Avoiding and Resolving EPCRA Reporting Violations

Similar documents
HSEQ Regulatory Inspections

ATTACHMENT 4 CERCLA NOTICE, COVENANT, AND ACCESS PROVISIONS AND OTHER DEED PROVISIONS

Central Kentucky Educational Cooperative

Preparing for Negotiations: The Environmental Lawyer s Checklist In Oil and Gas Transactions

TOWN OF LINCOLN COUNCIL POLICY

Environmental and Land Use ADVISORY

Minnesota Pollution Control Agency Voluntary Investigation and Cleanup

PUTNAM COUNTY BOARD OF COUNTY COMMISSIONERS REQUEST FOR PROPOSALS

July 1, 2017 HAZARDOUS SITE INVENTORY Environmental Protection Division Georgia Department of Natural Resources

JURISDICTIONAL RUNOFF MANAGEMENT PROGRAM ENFORCEMENT RESPONSE PLAN

Section 743(b) Adjustments in Multi-Tier Partnerships: Applying Rev. Rul to Upper- and Lower-Tier Entities

Exposure Draft (ED) 64 Summary Leases

Report on Inspection of Dixon Hughes Goodman LLP (Headquartered in Charlotte, North Carolina) Public Company Accounting Oversight Board

Implementing GASB s Lease Guidance

EARLY LEARNING COALITION OF OSCEOLA COUNTY

Due Care Obligations

New Proposed Regulations Regarding Lead-based Paint Requirements

ENFORCEMENT POLICY INCLUDING INDUSTRIAL AND COMMERCIAL ACTIVITIES DISCHARGE MANAGEMENT

Lease Accounting: Gather your data now and understand tax implications. Tuesday, December 5, 2017

ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT

Ohio EPA Guidance - VAP Environmental Covenants May 2005 Updated February 2012

MINNESOTA POLLUTION CONTROL AGENCY GENERAL PERMIT FOR DISPOSAL OF UNCOMTAMINATED CONCRETE

DRAFT PROPERTY TRANSFER OR CLOSURE STATUTES

Lead Based Paint Management Plan

Guide to STATE & LOCAL Energy Performance Regulations. Version 1.0

ENVIRONMENTAL DUE DILIGENCE AND DEFECT PROCEDURE

DIRECT-FINANCING TERMS

OFFICE OF INSPECTOR GENERAL PALM BEACH COUNTY

Department of Housing & Community Development Chapter 40T Guidance on Notices, 760 CMR 64.03:

Property Disposition Guidelines of the New Rochelle Industrial Development Agency

STATEMENT OF POLICY BY THE LOUISIANA REAL ESTATE APPRAISERS BOARD UPON ADOPTION OF REPLACEMENT RULE 31101

Procurement and Purchasing Procedure Manual October 15, 2015

[Type e-signature] This document has been electronically signed.

REAL PROPERTY ACQUISITION POLICY

An Overview of the Proposed Bonus Depreciation Regulations under Section 168(k)

Accounting for Tangible Capital Assets

CITY OF PITTSBURGH Department of Permits, Licenses and Inspections (PLI)

Many healthcare purchase and sale

Restoring the Past U.E.P.C. Building the Future

ALBUQUERQUE BERNALILLO COUNTY WATER UTILITY AUTHORITY COMPLIANCE DIVISION INDUSTRIAL PRETREATMENT PROGRAM ENFORCEMENT RESPONSE PLAN

ASSURANCE AND ACCOUNTING ASPE - IFRS: A Comparison Investment Property

Issue Date: Friday, January 26, Submission Deadline: Friday, March 9, 2018 at 5:00 p.m. CST OVERVIEW:

CHAPTER LEAD PAINT DISCLOSURE 114

PEORIA HOUSING AUTHORITY JOB DESCRIPTION

MASSACHUSETTS. Consumer Leases

City of Richmond Administrative Manual

Report on Inspection of KBL, LLP (Headquartered in New York, New York) Public Company Accounting Oversight Board

WHEREAS, the Board passed Resolution approving the aforementioned Guidelines; and

