ENFORCEMENT RESPONSE POLICY FOR SECTION 313
OF THE EMERGENCY PLANNING AND COMMUNITY RIGHT TO KNOW ACT
ALSO KNOWN AS
TITLE III OF THE SUPERFUND AMENDMENTS
AND REAUTHORIZATION ACT (SARA)
OFFICE OF COMPLIANCE MONITORING
OFFICE OF PESTICIDES AND TOXIC SUBSTANCES
THE U.S. ENVIRONMENTAL PROTECTION AGENCY
December 2, 1988
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ENFORCEMENT RESPONSE POLICY FOR SECTION 313
OF THE EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT
INTRODUCTION
The Emergency Planning and Community Right-to-Know Act
(EPCRA), also known as Title III of the Superfund Amendments and
Reauthorization Act of 1936, contains provisions for reporting
both accidental and nonaccidental releases of toxic chemicals.
Section 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. These reports must be sent to the U.S. Environmental
Protection Agency (EPA) and to designated state agencies. The
first annual report, for the 1987 calendar year, was due by July
1, 1988. The EPA is responsible for carrying out and enforcing
the requirements of section 313 of the EPCRA and any rules
promulgated pursuant to EPCRA.
Section 325(c) of the law authorizes the Administrator of
the EPA to assess administrative civil penalties for violations
of section 313. Any person (owner or operator of a facility,
other than a government entity) who violates any requirement of
section 313 is liable for a civil penalty in a'n amount not to
exceed $25,000 for each violation. Each day a violation continues
constitutes 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
the 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 assure
that enforcement actions for violations of section 313 and of
the section 313 regulations* 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 section 313 violations.
DETERMINING THE LEVEL OF ACTION
Enforcement alternatives include (1) taking no action;
(2) Notices of Noncompliance; (3) administrative civil penalties
and (4) criminal action under 18 U.S. Code 1001.
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NO ACTION
No action for late reporting Is to be taken against persons
who submit reports after July 1, 1988, but prior to August 1,
1983, provided the report is submitted prior to any contact by
EPA or an authorized representative of EPA in preparation for an
inspection. The Agency believes that the impact on its ability
to make this information available to the public will be minimal
during this first 30-day period due to the amount of time to
input the data into the tracking system and data base.
Also, no action is appropriate if a facility is amending
its submission(s) after the reporting period to reflect improved
information/procedures which were not previously available.
NOTICES OF NONCOMPLIANCE (NON)
Summary of Circumstances Warranting an NON
Reports containing readily-detectable errors found by EPA dur-
ing its data entry process. Facilities must provide corrections
in response to the NON by the specified time of 30 days or be
subject to a Civil Complaint (See Appendix A for discussion of
errors and NONs). Please note that EPA reserves the right to
issue a Civil Complaint for errors which are egregious or fraud-
ulent.
Reports with errors which would warrant an NON if found by
EPA during data entry, which are voluntarily disclosed by the
facility or found during an inspection and which are fully
corrected within 30 days of their discovery but within 180
days after the reporting date. EPA reserves the right to issue
a Civil Complaint for errors which are egregious or fraudulent.
Late reports which are submitted within 31-90 days after
the due date of July 1, 1988. Late reports which are submitted
within 1-60 days after the due date of July 1, 1989/or the first
year a report Is required if not 1988. Late reports which are
submitted within 1-30 days after the due date of July 1. 1990
and for subsequent reporting years. For a report to be con-
sidered late, It must be submitted to the Agency prior to
any contact by EPA or an authorized representative of EPA in
preparation for an inspection or for purposes of determining
compliance or if there Is no contact prior to an inspection,
prior to the inspection. AN NON IS APPROPRIATE PROVIDED THE
FACILITY HAS NEVER RECEIVED AN NON FOR LATE REPORTING DURING THE
PREVIOUS FIVE REPORTING PERIODS.
The submission of a form with trade secrets without a sanitized
version, or the submission of the sanitized version of the form
without the trade secret information.
