[Federal Register: October 3, 2003 (Volume 68, Number 192)]
[Notices]
[Page 57447-57459]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03oc03-68]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
[FRL-7565-1]
Agency Policy and Guidance: Draft Small Local Governments
Compliance Assistance Policy
AGENCY: Environmental Protection Agency.
ACTION: Request for public comment.
-----------------------------------------------------------------------
SUMMARY: The U.S. Environmental Protection Agency (EPA) today seeks
public comment on proposed revisions to its 1995 Policy on Flexible
State Enforcement Responses to Small Community Violations (the Small
Communities Policy). The Small Communities Policy encourages states to
enhance protection of public health and the environment by providing
comprehensive environmental compliance assistance to the 72% of
American communities that are home to 2,500 or fewer permanent
residents. If the actions of the state to provide compliance assistance
and the actions of the small community to achieve compliance stay
within the parameters of the Small Communities Policy, EPA will
generally defer to the state's decision to reduce or waive the
noncompliance penalty that EPA guidance would normally require the
state to assess for the small community's violations. During the course
of the compliance assistance, the small community must work in good
faith with the state to: (1) Evaluate the small community's compliance
status and identify all of its environmental violations; (2) develop a
priority-based schedule for the small community to achieve compliance
with all applicable environmental requirements as soon as practicable;
and (3) build the technical, managerial, and financial capacity the
small community needs to achieve and sustain comprehensive
environmental compliance. The central tenets of the Small Communities
Policy are:
1. Good faith efforts; 2. enforceable commitments; and 3.
comprehensive compliance with all environmental requirements.
The 1995 Small Communities Policy can be downloaded from the
Internet at http://www.epa.gov/compliance/resources/policies/incentives/smallcommunity/scpolicy.pdf
.
EPA now proposes a number of revisions intended to extend the scope
of the Small Communities Policy. The policy will be retitled the Small
Local Governments Compliance Assistance Policy to clarify EPA's intent
that the policy benefit units of local government.
To make the benefits of the Small Local Governments Compliance
Assistance Policy available to a greater number of small local
governments, EPA proposes to:
1. Defer to states' decisions to reduce or waive the normal
noncompliance penalties of local governments with 3,300 or fewer
permanent residents--if the actions of the state to provide compliance
assistance and the actions of the local government to achieve
compliance are consistent with the parameters established by the Small
Local Governments Compliance Assistance Policy.
2. Defer to states' decisions to reduce or waive the normal
noncompliance penalties of local governments with between 3,301 and
10,000 permanent residents--if a state has followed guidelines in the
Small Local Governments Compliance Assistance Policy to determine that
the technical, managerial, and financial capacity of the local
government is so limited that the local government is unlikely to
achieve and sustain comprehensive environmental compliance without the
state's assistance; and if the actions of the state to provide
compliance assistance and the actions of the local government to
achieve compliance are consistent with the parameters established by
the policy.
To make the benefits of the Small Local Governments Compliance
Assistance Policy available in a wider range of circumstances, EPA
proposes to defer to states' decisions to reduce or waive the normal
noncompliance penalties for eligible local governments that enter into
an enforceable agreement to: 1. correct known violations; and 2.
develop and implement Environmental Management Systems for their
governmental operations. EPA also proposes to defer to states'
decisions to reduce or waive the normal noncompliance penalties for
eligible local governments with between 3,301 and 10,000 permanent
residents that enter into enforceable agreements either to achieve
comprehensive environmental compliance or to develop and implement
environmental management systems within the ``fenceline'' of a subset
of their government operations.
EPA also seeks public comment on whether and how the Agency could
implement a policy similar to the Small Local Governments Compliance
Assistance Policy for its compliance assistance and enforcement
activities where EPA directly implements a program, where EPA retains
primary enforcement authority, or where EPA takes action after
consulting with a State
[[Page 57448]]
that has primacy or has been authorized to implement a Federal program.
DATES: The Agency requests comments on today's proposal. Comments must
be received or post-marked by midnight January 2, 2004. Comments
received after this date may not be considered in decision making on
the proposed policy.
ADDRESSES: Send written comments (in triplicate, if possible) to: the
Docket Clerk, U.S. Environmental Protection Agency Enforcement and
Compliance Docket and Information Center, Mail Code: 2201T), Docket
Number EC-P-2001-003, U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20004. Please use a font size no
smaller than 12. Comments may also be sent electronically to docket.oeca@epa.gov, or faxed to (202) 566-1511. Attach electronic
comments as an ASCii (text) file, and avoid the use of special
characters and any form of encryption. Be sure to include the docket
number EC-P-2001-003 on your document. In person, deliver comments to
the Enforcement and Compliance Docket and Information Center, U.S.
