Clean Air Act Compliance Enforcement Policy Compendium 1988 ed. Volume 5 ------- J ------- — 14 — J. Section 306: Federal Procurement 1. Implementation of Mandatory Contractor 08/08/84 Listing 2. Guidance on Implementing the Discretionary 11/26/86 Contractor Listing Program 3. Listing Asbestos Demolition and Renovation 03/11/88 Companies Pursuant to Section 306 of the Clean Air Act ------- 1 ------- Implementation of Mandatory Contractor Listing (08/08/84) File at Part J, Document #1 ------- UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON. D C. 20460 .‘ pr c,•’’ MEMORANDUM SUBJECT: Implementation of Mandatory Contr ctor Listing Courtney M. Assistant Administ tor f r Enforcement and Compliance Mbnitoring Resources Regional Counsels I—X Introduction and Purpose Pursuant to statutory requirements, the proposed revisions to 40 CFR Part 15 require that the List of violating _ Facilities (“the List”) automatically include any facility which gives rise toa criminal conviction of a person under Section 113(c)(l) r the Clean Air Act or Section 309T r the Clean .Wate ct . Any facility on the List is ineligible to receive any non—exempt Federal government contract, grant, or loan. Removal of a facility from the List occurs only if I certify that the condition giving rise to the conviction has been corrected or if a court reverses or vacates the conviction. This memorandum establishes the procedure to implement the mandatory portion of the contractor listing program. 1 1/ Guidance on implementation of the discretionary listing authority issued on July 18, 1984. OLEC oB 1984 13g4 4L! /3 P/i or;r c i; (r .3IIrr. r it ..N(i CO P IAp rb MON,lQRI .( FROM: TO: Assistant Assistant Associate Associate Associate Assistant Administrator for Air and Radiation Administrator for Water Enforcement Counsel for Air Enforcement Enforcement Counsel for Water Enforcement Enforcement Counsel for Criminal Enforcement Attorney General for Land and Natural ------- —2— procedure for Mandatory Listing I. A federal district court must enter a guilty verdict or guilty plea of a person under Section 113(c)(1) of the Clean Air Act or Section 309(c) of the Clean Water Act. The convicted person must own, operate, lease, supervise or have a financial interest in the facility which gave rise to the conviction. Note that criminal convictions under Section ll3(c)(2) of the Clean Air Act and criminal convictions entered by a State or local court do not qualify a facility for mandatory listing. II. Upon notification of an entry of a guilty verdict or guilty plea by the clerk of the..district court, the Department of Justice must immediately notify the Associate Enforcement Counsel for Criminal Enforcement (L.E— ]34E). This notification must occur even if the defendant still awaits sentencing, has moved for a new trial or a reduced sentence, or has appealed the conviction. III. The Associate Enforcement Counsel for Criminal Enforcement must independently verify that the court has entered the guilty verdict or guilty plea. IV. Upon such verification, the Associate Enforcement Counsel for Criminal Enforcement shall notify EPA’S Listing Official (LE—]30A) in writing, of the name and location of the facility and of the condition giving rise to the guilty verdict or guilty plea. V. The Listing Official shall then update the List by publishing a notice in the Federal Register , and shall notify the Associate Enforcement CoUnsel for Air or Water; the appropriate Regional Counsel; the Compliance Staff, Grants Administration Division, Office of Administration and Resource Management; the General Services Administration, and the facility. A facility remains on the mandatory List indefinitely until it establishes a basis for removal. Procedure for Removal from the Mandatory List I. Any person who owns, operates, leases, supervises, or has a financial interest in the listed facility may file with the Listing Official a request to remove that facility from the List. The request must establish one of the following grounds for removal: A. The condition at the facility that gave rise to the conviction has been corrected. B. The conviction (not just the sentence) was reversed or vacated. ------- —3— II. The Listing Official must transmit the request for removal to the Assistant Administrator for OECM. III. The Assistant Administrator for OECM, or her or his designee, shall review the request for removal and shall consult the appropriate Regional Counsel to determine whether the condition at the facility giving rise to the conviction has been corrected, or if the conviction has been reversi d or vacated. IV. The Assistant Administrator for OECM shall determine as expeditiously as practicable whether to remove the facility from the list. V. If the Assistant Administrator for OECM decides to remove the facility from the list, a written notification of such determination shall be sent to the facility and to the Listing Official who shall promptly publish a notice of removal in the Federal Register . VI. If the Assistant Administrator for OECM decides not to remove the facility from the List, the Listing Official shall send written notice of the decision to the person requesting removal. The notice shall inform the person owning, operating, leasing, supervising or having a financial interest in the facility of the opportunity to request a removal hearing before a Case Examiner (See 40 CFR Part 15 for the selection and duties of the Case Examiner). VII. If the Case Examiner, or the Administrator upon appeal of the Case Examiner’s decision, decides to remove the facility from the List, the Listing Official shall be notified. The Listing Official shall then promptly remove the facility from the List. If the Case Examiner or the Administrator upon appeal, decides not to remove the facility from the list, then the Listing Official shall send written notice of the decision to the person requesting removal. It is important to note that any decision regarding the listing or removal of a facility from the List does not affect any other action by any government agency against such a facility, including debarment from government contracting. I believe these procedures will enable us to conduct the mandatory listing program in an efficient manner. If you have any questions, please contact EPA’S Listing Official, Allen J. Danzig, at (FTS) 475—8777. cc: Stephen Ramsey, DOJ Belle Davis, GAD/OARM Judson W. Starr,/DO3 ------- Cardinar ------- Guidance on Implementing the Discretionary Contractor Listing Program (11/26/86) File at Part J, Document #2 ------- , • L”IITED SlATES ENVIRONMENTAL PROTECTION AGENCY VtASHINGTO!%, D.C. 20460 ‘. c ’ OFPICFOF E%E()R(I( , J N 2 6 A%DCOMPLI ..CL MO .ITORI MEMORANDUM SUBJECT: Guidance on Implementing the Discretionary Contractor Listing Program FROM: Thomas L. Adams, Jr. Assistant Administrator for Enforcement and Compliance Monitoring TO; Assistant Administrator for Air and Radiation Assistant Administrator for Water General Counsel Inspector General Regional Ac ministrators, Regions I—X Regional Counsels, Regions I—X I. Purpose This document establishes Agency policy and procedures for implementing the discretionary contractor listing program in EPA enforcement proceedings. It should be read in conjunction with the final revisions to the contractor listing regulations (40 CFR Part 15, 50 FR 36188, September 5, 1985), and the guidance document, “Implementation of Mandatory Contractor Listing” (General Enforce- ment Policy No. GM-32 , August 8, 1984). The procedures to be followed in all contractor listing actions are contained in the rule and are summarized in an Appendix to this document. This policy applies only to discretionary listing proceedings and super- sedes the “Guidance for Implementing EPA’s Contractor Listing Authority” (General Enforcement Policy No. GM—3], July 18, 1984). The revisions to the contractor listing regulations, together with this guidance document and other management initiatives, should encourage greater use of the Agency’s listing authority and should expedite the process for listing a facility. II. Background The Clean Air Act (CAA), Section 306, and the Clean Water Act (CWA). Section 508, as implemented by Executive Order 11738, authorize EPA to prohibit facilities from obtaining federal government contracts, ------- —2— grants or loans (including subcontracts, subgrants and subloans), as a consequence of criminal or civil violations of the CAA or CWA. Commonly called “contractor listing,” this program provides EPA with an effective administrative tool to obtain compliance with the CAA and CWA where administrative or judicial action against a facility has failed to do so. On July 31, 1984, EPA proposed revisions to the contractor listing regulations (40 CFR Part 15 (49 FR 30628)) to simplify and clarify the procedural opportunities which EPA will provide to parties to listing or removal actions and to provide for mandatory (i.e., automatic) listing of facilities which give rise to criminal convictions under Section 113(c) (1) of the CAA or Section 309(c) of the CWA. Final rules were promulgated on September 5, 1985 (50 FR 36188). III. Appropriate Cases for Discretionary Listing Recommendations In numerous cases, initiation of a listing action has proved to be effective in achieving more expeditious compliance and case settlements. While regional offices Bhould consider making contractor listing recommendations in every case where the criteria of 40 CFR Part 15 are met, listing is a tool to be used in conjunction with other enforcement actions. (See IV. Standard of Proof in Listing Proceedings , page 4.) The circumst-ances surrounding each case will dictate whether a listing action should be initiated. In particular, use of listing may be appropriate in the following cases: A. Violations of Consent Decrees Regional offices should strongly consider making listing recommendations for all cases of noncompliance with consent decrees under the CA.A or CWA. The recommendation should be prepared at the earliest possible time after the Region learns of noncompliance with the decree, but no later than the filing of a motion to enforce the decree. Initiation of the listing action should be supplementary to, and not in lieu of, a motion to enforce the decree. Where a consent decree covers CAA or CWA violations as well as violations of other envirorunenta]. statutes, such as the Resource Conservation and Recovery Act (RCRA) or the Toxic Substances Control Act (ISCA) (where EPA does not have contractor listing authority), a listing recommendation also should be considered. B. Continuing or Recurring Violations Following Filed Civil Judicial Actions Where EPA has filed a civil judicial enforcement action, the Regional Office should initiate a listing action at the earliest possible time after it determines that: (1) noncompliance is ongoing, (2) the defendant is not making good faith efforts to ------- —3— comply, and (3) an expeditious settlement does not appear likely. For example, a defendant may make a firm settlement offer that is far below the economic savings it realized from its noncompliance, making settlement unlikely. Similarly, where EPA initiates a multi—media civil enforcement action against violations under the CAA or CWA and other environ- mental statutes (such as RCRA or TSCA), and continuing water or air compliance problems exist without good faith corrective efforts, the Region should consider bringing a listing action. Therefore, it is important that all CAA and CWA counts be included in a multi- media enforcement action. C. Violations of Administrative Orders Where noncompliance continues after an administrative order has been issued under the CAA or CWA, and the Regional Office determines that the facility is not making sufficient efforts to come into compliance,.a Listing recommendation should be considered. Initiation of a listing action generally should not be in lieu of filing a civil judicial action to enforce the administrative order, but.should support the civil action. The Regional Office should consider initiating a listing action at the same time that it files the civil judicial action. D. Multi-Facility Noncompliance within a Single Company Contractor listing can be an effective tool to address a pattern of noncompliance within a single company. Where continuing or recurring CPLA or CWA violations occur at two or more facilities within the same company, and EPA previously has taken an enforcement action against each, the Regional Office should consider making listing recommendations in all such cases. While each facility’s continuing or recurring noncompliance must be proved separately (i.e., one may not use one violation from branch facility A and one violation from branch facility B to constitute the minimum two violations required), one listing recom- mendation describing noncompliance at two or more facilities may be submitted to the Assistant Administrator for the Office of Enforce- ment and Compliance Monitoring (OECM). A joint listing proceeding may be held concerning all facilities. Joint consideration of two or more facilities’ violations wiL’. require fewer Agency resources than listing each facility separately. It will also discourage companies from switching government contracts from a listed facility to another facility without taking steps to correct the violations which gave rise to the listing. To accomplish this, the Regional Office, with headquarters staff support, should review the EPA enforcement docket to see if a potential listing candidate has committed CAA or CWA violations at other company facilities. Note that a company’s facilities may be