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Summary of Circumstances Warranting an NON (contlnuea)
Those facilities which report to EPA but report late or not at
all to the state PROVIDED THE FACILITY HAS NEVER RECEIVED AN NON
FOR THIS VIOLATION DURING THE PREVIOUS FIVE REPORTING PERIODS.
States may also take action under their own laws, if applicable.
Recordkeeping violations. Please note that NONs which are
issued for recordkeeping violations will disallow penalty reduc-
tions related to culpability and attitude for future EPCRA
section 313 violations. A list of the various recordkeeping
violations are listed below:
- Falsified records
- No required records/serious recordkeeping deficiencies
and compliance cannot be verified/determined based on the
facil1ty's records.
- Incomplete/inadequate records.
- Records available but not at facility or submitter's
headquarters. If records cannot be presented within
14 calendar days from the date of the inspection,
the violation Is failure to keep records in accordance
with the regulations.
Reports which are sent to the incorrect address/office (i.e.,
any address other than that listed in the section 313 regu-
lation or on the Form R or the Administrator's office) warrant
an NON the first time. A Civil Complaint 1s warranted for
violations in subsequent years.
Discussion
A Notice of Noncompliance (NON) is the appropriate
response for errors In forms submitted to the Agency on a
timely basis and which are detected without an inspection.
However, the NON Is to state that corrections must be made
within a specified time (30 days from receipt of the NON) or a
Civil Complaint assessing a penalty will be Issued. In general,
NONs will be Issued for errors as defined in Appendix A. The
Agency does reserve the right to assess a Civil Complaint for
those errors which It believes are egregious (an example would
be underreporting by a large factor, such as reporting emission
of 1,000 pounds when there are a million pounds emitted) or which
EPA believes are fraudulent in nature. The use of NONs prior
to issuing a Civil Penalty 1s in recognition that this is a
new program and that the facilities for which errors are being
identified are for those facilities which did report.
Although an NON may be issued for any single error, NONs
will generally be issued for those reports containing numerous
errors. The Office of Compliance Monitoring and the Office of
Toxic Substances will prioritize NONs based on available
resources. It is likely that this portion of the policy will
be revised to provide for penalties for errors, especially
repeat errors.
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Similarly, an NON is appropriate if a company realizes
it has made errors and submits corrected information on a
timely basis, i.e. within 30 days of the discovery of the
error and within 180 day's of the reporting date. EPA wants
to encourage companies to self audit and to notify £PA of
errors. Again, EPA reserves the right to issue Civil
Complaints in situations of egregious errors or suspected
fraud.
NOTE: The exception to issuing an NON for reports with
errors are for those companies which submitted information
on the proposed form found in the proposed regulation prior
to July 2, 1988, instead of on the final form. The Office of
Toxic Substances will write a letter to those facilities
indicating that the correct form must be submitted within a
specified time. Failure to submit the corrected form within
that specified time may result in an NON being issued, and
a subsequent Civil Penalty if noncompliance continues.
In reference to NONs for certain late reports, EPA
believes an NON Is appropriate for the 31-90 day interval
after the reporting due date for the first year. This is
in deference to the start-up of a new and innovative law which
is requiring submissions from facilities, Including small-
business users of toxic chemicals, who may never have been
required to report on toxic chemical releases to the Federal
government. Due to the time to Input the information into
the newly developed data base, late reports submitted within
this time frame will have less Impact on the Agency being
able to ensure the availability of data to the public,
than a report submitted after 91 days.
NOTE: A Civil Complaint is to be issued which assesses the same
penalty as if the facility failed to report when the report is
submitted during this time frame but after the facility has been
contacted in preparation for a pending inspection or for the
purpose of determining compliance or In the absence of such
contact, after the Inspection. Regions are encouraged to document
any contact made with a facility regarding an inspection. If
contact 1s not made, the date for determining If the report is
late or Is to be treated the same as a nonreport will be the
date of the notice of inspection. The Agency is taking this
position, I.e., distinguishing between facilities submitting
late on their own volition and those submitting after EPA has
contacted the facility In regard to an inspection, because
it wants to encourage noncomplying facilities to report and
discourage nonreporters from waiting until EPA contacts them.