Environmental. Due Diligence 9 Steps Companies Should Take to Effectively Manage. Environmental. Risks in Commercial Real Estate Deals

Countdown to the Minimum Energy Efficiency Standards (MEES)

FASB and IASB Continue Making Decisions on Lease Accounting

March Construction-Related Issues with the Home and Customer Relations An Overview. Causes of product failures

Housing Commission Report

4/4/2018. GASB's New Leases Standard

The Boeing Company On-Site Environment, Health and Safety Supplemental Provisions (SP4)

2018 Requirements Manual An In-Depth Look at Changes to the Requirements

Chapter Three. Option One Mark-Up-To-Market. Overview. Section 3-1

FACT SHEET Brownfields Cleanup Program (BCP) KEY DEFINITIONS (see also ECL )

Due Diligence & Environmental Compliance Issues for Tribal Energy Projects: Hazardous Waste

certified and licensed Lead Risk Assessor

CUSTOMER CONTRACT REQUIREMENTS Transactional Spares CUSTOMER CONTRACT SPM4A1-09-G-0004 DO 8009

COUNTY OF VOLUSIA, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2009

Inspection of Liebman Goldberg & Hymowitz LLP (Headquartered in Garden City, New York) Public Company Accounting Oversight Board

WATER AUTHORITY OF GREAT NECK NORTH POLICY FOR THE DISPOSITION OF PROPERTY As Revised: March 19, 2018 for Item As Re-Adopted December 10, 2018

Technical Line SEC staff guidance

Final Repair Regulations and the Impact on Owners of Investment Real Estate

The Ministry of Defence s arrangement with Annington Property Limited

The new accounting standard for leases. 27 March 2017

Environmental Management Chapter

CPE ARTICLE. An Introduction to Lessee Accounting (Topic 842, Leases)

WELLS SANITARY DISTRICT POLICY FOR DISPOSITION OF SEWER LIEN FORECLOSURE ACQUIRED PROPERTY

Property Disposition Compliance Process Governance Committee #1345, approved March 29, 2017

LOCAL LAW NO. 2 OF 2009 COUNTY OF OTSEGO, NEW YORK A LOCAL LAW AMENDING LOCAL LAW NO. 3 OF ESTABLISHING A SOLID WASTE USER FEE

Report on Inspection of Ferlita, Walsh, Gonzalez & Rodriguez, P.A. (Headquartered in Tampa, Florida) Public Company Accounting Oversight Board

CHAPTER 8.0: CLOSEOUT

2018 Accounting & Auditing Update P R E S E N T E D B Y : D A N I E L L E Z I M M E R M A N & A N D R E A S A R T I N

BROWNFIELDS Connecticut All Grantee Meeting July Getting the most out of All Appropriate Inquiries (AAI)

Section 12 Accounting for Leases Accounting by the Lessor and Lessee

TANGIBLE CAPITAL ASSETS

Concho Wastewater Improvement District ( District ) Customer Rules and Regulations

A. IF SPECIAL TOOLING AND/OR SPECIAL TEST EQUIPMENT IS REQUIRED FOR WHICH THE PURCHASER WILL NOT BE CHARGED, SELLER S QUOTE TO INCLUDE:

PEORIA HOUSING AUTHORITYJOB DESCRIPTION

.01 The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.

FTC S BUSINESS OPPORTUNITY RULE REDUCED DISCLOSURE BUT INCREASED COVERAGE

VII Chapter 421J, Planned Community Associations

Standards of Performance

Report on Inspection of PricewaterhouseCoopers Kyoto (Headquartered in Kyoto, Japan) Public Company Accounting Oversight Board

CLASS C ELIGIBILTY BULLETIN

Use of Comparables. Claims Prevention Bulletin [CP-17-E] March 1996

STATE OF NEW MEXICO GENERAL MINING LEASE SALE

Property Disposition Guidelines of the Erie County Industrial Development Agency ( ECIDA ), Buffalo and Erie County Regional Development Corporation;

WHITE PAPER. New Lease Accounting Rules

Buffalo Niagara Convention Center. Management Corporation. Property Disposition Guidelines