known by the parent company name or by the names of company ------- —4— subsidiaries. Regional offices may obtain information on other company facilities from Charlene Swibas, Chief, Information Services Section, NEIC (FTS 776—3219), who will search EPA’s Facility Index System which lists this information for all EPA regions, or provide a Dunn arid Bradstreet report containing this information. The Region may also request data on administrative orders issued against a company under the headquarters Permit Compliance System (for CWA violations) and the Compliance Data System (for CAA violations). In some cases EPA has issued administrative orders and filed civil enforcement actions against company facil- ities which are located in more than one region. Such multi—regionaL inquiries may be coordinated with the Headquarters participating attorney and the Agency’s Listing Official. E. Other Circumstances Where Listing is Appropriate The regulation provides two other situations where listing may be appropriate. First, EPA can list a facility after it has issued a Notice of Noncompliance under Section 120 of the CAA. The threat of listing in combination with noncompliance penalties can impose a sufficiently severe economic cost on a facility to encourage efforts to achieve both compliance and quicker settlements. Second, RegionQl Offices may recommend listing when a state or local court convicts any person who owns, operates, or leases a facility of a criminal offense on the basis of noncompliance with the CAA or the CWA. They also may recommend listing when a state or local court has issued an injunction, order, judgement, decree (including consent decrees), or other civil ruling as a result of noncompliance with the CAA or CWA. IV. Standard of Proof in Listing Proceedings It will be the responsibility of the Office of Regional Counsel to represent the Agency at any listing proceeding (where one is requested by the affected facility). According to 40 CFR Section 15.13(c), “ [ t]o demonstrate an adequate basis for listing a facility, the record must show by a preponderance of the evidence that there is a record of continuing or recurring non—compliance at the facility named in the recommendation to list and that the requisite enforcement action has been taken.” “Requisite enforcement action” can be established by reference to an issued administrative or court order, or a filed civil judicial action. “Continuing or recurring” violations are understood to mean two or more violations of any standard at a facility, which violations either occur or continue to exist over a period of time. Such a violation occurs even when different standards are violated and time has elapsed between violations. Thus, in a listing proceed- ing, it is not necessary to prove all violations of CAA or CWA standards alleged in th underlying enforcement action. Nonetheless, ------- —5— the regional attorney must carefully review the sufficiency of the evidence and evaluate anticipated defenses. V. Fairness Concerns in EPA Use of Contractor Listing It is the intent of this guidance document to encourage the use of the Agency’s contractor listing authority in appropriate cases. However, it must be recognized that listing is a severe sanction. Before making a recommendation in any case, the Regional Office should determine that the continuing or recurring noncompli- ance involves clearly applicable CAA or CWA standards. Likewise, Agency enforcement personnel must be careful in using listing terminology during discussions with defendants. During settlement negotiations, for example, it js certainly proper for EPA to advise a defendant of the range of available EPA enforcement authorities, including contractor listing. However, EPA personnel must distin- guish between a listing recommendation (made by a “recommending person,” usually the Regional Administrator, to the Assistant Administrator for OECM), a notice of proposed listing by the Agency to the affected facility (which is sent by the Listing Official after a preliminary decision to proceed is made by the Assistant Administrator for OECM) , and a final decision to list which is made either by an Agency Case Examiner at the end of a listing proceeding, or by the Assistant Administrator for OECM if no listing proceeding is requested. Where appropriate, EPA personnel should explain that the Regional Administrator’s listing recommendation does not consti- tute final Agency decision to list. VI. Press Releases on Contractor Listing Actions EPk will use press releases and other publicity to inform existing and potential violators of the CAA and the CWA that EPA will use its contractor listing authority in appropriate situations. The November 21, 1985, “Policy on Publicizing Enforcement Activities” (GM—46), states that “ [ i]t is EPA policy to issue press releases when the Agency: (1) files a judicial action or issues a major adminis- trative order or complaint (including a notice of proposed contractor listing arid the administrative decision to List)....’ As discussed in that policy, the press release should be distributed to both the local media in the area of the violative conduct and the trade press of the affected industry. VII. Coordination with the Department of Justice To ensure that information presented during a listing proceeding will not compromise the litigation posture of any pending legal action against a party, EPA will coordinate with the Department of Justice (DOJ) before a recommendation to list is made to the Assis- tant Administrator for OECM. If the recommending party is an EP regional office official, he or she shall coordinate with the appropriate DOJ attorney before a recommendation is submittel to the Listing Official. He or she shall also provide the DOJ att)r— ney’s corr ents to the Listing Official as part of the recommen1 tiOfl ------- —6— package. If the recommending party is not an EPA official, the Listing Official shall coordinate with the EPA Office of Regional Counsel and the appr3priate DOJ attorney before a recommendation to list is presented to the Assistant Administrator for OECM. VIII. Applicability of Contractor Listing to Municipalities Municipalities are subject to listing under appropriate cir- cumstances. State and local governments and other municipal bodies are specifically identified by 40 CFR l5.4 as “persons” whose facilities may be listed. The standards for recommending that a municipal facility be listed are the same as those for listing other facilities. Listing may not be the most effective enforce- ment tool in many municipal cases because often the only federal funds received by a municipal. facility are grant funds to abate or control. pollution, which are exempted from the listing sanction by 40 CFR l5.5. However, listing still should be considered in cases where a municipal facility receives nonexempt funds or where the principles underlying the listing authority otherwise would be furthered by a recommendation to list. IX. Use of Listing in Administrative Orders Enforcement offices may wish to inform violating facilities early in the enforcement process of the possibility of being listed. Many facilities 1o not know about the listing sanction; such knowl— edge.may provide additional impetus for a facility to take steps to cor e into compliance. For example, some EPA regions notify facilities whose violations make them potential candidates for listing of this possibility in the cover letter which accompanies an administrative order requiring them to take action to correct their noncompliance. X. Obtaining Information Concerning Government Contracts ii id by a Facility Under Consideration for Listing After an EPA recommending person, usually the Regional Administrator, has submitted a listing recommendation to the Listing Official, the regional office attorney handling the case may require the facility to provide a list of all federal contracts, grants, and loans (including subcontracts, sub— grants, and subloans). To insure that such a requirement is not imposed prematurely, the regional. office attorney should require this information from a facility only after advising the Listing Official of his or her intention to do so. Requiring this information from the facility is not a prerequisite for listing a facility. Requiring this information from a facility may be accom- plished by telephone or through a letter similar to the models providel in Attachments D and E. Attachment D is a model letter requesting information from a facility which is violating an administrative order issued under the author .ty of the Clean ------- —7— Water Act for violating its National Pollutant Discharge Elimination System (NPDES) permit. Attachment E is a letter to a facility which EPA arid the Department of Justice have filed a civil suit against for violating the Clean Air Act. Regional office attorneys may elect to have such a request letter serve as notification to the facility that EPA is considering instituting a listing action, or they may wish to inform the facility before sending such a letter. Which approach is taken will depend on the regional office attorney’s judgment of the notification’s effects on the overall case against the facility. XI. Headquarters Assistance in Preparing and Processing Listing Recommendations In order to encourage the use of the contractor listing author- ity in appropriate cases, OECM staff have been directed to assist regional offices in preparing listing recommendations. Attached are model listing recommendations indicating the level of detail and support that should be provided with recommendations. (See Attachments A, B, and C for model listing recommendations.) Where a listing recommendation is sufficient, the Assistant Administrator for OECM will decide whether to proceed with the listing action under Section 15.11(c) (i.e., by directing the Listing Official to issue a notice of proposed listing to the affected facility) within t o weeks after receiving the recommendation. Questions concerning contractor listing may be d-irected to the Agency Listing Offici i1, Cynthia Psoras, LE-130A, FTS 475-8785, E-Mail Box EPA2261. Attachments CC: John Ulfelder Senior Enforcement Counsel Associate Enforcement Counsel for Air Associate Enforcement Counsel for Water Director, Office of Water Enforcement and Permits Director, Stationary Source Compliance Division Director, Office of Compliance Analysis and Program Operations Director, NEIC Director, Water Management Division (Regions I—X) Director, Air Management Division (Regions I, III, V and IX) Director, Air and Waste Management Division (Regions II and VI) Director, Air, Pesticides and Toxics Management Division (Region Iv) Director, Air and Toxics Division (Regions VII, VIII and x) David Buente, Department of Justice (DOJ) Nancy Firestone, DOJ ------- Appendix The Listing Program and Final Revisions to 40 CFR Part 15 A. Mandatory Listing If a violation at a facility gives rise to a criminal con- viction under Section l13(c)(l) of the CAA or Section 309(c) of the CWA, listing of the facility is mandatory (and effective upon conviction under 40 CFR Section 15.10). As soon as a conviction occurs, the Director of the Office of Criminal Enforcement, within the Office of Enforcement and Compliance Monitoring (OECM), must verify the conviction and notify the Listing Official. The Listing Official sends written notification to the facility and to the Federal Register . Both documents must state the basis for an the effective date of the mandatory listing. Removal from the mandatory list may occur only if: (1) the Assistant Administrator certifies that the facility has corrected the condition that gave rise to the criminal conviction under Section 113(c)(1) of the CAA or Section 309(c) of the CWA, or (2) a court has overturned the criminal conviction. The August 8, 1984, memorandum, “Implementation of Mandatory Contractor Listing,” (GM—32) discusses the procedures ior mandatory listing in more detail. B. Discretionary Listing 1. Basi .s for Discretionary Listing The following enforcement actions may serve as a basis for discretionary listing if t:’ ere is also a record of continuing or recurring noncompliance at a facility: a. A federal court finds any person guilty under Section 113(c)(2) of the CAA, if that person owns, leases, or supervises the facility. b. A state or local court convicts any person of a criminal offense on the basis of noncompliance with clean air or clean water standards if that person owns, leases, or supervises the facility. c. A federal, state, or local court issues an injunction. order, judgment, decree (including consent decrees), or other form of civil ruling as a result of non- compliance with the CWA or CWA at the facility. d. The facility is the recipient of a Noeice of Noncompliance under Section 120 of the CAA. e. The facility has violated an administrative order under: ------- —2— • CAA Section 113(a) 0 CAA Section 113(d) o CAA Section 167 0 CAA Section 303 0 CWA Section 309(a) f. The facility is the subject of a district court civil enforcement action under: o CAA Section 113(b) o CAA Section 167 0 CAA Section 204 0 CAA Section 205 0 CAA Section 211 O CWA Section 309(b) 2. The Discretionary Listing Process a. Listing Recommendation and Notice of Proposed Listing The discretionary listing process begins when a “recommending person” files a listing recommendation with the Listing Official. Recommending persons may include any member of the public, Regional Administrators, the Assistant Administrator for Air and Radiation, the Assistant Administrator for Water, the Associate Enforcement Counsel for Air, the Associate