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The decision to Issue NONs for the submission of a form
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 report with errors. Please note
that this is a violation* of section 313 as well as the trade
secret requirements. Other violations pertaining to trade
secrets will be addressed in a separate penalty policy.
The1 last violation for which an NON is to be issued deals
with facilities which report to EPA but report late or not at
all to the state. This was discussed with State representatives
convened by the National Governor's Association. It was
decided that NONs were appropriate for this first reporting
year. One reason is that the information will be available
to the state through EPA's data bases, although at a later
time. However, a repeat violation will be subject to a
penalty, i.e., a violation in subsequent years. This policy
in no way precludes states from taking action under their
own laws, if applicable. EPA also reserves the right to
assess a Civil Complaint if the facility refuses to report
to the state after the state has requested the report, or if
EPA requests the facility to send the report to the state.
Note on NONs: In those cases where a Region plans to issue
a Civil Complaint for a nonreporter (including for a form R
submitted after facility is contacted in regard to an inspec-
tion), any NONs for errors or other violations should be
incorporated into that Civil Complaint with compliance required
within 20 days for those items or additional penalties provided
for. In order to make this work, it is essential that Regions
notify the Office of Compliance Monitoring of any pending
action as soon as possible. Alternatively, the Civil Complaint
may be settled with a provision that failure to correct infor-
mation as indicated either in the Complaint or In a subsequent
NON is subject to a stipulated penalty.
ADMINISTRATIVE CIVIL PENALTY
An administrative civil penalty will be the appropriate
response for:
Nonreportlng, Including the failure to report for each
chemical (I.e., some chemicals reported but not all
as required) and including reports submitted by a
facility after being contacted regarding a pending
inspection or for the purpose of determining compliance or
after inspection.
Incomplete reporting.
Failure to respond to or comply with an NON, as specified
in the NON (i.e., those errors specifically identified).
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Certain late reporting, as specified, and for repeated
late reporting.
Repeat violations which otherwise would warrant an NON,
as identified in the Circumstance Levels.
Other violations not specifically referenced in the
di scussion of NONs.
Mote: See specific list in the next section under Circum-
stance Levels.
Concurrence
Civil penalties are to be assessed according to this
policy. Pursuant to the Delegations Manual, Regional enforce-
ment personnel must obtain written concurrence from the Office
of Compliance Monitoring of the Office of Pesticides and Toxic
Substances prior to initiating an adminlstratiave civil penalty
for section 313 violations. A region may request the relaxation
of the concurrence requirements once three civil administrative
actions have been successfully issued and closed out. For
these actions to be considered successful, regional cases
must have been supported by adequate evidence of the violation,
and the proposed penalties and final assessment must conform
to this section 313 enforcement response policy.
CRIMINAL SANCTIONS
The statute does not provide for criminal sanctions for
violations of section 313. However, 18 U.S. Code §1001 makes
it a criminal offense to falsify information being submitted
to the U.S. Government. In addition, the knowing failure to
file a section 313 report may be prosecuted as a concealment
proscribed by 18 U.S.C. §1001.
ASSESSING A CIVIL ADMINISTRATIVE PENALTY
SUMMARY OF THE PENALTY POLICY
To determine the base penalty, determine the circumstance
level and the penalty adjustment level. These factors are
incorporated into a matrix which allows determination of the
appropriate base penalty amount. The total penalty is deter-
mined by calculating the penalty for each violation on a per
chemical, per facility basis.
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Once the gravity-based penalty has been determined, upward
or downward adjustments to the penalty amount are made in con-
sideration of these other factors: culpability, history of prior
violations, ability to cpntinue in business, and such other
matters as justice may require, as described in this policy.
DISCUSSION
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 government.
The penalty adjustment level is based on the quantity of
section 313 chemical for which the violation is being issued
which is manufactured, processed, or used by the facility, and
the size of the total corporate entity in violation. A large
company is defined as a facility for which the total corporate
entity has sales of ten million dollars or more. A small company
is defined as a facility for which the total corporate entity
has sales of less than ten million dollars. The total corporate
entity refers to all sites taken together owned or controlled
by the foreign or domestic parent company.
