UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WSG 126
Date Signed: February 9, 1999
MEMORANDUM
Subject: Updated Procedures Concerning State Audit Privilege/Immunity Laws and
Legislation
From: Nancy K. Stoner
Director, Office of Planning & Policy Analysis
To: Regional Administrators
Deputy Regional Administrators
Regional Counsel
Regional Enforcement Division Directors
Regional Enforcement Coordinators
OECA Office Directors
Audit Task Force
I have updated the procedures EPA should follow concerning states with pending or
enacted audit privilege/immunity laws to reflect the lead role EPA's Regional offices are
assuming in this area. Section II.4 of these updated procedures establishes that EPA's Regional
offices will serve as Agency lead for all communications and negotiations with states (except
Colorado). As Agency lead, Regional offices should continue to initiate contact with states
regarding privilege/immunity laws and legislation and ensure that states retain the minimum
enforcement and information-gathering authorities required by federal law for program approval,
authorization or the grant of primacy.
As a result of this shift of additional responsibility to the Regions, it is especially
important that the Regions continue to keep OPPA informed of all pending state audit bills and
communications the Region is planning to have with a state concerning audit privilege/immunity
legislation or an enacted statue. In particular OPPA, and in some circumstances OECA upper
management, still needs to review in advanced all proposed written communications with a state
relating to audit legislation or an enacted statute.
If you have any questions or comments concerning the attached material, please contact
me at (202) 564-6577.
Attachment
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Procedures for Addressing State Audit Laws and Bills
I. Criteria for Reviewing Adequacy
1. All EPA communications with the States relating to audit privilege/immunity legislation and
statues need to make a distinction between OECA's position as a policy and a legal matter. On
the policy level, EPA opposes all state audit privilege/immunity laws in any form. Audit
privileges make it more difficult to enforce the nation's environmental laws by making it easier
to shield evidence of wrongdoing. EPA also opposes blanket immunities because, among other
things, they can eliminate the important deterrent effect of penalties and result in disparate
treatment of companies in states with different immunity laws. If a state legislature has passed a
bill, however, certain legal points could be made clear with regard to the possible impact of the
legislation on the state's ability to satisfy federal delegations criteria.
2. EPA will apply the criteria outlined in its "Statement of Principles" memo issued on 2/14/97
in determining whether states with audit laws have retained adequate enforcement authority for
any authorized or delegated federal programs. The principles articulated in the guidance are
based on the requirements of federal law, specifically the enforcement and compliance
provisions of environmental statues and the delegation regulations, e.g., 40 CFR 271.16
(RCRA), 40 CFR 70.11 (CAA), and 40 CFR 123.27 (CWA).
3. The Principles provide that if provision of the state law are ambiguous, it will be important to
obtain opinions from the State Attorneys General or independent legal counsel, as defined in
federal regulations, e.g. 40 CFR 271.7(a), 40 CFR 70.4(b)(3), and 40 CFR 123.23, interpreting
the law as meeting specific federal requirements. These opinions, however, must be reasonably
consistent with the wording of the state audit laws and must demonstrate how the delegations
criteria are satisfied. Where there is no such ambiguity, changes to state laws may be necessary
to obtain federal program approval.
II. Process
1. Case-by-Case Evaluation - State audit privilege/immunity bills vary significantly in their
provisions, and some may present few or no obstacles to approval of federal programs. As
agreed to at the 3/5/97 meeting that the Administrator held with various state environmental
commissioners, EPA will need to evaluate these laws on a state-by-state basis to take these
variations into account.
2. Pending State Audit Bills - Concerning pending State Audit bills, EPA should get on the
record to articulate EPA's position on a pending state bill. Depending upon the individual
circumstances, a letter to the state's department of environmental protection and to relevant
legislators in the state's legislature should suffice in most situations. Where appropriate, EPA
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should also seek opportunities to provide testimony on these bills. EPA's statements should
clearly articulate policy objections to privilege and immunity provisions, but will also, upon
request, identify specific revisions needed to meet minimum federal requirements for approval.
Many states are already contacting EPA for technical advice as bills are presented in their
legislatures.
3. States with Enacted Audit Laws - In States with enacted audit privilege/immunity laws.
Regional Administrators or Deputy Regional Administrators should promptly contact each of the
states within their Regions that have enacted such laws.
1) The RA or DRA should initiate contacts, on a state-by-state basis, with State
Environmental Commissioners and State Attorneys General. The Agency may request an
interpretation from the state's Attorney General regarding how specific provisions of the audit
law meet federal requirements for enforcement authority. The region may also simultaneously
contact the state and offer to begin negotiations, on a state-by-state basis, to attempt to reach
agreement on specific amendments to state laws needed to satisfy delegation or authorization
requirements. Amendments may vary based on individual state laws, but must be consistent
with federal requirements as articulated in the 2/14 Statement of Principles. Once the State
agrees to negotiate, representatives from the environmental community and from industry
generally should be identified and contacted for their input. If the state is one where a petition to
withdraw the state's program has been filed by an environmental group, it should be the
representative.
2) EPA will commit to accelerated review of any technical amendments at the highest
level of management, and OECA will obtain any necessary review from the Office of General
Counsel and other program offices.
3) EPA will not move to formal proceedings on program modification, approval or
withdrawal while EPA is satisfied that good faith negotiations are proceeding with appropriate
state officials in a manner that may quickly resolve EPA legal concerns with the state audit law.
EPA will consider progress of such negotiations in responding to petitions seeking program
withdrawals, while meeting legal requirements applicable to responding to such petitions.
4) If the individual state and EPA reach agreement on amendments to the state's audit
privilege/immunity statute, EPA will issue a letter memorializing the agreement and asserting
EPA's opposition to the state's audit privilege/immunity law, but stating that the state's audit
law would no longer present a barrier to program approval if amendments were to be enacted in
accordance with the agreement. If such changes are made, EPA would expect to deny any
petitions asserting lack of enforcement authority, but states should be aware that EPA's decision
may be subject to judicial review.
5) If the issue cannot be resolved informally, EPA will consider formal action regarding
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program approvals , modifications, or withdrawals.
4. Regional Lead / OPPA Involvement - Regional offices will serve as Agency lead for
communications and negotiations with a state concerning audit privilege/immunity legislation or
an enacted statute. Regional offices are responsible for initiating appropriate communications
with states and ensuring that any conflicts with federal delegations requirements are successfully
resolved. Regional offices should inform OPPA of all pending state audit bills and meetings the
Region in planning to have with a state concerning audit privilege/immunity legislation or an
enacted statute. Depending upon the specific circumstances, OPPA may actively participate in
negotiations led by the Region. OPPA will consult with the Regions as to appropriate staffing
for a particular negotiation. OPPA, and in some circumstances OECA upper mangement, also
needs to review in advance all proposed written communications with the state relating to audit
legislation or an enacted statute.
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