons will be deterred from committing EPCRA §313
violations and the PPA.
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For purposes of this document, "EPCRA," "§313" and EPCRA
"EPCRA S313* should be understood to include the requirements of
the Pollution Prevention Act.
(
LEVELS 07 ACTION
Enforcement alternatives include: (a) no action; (b)
notices of noncompliance; (c) civil administrative penalties (d)
civil judicial referrals, and (e) criminal action under 18 U.S.
Code 1001.
EPA reserves the right to issue a Civil Administrative
Penalty for any violation not specifically identified under the
Notice of Noncompliance or Administrative Civil Penalty section.
MO ACTION
Revisions to Form R reports
Generally, an enforcement action will not be taken regarding
voluntary changes to correctly reported data in Form R reports.
Changes to Form R reports are: revisions to original reports
which reflect only improved or new information and/or improved or
new procedures which were not available when the facility was
completing its original submission. Facilities submitting
revisions should maintain records to document that the
information used to calculate the revised estimate is new and was
not available at the time the first estimate was made. A
facility which submits a revision to a Form R report which does
not meet this description of a change or otherwise calls into
question the basis for the initial data reported on the original
Form R report will be subject to an enforcement action.
Discussion
Each Fora R report must provide estimated releases: it is
not acceptable to submit Form R reports with no estimate(s) of
releases. Such reports will be considered incomplete reports and
subject to an enforcement action as described below. An estimate
of "zero" is acceptable if "zero" is a reasonable estimate of a
facility's releases based on readily available information, i.e.,
monitoring data or emission estimates.
Every Form R report submitted after July 1 for a chemical
not previously submitted is not a revision, but a failure to
report in a timelv manner.
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Facilities considering whether to submit a revision should
refer to the September 26, 1991 Federal Reaiste^ policy notice
which explains for what circumstances a facility should submit a
revision and the correct format for submitting a revision.
Additionally, the notice explains the purpose of EPA's policy of
delaying data entry of all revisions received after November 30th
of the year the original report was due until after the Toxic
Release Inventory (TRI) database can be made available to the
public. Revisions submitted after November 30th will be
processed and made available to the public in updated versions of
the TRI database. The EPA cannot accept and process revisions to
the TRI database on a continuing basis without significantly
delaying the public availability of the data. Following on the
September 26, 1991 Federal Register policy notice, this ERP
adopts the November 30th date to determine the gravity of
voluntarily disclosed data quality violations.
NOTICE8 07 NOHCOMPLIANCB (NOM)
of Circy^s^ances Generally Warranting an NON
Form R reports which are incorrectly assembled; for
example, failure to include all pages for each Form R
or reporting more than one chemical per Form R.
Form R reports which contain missing or invalid facility or
chemical identification information; for example, the
CAS number reported does not match the chemical name
reported.
Submission of §313 and Pollution Prevention Act data on an
invalid form.
Incomplete Reporting, i.e., reports which contain blanks
where an answer is required.
Magnetic media submissions which cannot be processed.
The submission of a Form R report with trade secrets without
a sanitized version, or the submission of the sanitized
version of the Form R report without the trade secret
information.
Form R reports which are sent to an incorrect address.
NOTE: An incorrect address is any address other than
that of the U.S. EPA Administrator's office, or other
than the address listed in the §313 regulation or on
the Form R. Form R reports not received by EPA due to
an incorrect address and/or packaging are not the
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responsibility of EPA and are subject to a civil
administrative penalty for "failure to report in a timely
manner" violation.
NOTE: The Agency reserves the right to assess a Civil
Administrative Complaint for certain data quality
errors; see page five for a definition of these types
of errors. Generally, these are errors which cannot be
detected during the data entry process.
Discussion
A Notice of Noncompliance (NON) is the appropriate response
for certain errors on Form R reports detected by the Agency.
Generally, these are errors which prevent the information on the
Form R from being entered into EPA's database. The NON will state
that corrections must be made within a specified time (30 days
from receipt of the NON). Failure to correct any error for which
a NON is issued may be the basis for issuance of a Civil
Administrative Complaint.