Thus, a large company which manufactures 10 times or more
section 313 chemical than the threshold limit is assessed the
highest penalty for the specific violation (i.e., based on the
circumstance level). If a company is large but manufactures/
processes/uses less than 10 times the threshold, the penalty for
that violation falls in the appropriate circumstance level and
penalty adjustment level 8. If the corporate entity is small
and manufactures/ processes/uses 10 times or more of the violative
section 313 chemical, then the penalty remains in the middle
penalty adjustment level B. If the corporate entity is small
and manufactures, processes, or uses less than 10 times the
threshold level, then the penalty for that particular circumstance
level falls Into penalty adjustment level C, which 1s the least
penalty for that particular circumstance level.
A size of business adjustment factor is being used to
reflect the fact that small businesses are deterred by a smaller
penalty and that Impact of the penalty is likely to be the same
as a larger penalty for a large company. Thus, the Agency
believes that the deterrent effect is comparable. EPA also
recognizes that EPCRA is a new statute affecting a broad
range of facilities and that this law may bring certain small
businesses into EPA's purview for the first time.
Furthermore, penalty policies under other statutes
often assess the same initial penalty for a violation and then
provide for substantial adjustments based on the firm's ability
to pay and ability to continue in business. By making a size
of business adjustment up front in the base penalty, the Agency
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hopes to avoid the large disparity between penalties proposed
and penalties collected.
However, it was pointed out that a small company may nuinu-
facture/process/use a large amount of a section 313 chemical
and its emissions may be substantial. Thus, the two factors
are combined and used to determine the penalty adjustment
level of the matrix. Please note that the size of business
level is based on the definition for small business orginally
developed in conjunction with the Small Business Administration
when the section 313 rule was being developed and thus has been
subject to public review and comment.
The enforcement-related use of ten times or more the
threshold established in the statute is established as a level
which is likely to be of more Interest to the community and to
the government, at least initially. After a review of incoming
reports, it was believed that ten times the threshold level
was a reasonable cutoff to distinguish between manufacture
/process/use of a large amount of section 313 chemical.
Definition of Late Report
To be considered a late report instead of a failure to
report for those reports submitted after the deadline of July
1, the report must be submitted prior to the facility being
contacted by EPA or an EPA representative in preparation for
a pending inspection or for purposes of determining compliance
or in the absence of such contact, prior to the date of the
inspection. Any report which 1s submitted after such contact/
inspection is to be treated the same as a nonreport in assess-
ing the penalty. Regions are encouraged to keep written
records which document any such contact with the facility.
Definition of Failure to Report
If a report is submitted by a facility after the reporting
deadline and after being contacted by EPA or an EPA representa-
tive in preparation for a pending inspection or for purposes
of determining compliance or in the absence of such contact,
after EPA begins an Inspection (i.e., issuance of a Notice of
Inspection), the violation is considered a failure to report
violation.
If a facility reports to a state but not to EPA, the
violation is considered a failure to report, unless it is
submitted late prior to the contact by EPA or its representative
as described in the previous paragraph.
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Notification of Pending Actions
It is the Regional Office's responsibility to notify the
Office of Compliance Monitoring (OCM) Case Development Coordinator
for that Region that an inspection has been conducted and a
nonreporter detected in 'order to avoid the issuance of an NON
by OCM for a late report wnen the nonreporter submits his report.
For those facilities inspected by the National Enforcement
Investigations Center (NEIC) for which violations are found,
NEIC will notify the Region, who will notify OCM. Alternatively,
NEIC and the Region may work out a different arrangement to
assure that OCM is informed of the violation.
PENALTY MATRIX
PENALTY MATRIX *
CIRCUMSTANCE **
LEVELS
1
2
3
4
5
6
ADJUSTMENT LEVELS
A
$25,000
$20,000
$15,000
$10,000
$ 5,000
$ 2,000
B
$17.000
$13,000
$10.000
$ 6.000
$ 3.000
$ 1.300
C
$5.000
$3,000
$1,500
$1.000
$ 500
$ 200
* Penalty is to be assessed for each chemical for each
facility. See discussion on per day penalties for further
clari fication.