Environmental Protection Agency, 1200 Pennsylvania Ave., NW., EPA West,
Room B133, Washington, DC 20004.
FOR FURTHER INFORMATION CONTACT: Kenneth Harmon, telephone (202)564-7049; e-mail harmon.kenneth@epa.gov.
SUPPLEMENTARY INFORMATION:
I. Background and History
EPA's enforcement response policies generally provide for
initiation of an enforcement action and assessment of standard
penalties (which can be adjusted downward on the basis of the
violator's inability to pay) if a local government entity is discovered
to have violated environmental regulations. In 1994, EPA began informal
discussions with the States of Oregon and Idaho, later joined by the
State of Nebraska, centered on those States' planned use of enforcement
discretion with respect to small community violators. These States
noted that small communities may have more difficulty complying with
environmental regulations than larger communities do. Small communities
that lack personnel trained in environmental management may be unaware
of environmental requirements. Once informed of their environmental
noncompliance, small communities may not know how to correct their
problems. Because small communities have a smaller tax base and a
smaller pool of ratepayers, their residents often must pay higher per
household costs for environmental compliance. Oregon, Idaho, and
Nebraska sought assurances that EPA would defer to a State's exercise
of enforcement discretion to reduce or waive the normal noncompliance
penalty where a State determines that a small community violator is
working diligently in good faith to identify and correct its
noncompliance.
In 1995, EPA responded by issuing the Policy on Flexible State
Enforcement Responses to Small Community Violations (``the Small
Communities Policy''). The Small Communities Policy established
parameters within which EPA encourages States to provide incentives for
small communities to seek State assistance in identifying their
environmental problems, developing a priority-based schedule for
returning to full comprehensive environmental compliance, and building
the technical, managerial, and financial capacity needed to achieve and
sustain compliance.
II. Overview of the Small Communities Policy
EPA's 1995 Small Communities Policy gives States \1\ considerable
freedom to tailor small community environmental compliance assistance
practices or programs that meet specific local needs. EPA's deference
on penalty reductions and waivers under the Small Communities Policy is
generally restricted to agreements States enter into with communities
with no more than 2,500 permanent residents. These communities must be
working diligently in good faith to achieve and sustain comprehensive
environmental compliance, i.e., compliance with every environmental
requirement to which their government operations are subject. If a
small community cannot achieve comprehensive compliance within 180 days
of the State's commencement of compliance assistance to the community,
within that same 180 days, the community must enter into a written and
enforceable agreement with the State that establishes a schedule for
addressing and correcting all of its environmental violations as soon
as practicable. A State that seeks EPA's deference to its decision to
reduce a small community's noncompliance penalties must have adequate
processes for:
---------------------------------------------------------------------------
\1\ ``State'' means the agency of any State, Commonwealth, or
territory of the United States that has received EPA's approval to
implement environmental laws and regulations. An Indian Tribe can be
a State if it has received EPA's approval for treatment as a State.
---------------------------------------------------------------------------
[sbull] Responding quickly to requests for compliance assistance;
[sbull] Selecting communities to participate in the State's
compliance assistance program;
[sbull] Assessing a community's good faith and compliance status;
[sbull] Establishing priorities for addressing noncompliance; and
[sbull] Ensuring prompt correction of violations
The Agency reserves all of its enforcement authorities, including
its discretion to initiate an enforcement action to address any
violation or circumstance that may present an imminent and substantial
endangerment to, has caused or is causing actual serious harm to, or
presents a serious threat to, public health or the environment.
Deference under the Small Communities Policy is not warranted if,
in EPA's judgment, a State's program to reduce or waive small
communities' noncompliance penalties in exchange for comprehensive
environmental compliance fails to satisfy the conditions of the Small
Communities Policy. Neither is deference under the Small Communities
Policy warranted if, in EPA's judgment, a State's application of its
program to reduce or waive small communities' noncompliance penalties
in exchange for comprehensive environmental compliance fails to
provide, in a specific case, adequate protection to human health and
the environment because that application neither requires nor results
in reasonable progress toward, and achievement of, environmental
compliance by a date certain.