Enforcement Counsel for Water, and the Gover.ior of any State. The recommendation to list: (1) states the name, address, and telephone number of the recommending person; (2) identifies the facility to be listed, and provides its street address and mailing address; and (3) describes the alleged continuing or recurring noncorn )1iance, and the requisite enforcement action (see 40 CFR Section 15.11(b)). The recommendation to list should describe the history of violations in detail, including the specific statutory, regulatory, or permit requirements violated. In addition, regional offices may include as attachments to the listing recominen— dation documents prepared for other purposes, such as complaints, litigation reports, and other explanatory material which describes the nature of the violations. (See Attachments for model listing recommendations.) The Listing Official must determine whether the recommendation meets the requirements of Section 15.11(b). If the recommendation is sufficient and the Assistant Administrator for OECM decides to proceed under Section 15.11(c), the listing official will contact the regional office to ensure that it still wishes to proceed. If the decision is made to proceed, the listing official provides notice of the proposed listing to the owner or operator of the affected facility ani provides the owner or operator of the facility 30 days to request a listing proceeding. A listing proceeding is not a formal hearing; rather, it is an informal administrative procee . ing presided over by an Agency Case Examiner. If the facil- ity’s owner or operator requests a listing proceeding, the Listing Official must schedule it and notify the recommending person ani ------- —3— the owner or operator of the date, time, and location of the proceed .rig. The Assistant Administrator designates a Case Examiner to preside over the listing over the listing proceed ing. ’ b. . isting Proceeding Th Federa’l Rules of Civil Procedure and Evidence are not used during listing proceedings. The Agency and the facility. may be re resentèd by counsel and may present relevant oral and writte evidence. With the approval of the Case Examiner, either party may call, examine, and cross—examine witnesses. The Case Examiner may refuse to permit cross—examination to the extent it would: (1) prematurely reveal sensitive enforcement information which the government may legally withhold, or (2) unduly extend the proceedings in lig t of the usefulness of any additional information likely to be produced (see Section 15.13(b)). A transcript of the proceeding along wit - any other evidence admitted in the proceeding constitut . the record. The Agency must prove each element of a discretionary listing by a preponderance of the evidence (see Section 15.13(c)). The Case Examiner must issue a written decision within 30 calendar days after the proceeding. The party adversely affected may appeal the decision to the General Counsel. The appeal, which is filed with the Listing Official, must contain a statement of: (1) the case and the facts involved, (2) the issues, and (3) why the decision of the Case Examiner is not correct based on th. record of the proceeding considered as a whole. The General C’..,u’isel must issue a final decision, in writing, as soon as practicable after reviewing the record. The Listing Official then must send writteL notice of the decision to the recommending person and to the facility, and must publish the effective date of the listing in the Federal Register if the General Counsel upholds the Case Examiner’s decision to list. c. Removal from the List of Violating Facilities Removal from the List of Violating Facilities can occur in any of the following circumstances: 1. Upon reversal or other modification of the criminal conviction decree, order, judgment, or other civil ruling or finding which formed the basis for the discretionary listing, where the reversal or modification removes the basis for the listing; 1/ If the owner or operator of the facility does not make a timely request f. r d listing proceeding, the Assistant Administrator will. deter’nine whether to list the facility based upon the recommenz atioi to list and any other available information. ------- —4— 2. If the Assistant Administrator for OEC 1 determines that the facility has corrected the condition(s) which gave rise to the listing: 3. Automatically if, after the facility has remained on the discretionary list for one year on the basis of Section 15.ll(a)(4) or Section 15.ll(a)(5) and a basis for listing under Sections 15.ll(a)(l), (2), or (3) does not exist; or 4. If the Assistant Administrator for OECM has approved a plan for compliance which ensures correction of the condition(s) which gave rise to the discretionary listing. The original recom ’nending person or the owner or operator of the facility may request removal from the list. The Assistant Administrator for OECM then must review the request and issue a deci.sioi as soon as possible. The Listing Official then must transmit the decision to the person requesting removal. If the Assistant Administrator for OECM denies a request for removal, the requesting person may file a written request for a removal proceeding to be conducted by a Case Examiner designated by the Assistant Administrator. The Federal Rules of Civil Procedure and Evidence are not used during a removal proceeding. The Case Examiner’s written decision must be based solely on the record of the removal proceeding. Within 30 calendar days after the date of the Case Examiner’s decision, the owner or operator of the facility may file with the Listing Official a request for review by the Administrator. The Administrator will determine if the Case Examiner’s decision is correct based upon the record of the removal proceeding considered as a whole. The Administrator then must issue a final written decision. ------- Attachment A MODEL LISTING RECOMMENDATION BASED ON ADMINISTRATIVE ENFORCEMENT ACTION DATE: 10/01/86 SUBJECT: Recomntendation to List Violating Facility FROM: Regional Administrator, Region XI TO: Cynthia Psoras Listing Official Legal Enforcement Policy Division (LE—130A) The purpose of this memorandum is to recommend that the [ name of facility and type of operations conducted at the facility] owned and operated by John Doe at [ street address, city and state] be placed on the EPA List of Violating Facilities because of violations of clean air standards. Information concerning the recurring violations and the history of action taken thus far by the Agency is set forth below. Copies of pertinent supporting materials are attached. [ Attach technical documents describing th violation, the administrative order, and other documents describing the enforcement action taken.] This plant is subject to the New Source Performance Standards (NSPS) for Asphalt Concrete Plants. 40 CFR Part 60, Subpart I (1986). On July 5, 1985, the Region XI Director, Air Management Division, notified [ owner and operator] that on the basis of performance tests conducted December 19, 1984, the facility was in violation of 40 CFR 60.92(a)(l), in that it was discharging gases into the atmosphere, and those gases contained 256.5 milLigrams of particulate matter per dry standard cubic meter (0.114 grain per dry stanlard cubic foot). The allowable discharge of particulate matter into the atmosphere is 90 milligrams per dry standard cubic meter (0.04 grain per dry standard cubic foot). On August 14, 1985, the Region XI Regional Administrator issued an Administrative Order pursuant to Section 113(a)(3) of the Clean Air Act. That order required, in part, that [ name of facility] operate its [ specific portion of the plant or processes causing the violations] in compliance with the NSPS for Asphalt Concrete Plants, 40 CFR Part 60, Subpart I, and to conduct performance tests for emissions of particulate matter within sixty days following he effective date of the Administrative Order. Performance tests were completed on September 1, 1985, and the particulate emissions were 373.5 milligrams per dry standard cubic meter (0.166 grain per dry standard cubic foot). Th .is, riane of facility] is not in compliance, and has violatei the Ad.ninistrative Order. Further, the violation ------- 2 of the NSPS has been a continuing violation in that the particulate emissions have been greater than the permissible limits since the December 19, 1985, test date. The recommending person for this listing recommendation is Regional Administrator, Region XI, EPA, Government Office Building, City, 51st State: her telephone number is (FTs) 123—4567. This action is authorized under discretionary listing, 40 CFP 15.ll(a)(4) (1986). It meets the regulations’ two requirements that: there is “continuing or recurring noncompliance with clean air standards ... at the facility recommended for listing” and that the facility has violated an administrative order issued under Section 113(a) of the Clean Air Act. If you have any questions, please contact Attorney, at (FTS) 123—4568, or Engineer, at (FTS) 123—4569. Attachments [ technical documents, Administrative Order, documents describing the previous enforcement actions taken] ------- Attachment B MODEL LISTING RECOMMENDATION B/ SED ON JUDICIAL ENFORCEMENT ACTION ME MO RAN DUM SUBJECT: Recommendation for Listing FROM: Regional Administrator, EPA Region 12 TO: Cynthia Psoras Listing Official Legal Enforcement Policy Division, LE—130A This is a recommendation that the [ facility name and address] be ?1ace 1 on the EPA List of Violating Facilities, pursuant to Section 306 of the Clean Air Act, Executive Drder 1l73 3, 40 CF’R Part 15, and the October 1986 guidance from the Assistant Administrator for Enforcement and Compliance Monitoring. This action is authorized under 40 CFR 15.11(a)(6) (19a6). This recommendation is based on violations alleged in the civil actinr ctirr rit1y being pursued against [ facility name] in the 1 Jnite States District Court for the Fifty Second State. [ Facility name] operates four coal—fired boilers (boLlers nos. 2-5) at the [ facility] without adequate air p3liUtIOfl control. equipment. As indicated in the attached counterclaim, motion for partial summary judgment, anl affidavits, [ facility name] has been in vioLation of the Federal New Source Performance Standards (NSPS) for particulate emissions since startup of the boilers, more thaii fiie years ago. The United States issued a notice of vioLation to [ facility name] regarding mass emission violations at the [ facility name] boilers nos. 2-5 on May 30, 1981. [ Facility name] has not substantially modified the particulate emission control system for these four boilers since that time. Particulate stack testing conducted as recently as January 1986 shows continuing violations of the boilers. The complaint, attached to this memo, was filed by defendant on June 15, 1985. The United States then filed a counterclaim on August 1, 1985. The Government’s Motion for Partial Summary Judgment as to liability, filed on or about December 12, 1985, was granted in part on April 8, 1986, wherein the court denied [ facility name’s] claim that the four boilers were not covered by NSPS. The remainder of the Motion, requesting judgment on the counterclaim for enforcement, is pending before the court. m [ facility name] plant is located in [ City and State] which is t secondary nonattainment area for Total Suspended ?articulates. The attach . affidavits contain summaries of mass violations at th Efacility name’s] boilers nos. 2—5. All data summarized ------- 2 were obtained from stack tests performed on the [ facility name] boilers by the [ owner and operator corporation] and stack tests performed by a consultant retained by the [ owner and operator corporation]. Based on the information contained above and in the attachments to this recomii endation, I request that the Assistant Administrator for Enforcement and Compliance Monitoring find that there is adequate evidence of continuing or recurring violations of Clean Air Act standards at the [ facility name] and place this facility on the EPA List of Violating Facilities pursuant to the procedures set forth in 40 CFR Part 15. For further information please contact Attorney on (FTS) 987-654 or Technical Specialist (FTS) 987—655. (Signed) Regional Administrator Attachments [ tec’mical documents, consultant’s report, documents describing the judicial iiforcement action] ------- Attachment c ATr ENT TO MODEL LISTING RECOMMENDATION BASED ON JUDICIAL ENFORCEMENT ACTION ME A DL” SUBJECT: Attach—.ent to Recommendation for Listing FROM: Regional Administrator, EPA Region 12 TO: Cynthia Psoras Listing Official Legal Enforcement Policy Division (LE—103—A) Description of Violations The fo.ir coal-fired boilers at [ facility name] are subject to 40 CFR part. 63, Subpart D, “Standards of Perf Drrance for Fossil-Fuel—Fired Steam Generators for which Construction is Commenced after August 17, 1971,” and 40 CFR part 60. Subpart A, “General Provisions,” which are app1icab to all. categD ies of sources for which New Source Perforia: ce 5n- ds (NSPS) have been promulgated. S.. bpart r) i-ic dcs e’nission limits for particulate r att.er, orDaci.:v, sulfur dioxide and nitrogen oxides (43 CFR §60.42). It a.so re .iires installation, calibration, r ainte a:ice o ratio.i of continuous emission monitoring (“:E syste s for o-acity, sulfur dioxide and nitrogen oxides (40 F §45( )). ach of t e facility’s boilers nos. 2, 3, 4, and 5 is s jec. tc thes. emission limitations and CEM requirenents. When L A .er o2er tor] constructed the facility’s boilers 2-5 bet .. ee:- 1970 an E 1980, it equipped each of the boilers .ioub aFcal.i. venturi scrubber for combined control of suif. r di iie arid particulate matter. These scrubbers su:- cessful.ly cor.trol sulfur dioxide emissions but they have never achieve the Subpart D particulate emission limit, 40 CFR §6O.42( )(l). [ Owner arid operator) also equipped the boilers with coitinuous monitoring systems for opacity, sulfur dioxide and oxyge: (it was exempt from the NOX CEM requirement, pursuant to 40 CFR §60.45(b)(3)). The sulfur dioxide monitoring system has never operated properly. Subpart A includes requirements related to operation and maintenance of CEM systems (40 CFR §60.13); notification an 1 recordkeeping (40 CFR §60.7) and performance testing (40 CFR §60.8k). Under 40 CFR §60.13, all CEM systems installed under applicable subparts must: a. he installed and operational prior to conducting perfDrr ar1ce tests (erussions tests) — §60.13(b); b. Undergc a perfor iance evaluation (monitor ------- 2 certification test) during or within 30 days of the performance tests — §60.13(c); c. undergo regular calibration and maintenance — §60. 