** See circumstance definitions below for detail.
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CIRCUMSTANCE LEVELS
Level 1
($25,000 $17,000 $5,000)
Nonrepor'ting/fai lure to report a chemical (See definition of
late report and failure to report in previous sections.)
Falsified report
Level 2
($20,000 $13,000 $3,000)
Late Reporting after 180 days. (These reports i
to NONs if they contain errors which warrant an
sequent penalties if errors are not corrected ii
the NON.)
may be subject
NON and sub-
in response to
the NON.)
Level 3
($15,000 $10,000 $1,500)
Errors (fail to respond/correct information identified by EPA as
an error during data entry by due dates specified in NON or
if errors found during an inspection, failure to correct informa-
tion within 30 days of the facility being informed of the errors)
See section on Initial Offer of Settlement for error violations
identified in NONs.
Serious errors/incorrect reports found through audit/inspection/
tip/complaint/voluntary disclosure. (Errors which seriously
affect the utility of the data; does not Include those which
would generally warrant an NON as a result of data entry.)
Voluntary disclosures of serious errors are subject to voluntary
disclosure reductions.
LEVEL 4
($10,000 $6,000 $1,000)
Errors/incorrect reports which are voluntarily disclosed
but not disclosed and corrected within 30 days of the discovery
and within 180 days of the reporting date. These disclosed
violations are subject to the first voluntary disclosure reduc-
tion provided errors are corrected prior to issuance of the
complaint.
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LEVEL 5 .
(S 5.000 $ 3.000 $ 500)
Late Reporting (91-180 days after the due date for 1988
reports and 61-90 days after the due date for 1989 reports
and 1-30 days for 1990 and future reporting years. Facili-
ties which do not become subject until future years may have
the benefit of 61-90 days after the due date for the first
year they have to report and the 1-30 days thereafter.)
Reports to EPA but not to State and the facility has received
a previous NON from EPA for this violation.
LEVEL 6
($ 2.000 $ 1.300 $ 200)
Late Reporting from 1 to 59 days for 1939 reporting year
if an NON has been issued for late reporting or a Civil
Complaint for a section 313 violation for a violation
during the 1988 reporting year.
Error corrections not reported to State when responding
to NON/Civil Complaint for errors.
Minor errors in report found through audit/inspection/tip/
complaint/voluntary disclosure and which are not corrected
within 30 days of the discovery.
PTNTLTV ADJUSTMENT LEVELS
Level A
Facility for which the total corporate entity* has sales
of ten million dollars or more or 50 employees or more** and
which manufactures/processes/ uses the section 313 chemical
associated with the violation at 10 times or more the threshold
level for reporting.
* Totalcorporate entity refers to all sites taken together owned
or controlled by the foreign or domestic parent company.
** Region has discretion to use whichever figures are readily
available. If no Information is available. Regions may assume
the higher level and adjust if the facility can show that they
are subject to the small business definition. Please note
that to be subject to the section 313 requirements, the facility
must employ 10 or more employees.
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Level B
Facility for which the total corporate entity has sales of
ten ml 11 Ion dollars or more or 50 employees or more and which
manufacturers/processes/uses the section 313 chemicaTassociated
with the violation at less than 10 times the threshhold level
for reporting.
Facility for which the total corporate entity has sales of 1 ess
than ten million dollars or less than 50 employees and which
manufactures/processes/uses the section 313 chemicalassociated
with the violation at 10 times or more the threshhold level for
reporting.
Level C
Facility for which the total corporate entity has sales of less
than ten million dollars or less than 50 employees and which
manufactures/processes/uses the section 313 chemical associated
with the violation at less than 10 times the threshhold level
for reporting.
MULTIPLE VIOLATIONS
Separate penalties are to be calculated for each chemical
for each facility. If a company has 3 facilities and fails to
report for the same chemical at each facility, a penalty is to
be assessed for each facility and for each chemical. Assuming
the annual sales exceed ten million dollars and each facility
exceeds the threshhold limits by more than 10 times, the penalty
would be $25,000 X 3 or $75,000. If each facility manufactured
the same two chemicals again more than 10 times the threshhold,
the penalty would be $25,000 X 3 X 2 or $150,000.