The decision to issue NONs for the submission of a Form R
report with a trade secret claim without a sanitized version, or
of the sanitized version without the trade secret information, is
being treated the same as a Form R report with errors. This is a
violation of EPCRA §313 as well as the trade secret requirements
of EPCRA.
CIVIL ADMINISTRATIVE COMPLAINTS
A Civil Administrative Complaint will be the appropriate
response for: failure to report in a timely manner; data quality
errors; failure to respond to a NON; repeated violations; failure
to supply notification and incomplete or inaccurate supplier
notification; and failure to maintain records and failure to
maintain records according to the standard in the regulation.
Definitions:
Failure to Reporfc in a Timely Manner This violation includes the
failure to report in a timely manner to either EPA or to the
state for each chemical on the list. There are two distinct
categories for this violation. A circumstance level on* penalty
will be assessed against a category I violation. A "per day"
formula is used to determine category II penalties; see this per
day formula on page 13.
o Category It Form R reports that are submitted one year or
more after the July 1 due date.
o Category II; Form R reports that are submitted after the
July 1 due date but before July 1 of the following year.
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EPCRA §313 Subpart (a) requires Form R reports to be
submitted annually on or before July 1 and to contain data
estimating releases during the preceding calendar year.
Facilities which submit Form R reports after the July 1 deadline
have failed to comply with this annual reporting requirement and
have defeated the purpose of EPCRA §313, which is to make this
toxic release data available to states and the public annually
and in a timely manner.
Data Quality Errors: Data Quality Errors are errors which cause
erroneous data to be submitted to EPA and states. Generally,
these are errors which are not readily detected during EPA's data
entry process.1 Below are the range of actions which constitute
data quality errors; generally, these are a result of a failure
to comply with the explicit requirements of EPCRA §313:
o Failure to calculate or provide reasonable estimates of
releases or off-site transfers.
o Failure to identify all appropriate categories of chemical
use, resulting in error(s) in estimates of release or off-
site transfers.
o Failure .to identify for each wastestream the waste
treatment or disposal methods employed, and an estimate of
the treatment efficiency typically achieved by such methods,
for that wastestream.
o Failure to use all readily available information necessary
to calculate as accurately as possible, releases or off-site
transfers.
o Failure to provide the annual quantity of the toxic chemical
which entered each environmental medium.
o Failure to provide the annual quantity of the toxic chemical
transferred off-site.
o Failure to provide information required by §6607 of the
Pollution Prevention Act of 1990 and by any regulations
promulgated under §6607 of the Pollution Prevention Act of
1990.
1EPA's program office may issue Notices of -Technical Error
(NOTEs) for certain data quality errors which are detected during
the data entry process.
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o Under the requirements of §6607 of the Pollution Prevention
Act of 1990, claiming past or current year source
reduction or recycling activities which are not in fact
implemented by the facility. This does not apply to
activities which the facility may estimate for future
years.
o A facility's Fora R reporting demonstrates a pattern of
similar errors or omissions as manifested by the issuance by
EPA of NONs for two or more reporting years for the same or
similar errors or omissions.
.MOTE: If an error is made in determining a facility's toxic
chemical threshold which results in the facility erroneously
concluding that a Form R report for that chemical is not
required, this is not a data quality error, but a "failure to
report in a timely manner" violation.
Failure to respond to an NON When a facility receives a Notice
of Noncompliance (NON) and fails to comply with the Notice of
Noncompliance, i.e, fails to correct the information EPA requests
to be corrected in the NON by the time period specified in the
NON, the violation is "failure to respond to an NON." Included
here is the failure to also provide the state with corrected
information requested in the NON within 30 days of receiving the
NON.
Repeated violation This category of violation only applies to
violations which would generally warrant an NON for the first
time. A repeated violation is any subsequent violation which is
identical or very similar to a prior violation for which an NON
was issued. Separate penalty calculation procedures (discussed
on page 16 under "history of prior violations") are to be
followed for violations which warrant a civil administrative
complaint for the first violation and are repeated.