Rider To Purchase Agreement

New York State Housing Trust Fund Corporation M E M O R A N D U M ANNUAL REPORT ON PROPERTY DISPOSAL GUIDELINES

REQUEST FOR EXPRESSIONS OF INTEREST Environmental Assessment Services

CHAPTER 5 RULES, RATES AND CHARGES FOR THE STORMWATER UTILITY SERVICE 1

INTERNAL AUDIT DIVISION CLERK OF THE CIRCUIT COURT FOLLOW-UP AUDIT OF BUILDING PERMITS

ACCOUNTING FOR CAPITAL ASSETS. Presented by: Joel Knopp, CPA Shareholder

Exposure Draft 64 January 2018 Comments due: June 30, Proposed International Public Sector Accounting Standard. Leases

Transcription:

Click to edit Master title style Avoiding and Resolving EPCRA Reporting Violations Sara G. Smith August 26, 2015

Click to edit Master title style EPCRA was the result of Bhopal

Click Structure to edit and Master Purpose title style of EPCRA EPCRA Sections 301 to 303 Emergency planning Establishment of state commissions, planning districts and local committees Identification of extremely hazardous substances (EHS) 355 EHS Threshold planning quantities = 1 to 10,000 lbs on site for EHS and hazardous chemicals Facilities covered notification required Covered facilities must: Participate in planning process as facility emergency coordinator Promptly inform committee of changes Provide requested information

Click Structure to edit and Master Purpose title style of EPCRA Section 304 Emergency Notification Report each time there is a release above reportable quantity Three types of releases require different notifications: release of EPCRA listed EHS requires CERCLA section 103(a) notice release of EPCRA listed EHS does not require CERCLA section 103(a) notice Release is not an EPCRA listed EHS but does require CERCLA section 103(a) notice Release which results in exposure to persons solely within the site on which a facility is located is exempted.

Structure and Purpose of EPCRA Click to edit Master title style Section 304 Emergency Notification Notice: immediate to whom? content of notice written follow up notice Applies to: numerous substances (not just EHS) reportable quantities 1 to 5,000 lbs in 24 hour period

Click Structure to edit and Master Purpose title style of EPCRA Section 311 312 Community Right to Know Maintain SDS for each hazardous chemical (over 500,000 hazardous chemicals must have SDS not just EHS) What is a hazardous chemical? It has hazardous characteristics Toxicity acute or chronic Flammable Reactive Sudden release of pressure

Click Structure to edit and Master Purpose title style of EPCRA Section 311 312 Community Right to Know Reporting requirement: Provide copies of SDS for materials above threshold quantities Lesser of 500 lbs or threshold planning quantities for EHS 75,000 gallons for gasoline 100,000 gallons for diesel 10,000 for all other chemicals Can provide a chemical list instead of SDS must include chemical or common name and hazard classification If a facility adds or changes its chemical inventory to increase amounts or exceed threshold must report changes

Structure and Purpose of EPCRA Click to edit Master title style Section 311 312 Community Right to Know Tier I or Tier II inventory reports required annually (by March 1) don t just copy over last year s report! Tier I Reports provide estimates by category of chemical including maximum on site at any one time in the past year and average daily amount on site. Include general location of chemicals in each category. Tier II Reports more detail than Tier I, includes specific chemicals including the chemical or common name, maximum present and average daily amount, description of storage, location, is information deemed private. Kentucky requires electronic reporting and fee payment.

Click Structure to edit and Master Purpose title style of EPCRA Section 313 Toxic Release Inventory (TRI) Applies to certain industry sectors see http://www.epa.gov/tri/lawsandregs/naic/ncodes.htm Program is not just for releases. Includes information about recycling, energy recovery, treatment as well as environmental releases. Report is due July 1 Information is available to the public at www.epa.gov/tri

Common Issues and Errors Click to edit Master title style Failure to reevaluate when the facility or chemicals at the facility change Lack of up to date SDS Lack of accurate inventory Failure to recognize EHS