13(d) (1) (Facility name] violated all these provisions. It never performed a monitor performance evaluation on, and has ne ’er operated and maintained, its sulfur dioxide CEM system. Under 40 CFR §60.7, owners and operators of NSPS sources mu St: a. Notify EPA of the anticipated date of initial start—up of an affected facility postmarked not less ti a1 30 days prior to such date — §60.7(a)(2): b. Notify EPA of the actual date of initial start-. p postmarked within 15 days of such date §6 .7(a) (3); c. Subr t quarterly reports of “excess emissions’ (e-tissior s exceeding applicable emission limits) as measured by continuous monitoring systems — §6 .7(c). a::iity name] failed to notify EPA of the anticipates or actual sta-t-up of boilers 4 and 5. (Facility name] has neve: sub— .tte arty excess emissions reports to EPA. n er 4C CFR §60.8, owners/operators are required to conch t e formance tests of affected facilities not later thart 16:) dais after initial start—up. (Facility name] vio1ate this provision with respect to boilers 4 and 5. It is [ facility name’s] customary practice to operate one or more of the boilers during the winter heating season. The steam that is generated is used for space heating and production. The boilers are not operated, or are operated using only natural gas as fuel, in the warmer months. Each heating season since the NOV was issued (in August 1980). boilers 2 and 3 have been regularly operated. Each day a boiler is operated, particulate emissions from that boiler exceed the limit, and violations of the CEM regulations occur because the sulfur dioxide C D I remains inoperative. - This winter, [ facility name] has informed us that they will not operate the boilers using coal for fuel and will only use naturaL gas. Ho ever, they have made no commitment to permanently cease operating the boilers using coal. ------- 3 The Motior for Sums ary Judgment On September 25, 1985, the District Court for the Central District of the Fifty Second State ruled on EPA’s motiion for partial summary judgment with respect to the Agency’s counterclaim for enforcement. EPA’S motion dealt only with the alleged violations of the subpart D particulate emissions limit. It did not deal with the monitoring, notification arid reporting violations. EPA introduced into evidence six stack tests conducted on boilers nos. 2—5, all of which showed the tested boiler to be exceeding the limit. The court ruled that on the six days on which those tests occurred, (facility name] violated the subpart D particulate standard. Enclosed is a copy of the transcript of the Septenber 26, 1985, hearing on the Motion for Summary Judgment. Judge X ruled from the bench following oral argumer 1 by the parties. See pages 21—25. The judge stated that he would issue a written order, but he has not done so yet. We will furnish you with a copy upon receipt. An eviden iary hearing is scheduled for March 1, 1985, to establish days of violation other than the six stack test days. (signed) Regional Administrator ------- Attachj ent D MODEL LETTER TO A FACILITY VIOLATING THE CLEA WATER ACT REQUESTING A LIST OF ITS FEDERAL CONTRACTS, GRANTS, AND LOANS CERTIFIED MAIL RETURN RECEIPT REQUESTED Mr. John Smith President XYZ Corporation 1000 Corporate Lane Fifty Second State 12345 Dear Mr. Sr ith: The XYZ C3rporation was issued National Pollutant Discharge Elinination System (NPDES) permit number FS0100524 by the Regional Adninistrator of EPA. Region XI, pursuant to Title 33, Unite. States Code, Section 1342. This permit auth.rizes the discharge of pollutants into the Blue River in accordance with the effluent limitations, monitoring re uirements, and other provisions of the permit. On May 6, 1986, E? issued Administrative Order 086—1570 to the XYZ Corpora iori pursuant to the authority granted under Title 33, Unite States Code, Section 1319(a)(3) for exceeding the effluer.t imitations for biochemical oxygen demand and total suspended so1i s. As discussed in our letter to you of July 6, 1986 you are currently in violation of this Administrative 0rde . Under the provisions of Title 33, United States Code, Section 1368(a), a facility owned, leased, or supervised by a “person’ (defined to include a corporation such as XYZ Corpora- tion) who comrnits “continuing or recurring” violations of the Clean Water Act may be placed on a “List of Violating Facilities and prohibited from receiving Federal contracts, grants and loans. The prohibition under Title 33, United States Code, Section 1368(a) is implemented by the Environmental Protection Agency (EPA) under regulations promulgated at Title 40 of the Code of Federal Regulations Part 15, entitled Mmi js- tration of The Clean Air Act and Federal Water Pollution Control Act with Respect to Federal Contracts, Grants, or Loans.” These regulations state that a facility may be placed on the “List of Violating Facilities” for a violation of an administrative order under Title 33, United States Code, Section 1319(a). Under T t1e 33, United States Code, Section 1318, EPA has authority to require the owner or operator of any point source to make s .ic’i reports and to provide such other infor- mation as are dee e reasonably necessary to carry out the ------- —2— objectives of the Clean Water Act, Title 33, United States Code, Section 1251 et Accordingly 1 for the purposes of implementing Title 33, United States Code, Section 1368(a), EPA hereby invokes its authority under Title 33, United States Code, Section 1318, and requires XYZ Corporation, as the owner and operator of a point source, identified in NPDES permit number PSOlOO524, to provide the information specified below no later than 15 calendar days from receipt of this letter. The submittal should be addressed to: Regional Attorney Office of Regional Counsel U.S. Environmental Protection Agency Region XI Informatio -. to be Submitted to EP 1. Identify, by contract number, contracting agency and con- tract date, all Federal contracts held by the facility for the pro:ure rent of personal property or nonpersonal services, for which XYZ Corporation is either the prime contractor or subcontractor. 2. Identify, by grant number, granting agency, and grant date, all Federal grants received by the facility, including grants-in- aid, for which XYZ Corporation is either the grantee (prime recipient of a grant) or a subgrantee (the holder of an a reei ent or an arrangement under which any portion of the activity Cr prograr. is being assisted under the grant). 3. Identify, by loan number, lending agency, and loan date, all Federal loans for which XYZ Corporation is a borrower or subborro er. 4. Identify, by bid number, agency and date, all bids submit- ted b XYZ Corporation for future Federal contracts or subcontracts. 5. Identify, by grant application number, agency and date, all grant applications submitted by XYZ Corporation for any future Federal grant or subgrant. 6. Identify, by loan application number, agency and date, all loan applications submitted by XYZ Corporation for future Federal loans or subloans. 7. Identify, by percentage estimate, the extent to which XYZ Corporatl.orts business is connected, in any degree, to Federal contracts, grants and loans. ------- —3— 8. Identify the effect, if any, of the prohibition of Title 33, Ur.ited States Code, Section 1368(a), upon the business of XYZ Corporatio! . This inquiry does not constitute an official notification that XYZ Corportion is under consideration for placement on the “List of Violating Facilities.” If deemed appropriate, such a notice will be initiated by the Listing Official, Office of Enforcement and Compliance Monitoring, EPA. Under Title 33, United States Code, Section 1318(b), xyz Corporation may assert a business confidentiality claim with respect to part or all of the information submitted to EPA in the manner described at 40 C.F.R. 2.203(b). Informatio- covered by such a claim will be disclosed by EPA only to the extent, arid by means of the procedures set forth in 40 C.F.R. Part 2, Subpart B. If no such claim accompanies the information when it is submitted to EPA, it may be made available to the public by EPA without further notice to XYZ Corporation. Care should be taken in ensuring that the response to this letter is complete and accurate because Title 33. United States Code. Section 13l9(c)(2) provides criminal penalties for kno ing1y or willfully submitting false information to EPA in any report required by the Clean Water Act. In addition, Title 18, Uru.ted States Code, Section 1001 provides criminal penalties for cnowingly or willfully submitting false. inform tioi to a federal official. This i iformation request is not subject to the approval require ients of the Paperwork Reduction Act of 1980, Title 44 Unite 4 . St. tes Code, Sections 3501 et Sho 1d you have a y questions, please contact me at (123) 456-789Z . Sincerely yours, Regional Attorney Region XI ------- Attachment E M DEL LETTER TO A FACILITY VIOLATING THE CLEAN AIR ACT REQUESTfl* G A LIST OF ITS FEDERAL CONTRACTS, GRANTS, MD LOANS CERTIFIED MAIL. RETURN RECEIPT REQUESTED Mr. cohn Smith President ABC Corporation 1000 Corporate Lane Fifty Third State 12345 Dear Mr. S’ ith: On May 5, 1986, in the Southern District of the Fifty Third Star , the Department of Justice instituted a civil suit against the ABC Corporation for continuing and recurring violations of Title 42, United States Code, Section 7413(b). Title 40 of the Code of Federal Regulations, Part 15, entitled “Administration of The Clean Air Act and Federal Water Pollution Control Act with Respect to Federal Contracts, Gra its, or Loans,” promulgated pursuant to Title 42, United States Code, Section 7606(a) and Executive Order 11738 (38 FR 25161, Sep-..ern er 12, 1973) authorize EPA to establish a “List of Violating Facilities.” Facilities on this List are prohibited from receiving Federal contracts, grants, and loans. A facility who co—..—i- ..s ‘c3ntir.Jir1 or recurring” violations of the Clean Air Act may be placed on the List. These regulations state that a facility nay be placed on the List after EPA. through the Department of Justice, has filed a civil enforce- nent. action in federal court under Title 42, United States Code, Section 7413(b). Under Title 42, United States Code, Section 7414(a), EPA has authority to require the owner or operator of any emission source to make such reports and to provide such other infor- mation as are deemed reasonably necessary to carry out the objectives of the Clean Air Act, Title 42, United States Code, Section 7401 et . Accordingly, for the purposes of implementing Title 42 United States Code, Section 7606(a), EPA hereby invokes its authority under Title 42, United States Code, Section 7414, and requires ABC Corporation as the owner and operator of a emission source, to provide the information specified below no later than 15 calendar days from receipt of this letter. ------- —2— subiuttal should be addressed to: Regional Attorney Office of Regional Counsel U.S. Environmental Protection Agency Region XI Information to be Submitted to EPA 1. Identify, by contract number, contracting agency and con- tract date, all Federal contracts held by this facility for the procurement of personal property or nonpersonal services, for which ABC Corporation is either the prime contractor or subcontractor. 2. Identify, by grant number, granting agency, and grant date, all Federal grants received by this facility, including grants-in-aid, for which ABC Corporation is either the grantee (pri:ne recipient of a grant) or a subgrantee (the holder of an agreement or an arrangement under which any portion of the activity or progran is being assisted under the grant). 3. Ide- tify, by loafl nu ber , lending agency, and loan date, all Federal loa is for whic?’ ABC Corporation is a borrower or subborro er. 4. Identify, by bid nu her, agency and date, all bids submit- ted oy A5C Corporation for future Federal contracts or subcor.tracts. 5. Ider. ifj, by grant application nunther, agency and date, a1.i grant ap 1icat.cis subr itted by ABC Corporation for any future Federal grant or subgrant. 6. Identify, by loan application number, agency and date, all loan applications submitted by ABC Corporation for future Federal Loans or subloans. 7. Identify, by percentage estimate, the extent to which ABC Corporation’s business is connected, in any degree, to Federal contracts, grants and loans. 