Failure to Supply Notification Under 40 CFR §372.45, certain
facilities which sell or otherwise distribute mixtures or trade
name products containing §313 chemicals are required to supply
notification to (i) facilities described in §372.22, or (ii) to
persons who in turn may sell or otherwise distribute such
mixtures or products to a facility described in 5372.22(b) in
accordance with paragraph §372.45(b). Failure to comply with 40
CFR §372.45, in whole or in part, constitutes a violation. A
violation will be "failure to supply notification" or "incomplete
or inaccurate supplier notification."
Failure to Maintain Records Under 40 CFR §372.10, each person
subject to the reporting requirements of 40 CFR §372.30 must
retain records documenting and supporting the information
submitted on each Form R report. Additionally, under 40 CFR
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§372.10, Mich person subject to the supplier notification
requirements of 40 CFR §372.45 must retain certain records
documenting and supporting the determination of each required
notice under that saae section. These records must be kept for
three years from the date of the submission of a report under 40
CFR §372.30 or the date of notification under 40 CFR §372.45.
The records must be maintained at the facility to which the
report applies or at the facility supplying notification.
Failure to comply with 40 CFR Part 372.10, in whole or in part,
constitutes a violation, violations will be a "failure to
maintain records as prescribed at 40 CFR Part 372.10 (a) or (b)",
or a "failure to maintain complete records as prescribed at 40
CFR Part 372.10 (a) or (b)" or "failure to maintain complete
records at the facility as prescribed at 40 CFR Part 372.10(c)."
CIVIL JUDICIAL REFERRALS
In exceptional circumstances, EPA, under EPCRA §325(c), may
refer civil cases to the United States Department of Justice for
assessment and/or collection of the penalty in the appropriate
U.S. District Court. U.S. EPA also may include EPCRA counts in
civil complaints charging Respondents with violations of other
environmental statutes.
CRIMINAL SANCTIONS
EPCRA does not provide for criminal sanctions for violations
of §313. However, 18 U.S.C. §1001 makes it a criminal offense to
falsify information submitted to the U.S. Government. This would
specifically apply to, but not be limited to, EPCRA §313 records
maintained by a facility that were intentionally generated with
incorrect or misleading information. In addition, the knowing
failure to file an EPCRA §313 report may be prosecuted as a
concealment prohibited by 18 U.S.C. §1001.
ASSESSING A CIVIL ADMINISTRATIVE PENALTY
SUMMARY OF THE PENALTY POLICY MATRIX
This policy implements a system for determining penalties in
civil administrative actions brought pursuant to §313 of the
Emergency Planning and Community Right-to-Know Act (EPCRA).
Penalties are determined in two stages: (1) determination of a
"gravity-based penalty," and (2) adjustments to the gravity-based
penalty.
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To determine the gravity-based penalty, the following
factors affecting a violation's gravity are considered:
o the "circumstances" of the violation
o the "extent" of the violation
The circumstance levels of the matrix take into account the
seriousness of the violation as it relates to the accuracy and
availability of the information to the community, to states, and
to the federal government. Circumstance levels are described on
pages 11-13.
The extent level of a violation is based on the quantity of
each EPCRA §313 chemical manufactured, processed, or otherwise
used by the facility; the size of the facility based on a
combination of the number of employees at the violating facility;
and the gross sales of the violating facility's total corporate
entity. The Agency will use the number of employees and the
gross sales at the time the civil administrative complaint is
issued in determining the extent level of a violation.
To determine the gravity-based penalty, determine both the
circumstance level and the extent level. These factors are
incorporated into a matrix which establishes the appropriate
gravity-based penalty amount. The penalty is determined by
calculating the penalty for each violation on a per-chemical,
per-facility, per-year basis (see special circumstances for per
day penalties on page 13).
Once the gravity-based penalty has been determined, upward
or downward adjustments to the proposed penalty amount may be
made in consideration of the following factors:
o Voluntary Disclosure
o History of prior violation(s)
o Delisted chemicals
o Attitude
o Other Factors as Justice May Require
o Supplemental Environmental Projects
o Ability to Pay
The first three of these adjustments may be made prior
to issuing the civil complaint.