Common Issues and Errors Click to edit Master title style Mistakes in classifying, measuring or considering materials De minimus chemicals any hazardous chemicals that are 1% or more of a mixture must be reported (see SDS); carcinogens in excess of 0.1% must be reported Identifying when to list a mixture and when to list a pure chemical Industrial batteries containing sulfuric acid Manufacturing support materials Residual in drums

Common Issues and Errors Click to edit Master title style Practice points Start with a thorough audit of materials on site Develop and maintain an accurate inventory system that tracks materials coming on site, SDS management, materials used, recycled, disposed of Understand threshold reporting quantities and reportable release quantities for each material Create a release notification guidance Begin early when preparing Tier II reports and TRI Engage with your local responders and emergency planning committee

Click Resources to edit Master title style EPA Fact Sheet http://www2.epa.gov/sites/production/files/2015 05/documents/epcra_fact_sheet.pdf The Title III List of Lists http://www.epa.gov/emergencies/tools.htm#lol Kentucky s How to Comply Packet http://kyem.ky.gov/programs/documents/2015%20epcra%2 0How%20to%20Comply%20Packet.pdf

Click to edit Master title style THANK YOU from Smith Management Group www.smithmanage.com LEXINGTON 859 231 8936 LOUISVILLE 502 587 6482

Avoiding and Resolving EPCRA Reporting Violations R. Clay Larkin August 26, 2015

EPCRA Enforcement Overview EPCRA Enforcement Responsibility EPRCA Enforcement Trends EPA Inspections EPA Enforcement Response Policies/Penalty Policies Tips on Negotiating EPCRA Enforcement Cases Voluntary Self-Disclosure Considerations

EPCRA Enforcement Responsibility In Kentucky, EPCRA is enforced by EPA Region 4, based in Atlanta Region 4 covers Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee EPCRA not addressed by state agency enforcement of other programs Cannot rely on prior inspections under other programs for assurance of compliance with EPCRA requirements

EPRCA Enforcement Trends Significant enforcement activity within Region 4 For example, from August 1, 2014 August 1, 2015, Region 4 filed 32 administrative complaints initiating new enforcement cases. This does not include other types of enforcement (citizen suits, federal lawsuits, etc.). This also does not include settlements reached without filing of complaint or consent agreement/final order. Bottom line if an EPCRA violation exists at a facility, there is a good chance it will be discovered

EPA Inspections Performed by Region 4 inspectors Take place at the facility Involve both a review of records and inspection of facility and operations Focus on: Completion, accuracy, and retention of required reports and documents Operations that may be subject to reporting

EPA Inspections Advance notice of inspection may or may not be provided If advance notice is provided, critical that all necessary records be gathered and made available for review As with all inspections under any program, focus should be on preparation and cooperation. General good housekeeping of facility presents a positive impression to inspector Cooperative attitude Key personnel available to accompany inspector/address questions or locate documents

EPA Inspections Inspector will likely hold some form of close-out meeting with personnel, but may not address ultimate findings of compliance/non-compliance A positive meeting does not necessarily mean no violations have been discovered There is often a significant lag time between inspection and a letter or NOV alleging violations a delay of 6-12 months is not uncommon

EPA Inspections If inspection identifies potential violations, EPA will in most cases issue a letter of potential violations or NOV This letter will typically ask the facility to appear for a show cause meeting to address EPA s allegations. Such meetings may be held telephonically or in Atlanta EPA has authority to directly file a complaint in federal court or take other action, but the vast majority of cases are addressed in the administrative setting. EPA will usually, at first, operate under the assumption that the violation can be settled without litigation

Enforcement Response Policy Upon receipt of communication from EPA indicating that violations have been identified, preparation should begin for show cause call or written submittal to EPA addressing alleged violations If using legal counsel, they should be involved early in the process This avoids unnecessary admissions of liability, and allows legal counsel to present the case in the best light from the outset Waiting until EPA proposes a penalty is not ideal time to involve legal counsel

Enforcement Response Policy Majority of violations discovered during inspection are resolved via Consent Agreement/Final Order negotiated using EPA s EPCRA Enforcement Response Policy documents, often referred to as the Penalty Policy The CA/FO is a settlement, but is also legally binding order of EPA Signing a CA/FO requires that the facility certify compliance with EPCRA