8. Identify the effect, if any, of the prohibition of Title 42, United States Code, Section 7606(a), upon the business of ABC Corporation. This inquiry does not constitute an official notification that ABC Corportion is under consideration for placement on the ‘List of Violating Facilities.” If deemed appropriate, such a notice will be initiated by the Listing Official, Office of Enforce:ie. t and Compliance Monitoring, EPA. ------- —3— Under Title 42, United States Code, Section 7414(c), ABC Corporation may assert a business confidentiality claim with respect to part or all of the information submitted to EPAin the manner described at 40 C.F.R. 4 2.203(b). Information covered by such a claim will be disclosed by EPA only to the extent, and by means of the procedures set forth in 40 C.F.R. Part 2, Subpart B. If no such claim accompanies the information when it is submitted to EPA, it may be made available to the public by EPA without further notice to ABC Corporation. Care should be taken in ensuring that the response to this letter is complete and accurate because Title 42. United States Code, Section 74l3(c)(2) provides criminal penalties for knowingly submitting false information to EPA in any report required by the Clean Air Act. In addition, Title 18, United States Code, Section 1001 provides criminal penalties for knowingly or willfully submitting false information to a federal official. This inforr iatio request is not subject to the approval requirerients of the Paperwork Reduction Act of 1980, Title 44 United States Code, Sections 3501 et Sho d you have any questions. please contact me at (123) 456-7890. Sincerely yours, Regional Attorney Region XI ------- Cam’Jna!® ------- Listing Asbestos Demolition and Renovation Companies Pursuant to Section 306 of the Clean Air Act (03/11/88) File at Part J, Document #3 ------- á UNITED STATES ENVIRONMENTAL PROTECTION AGENCY I 1 WASHINGTON. D.C. Z0460 ‘AR I I 1928 MEMORANDUM SUBJECT: Listing Asbestos Demolition and Renovation Companies Pursuant to Section 306 of the Clean Air Act FROM: Michael S. Alushin, ,/. 4 .4 , Associate Enforcement ounse Air Enforcement Divisi £ / John S. Seitz, Directo Stationary Source Compi ance Division Office of Air Qu 1ann tandfrds Terre 11 E. ‘H13n.t- fr Office of Enforcement Policy Office of Compliance Analysis and Program Operations TO: Addressees we urge you to consider listing, under Section 306 of the Clean Air Act, contractors who are violators of the asbestos demolition and renovation (D&R) standards, 40 C.F.R. Part 61, Subpart M. Since significant amounts of federal money are involved in asbestos removal, we think that you will find that contractor listing can be an effective sanction against recalcitrant violators. It will deprive them of the privilege of contracting or subcontracting with federal agencies or with any other entity which has received federal grants or loans for asbestos removal. Contractors convicted of criminal violations under S 113 (c)(1) will be automatically listed under the Mandatory Listing provisions, 40 C.F.R. S 15.10. Under 40 C.F.R. S 15.11, EPA has the discretion to list contractors who o have violated an administrative order under S 113(a) or (d), S 167 or S 303, • have been issued a Notice of Noncompliance under S 120, O have been issued any form of civil ruling by a federal, state or local court, as a result of noncompliance with clean air standards, ------- 2. o have been convicted by a state or local court of any criminal violations of the CAA or by a federal court for criminal violations under S 113(c)(2) (for making false statements, records or reports); or • have had a civil judicial enforcement action filed against them in federal district court for CAA violations. Asbestos D&R contractors differ from the traditional “stationary sources” of air pollution, because each job is done at a different construction site, generally owned by someone other than the asbestos D&R company. Therefore, the enclosed legal memorandum was prepared to clarify the application of the contractor listing regulations to asbestos D&R contractors. This memorandum addresses the question of whether the bus- iness address of an asbestos D&R company may be listed as the “violating facility” when placing an asbestos D&R company on the List of Violating Facilities under Section 306 of the Clean Air Act. It concludes that the business address of an asbestos D&R company, rather than the address of the demolition site, should be used to identify the “violating facility” when placing an asbestos D&R company on the List of Violating Facilities. We need your help to make this program a success. To get off to a good start, establishing some clear precedents, we need your nomination of candidates for listing. We hope to start with contractors with both egregious substantive violations and notice violations. If a nationwide or very large contractor has distinct regional or other sub—divisions, you should consider whether naming the smaller unit as the “listed facility” is more appropriate (cf. page 6 of the enclosed legal memorandum for a discussion of this aspect). Please contact Rich Biondi in SSCD (382—2826) or Charlie Garlow (475—7088) or Justina Fugh (382—2864) in OECM—Air to consult about potential candidates for listing before sending a formal recommendation to list to Headquarters. Addressees: Regional Counsels Regions I—X Air Management Division Directors Regions I, Ill, & IX Air and Waste Management Division Director Region II ------- 3. Air, Pesticides and Toxics Management Division Directors Regions IV and VI Air and Toxics Division Directors Regions VII, VIII, and X Air and Radiation Division Director Region V cc: Thomas L. Adams, Jr. Assistant Administrator for Enforcement and Compliance Monitoring J. Craig Potter Assistant Administrator for Air and Radiation Jonathan Z. Cannon Deputy Assistant Administrator for Civil Enforcement Paul R. Thompson, Jr. Deputy Assistant Administrator for Criminal Enforcement Gerald A. Bryan, Director OfUce of Compliance Analysis and Program Operations Francis S. Blake General Counsel Deputy Regional Administrators Regions I—X Deputy Regional Counsels Regions I—X Alan W. Eckert Associate General Counsel for Air and Radiation Robert A. O’Meara, Chief Control Technology and Compliance Section, Region I Ken Eng, Chief Air Compliance Branch, Region II Bernard Turlinski, Chief Air Enforcement Branch, Region III James T. Wilburn, Chief Air Compliance Branch, Region IV Larry Kertcher, Chief Air Compliance Branch, Region V ------- 4. John Hepola, Chief Air Enforcement Branch, Region VI Charles Whitmore, Chief Air Compliance Section Doug Skie, Chief Compliance Section, Region VIII Charles Seely, Chief Compliance Section, Region IX Michael Schultz, Chieg Compliance Section, Region X Pam Hill, Air Team Leader Office of Regional Counsel, Region I Faith Halter, Air Branch Chief Office of Regional Counsel, Region II Marcia B. Mulkey, Air & Toxics Branch Chief Office of Regional Counsel, Region III Bill Anderson, Air, Water and General Law Branch Chief Office of Regional Counsel, Region IV - Michael G. Smith, Air, Water, Toxics and General Law Branch Chief Office of Regional Counsel, Region V Barbara Greenfield, Air Branch Chief Office of Regional Counsel, Region VI Robert Patrick, Air, Toxics and Pesticides Team Leader Office of Regional Counsel, Region VII ChrLs Phillips, Air Branch Chief Office of Regional Counsel, Region VIII Nancy Marvel, Air Team Leader Office of Regional Counsel, Region IX David Dabroski, Air and Toxics Team Leader Office of Regional Counsel, Region X Asbestos Enforcement Contacts Regions I—X ------- io Sr 4 .., UNITED STATES ENVIRONMENTAL PROTECTION AGENCY ‘4. WASHINGTON. D.C. 20460 44 pq I O ic or INIORCEMENT AND COMPtI* 4C MONITO II,G MEMORANDUM SUBJECT: Defining the “Violating Facility” for Purposes of Listing Asbestos Demolition and Renovation Companies Pursuant to Section 306 of the Clean Air Act QUESTION PRESENTED: Can EPA use the business address or the address of some other property used by an asbestos demolition and renovation company to identify the “violating facility” when placing the company on the List of Violating Facilities?- ANSWER PRESENTED: The business address or the address of some other property used by an asbestos demolition and renovation company may be used to identify the “violating facility,” rather than the address of the particular site involved in the violating activity, when placing an asbestos demolition and renovation company on the List of Violating Facilities. Under the definition in $ 15.4, the “facility” includes “any ... locationor site of operations ... to be used in the performance of a contract, grant or loan.” ------- 2. DISCUSSION Background Section 306(a) of the CAA (42 U.S.C. S 7606(a)) prohibits federal agencies from entering into any contract for goods, materials or services with a person who has been convicted of certain violations of the CAA if the contract is to be performed at “any facility at which the violation which gave rise to such conviction occurred if such facility is owned, leased or supervised by such person.” This section provides the statutory authority for mandatory listing of CAA violators. Section 306(c) of the CAA (42 U.S.C. S 7606(c)) is the statutory basis for the discretionary listing of CAA violators. It directs the President to issue an order:—--- (1) requiring each Federal Agency ... to effectuate the purpose and policy of (the CAA] in such contracting or assistance activities, and (2) setting forth pro- cedures, sanctions, penalties, and such other provi- sions ... necessary to carry out such requirement. Section 508(c) of the Clean Water Act (CWA) (33 U.S.C. $ 1368) as amended on October 18, 1982, by Pub. L. 95—500, S2, contained an almost identical provision. These provisions were implemented by Executive Order 11,738, issued on September 12, 1973 (38 Fed. Reg.-- 25,161). The Order states that it is the policy of the Federal Government to assure that each Federal agency empowered to enter into contracts for the procurement of goods, materials, or services and each Federal agency empowered to extend Federal assistance ... shall undertake such procurement ------- 3. and assistance activities in a manner that will result in effective enforcement of the Clean Air Act and the (Clean Water Act). Exec. Order No. 11,738, 35 Fed. Reg. 25,161 (1973) On April 16, 1975, EPA promulgated regulations at 40 C.F.R. Part 15 (40 Fed. Reg. 17,124) which provide procedures for insuring that Executive Branch agencies conduct their procurement and assistance programs in accordance with the President’s responsibi1ity for ensuring compliance with CAA and CWA standards. These regulations authorize EPA to suspend or bar “facilities” which are violating the CAA or the CWA from receiving Federal contracts or subeontracts, grants or loans, by placing them on a List of Violating Facilities. The regula- tions require mandatory .listing of violating “facilities” after the owner or operator is convicted for criminal violations under 5 113(c)(1) of the CAA or S 309(c) of the CWA. They provide for discretionary listing of facilities where there are continuing and recurring civil violations of the CAA or CWA. The EPA List of Violating facilities is published in the Federal Register twice a year and is updated in the Federal Register whenever a facility is added to the list or removed from the list. The List is also transmitted to Federal agencies with assistance responsibilities and to the General Services Administration, which publishes a consolidated list of barred, suspended or ineligible contractors. 1/ These regulations were revised on September 5, 1985 (50 Fed. Reg. 36,188). ------- 4. The Problem The question which this memorandum addresses is what is the “facility” to be placed on the List in the case of an asbestos demolition and renovation company which has a history of continuing and recurring violations of the National Emission Standard for Asbestos (hereafter the Asbestos NESHAP) or which is owned or operated by a person who has been convicted of a criminal violation of the Asbestos NESV!AP.2/ Since asbestos demolition and renovation companies provide services, it is sometimes more difficult to identify the “facility” of an as- bestos demolition and renovation company than it is to identify the “facili.ty” of a company which produces goods. Goods are generally pràduced in or e or more buildings owned or leased by the producer. Sometimes services are provided at a location owned or leased by the provider. In other cases, services are provided at a location owned or leased by the purchaser of the service. Asbestos demolition and renovation companies which violate the asbestos NESRAP regulations generally do so in the course of perforling a contract to demolish or renovate a building which is owned or leased- by . one else. If the contractor violates the asbestos regulations, the violations are most likely to occur at the demolition or renovation site. Listing 2/ Asbestos NESHAP regulations, issued pursuant to S 112 of the Clean Air Act, are codified at 40 C.F.R. Part 61, S 61.140 et seq . ------- 5. the address of the property at which the demolition or renovation work occurred as the “violating facility” would not accurately identify the asbestos demolition and renovation company which performed the work and, therefore, would not accomplish the intended purpose of CAA S 306(a) —— to assure that persons or corporations convicted of a knowing violation of CAA standards or limitations are ineligible to enter into Federal contracts until the continuing or recurring violation has been corrected.1/ The issue is whether CAA S 306 and the regulations promul- gated to implement this section, 40 C.P.R. Part 15, permit EPA to list, as a “facility”, the executive office (or similar