EXTEHT LKVZLS
In the table below, the total corporate entity refers to all
sites taken together owned or controlled by the domestic or
foreign parent company. EPA Regions have discretion to use those
figures for number of employees and total corporate sales which
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are readily available. If no information is available, Regions
may assume the higher level and adjust if the facility can
produce documentation demonstrating they belong in a lover extent
level.
Facilities which manufacture, process or otherwise use ten
times or sore the threshold of the §313 chemical involved in the
violation and meet the total corporate entity sales and number of
employees criteria below:
LEVEL
$10 million or more in total corporate entity sales A
and 50 employees or more.
$10 million or more in total corporate entity sales B
and less than 50 employees.
Less than $10 million in total corporate entity sales B
and 50 employees or more.
Less than $10 million in total corporate entity sales B
and less than 50 employees.
Facilities which manufacture, process or otherwise use less
than ten times the threshold of the §313 chemical involved in the
violation and meet the total corporate entity sales and number of
employee criteria below:
LEVEL
$10 million or more in total corporate entity sales B
and 50 employees or more.
$10 million or more in total corporate entity sales C
and less, than 50 employees.
Less than $10 million in total corporate entity sales c
and 50 employees or more.
Less than $10 million in total corporate entity sales c
and less than 50 employees.
Discussion
EPA believes that using the amount of §313 chemical involved
in the violation as the primary factor in determining the extent
level underscores the overall intent and goal of EPCRA §313 to
make available to the public on an annual basis a reasonable
estimate of the toxic chemical substances emitted into their
communities from these regulated sources. A necessary component
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of making useful data available to the public is the supplier
notification requirement of $313, as a significant amount of
toxic chemicals are distributed in mixtures and trade name
products. An additional goal of §313 is to ensure that
purchasers of §313 chemicals are informed of their potential §313
reporting requirements. The extent levels underscore this goal
as well.
The size of business is used as a second factor in
determining the appropriate extent level to reflect the fact that
the deterrent effect of a smaller penalty upon a small company is
likely to be equal to that of a larger penalty upon a large
company. Ten times the threshold for distinguishing between
extent levels was chosen because it represents a significant
amount of chemical substance. Thus, the two factors, the amount
of §313 chemical involved and the size of business, are combined
and used to determine the extent level table.
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PENALTY MATRIX
11
CIRCUMSTANCE
LEVELS
1
2
3
4
5
6
PENALTY >
EX1
A
$25,000
$20,000
$15,000
$10,000
$ 5,000
$ 2,000
IATRIX
:ENT LEVELS
B
$17,000
$13,000
•
$10,000
$ 6,000
$ 3,000
$ 1,300
c
$5,000
$3,000
$1,500
$1,000
$ 500
$ 200
CIRCUXSTANCB LEVELS
A penalty is to b« assessed for each §313 chemical for each
facility. There are two "per day1* penalty assessments; see page
12 and 13 for further clarification.
The date used to determine the circumstance level for "failure to
report in a timely manner" is the postmark date of the Form R
submission(s).
All violations are "one day" violations unless otherwise noted,
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T.FVT-T. 1 _ __
Failure to report in a timely manner, Category I.
TfVEL 2
Failure to maintain records as prescribed at 40 CFR §372.10(a) or
(b).
Failure to supply notification; per chemical, per year.
Data Quality Errors.
Repeated NON violations.
Failure to report in a timely manner, Category II: Per Day
formula applies.
Failure to maintain complete records as prescribed at 40 CFR
§372.10(a) or (b) .
Failure to Respond to an NON.
Data Quality Errors which are voluntarily disclosed after
November 30th of the year the original report was due.
Incomplete or inaccurate supplier notification; per chemical, per
year.
Data Quality Errors which are voluntarily disclosed on or before
November 30th of the year the original report was due.
Revisions which are voluntarily submitted to EPA but are not
reported to the State within 30 days of the date the revision is
submitted to EPA.