If there 1s more than one violation for the same facility
involving the same chemical, the penalties are cumulative. For
example, If a firm reports after 180 days and the form also
contains major errors which the-firm refused to correct, the
penalty is $20,000 plus $15,000. However, since it is the same
form involved, the penalty which will be assessed should be
the $25,000 maximum per day.
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PER DAY PENALTIES~~~~
Per day penalties are appropriate for those facilities
which continue to fail to report in subsequent reporting years.
Generally, per day penalties will not be used unless a facility/
a company witnin the corporate entity has received Civil
Complaints for failing to report under section 313, which has
been settled (i.e., by payment or by a Consent Agreement and
Final Order, or by a Court Order), for two previous reporting
periods.
Per day penalties may also be used for those facilities
which refuse to submit reports or corrected information after a
Civil Complaint is issued. Such refusal may be the basis for
amending the Civil Complaint to assess per day penalties or
a new Complaint issued which addresses the days of continuing
noncompliance after the initial Civil Complaint is closed, e.g.,
a facility may pay the penalty in full and not come into
compliance, in which case a new Civil Complaint should be
i ssued.
In cases where the EPA has determined that facility has
knowingly failed to submit a report, per day penalties may be
assessed. Regions should consult with the Office of Compliance
Monitoring prior to issuing a Civil Complaint with a per day
assessment, even if concurrence has been relaxed. Prior to
the relaxation of concurrence, Regions should discuss per day
assessments in advance of submitting the drafted Civil Complaint.
ADJUSTMENT FACTORS
Voluntary Disclosure
Disclosures of nonreporting prior to EPA contacting a faci-
lity in preparation for an inspection are considered late
reporters so no further adjustment is needed provided completed
report is submitted. The circumstance level of the violation
is based on the day the report is submitted.
Disclosures regarding serious errors or Incorrect reports
will be made In the following manner:
25? Voluntarily disclosed and corrected
within 30 days of the disclosure.
Additional 25* If disclosed and corrected within 30
days of discovery.
Please note that disclosures of those types of errors which
would otherwise result In an NON if detected by EPA warrant an
NON and not a Civil Penalty if corrections are made within 30 days
of the discovery by the facility and within 180 days of the
reporting period. If a facility reports the error more than
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180 days after the reporting period, it is subject to a Civil
Complaint and may be eligible for the voluntary disclosure
reductions. EPA wishes to foster self-auditing and submission
of corrected forms by facilities on a prompt basis.
A violation is not considered to be voluntarily disclosed
if it is done after EPA or its representative has contacted
the facility in preparation for an inspection of that facility
or for the purposes of determining compliance or if an inspection
has started.
Culpability
The Agency intends to pursue a policy of strict liability
in penalizing for a violation, though some allowance may be
made on the extent of the violator's culpability. The base
penalty may be increased or decreased or may remain the same
depending on the violator's culpability.
The principal criteria for assessing culpability are
(a) the violator's knowledge, (b) the violator's control
over the violatlve condition, and (c) the attitude of the
violator.
(a) The violator's knowledge. The lack of knowledge
would 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 Informa-
tion which is available. However, if a violation is knowing or
willful, the Agency reserves the right to assess per day penal-
ties.
(b) Degree of control over the violation. There may be
situations where the violator may be less than fully responsible
for the violation's occurence. For example, an employee whose
conduct caused the violation may have been disobeying his
employer's instructions. Such situations would probably warrant
some reduction In the penalties. Adjustments may be made at
the Agency's discretion to adjust the penalty downwards a
maximum 25J. However, the use of this factor is expected
to be rare, and must be justified.
(c) Attitude of the violator. In assessing the violator1;
"attitude", the Agency will look at the following factors:
Whether the violator made "good faith" efforts to comply and
the promptness of the violator's corrective actions. Attitude
may justify a penalty adjustment of up to 15% of the penalty
in either direction. Objective evidence such as statements or
actions of the violator should be used to justify such adjust-
ments. This adjustment is to be made after the Civil Complaint
has been issued in the context of settlement.