address) of the person (or company) providing the services and taking the action that violated the CAA. Definition of Facility EPA regulations implementing the Contractor Listing Program are found at 40 C.F.R. Part 15. Section 15.11 authorizes the Listing Official to “place a facility on the List” under stated conditions. Section 15.4 defines “facility”: “Facility” means any building, plant, installation, structure, mine, vessel or other floating craft, location or site of operations owned, leased or supervised by an applicant, contractor, grantee, or borrower to be used in the performance of a con- tract grant or loan . Where a location or site of operations contains or includes more than one build- ing, plant, installation, or structure, the entire location or site shall be deemed to be a facility, 3/ Of course, in cases where the owner of the building which was renovated or demolished has also violated the asbestos NESHAP, the building may also be listed as a “violating facility”. ------- 6. except where the Assistant Administrator determines that independent facilities are located in one geographic area. (emphasis added). For the purposes of the Contractor Listing Program, the faci1ity” of a company includes any location used by the com- pany to produce the particular goods or provide the particular services which the government may wish to purchase or assist others to purchase under a particular contract.4/ To determine whether a particular “buil ing, plant, installation ... location or site” is part of a “facility” at which a violation giving rise to a criminal conviction occurred, or is part of a “facility” which has a record of continuing or recurring noncompliance with clean air (or water) standards, one should look at the relatioitship of the “building, plant, installation ... location or site,” to the production of the goods or services which the government might procure or assist others in procuring . Depend- ing on circumstances, the relevant “facility” may or may not include all locations owned by a company. If several different locations are involved in manufacturing a particular product or 4/ A diI iient definition of “facility” is used in the Asbestos NESHAP, 40 CSF.R. 5 61.141. That definition should be used for the purpose of determining whether the owner or operator an of an asbestos demolition and renovation company complies with the NESHAP. If the Agency determines that the owner or operator of the company violated any of the requirements of the NESHAP, then the definition in 40 C.F.R. S 15.4 should be used to determine what the “violating facility” is. ------- 7. in supplying a particular service, all of those locations together make up the “facil.ity”.S/ The Legislative History This definition of wfacility is consistent with the pur- pose of S 306, which was designed to be a sanction available to EPA against those who would provide goods and services to the Federal government using noncomplying facilities. Section 306 of the CAA is derived from Senate bill S. 4358. Section 306(a) of the Senate bill read as follows: Sec. 306(a) Any person (1) required to comply with an order issued by a Federal court pursuant to this Act who fails to comply within the time period specified in such order, or (2) convicted by a Federal court for knowing violation of any applicable schedule or time- table of compliance, emissions requirement, prohibition, emission standard, or standard of performance, shall be ineligible to enter into any contract with any Federal agency for the procurement of goods, materials, and services to perform such work at or with any facilities subject to such action by the court which are owned, leased or supervised by such person . Such ineligibility shall continue until the Secretary (of HEW] certifies compliance with such order, or that the conviction giving rise to the violation has been corrected. (emphasis added). S. 4358, 91st Cong., 2d Sess. S 306 (1970). 5/ Where a company has several different divisions or factories or regional offices, each producing particular goods or services independently from each other, each would be a separat.e facility; and if one of those divisions or factories or regional offices is violating the CAA or the CWA, that particular unit of the company is the only one that would be placed on the List of Violating Facilities. ------- 8. The Senate Committee on Public Works issued a report to accompany S. 4358, in which the following explanation of Section 306 was given: The Committee considered proposals offered by Senator Muskie and Senator Cook to assure that the Federal Government does not patronize or subsidize polluters in its procurement practices and policies. Section 306 would make any person or corpora- tion who fails to comply with a court order issued under this ct or who is convicted of a knowing violation of any schedule or timetable of compli- ance, emission requirement, prohibition, emission standard, or standard of performance, ineligible for a Federal contract for any work to be done at the polluting facility.... This section would be limited, whenever feasible and reasbnable, to contracts affecting only the facility not in compliance , rather than the entire corporate entity or operating division . There might be cases where a plant could not participate in a Federal contract due to a violation but another plant owned by the same company might bid and transfer other work to the first plant. This type of action would circumvent the intent of this pro- vision . In this case, the company’s second facility should also be barred from bidding until the first plant returns to compliance. There would also be instances where a second plant within a corporation was seeking a contract unrelated to the violation at the first plant. In such a case, the unrelated facility should be permitted to bid and receive Federal contracts. (emphasis added). S. Rept. No. 1196, 91st Cong., 2d Sess. 39 (1970). Section 306 of S. 4358 was passed by the Senate without change. A companion bill in the House, H.R. 17255, 91st Cong., 2d sess. (1970), had no provision about procurement policies. In conference, the provision making persons convicted of knowing violations of the CAA ineligible for Federal contracts or assis— ------- 9. tance was retained In lieu of the provision of the Senate bill extending ineligibility to persons subject to, but not complying with, court orders, the conference committee substi- tuted a more general requirement that “the President shall cause to be issued an order (1) requiring each Federal agency to effectuate the purpose and po4icy of this chapter in such contracting and assistance activities,...”6/ The Executive Order The President complied with this mandate by issuing Executive Order No. 11,602 on June 29, 1971. E.O. No. 11,602 was superseded by Executive Order No. 11,738, on September 10, 1973.7/ Exec. Order 11,738 sets forth the following Federal 6/ When the CAA amendments were reported out of the conference committee, the conference report on Section 306 stated: The conference substitute is more limited than the Senate provision. It provides that persons con- victed of a knowing violation of standards or limita- tions shall be ineligible to enter into Federal con- tracts until the Administrator certifies that the violation has been corrected. The remainder of the conference substitute follows the Senate amendment by requiring the President to issue an order requiring Federal agencies (1) to assist in the implementation of this act and (2) to establish sanctions for non- compliance. Conference Report No. 1783 (to accompany H.R. 17255), 91st Cong. 2d Sess. (Dec. 17, 1970), reprinted in 1970 U.S. Code Cong. & Ad. News 5356, 5389. 7/ Exec. Order No. 11,738, 38 Fed. Reg. 25,161 (1973), amend- ed Exec. Order 11,602, 36 Fed. Reg. 12,475 (1971), by adding the words “Federal Water Pollution Control Act” to S 1 and changing references to “the Act” in SS 2, 4, 6 and 9 to “the Air Act” and adding references to “the Water Act.” Exec. Order 11,738 also adds S 11, which requires that regulations issued pursuant to CWA S 508 shall be uniform with regulations issued pursuant to CAA S 306 to the maximum extent possible. ------- 10. procurement policy: Section 1. policy . it is the policy of the Federal Government to improve and enhance environmental quality. In furtherance of that policy, the program prescribed in this Order is instituted to assure that Federal agencies are empowered to enter into contracts for the procurement of goods, materials or services or to extend Federal assistance by way of grants or contracts in such a manner that will result in effec- tive enforcement of the Clean Air Act ... and the Federal Water Pollution Control Act. ... (emphasis added). Section 2 of the Order states, in part: (b) In carrying out his responsibilities under this Order, the Administrator shall ... designate facili- ties which have giyen rise to a conviction for an offense under section 1l3(c)(l) of the Air Act (andj publish and circulate ... lists of those faci- lities, together with the names and addresses of the persons who have been convicted of such offenses (emphasis added). Section 3 prohibits any Federal agency from entering into any contract with or extending any assistance to any facility which has been listed pursuant to CAA S 306. Section 4 requires that all Federal procurement regulations issued by any agency of the Executive Branch shall be amended to require ... inclusion of a provision requiring compliance with the Air Act, the Water Act, and standards issued pursuant thereto in the facili- ties in which the contract is to be performed, or which are involved in the activity or program to re- ceive assistance . (emphasis added). Section 5 authorizes the Administrator of the Environmental Protection Agency “to issue such rules, regulations, standards and guidelines as he may deem necessary and appropriate to carry out the purposes of this Order.” Sections 1 and 5 of ------- 11. Exec. Order 11,738, together with S 306(c) of the CAA (and S 508(c) of the CWA), provide the authority for the discretion- ary listing program. EPA’S Contractor Listing regulations, codified at 40 C.F.R. Part 15, implement the Executive Order. Discussion As defined in 40 C.P.R. S 15.4, a “facility” includes any building, location, or site to be used in th course of perform- ing the contract or loan. While the buildings or sites at which work is performed are often also the buildings or sites at which a violation occurs, the fact that the violation may occur “off-site”, i.e. , at a location owned or operated by a customer, does not mean that--such locations—a-re not part_of the “facility” “to be used in the performance of” a contract. The “facility” of a contractor also includes the business address which the company uses in its contracts, even if the business address is simply a post office box. As Congress recognized, a company may be violating the CAA or CWA at one “facility” and have other complying “facilities” which are not involved in the production of the same goods and services, Congress differentiated between entirely uninvolved “facilities”, on the one hand, and involved “facilities”, e.g. , where a sister “facility” “B” was used to circumvent a ban on goods or services produced at “facility” “A”. The definition of “facility” in S 15.4 implements that concept. If an asbestos demolition and renovation company has ------- 12. two or more divisions which operate independently of each other, each division would, at least presumptively, be a separate “facility” under the definition found in S 15.4. If only one of the divisions is convicted of criminal violations of the asbestos NESHAP or if only one of the divisions has a record of continuing or recurring noncompliance with the asbestos NESHAP, only that division of the company would be placed on the List C of violating Facilities, absent the kind of situation described by Congress. This is the only way that an asbestos demolition and reno- vation “facility” can be defined which is consistent with the intent of the statutes, the executive orders, and the regulations. A contrary interpretation would fail to “effectuate the purpose and policy of (the CAAJ in (the government’s] contracting and assistance activities” as required by S 306. The “facility” concept is intended to carry out, not to thwart, the intent of S 306. While the business address of the “facility” will often coincide with the address of the site where violations occurred, there is no requirement in S 306 that it do so. Listing is intended broadly to sanction “persons” who continue to violate the CAA by depriving them of access to Federal con— tracts for goods and services and to federal grants and loans. Congress did not intend to limit this sanction to contractors who engage in violative conduct on property that they happen to own or control. So long as the business address of the asbestos ------- 13. demolition and renovation company is fairly associated with the activity which is the violating conduct, that address may be used to identify the “facility” to be placed on the List, notwithstanding that additional, related work (and the actual violations) occurred elsewhere. ------- K ------- — 15 — K. Section 307: Administrative Proceedings and Judicial Review 1. Federal Register Publication of Significant 09/01/79 Final Actions Under Title I of the Clean Air Act 2. Requirement to Publish All Significant 02/23/83 Final Actions Under Title I of the Clean Air Act ------- 11 Canlinal® ------- Federal Register Publication of Significant Final Actions Under Title I of the Clean Air Act (09/01/79) File at Part