Failure to maintain records at the facility (40 CFR §372.10(c)).
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MULTIPL1 VIOLATIONS
Separate penalties are to be calculated for each chemical
for each facility. If a company has three facilities and fails
to report before July 1 of the year following the year the report
was due, a penalty is to be assessed for each facility and for
each chemical. Assuming the annual sales of the corporate entity
exceed $10 million dollars, the facility has more than 50
employees, and each facility exceeds the threshold limits by more
than ten times, the penalty would be $25,000 X 3 or $75,000. If
each facility manufactured two chemicals, again at more than ten
times the threshold, the penalty would be $25,000 X 3 X 2 or
$150,000.
If there is more than one violation for the same facility
involving the same chemical, the penalties are cumulative. For
example, if a firm reports more than one year after the report
was due, and the form also contains errors which the firm refused
to correct after receiving an NON, the penalty is $25,000 plus
$15,000. However, since it is the same form involved, and since
the statute imposes a maximum of $25,000 per violation for each
day the violation continues, the penalty which will be assessed
should be the one day $25,000 maximum.
PER DAY PENALTIES
Generally, penalties of up to $25,000 per day may be
assessed if a facility within the corporate entity has received a
Civil Administrative Complaint, which has been resolved, for
failing to report under §313 for any two previous reporting
periods. A Civil Administrative Complaint is resolved by a
payment, a Consent Agreement and Final Order, or a Court Order.
Penalties of up to $25,000 per day may also be used for
those facilities which refuse to submit reports or corrected
information within thirty days after a Civil Administrative
Complaint is resolved. Such refusal may be the basis for issuing
a new Civil Administrative Complaint to address the days of
continuing noncompliance after the initial Civil Administrative
Complaint is resolved. For example, a respondent may respond to
a Civil Administrative Complaint by paying the full penalty, yet
not correct the violation; in such a situation, a new Civil
Administrative Complaint should be issued.
PER DAY FORMULA FOR FAILURE TO REPORT IN A TIMELY MANNER
The following per day penalty calculation formula is to be
used only for violations involving failure to report on or before
July 1 of the year the report is due and before July 1 of the
following year:
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Level 4 Penalty +
(i of dava ],flte - l)xfLevel 1 - Level 4 Penalty)
365
For example, the penalty for a facility which submitted one
Fora R report on October 11 of the year the report was due, and
met the criteria for extent level A, would be calculated as
follows:
$10,000 + (102-n($15.000) - $10,000 + $4151 - $14,151.
365
CAPS OH PENALTIES
While there is a $25,000 per day per violation maximum
penalty under EPCRA §326, which outlines EPA's enforcement
authority for EPCRA $313, there are no caps on the total penalty
amount a facility may be liable for under EPCRA §313.
ADJUSTMENT 7ACTORS
The Agency intends to pursue a policy of strict liability in
penalizing a violation, therefore, no reduction is allowed for
culpability. Lack of knowledge does not reduce culpability since
the Agency has no intention of encouraging ignorance of EPCRA and
its requirements and because the statute only requires facilities
to report information which is readily available. In fact, if a
violation is knowing or willful, the Agency reserves the right to
assess per day penalties, or take other enforcement action as
appropriate. In some cases, the Agency may determine that the
violation should be referred to the Office of Criminal
Enforcement.
Voluntary Disclosure
To be eligible for any voluntary disclosure reductions, a
facility must: submit a signed and written statement of
voluntary disclosure to EPA and submit complete and signed
report(s) to their state and EPA's TRI Reporting Center within 30
days, or submit complete and signed Form R report(s) immediately
to their state and EPA's TRI Reporting Center as indicated on the
Form R. In the case of supplier notification violations, the
facility must submit a signed and written statement of voluntary
disclosure to EPA.
The Agency will not consider a facility to be eligible for
any voluntary disclosure reductions if the company has been
notified of a scheduled inspection or the inspection has begun,
or the facility has otherwise been contacted by U.S. EPA for the
purpose of determining compliance with EPCRA $313.