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HI story of prior violations
The penalty matrix Is designed to apply to "first offenders"
Where a violator has demonstrated a history of violating EPCRA
section 313, the penalty should be adjusted upward. The need
for such an upward adjustment derives from the violator not
being sufficiently motivated to comply (deterred from noncomply-
ing) by /the penalty assessed for the previous violation, either
because of economic factors consciously analyzed by the firm, or
because of negligence. Another reason for penalizing repeat
violators more severely than "first offenders" is the increased
enforce ment resources that are spent on the same violator.
The Agency's policy is to interpret "prior such violations"
as referring only to prior violations of EPCRA section 313.
The following rules apply in evaluating history of prior such
violations:
(a) In order to constitute a prior violation, the prior
violation must have resulted in a final order, either as a
result of an uncontested complaint, or as a result of a con-
tested complaint which Is finally resolved against the violator,
except as discussed in section (d). A consent agreement and
final order (CAFO), as well as receipt of payment in response
to a civil complaint, are both considered to be the final
resolution of the complaint against the violator. Therefore,
a CAFO, or receipt of the check, can be used as evidence
constituting a prior violation, regardless of whether or not a
respondent admits to the violation.
(b) To be considered a "prior such violation", the
violation must have occurred within five years of the present
violation. This five year period begins when the prior viola-
tion 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.
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(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 1002. Please note that in those cases where the
penalty goes to per day penalties because of previous violations,
upward adjustments would only be appropriate for violations which
are committed after the initial complaint with per day assessments
In those cases where an NON has been issued for record-
keeping violations, the adjustment factor based on good attitude
is not warranted and should not be given. Additionally, consider-
ation should be given to whether a culpability finding of willful
violation should be made and appropriate penalty adjustments made.
Application of ability to continue In business.
The matrix Incorporates an ability to pay factor. Therefore,
the application of an ability to continue in business adjustment
is expected to be rare. Measuring a firm's ability to continue
in business can be very complex. This adjustment factor should
only be applied in making adjustments to the penalty after the
Civil Complaint has been issued. If a firm raises the issue of
inability to pay in its answer, or in the course of settlement
discussions, the firm should be asked to document Its inability
to pay. In complex cases, the Agency may need to rely on a
management division economist or an accountant to analyze the
firm s ability to continue in business and, on a case-by-case
basis, to further reduce the proposed penalty. Alternatively,
this may be done in accordance with Policy GM-56 found in EPA's
Enforcement Guidance Manual.
Other factors as justice may require.
* New Ownership for "history of violations". It may be
unfair in some cases to burden new ownership with the previous
owner's history.
* Environmentally beneficial expenditures. Circumstances
may arise where a violator will offer to make expenditures
for environmentally beneficial purposes above and beyond those
required by law, In Heu of paying the full penalty. The
Agency in penalty actions in the U.S. District Courts under
the Clear Air and 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 section 313 are administratively assessed, the same
rational applies. This adjustment, which constitutes a credit
against the actual penalty amount, will normally be discussed
only in the course of settlement negotiations. Before the
proposed credit amounts can be incorporated into a settlement,
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the complainant must assure himself that the company is not
expending the funds to come into compliance with other statutes/
regulations and has not already received credits in another
enforcement action for the same environmentally beneficial
expenditures. Agreements to cone into compliance with EPCRA
would not warrant a reduction in penalty other than in the
context of an attitude adjustment factor. The settlement
agreement incorporating such an adjustment should make clear
what the actual penalty assessment is, after which the terms
of the reduction should be spelled out in detail and in a
clearly enforceable manner.
Any conditions which are to be met in exchange for a
penalty reduction are to be imposed in accordance with the
Toxic Substances Control Act Settlement with Conditions
Policy which was Issued November 22, 1933 (or in accordance
with any revisions to that policy).
One area of environmentally beneficial expenditures for
which a reduction in penalty would be appropriate is an
agreement to reduce emissions from the facility or other
facilities within the company by a certain amount within an
agreed upon timeframe.
SETTLEMENT
This policy does not set a specific pencentage guideline
for penalty reductions in the course of settlement. While, as
a general rule, penalties may be altered in the course of
settlement, there should always be a substantive reason given,
which is to be incorporated in any settlement agreement and
consent decree and final order for any penalty reduction.