K, Document #1 ------- ____ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON. D.C. 20460 0 1SEP ‘1979 OFFICE CF GENERAL COUNSEL MEMORANDUM SUBJECT: Federal Register Publication of Significant Final Actions Under Title I of the Clean Air Act FROM: General ‘ Assistant Admini a iç 6 Air Noise and Radiation - °“ “ Assistant Administrator for Enforcement /p ,. f i1AVde TO: Regional Administrators Director, Office of Air Quality Planning and Standards Associate General Counsel for Air, Noise and Radiation Director, Stationary Source Enforcement Division POLICY Effective immediately, notice of significant final actions under Title I of the Clean Air Act must be promptly published in the Federal Register . The significant actions that are not now routinely noticed in the Federal Register and which are the primary focus of this memo, are: applic- ability determinations under , NESHAP and PSD, issuãi.ce and denial of PSD, NESHAP aTI source review permits; and issuance and denial of Section 111(j) waivers . Guidance on publishing notice of acti under Title LI will be circulated later. RATIONALE A number of considerations support the policy of publishing final actions in the Federal Register . First, section 307(b) (1) now provides that the 60 day period for obtaining judicial review of any final action runs from the date on which notice appears in the Federal Reqister. By starting the 60—day period for judicial review, publication forces interested persons to seek review promptly, or not at all. This gives finality to our actions, and avoids litigation ------- —2— over stale issues. (We are now defending the issuance of a PSD permit in a lawsuit filed a year after the permit was issued.) Second, under the Administrative Procedure Act, if we publish our final actions, we can rely on them as precedent in subsequent cases. See 5 U.S.C. §552(a) (2). Third, publication of final actions will support our position that all final actions are directly reviewable in the courts of appeals. Although both the plain langage and the legislative history. of Section 307(b) (1) support this position, a recent decision of the United States Court of Appeals for the Fifth Circuit held that an NSPS applicability decision was reviewable in the district court. PPG Industries v. Harrison , 587 F.2d 237 (1979). Publication of the determination in the Federal Register might have helped us persuade the Court that it was a final action and the result of an established deliberative process. We expect that other persons affected by final Agency actions will seek judicial review in the district courts, where they may obtain lengthy discovery and a trial, rather than be limited to a review of the record made by the Agency. Publication of the actions in the Federal Register will strengthen our position that review is in the courts of appeals. Fourth, publication of actions will tend to insure consistent decision-making throughout the Agency. Congress has stressed the importance of such consistency in Section 301(a) (2) (A) of the Act. IMPLEMENTAT ION We do not expect that giving notice of these significant actions in the Federal Register will impose great resource burdens on your offices. In the case of the significant actions listed above, the responsible office normally makes a written determination, including a statement of the facts and the rationale for the determination. All that is required is to put the determination into Federal Register format. If the determination seems too long to be published verbatim, the Federal Register notice could merely summarize it, and give notice of how interested persons can obtain the full text. Permit determinations will probably be the only actions lengthy enough to be candidates for this abbreviated approach. Federal Register notices of final action may not reveal information that is entitled to treatment as confidential. You should remind regulated persons that a notice will be ------- —3— published, and that they should clearly indicate in their submission what information they want to be treated as con- fidential. See 40 C.F.R. Part 2, Subpart B, “Confidentiality of Business Information.” If you feel that sending individual notices of final actions to the Federal Register is a resource burden, you could accuminulate them and send them in batches. You must send such batches at least every month. Note that this policy is prospective. We do not re- quire that past actions be published, although they cannot be relied on as precedent unless they are published. If you need any help in interpreting or implementing this policy, please contact one of the following persons on our staffs: Office of General Counsel - Earl Salo, 755-0763 Office of Air, Noise and Radiation - Dick Rhoads, 629—5251 Office of Enforcement - Martha Prothro, 755-2523 In particular, please advise us if you need guidance on the proper format for these Federal Register notices. Alsc, please advise us if you think there are additional categories of significant final actions under Title I that we have not listed. We are also considering which actions under Title II should be noticed in the Federal Register . We welcome any suggestions on this question. Attached as an example is a Federal Register notice of the issuance of a PSD permit. Attachment ------- ENVIRONMENTAL PROTECTION AGENCY Region I Notice of Approval of PSD Permit to Lime Products Corporation Notice is hereby given that on :June 19, 1979, the Environmental Protectic Agency issued a Prevention of Significant Deterioration (PSD) permit to Lime Products Corporation for approval to construct an asphalt batch plant in Warren, Maine. This permit has been issued under EPA’s Prevention of Significant Air Quality Deterioration (40 CFR Part 52.21) regulations applicable to the asphalt batch plant subject to certain conditions, including: I. Particulate matter emission limitation shall not exceed 0.05 grldscf (10 lbs/hr.) 2. Retrofit with air pollution control equipment as specified in application. 3. The aggregate used to be comprised of limestone and/or dolomite (pH greater than 7). The PSD permit is reviewable under Section 307 b)(1) of the Clean AIr Act only in the First Circuit Court of Appeals. A petition for review must be filed on or before ( 60 days from publication in the Federal Register) . Copies of the permit are available for public inspection upon request at the following locations: Environmental Protection Agency Region I, Air Branch, Room 1903 3FK Federal Building Boston, Massachusetts 02203 Department of Environmental Protection Bureau of Air Quality Control State House Augusta, Maine 04330 Date ‘2- 1 ‘ i V1 - k-i...cc# u. i4 - fkt Rebecca \V. Hanmer, Acting Regional Administrator, Region I ------- ------- ll llPOIR TA WI I WIOTL S= - I ------- Requirement to Publish All Significant Final Actions Under Title I of the Clean Air Act (02/23/83) File at Part K, Document #2 ------- L ------- 08-12-1994 14:43 202 260 0500 EPA OE P.02/10 ___ a UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460 PR— AUS 12 1S9 OFFcEO ENFOR MENT MID OOMPUAIIcEA88LjRANc SUBJECTS Enforcement Response Policy for Treatment of Information Obtained Throug ...e Gafl Air Act Section 507 Small Business A. 3 .-Programs FROM: Steven A. Herma t 1 J Assistant Adminis r(tor TO: Assistant Administrators Oenoral Counsel Regional Administrators Deputy Regional Administrators Regional Counsel This memorandum sets forth the Agency’s enforcement response policy on the treatment of violations detected during compliance assistance provided under state small business assistance progra s (SEAPs) required under Section 507 of the Clean Air Act (CAA). 1 This policy responds to stat. and regional requests f or guidance as to what incentives are appropriate to encourage small businass s to seek SBAP assistance. It will allow EPA regions to determine whether SBAPs are administered so as to ensure that states have the enforcement authority necessary for approval of their state implementation plans (SIPs). The policy applies to information obtained by state agencies administering Section 507 SBAPS, including agencies that also manage permitting and enforcement programs. The policy sets forth two general options designed to encourage small business participation in SBAPs. In uzmary, this policy updates and amends earlier EPA Section 507 guidance and endorses state SBAPB that either (l give small business that voluntarily seek compliance assistance a limited period to correct violations observed or revealed as a reault of compliance assistance or, (2) if the SBAP is independent of the delegated state air enforcement program, keep confidential information that identifies the names and locations of specific small businesses with violations revealed through compliance assistance. These two options are For present purposes, this policy applies only to violations of the Clean Air Act that are detected through SBAP compliance assistance. The Agency will clarify the application of this policy to violations in other media as soon as is practicable. i.isI,4 u, dibIu Pvh.d.V Ig, C*Wi 1 10% i. d.d ------- 08-12-1994 14:44 202 260 0500 EPA 0€ P.03/jo 2 set forth in detail below. In developing these alternatives, EPA balanced three primary considerations, First, the Agency is seeking to provide the states with ample opportunity to adopt innovative approaches to compliance within federal guidelines. Thus, the policy options set forth below should be regarded as outer limits, within which statse have flexibility to tailor 8BAPs suited to state needs. For example, states that exercise enforcement discretion on a case—by-case basis to determine th. appropriate response to violations detected through 8BAP compliance assistance meet the general criteria set forth in this policy. In addition, EPA’S “Guidelines for Iinpleitentation of Section 507 of the 1990 Amendments” specifically encourage 8BAPs to leverage the efforts of existing technical assistance providers, which have had a long—standing practice of offering their services confidentially to industry. Thus, this policy preserves the states’ option to continue to maintain confidentiality in their SEAPS. Second, EPA recognizes that participation In SBAPS is typically voluntary. Assistance is provided only upon request, and therefore the programs will succeed in promoting compliance only if assistance services are sought on a widespread basis. Thus, the Agency is seeking to give the states the ability to provide incentives that will encourage small businesses to participate in SEAPS. Third, the CM requires the state to have authority to take appropriate enforcement action with respect to CM violations. Thus, EPA has an obligation to ensure that state SEAPs are structured so as to maintain an appropriate level of enforcement authority within delegated state programs. The Agency believes the options set forth in this policy will allow states sufficient latitude to use an appropriate combination of delegated Btato enforcement authority and compliance assistance activity to improve compliance in the small business community. rrection oariod option This policy option allows states to give small businesses up to 90 days either to correct, or to take substantial steps to correct (e.g. apply for necessary permits, secure financing, order equipment) violations discovered during compliance assistance. For violations that cannot be corrected within 90 days of detection, the correction period may be extended up to an additional 90 days i i a written agreement that establishes a compliance schedule.’ To ensure that S8APB do not provide an 2 Obviously, st&tea may not offer a correction period for violations of CM provisions for which EPA has not delegated enforcement authority to the state. ------- 03-12-1994 14:45 202 260 0500 EPA CE 4/10 3 unint.nded shield, the following conditions must apply: 1. During the correction period, the state may commit to forego all enforcement responses, including notice& of violation (NOVa) and civil penalties, for violations that are observed by or revealed to the state as a result of compliance assistance provided in accordance with this policy. Rowever the state BhalI. not agree to forego during the correction period 1) criminal actions, 2) actions to enjoin imminent and substantial endangerment to human health or th3 environment or 3) actions to addr.ss recurrences of violations for which a prior enforcement response had been taken. The correction period shall be sufficient for the source to correct 1 or to takO substantial steps to correct (e.g. apply for necessary permits, secure financing, order equipment) the violation, but is not to exceed 90 days following detection. For violations that cannot be corrected within 90 days, states may extend the correction period for an additional period not to exceed 90 days, so long as the state enters into a written agreement with the source that sets forth the additional correction period and any additional steps to be undertaken by the source to achieve compliance. The requirements of the correction period should be made clear to the source prior to offering compliance assistance. 2. Although the state may agree, except as provided in paragraph (1) above, that no enforcement action will be taken for violations that are revealed or observed through compliance assistance and corrected within the correction p.riod, the state shall not give guarantees that the information obtained or revealed through compliance assistance will be kept confidential. However, this policy option does not require SBAPs to provide to EPA information that identifies the names or locations of specific businesses that are found to be in violation through compliance assistance. In general, EPA will look to BBAPs primarily for information that shows whether SBAPs are successful in promoting compliance or. that generally identifies business sectors with chronic compliance problems. Further, this policy does not affect exiBting Agency policy or regulations regarding treatment of confidential business information. 