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This enforcement response policy establishes two reductions
in penalties for voluntary disclosure of violations; the first
reduction i» a fixed 25%; the second reduction is capped at 25%
and can be applied in full or in part according to the extent to
which the facility meets the criteria for the second 25%
reduction. All facilities which voluntarily disclose violations
of §313 (except those identified below) are eligible for the
first fixed 25%. The voluntary disclosure reductions apply to
the following violations: failure to report in a timely manner,
category I and II; and failure to supply notification.
In order to obtain the second reduction for voluntary
disclosure a facility must meet the following criteria and
explain and certify in writing how the facility meets these
criteria:
o The violation was immediately disclosed within 30 days
of discovery by the facility.
o The facility has undertaken concrete actions to ensure
that the facility will be in compliance with EPCRA §313
in the future. Such steps may include but are not
limited to: creating an environmental compliance
position and hiring an individual for that position;
changing the job description of an existing position to
include managing EPCRA compliance requirements; and
contracting with an environmental compliance consulting
firm.
o For supplier notification violations, the facility
provides complete and accurate supplier notification to
each facility or person described in §372.45(a) within
60 days of notifying EPA of the violation.
o The facility does not have a "history of violation"
(see below) for EPCRA §313 for the two reporting years
preceding the calendar year in which the violation is
disclosed to EPA.
This policy is designed to distinguish between those
facilities vhich make an immediate attempt to comply with §313 as
soon as noncompliance with §313 is discovered and those which do
not.
This enforcement response policy does not allow for
voluntary disclosure adjustments in penalties for the following
violations because these violations will, in almost all
circumstances, be discovered by EPA: failure to maintain
records, failure to maintain records according to the standard in
the regulation, failure to submit Form R reports containing error
corrections or revisions to the state, and failure to supply
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corrections or revisions to the state, and failure to supply
notification according to the standard in the regulation. In the
rare case that a facility identifies such violations and
voluntarily discloses then, EPA Regional offices have discretion
to adjust the penalty under the "as justice may require"
reduction. Consideration of voluntary disclosure for data
quality errors is already structured into the circumstance
levels: voluntarily disclosed data quality errors are assessed
two and three levels lover than data quality errors which are
discovered by EPA. Therefore no further "voluntary11 reduction
is allowed.
NOTEi Reductions available for attitude and for voluntary
disclosure are mutually exclusive, as both recognize the
facility's concern with, and actions taken toward, timely
compliance. Therefore, a facility cannot qualify for reductions
in both of these categories.
History of Prior Violations
The penalty matrix is intended to apply to "first
offenders." Where a violator has demonstrated a history of
violating any section(s) of EPCRA, the penalty should be adjusted
upward according to section (d) below prior to issuing the
Administrative Civil Complaint. The need for such an upward
adjustment derives from the violator not having been sufficiently
motivated to comply by the penalty assessed for the previous
violation, either because of certain factors consciously analyzed
by the firm, or because of negligence. Another reason for
penalizing repeat violators more severely than "first offenders"
is the increased enforcement resources that are spent on the same
violator.
The Agency's policy is to interpret "prior such violations"
as referring to prior violations of any provision of the
Emergency Planning and Community Right-to-Know Act (1986). The
following rules apply in evaluating history of prior such
violations:
(a) In order to constitute a prior violation, the prior
violation Bust have resulted in a final order, either as a result
of an uncontested complaint, or as a result of a contested
complaint which is finally resolved against the violator, except
as discussed below at section (d). A consent agreement and final
order/consent order (CAFO/CACO), or receipt of payment in
response to a administrative civil complaint, are both considered
to be the final resolution of the complaint against the violator.
Therefore, either a CAFO/CACO, or receipt of payment made to the
U.S. Treasury, can be used as evidence constituting a prior
violation, regardless of whether or not a respondent admits to
the violation.
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(b) To be considered a "prior such violation," the violation
must have occurred within five years of the present violation.