Any reductions in penalties are to made in accordance with
this penalty policy. In preparing Consent Agreements, Regions
should require a statement signed by the company which certifies
that it has complied with all EPCRA requirements and specifically
section 313 requirements at all facilities under their control.
For large companies with many facilities, Regions are encouraged
to inspect a number of facilities, belonging to a corporation
with a history of violation to assure full compliance. This
does not mean prior to taking an initial action but afterwards
to assure that the firm has come into compliance.
Any violations reported by the company or facility in the
context of settlement is to be treated as a self-confessed
violation and subject either as a late report if the company
has failed to report or as eligible for the disclosure reductions
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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 pro-
vision. However, no penalty reductions are appropriate for
the audit which Is considered the cost of compliance at this
point in time. The violations detected during the audit are
to be assessed in accordance with this enforcement response
policy although reductions for voluntary disclosure may be
given and reports submitted may be assessed as late reports,
even though an inspection has been done.
OFFER OF SETTLEMENT FOR CIVIL COMPLAINTS RESULTING FROM A
FACILITY'S FAILURE TO RESPOND TO AN NON FOR ERRORS
Background
The following policy will be utilized on a pilot basis
for the first year for those cases issued by headquarters.
This policy is aimed at fostering the submission of correct
information on a timely basis and streamlining the enforcement
process. It is hoped that companies will submit a corrected
form within the 20 days and then after the form is determined
to be free of readily detectable errors, pay its fine.
If this process becomes as time consuming as a Civil
Complaint without an upfront offer of settlement, then
it will be discontinued and settlements will be based on
the larger proposed penalty amount, with adjustments as
specified in this policy, if appropriate.
Policy
For violations Involving readily detectable errors for
which no response to an NON is made or the response was
inadequate i.e, failed to submit correct information, a written
offer of settlement for $300 Is to be made at the time the
initial civil complaint Is issued.
This offer Is contingent on the facility submitting
corrected Information within 20 days of receipt of the Civil
Complaint. Payment for the above penalties must be made in
full with no additional reduction with the exception of ability
to continue In business.
If settlement is not made based on the initial offer of
settlement, including the requirement that correct information
is submitted within 20 days of the receipt of the Civil Complaint,
any settlement agreement is to exceed the original offer and
any and al1 reductions to the penalty must be justified based
on the specific factors in this policy. The final Consent
Agreement is to specifically identify and justify any reductions.
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Continual Failure to Report or to Submit Corrected Information
Per day penalties may be appropriate if a facility continues
to refuse to submit the 'required information. In addition, if a
facility pays its penalty and continues to refuse to submit the
information as required, then a criminal referral may be the
appropriate response.
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APPENDIX A
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TRI ERROR TYPES
The Information Management Division (IMD) has divided
errors found in TRI submissions into three broad classes:
1. Pre-Tracking Errors - These errors are manually
identified, and involve Form R's which are
incorrectly put together. For example, a Form R
should consist of a completed Part I, II, III, and
IV. Failure to include all four parts is a pre-
tracking error. Also, including more than one Part
III in a single Form R package is a pre-tracking
error. Pre-tracking errors prevent the submission
information from being entered into the document
tracking system.
2. Tracking Errors - These errors are machine identified
by the document tracking system, and involve missing
or invalid facility or chemical identification
information. For example, if the CAS number reported
in Part III is 50-00-0 (the CAS number for
formaldehyde), and the chemica}. name reported is
Freon 112, the chemical identity is invalid because
the reported CAS number and the reported chemical
name do not match.
3. Major and Minor Errors - These errors are machine
identified by the THIS database edits on the EPA 3090
mainframe computer. They involve missing or invalid
release data. For example, if the Form R
instructions require a response of "NA" or a value in
a specific data field, and the field is left blank by
the submitter, a major or minor error is created.
(More information about these edits is found is Toxic
Chemical Release Inventory System Physical Design
(appendix C) available from Ruby Boyd, TRIS Database
Administrator, IMD, 202/475-8387.)
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