Enforcement Response Policy EPA Region 4 adheres very closely to the guidelines in the Enforcement Response Policies It is very difficult to negotiate a penalty that is outside of the ranges contained in the Enforcement Response Policy EPA CA/FOs are publicly available, and EPA Region 4 staff have stated that a primary goal is consistency in the types of penalties imposed in similar cases While this provides predictability, it significantly limits EPA s discretion to reduce the penalty

Enforcement Response Policy EPA s Enforcement Response Policy requires enforcement staff to assign each violation a gravity component, based on: the type of violation, the amount of chemical involved, and the size of the facility Based on its gravity, the violation is assigned a location on a penalty matrix which provides a dollar amount range of civil penalty EPA is also required to seek any economic benefit of noncompliance, but this is typically minimal for most EPCRA violations

Enforcement Response Policy The Gravity component of a violation may be adjusted upward or downward based on many factors, including: Facility s history of prior violations Facility s cooperative attitude (or lack thereof) Ability to pay Other factors as justice may require Up to a 30% reduction for cooperation is available, providing a significant incentive to work in a cooperative manner with EPA

Enforcement Response Policy Because the Enforcement Response Policy is relatively rigid, EPCRA violations often carry significant financial penalties The majority of resolved EPCRA enforcement cases in recent years have involved five-figure civil penalty amounts, even when they involve only a handful of alleged violations and no environmental harm

Tips for Resolving EPCRA Violations Cooperative attitude from time of inspection through negotiation of CA/FO Involvement of legal counsel Preparation of written submittals where appropriate Ensuring full compliance prior to signing CA/FO certification Evaluation of Supplemental Environmental Projects (SEPs) in mitigation of penalty amount There are pros and cons to SEPs

Voluntary Self-Disclosure Given the rigid EPCRA Enforcement Response Policy, and high potential penalty amounts, there is a significant incentive to consider voluntary self-disclosure under EPA s Audit Policy Audit Policy can be found at 65 Fed. Reg. 19,618 (April 11, 2000) ( Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations ) This policy provides for a potential complete elimination or 75% reduction in the gravity-based component of civil penalty for identified violations As noted above, gravity component is major component of most EPCRA violations

Voluntary Self-Disclosure Nine conditions of Audit Policy to receive complete elimination of gravity-based component Violation discovered through environmental audit or compliance management system Violation identified voluntarily Prompt disclosure Disclosure not result of EPA or third party action Correction/remediation of violation Take steps to prevent recurrence No repeat violation No environmental harm Cooperation with EPA

Voluntary Self-Disclosure Environmental Audit or Management System Necessary to receive full reduction; only 75% reduction available if no audit or EMS No bright-line rule on what constitutes environmental audit, but must be systematic, intentional activity by the facility to discover and remedy potential violations

Voluntary Self-Disclosure Violation is voluntarily identified Cannot be identified as part of activity required by some other environmental law e.g., ordinary monitoring under NPDES or Clean Air Act permit

Voluntary Self-Disclosure Prompt Disclosure Violation must be self-disclosed within 21 days of discovery Attention must be paid to this deadline during the course of any audit or other systematic review of compliance to ensure that the deadline is met

Voluntary Self-Disclosure Not the result of EPA or Third Party Action Cannot, for example, receive a citizen suit notice letter or EPA NOV and then claim to have discovered the violation

Voluntary Self-Disclosure Violation Must Be Corrected/Remedied Steps Must Be Taken to Prevent Recurrence of Violation No Actual Harm to the Environment Usually not an issue in EPCRA self-disclosure situations No Repeat Violation The facility cannot take advantage of voluntary selfdisclosure if it had the same or a closely-related violation in the prior three years

Voluntary Self-Disclosure Facility must cooperate with EPA and provide EPA with information necessary to determine whether the Audit Policy applies Legal counsel should be consulted in drafting the voluntary self-disclosure and evaluating whether the Audit Policy applies to a discovered violation

Questions? R. Clay Larkin Lexington, KY Clay.Larkin@dinsmore.com