Generally, the date used for the present violation will be one
day after July 1 of the year the Form R report was due for
failure to report, data quality errors, recordfceeping violations,
and supplier notification violations. For other violations, the
date of the present violation will be the date the facility was
required to come into compliance; for example, for a "failure to
respond" violation, the date of the present violation vill be the
last day of the 30 day period the facility had to respond to a
Notice of Noncompliance. This five-year period begins when the
prior violation becomes a final order. Beyond five years, the
prior violative conduct becomes too distant to require
compounding of the penalty for the present violation.
(c) Generally, companies with multiple establishments are
considered as one when determining history. Thus, if a facility
is part of a company for which another facility within the
company has a "prior such violation," then each facility within
the company is considered to have a "prior violation.* However,
two companies held by the same parent corporation do not
necessarily affect each other's history if they are in
substantially different lines of business, and they are
substantially independent of one another in their management, and
in the functioning of their Boards of Directors. In the case of
wholly- or partly-owned subsidiaries, the violation history of a
parent corporation shall apply to its subsidiaries and that of
the subsidiaries to the parent corporation.
(d) For one prior violation, the penalty should be adjusted
upward by 25%. If two prior violations have occurred, the
penalty should be adjusted upward by 50%. If three or more prior
violations have occurred, the penalty should be adjusted upward
by 100%.
(e) A "prior violation1* refers collectively to all the
violations which may have been described in one prior
Administrative Civil Complaint or CAFO. Thus, "prior violation"
refers to an episode of prior violation, not every violation that
may have beeji contained in the first Civil Administrative
Complaint or CAFO/CACO.
Dclisted Chemicals
For delisted chemicals, an immediate and fixed reduction of
25% can be justified in all cases according the following policy:
If the Agency has delisted a chemical by a final Federal
Register Notice, the Agency may settle cases involving the
delisted chemical under terms which provide for a 25% reduction
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of the initial penalty calculated for any Section 313 violation
involving that chemical. The reduction would 9n^y apply to
cheajcplg delisted before or during the pendency of the
enforcement action. This reduction may be made before issuing
the Administrative Civil Complaint. Facilities will not be
allowed to delay settling Administrative Civil Complaints in
order to determine whether the violative chemical will be
delisted.
Attitude
This adjustment has two components: (1) cooperation and
(2) compliance. An adjustment of UP to 15% can be made for each
component:
(1) Under the first component, the Agency may reduce the
gravity-based penalty based on the cooperation extended to EPA
throughout the compliance evaluation/enforcement process or the
lack thereof. Factors such as degree of cooperation and
preparedness during the inspection, allowing access to records,
responsiveness and expeditious provision of supporting
documentation requested by EPA during or after the inspection,
and cooperation and preparedness during the settlement process.
(2) Under the second component, the Agency may reduce the
gravity-based penalty in consideration of the facility's good
faith efforts to comply with EPCRA, and the speed and
completeness with which it comes into compliance.
NOTEi See note on page 16 regarding the mutual exclusion of
reductions for attitude reduction and voluntary disclosure.
Other Factors as Justice Mav Require
In addition to the factors outlined above, the Agency will
consider other issues that might arise, on a case-by-case basis,
and at Regional discretion, which should be considered in
assessing penalties. Those factors which are relevant to EPCRA
§313 violations include but are not limited to: new ownership
for history of prior violations, "significant-minor" borderline
violation*, and lack of control over the violation. For example,
occasionally a violation, while of significant extent, will be so
close to the borderline separating minor and significant
violations or so close to the borderline separating noncompliance
from compliance, that the penalty may seem disproportionately
high. In these situations, an additional reduction of up to 25%
off the gravity-based penalty may be allowed. Use of this
reduction is expected to be rare and the circumstances justifying
its use must be thoroughly documented in the case file.
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Settl?m.ff"t With conditions (SVC)
Supplemental Environmental Projects (SEPs):
Circumstances may arise where a violator will offer to make
expenditures for environmentally beneficial purposes above and
beyond those required by lav in lieu of paying the full penalty.