III. Differences Among the Self-Disclosure Policies
In addition to the Small Communities Policy, EPA has issued
Incentives for Self-Policing: Discovery, Disclosure, Correction and
Prevention of Violations (the Audit Policy) and the Small Business
Compliance Policy (the Small Business Policy), both of which were last
revised in April of 2000. These policies provide penalty relief to
regulated entities who, upon discovering their violations, promptly
disclose them to EPA and promptly return to compliance. Although the
Small Communities Policy is often grouped with the Audit Policy and the
Small Business Policy under the shared term ``self-disclosure
policies,'' it differs in significant ways. The Audit Policy and the
Small Business Policy apply only to violations discovered outside the
scope of a compliance assessment required by statute or regulation. The
Small Communities Policy can apply to a violation no matter how
discovered. It can apply to violations discovered
[[Page 57449]]
outside the scope of required compliance assessments as well as to
violations discovered during required compliance assessments and to
violations discovered by the regulator during the course of an
inspection. While the Audit Policy and the Small Business Policy do not
provide penalty relief for repeat violations, the Small Communities
Policy allows application of the policy to communities with a history
of noncompliance if the State determines that the community has been
acting in good faith and to the best of its ability to address
violations and achieve compliance. The Audit Policy and the Small
Business Policy generally allow disclosing violators no more than 60
days and 90 days, respectively, to correct their violations (the Small
Business Policy will allow 180 days for corrections if the violator
first submits a written schedule, and up to 360 days for corrections if
the violator will correct the violations by putting pollution
prevention measures in place). The Small Communities Policy gives
communities up to 180 days to correct violations without a written
agreement and schedule, but, if a community cannot achieve compliance
within 180 days, the policy permits the community to enter into a
written and enforceable agreement with the State establishing a
schedule for the community to address all of its violations as
expeditiously as practicable in order of risk-based priority. Also, the
Audit Policy and the Small Business Policy do not require, as the Small
Communities Policy does, that noncompliers evaluate their compliance
with all applicable regulatory requirements. This significant
difference between the Small Communities Policy and the other self-
disclosure policies is the best illustration that the Small Communities
Policy has a different purpose. The Audit Policy and the Small Business
Policy are intended to provide incentives for regulated entities to
conduct self-audits and disclose the violations they discover. The
Small Communities Policy is intended to encourage States to conduct
comprehensive evaluations of their small communities' compliance with
every environmental requirement that applies to the community's
governmental operations, and then work with communities to help them
build the technical, managerial, and financial capacity they need to
achieve and sustain comprehensive environmental compliance.
IV. The January 23, 2002 Federal Register Notice
Although State comprehensive environmental compliance assistance
programs have provided compliance assistance to more than 250 small
communities since EPA issued the Small Communities Policy, most of that
activity took place in just two States. In discussions with small
community and State stakeholders questioning why so few States had
implemented the policy, EPA learned that many stakeholders find aspects
of the policy problematic. Some stakeholders believe that the Small
Communities Policy's population cap of 2,500 is too low. Many States
point out that EPA has not provided funding for States to establish
programs offering comprehensive environmental compliance assistance to
small communities. Many small communities do not see how participating
in a State's comprehensive compliance assistance program would benefit
them. These and other perceived shortcomings of the policy were seen as
impediments to its more wide-spread implementation among the States.
On January 23, 2002, EPA published a Federal Register notice (67 FR
3185) requesting public comment on possible revisions to various
aspects of the Small Communities Policy. The Federal Register notice
sought comment on: (1) Raising the policy's population cap to allow
participation of larger (but still small) communities; (2) allowing
comprehensive environmental compliance assistance projects confined
within the ``fenceline'' of one of a community's operations; (3)
reducing the resource burdens associated with establishing and
participating in comprehensive environmental compliance assistance
programs; and (4) enhancing incentives for both States and small local
governments to participate in such programs. The Federal Register
notice also discussed the relationship between actions undertaken in
accordance with the Small Communities Policy and actions undertaken as
part of an environmental management system (EMS). EPA noted that if a
small local government receiving comprehensive environmental compliance
assistance from the State were to develop and implement an EMS as part
of its strategy to address its noncompliance, the local government
should incorporate its EMS activities into the written and enforceable
agreement and the schedule required by the policy. Finally, EPA
requested comment on more general aspects of the Small Communities
Policy, including the policy's definition of community, the time frames
for disclosure and correction of violations, and the types of
violations to which the Small Communities Policy would apply.
EPA received comments from ten respondents. A summary of these
comments and the comments themselves are available from EPA's
Enforcement and Compliance Docket and Information Center (EDIC) in the
EPA Docket Center (EPA/DC), EPA West Room B102, 1301 Constitution
Avenue, NW., Washington, DC. The EPA Docket Center Public Reading Room
is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
legal holidays. The telephone number for the Reading Room is (202) 566-
1744, and the telephone number of the EDIC is (202) 566-1514. An
electronic version of the public docket is available through EPA
Dockets (EDOCKET) at http://www.epa.gov/edocket. Use EDOCKET to submit
or view public comments, access the index listing of the contents of
the public docket, and to access those documents in the public docket
that are available electronically. Once in the system, select
``search,'' then type in the docket ID number identified above.