3. Violations detected through state enforcement inspections shall remain fully enforceable by the state, unless the violation was aloe previously observod or revealed through voluntary compliance assistance and the source has made a commitment to come into compliance during a correction period. 8tates must reserve their discretion to conduct scheduled enforcement inspections at all times including during the correction period. ------- 08-12-1994 14:46 202 260 0500 EPA 06 P.05,io 4 4. Upon expiration of the correction period, the small business shall be subject to all applicable enforcement response policies (which may includ. discretion whether or not to take formal enforcament action) with r.sp.ct to all violation. that had bs.n revealed through compliance assista ce and were not corrected within the correction period. The penalty in any such action may be calculated to include the correction period. This policy doe. not limit the states’ discretion to us. information on violations observed or revealed through compliance assistance as evidenc, in subsequent enforcement actions, for example to show prior or repeated violations. 5. Ths state’s actions in providing compliance assistance shall not be a legal defense in any enforcement action. However, a source’s good faith efforts to correct violations detected during compliance assistance may be considered as a mitigating factor in determining an appropriat, enforcement response or penalty in subs.qu.nt enforcement actions. 6. Section 507 makes clear that SBAPs are intended primarily to benefit small businesses that do not have the technical or financial capabilities to meet .nvironaental raquir.msnts without SBAP assistance. Thus, SBAPs shall state explicitly that the program is subject to the eligibility r9uirements sat forth in Section 507(c). These requirements include the requirement that only sources that are non—major for all, air program. are eligible, except as provided under Section 507(c)(2). Small businesses excluded by states or the Administrator under Section 507(c) (3) (A) or (B) shall be ineligible for application of this policy option. In addition, if a source is already the subject of a pending NOV or enforcement action, the correction period option cannot be applied to the violations involved in the enforcement action. Moreover, the states should retain their discretion to deny compliance assistance on a case-by- case basis, for example if a facility is already scheduled for an enforcement inspection or has a history of non- compliance. For sourcss that are ineligible for SB AP assistance, and therefore this policy option, the applicable enforcement response policies (which may include discretion as to whether or not to take enforcement action) apply. 7. Small businesses shall be eligible only once for an on-site This policy does not require, or even propose, that state SBAPs, as opposed to separate agencies or offices, have regulatory enforcement authority. Moreover, this policy gives SBAPB considerable flexibility as to how to interact with state regulatory enforcement programs under the correction period option. ------- 08- 12-1994 14:47 202 260 OEOO EPA OE P.06,10 S compliance audit or similar on-site assistance resulting in a correction period as described above, unless a requeBt is mad. for such an audit or assistance in order to comply with requirements that did not exist when prior compliance assistance was requested and provided. For on-site compliance assistance provided in response to a second or subsequent request, correction periods shall be granted only for violations of new requirement.. a. States following this policy shall includa and implement plans for conducting follow—up inspections or auditi, or other activities sufficient to verify and track compliance. Under this opt ton, exposing uncorrected violations to the possibility of an enforcement response, including penalty assessment, after the correction period has expired is essential if w. are to make substantial gains in compliance through these small business assistance programs. This policy option has several important advantages over other options we have considered. First, it offers certainty, in that a small business requesting and receiving compliance assistance will know that no state enforcement will result for violations that are identified and corrected within the correction period. We expect this degree of certainty to ensure greater participation in SBAPa, especially if SBAPI give official recognition to businesses that have participated successfully in SBAPs. Second, the policy will allow greater openness between SBAP5 and specific facilities, the small business community in general, and other state officials. It will promote the sharing of information on pollution prevention measures, cost effective means of compliance and other valuable compliance-related activities with and among the regulated community. In addition, the policy will make it easier for states to use facility-wide or industry-wide information obtained through compliance assistance programs to address chronic violations with an appropriate balance of targeted compliance assistance and enforcement strategies. Confidentiality 9 ption This policy option applies only to SSAPs that are operated strictly independently from the stats’s delegated regulatory enforcement program. The requirement for independence is met if either (1) the 8BhP is not operated out of the state air pollution control agency (as defined in CM Section 302) or (2) a regulation, official policy, memorandum of understanding or other official document establishes independence between the SBAP and the enforcement program. Under this option, SBAPS may keep ------- 08 I’ 1994 14.48 202 260 0500 EPA 06 P.O7 jg 6 confidential 4 information regarding violations detected through SHAP compliance assistance, including the names and locations of the Bmall businesses. However, to ensure that deterrence continues to operate as an incentive to participation in 8BAP., the following conditions apply to this option: 1. Although SBAPs choosing this option may keep confidential information that identifies specific small bueineue. as having violations, the SBAP shall make general statistical and other information regarding violations detected through compliance assistance available to the state regulatory enforcement program. This information should be sufficient to assist the enforcement program in developing targeted enforcement strategies, as well as to complement compliance assistance activities. 2. State regulatory enforcement programs in states selecting this option shall retain their full discretion to take enforcement action against small businesses who receive SBAP assistance. However, the enforcement program may consider good faith efforts to achieve compliance through participation in the 8BhP in determininq the appropriate enforcement response in specific cases. 3. Conditions 5, 6, and 8 applicable to the correction period option apply also to the confidentiality option. These policy options do not limit EPA’s or citizens’ existing authority to conduct inspections or take enforcement action. However, EPA is committed to helping SBAPs succeed. Thus, in taking enforcement action against a specific source, EPA will not routinely seek information obtained from or revealed by the source during on—site compliance assistance provided by state SUAPs. In addition, EPA will give considerable weight to a source’s participation in a 5BhP and good faith commitment to achieving compliance in determining an appropriate enforcement response. In general, many of the small businesses who will be eligible for SBAP compliance assistance are rarely or never subject to federal inspections for provisions Of the CAA for which the state has received a delegation, and therefore EPA does not expect much overlap between federal enforcement programs and SBAP5. Indeed, EPA expects that by working in accordance with this policy, SBAPe will increase compliance in the small business State freedom of information laws may place limits on the degree of confidentiality that can be given to information. This policy option is intended primarily to allow states to keep information known to the SBAP confidential from the state enforcement program, ------- 08-12- [ 994 14.50 202 260 0500 EPA OE p.08,t o 7 community without affecting the axpeaure of small businesses to fsd.ral. enforce isnt. cc: Director, Office of Small and Disadvantaged BusineSS Utilization Small Business and Asbestos Ombudsman ------- oe.- --1994 14:50 202 260 0500 EPA 06 .og,ie SU) AR 1 OF EPA’S CLEAN AIR ACT SECTION 501 ENFORCEMENT POLICY This summary outlines EPA’s Enforcement Response Policy (ERP) for Section 507 of the Clean Air Act (CM). The new policy is designed to encourage small businesses to call on state Small Business Assistance Programs (SBAP5) established under Section 507 to find practical ways to comply with the Act. EPA expects the new policy to usher in a new era of trust between small businesses and government agencies and to change the way small businesses view environmental requirements. The result will be more compliance and cleaner air for the public. The policy provides states with two options for providing compliance assistance as required by Section 507. It offers states the flexibility to use innovative approaches for providing compliance assistance to small businesses, while at the same time enabling states to continue to use enforcement actions to ensure strict compliance with the CM. However 1 the new policy does not weaken clean air standards: under either option, all small businesses are unconditionally responsible for full compliance with the applicable requirements of the CM, This policy responds to many state and regional requests for guidance as to what incentives would be appropriate to offer small businesses to encourage participation in SBAPa. States were concerned that many small businesses would not seek compliance assistance from the government if violations identifisd during compliance assistance resulted in enforcement actions. The Regions were concerned about whether they could approve SIPs if a SBAP provided confidentiality for small businesses receiving compliance assistance, or allowed sources the opportunity to correct violations discovered during compliance assistance before an enforcement action would be taken. This policy responds to these concerns by offering SBAPs the option to choose one of two choices: 1. SBAPs may allow small businesses that receive compliance assistance up to 90 days, with the possibility of an additional 90—day extension, to correct any violations discovered under the SBAP program. Any violations remaining at the end of that period are subject to existing enforcement response policies, which may include discretion not to take enforcement action in appropriate cases. To ensure that tM state has the ability to take enforcement actions for any violations that remain uncorrected, SBAPB offering the correction period can not give guarantees that they will keep information on violations confidential. 2. SBAPs may guarantee that information identifying specific small businesses that have violations detected throu h compliance assistance will be kept confidential, subject to two important limitations. First, the state must retain the ------- 08-12-1994 14:51 202 260 0500 EPA OE P.10,10 2 ability to investigate and/or take enforcement action at any time for any violation discovered independantly from the Section 507 program. Second, confidential compliance assistance can only be offered through SaAPa that operate independently of the state’s delegated regulatory enforcement program. The policy iøt forth these options, including additional conditions, in more detail. In developing these options, EPA had to balance several considerations. First, the Agency wanted to provide states with the flexibility to use innovative approaches for providing compliance assistance to small businesses. Thus, the states nay experiment with a wide range of options, as long as they do not adopt approaches that are more lenient than the options set forth in this policy. Second, the Agency recognizes that compliance assistance is generally sought voluntarily and SHAPe will not be successful unless small businesses are willing to use the services that are offered. Providing a limited grace period, one of the two options to address this concern, is EPA’s preferred incentive for participation. Finally, states have an obligation under the Clean Air Act to enforce against violations. The policy maintains atat authority to use an appropriate combination of enforcement and compliance assistance activities to beat achieve compliance In the small business community. The policy takes into account that small businesses have a special need for help to comply with .nvironm.ntal laws because they generally lack the resources available to larger companies. Thus, the policy requires states to limit application of the policy to small busineass that meet the eligibility requirements in Section 507. The Office of Enforcement and Compliance Assurance contacts regarding this policy are Geoff Carver, at (202) 260-3914, and Lynn Vendine]lo, at (202) 260—2842. ------- |