The Agency, in penalty actions in the U.S. District Courts under
the Clean Air Act and Clean Water Acts, and in administrative
penalty actions under the Toxic Substances Control Act, has
determined that crediting such expenditures is consistent with
the purpose of civil penalty assessment. Although civil
penalties under EPCRA §313 are administratively assessed, the
same rationale applies. This adjustment, which constitutes a
credit against the actual penalty amount, will normally be
discussed only in the course of settlement negotiations.
Other Settlements With Conditions may be considered by EPA
Regional Offices as appropriate.
Before the proposed credit amounts can be incorporated into
a settlement, the complainant must assure himself/herself that
the company has met the conditions as set forth in current or
other program specific policy guidance. The settlement agreement
incorporating a penalty adjustment for an SEP or any other swc
should make clear what the actual penalty assessment is, after
which the terms of the reduction should be clearly spelled out in
detail in the CAFO/CACO. A cash penalty must always be collected
from the violator regardless of the SEPs or SWCs undertaken by
the company. Finally, in accordance with Agency-wide settlement
policy guidelines, the final penalty assessment contained in the
CACO/CAFO must not be less than the economic benefit gained by
the violator from noncompliance.
Ability to Pav
Normally, EPA will not seek a civil penalty that exceeds the
violator's ability to pay. The Agency will assume that the
respondent has the ability to pay at the time the complaint is
issued if information concerning the alleged violator's ability
to pay is not readily available. Any alleged violator can raise
the issue of its ability to pay in its answer to the civil
complaint, or during the course of settlement negotiations.
If an alleged violator raises the inability to pay as a
defense in its answer, or in the course of settlement
negotiations, it shall present sufficient documentation to permit
the Agency to establish such inability. Appropriate documents
will include the following, as the Agency may request, and will
be presented in the form used by the respondent in its ordinary
course of business:
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1. Tax returns
2. Balance sheets
3. Income statements
4. Statements of changes in financial position
5. Statements of operations
6. Retained earnings statements
7. Loan applications, financing and security agreements
8. Annual and quarterly reports to shareholders and the
SEC, including 10 K reports
9. Business services reports, such as Compusat, Dun and
Bradstreet, or Value Line.
10. Executive salaries, bonuses, and benefits packages.
Such records are to be provided to the Agency at the
respondent's expense and must conform to generally recognized
accounting procedures. The Agency reserves the right to request,
obtain, and review all underlying and supporting financial
documents that form the basis of these records to verify their
accuracy. If the alleged violator fails to provide the necessary
information, and the information is not readily available from
other sources, then the violator will be presumed to be able to
pay.
SETTLEMENT
Any reductions in penalties are to be made in accordance
vith this penalty policy. In preparing Consent Agreements,
Regions must require a statement signed by the company which
certifies that it has complied with all EPCRA requirements, and
specifically §313 requirements, at all facilities under their
control.
Any violations reported by the company or facility in the
context of settlement are to be treated as self-confessed
violations or treated as a failure to report in a timely manner
if the company has not submitted the report. If a Region wishes
to enter into a Settlement Agreement for the facility/company to
audit its facility/company, then the Consent Agreement and Final
Order may contain this agreement. A Region may choose to agree
to assess prior stipulated penalties for the violations found
during the compliance audit, or may choose to assess any such
violations in accordance vith this enforcement policy.
Reductions for compliance audits cannot exceed the after-tax
value of the compliance audit. Finally, as stated above, a cash
penalty must always be collected from the violator regardless of
the SEPs or SWCs undertaken by the company.
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AKKVDKZHT for i»»l Reporting Year only
Due to the unusual circumstance* in finalizing and
distributing the revised Fora R for use beginning with calendar
year 1991 reports (reports due on July 1, 1992), the following
amendment to the Enforcement Response Policy is issued:
Penalty Assessment for railure to Report in a Timely Manner
One element of the Per Day Penalty Formula on page 14 is the
number of days late a facility submits its Form R reports. For
the 1991 reporting year only, the number of days late will be
calculated beginning on September 2, 1992. Thus, if a facility
submits its Form R report on September 15, 1992, the number of
days late should be calculated as 14.
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