V. The Role of the EPA Inspector in Providing Compliance Assistance
During Inspections
On June 25, 2003, EPA issued a national policy titled: The Role of
the EPA Inspector in Providing Compliance Assistance During Inspections
(Inspector Policy). EPA's Inspector Policy concerns the actions of EPA
inspectors, not State inspectors, conducting compliance inspections,
but it can provide useful guidance for States. The Inspector Policy
encourages EPA inspectors' current practice of providing compliance
assistance during on-site compliance inspections, and clarifies what
compliance assistance is appropriate in such circumstances. The
Inspector Policy can be accessed at http://www.epa.gov/Compliance/resources/policies/monitoring/
inspection/inspectorrole.pdf.
VI. Proposed Changes to the Small Communities Policy
EPA today proposes replacing the term ``community'' with the term
``local government'' as derived from U.S. Census Bureau definitions.
This change, which clarifies EPA's intent to focus compliance
assistance on small governmental entities, is also reflected in the
title of the revised policy: the Small Local Governments Compliance
Assistance Policy. EPA also proposes three major changes to the Small
Communities Policy, one related to the cap on the population of
participating local governments, one allowing projects of restricted
scope in some circumstances, and one encouraging local governments to
develop and implement EMS. These changes are intended to make it easier
for more local
[[Page 57450]]
governments to get needed compliance assistance from their States, and
to promote more effective management of environmental responsibilities
by local governments.
The following sections discuss the revised term used to describe
entities eligible for participation under the policy, proposed
revisions to the population cap and to the requirement of comprehensive
assistance at all of a local government's operations, and the proposed
addition of an EMS option.
A. Entities Eligible To Receive all Benefits
The 1995 Small Communities Policy applied to ``small communities'',
which EPA defined as ``communities, generally comprised of fewer than
2,500 residents, [that are]:
[sbull] Non-profit
[sbull] Governing entities (incorporated or unincorporated)
[sbull] That own facilities that supply municipal services.
EPA now proposes to minimize possible confusion by replacing the
term ``community'' with the term ``local government'', thereby
designating familiar, legally-defined entities as those entities
eligible to receive benefits under the policy. Although EPA originally
adopted a broad definition of eligible entities to provide States
flexibility to develop compliance assistance programs that addressed
the State's particular needs, in the seven years the policy has been in
force, EPA has seen no evidence that States wish to offer comprehensive
environmental compliance assistance to communities that are not
traditional units of local government. EPA's proposal derives its
definition of ``local government'' from United States Census Bureau
definitions (see, http://www.census.gov/geo /www/tiger/glossary.html#glossary)
related to ``governmental unit''. As used by the policy, the term
``local government'' can mean any organized unit of government
authorized in a State's constitution and statutes, and established to
provide general government for a defined area. This includes
governments designated as a county, parish (in Louisiana),
municipality, borough, city, village, town, township, or plantation (in
Maine).
EPA acknowledges that this definition differs from ``local
government'' as defined in Section 2 of the Homeland Security Act of
2002 (Pub. L. 107-296). For the purposes of that Act, Congress defined
`local government' as:
(A) A county, municipality, city, town, township, local public
authority, school district, special district, intrastate district,
council of governments (regardless of whether the council of
governments is incorporated as a nonprofit corporation under State
law), regional or interstate government entity, or agency or
instrumentality of a local government;
(B) An Indian tribe or authorized tribal organization, or in Alaska
a Native village or Alaska Regional Native Corporation; and
(C) A rural community, unincorporated town or village, or other
public entity.
For the Small Local Governments Compliance Assistance Policy EPA
proposes a more restrictive definition because it is the Agency's
intention to focus the benefits of the policy on small units of general
purpose local government. It is EPA's belief that special districts and
governmental entities comprised of more than one participating
governmental unit are created specifically for the purpose of ensuring
that the resulting governmental unit has the technical, managerial, and
financial capacity to discharge its responsibilities. EPA also believes
single-medium compliance assistance programs or compliance assistance
efforts designed for that specific sector of the regulated community
can best meet the needs of governmental entities created for the
purpose of delivering one type of service (not general services) to the
public.
EPA invites public comment on this proposed change to the
definition of entities eligible to receive the full benefits of the
Small Local Governments Compliance Assistance Policy, particularly to
the extent the policy would now not apply either to unincorporated
entities that provide municipal services, or to district government
entities authorized by State statute to provide, not general services,
but to perform a specific function (e.g., school, water, or power
districts).
B. Proposed Revisions to the Population Cap
EPA's January 23, 2002 Federal Register notice sought comment on
two specific questions related to the population cap: (1) Should the
policy raise its current cap to allow participation of communities with
more than 2,500 residents? and (2) should the population cap be
replaced by a test of a community's capacity to address its
environmental responsibilities?
Nine of the ten commenters addressed the population cap. All nine
favored giving State programs flexibility to admit communities with
more than 2,500 permanent residents. Four commenters supported raising
the population cap to 10,000, both to be consistent with some of the
population-dependent provisions of the Safe Drinking Water Act (in
which public water systems that serve more than 10,000 users are
labeled ``large'') and because the commenters believe communities with
populations of up to 10,000 often provide essential public services to
a customer base too small to fund a full-time professional
environmental staff. Three commenters indicated that while a population
of 2,500 could serve as a reliable rule of thumb for determining which
communities need compliance assistance, they recommended that States be
given discretion to justify application of the policy to larger
communities if those larger communities can be shown also to need
compliance assistance.
None of the eight respondents who offered comments on capacity
tests supported determining a community's eligibility for compliance
assistance solely on the basis of a capacity test. Three commenters
rejected capacity tests outright, as they believe small local
governments lack the expertise and resources needed to gather the
information that would be required by such tests, and States lack the
resources needed to evaluate the large number of small local
governments potentially eligible for assistance. Five commenters
asserted that States should have the flexibility to use a capacity test
as a means of determining if a community whose population exceeds the
population cap should nonetheless be eligible for participation.
After considering these comments, EPA decided to propose a hybrid
approach. The proposed revised policy establishes a two-tiered
population cap. EPA will defer to the States' acceptance into their
programs of local governments with up to 3,300 permanent residents
without analysis demonstrating a lack of technical, managerial, or
financial capacity on the part of the local government. The proposed
revised policy also provides that States can apply a capacity test to
justify the participation of a local government with more than 3,300
but no more than 10,000 permanent residents. As a practical matter,
such an upper limit is necessary if EPA wishes to focus comprehensive
compliance assistance resources on small local governments who most
need it while encouraging larger municipalities to use their greater
technical, managerial, and financial capacity to assume more
responsibility for ensuring their environmental compliance. In
proposing these population levels for the population cap and the upper
population limit, EPA
[[Page 57451]]
acknowledges the desirability of consistency with the definition of
small local government in environmental statutes (most notably
regulations implementing the Safe Drinking Water Act, in which public
water systems serving 3,300 and fewer users are labeled ``small'' ) and
in the recent Public Health Security and Bioterrorisim Preparedness and
Response Act of 2002 (Pub. L. 107-188) (which, in its amendments to the
Safe Drinking Water Act, reaffirmed 3,300 as the population level below
which public water systems were exempt from some requirements). EPA
also acknowledges that States, in implementing the Small Local
Governments Compliance Assistance Policy are free to adopt a more
stringent population cap if they believe lower population levels are
more appropriate for their local circumstances. If, for example, a
State believes population levels of 2,500 without a demonstration of
incapacity and up to 5,000 with a demonstration of incapacity are more
appropriate to its local circumstances, the State can establish those
levels for its program. A State may choose to evaluate the capacity of
requiring all potential participating local governments, or choose not
to conduct any capacity tests and simply limit participation in its
program to local governments no larger than 3,300 permanent residents.
A State also has the option of providing comprehensive environmental
compliance assistance to local governments without regard to their
populations, but if the State reduces or waives the normal
noncompliance penalties of local governments with more than 10,000
permanent residents, EPA may find it appropriate to initiate its own
enforcement action to recover additional remedies.
EPA's proposed revised policy recommends that States adopt a number
of listed capacity measures the Agency has drawn from studies performed
by EPA's Boise Environmental Finance Center. In the context of
measuring the ability of small local governments to implement the
requirements of the Safe Drinking Water Act, the Boise Environmental
Finance Center identified a number of factors that influence the
technical, managerial, and financial capacity of local governments
(see, http://sspa.boisestate.edu/efc/). EPA adapted many of these
measures for inclusion into the proposed revised policy, and recommends
that States incorporate these measures as appropriate for their local
conditions. A State that has provided compliance assistance to a small
local government with more than 3,300 but no more than 10,000 permanent
residents and seeks EPA deference to its decision to reduce or waive
the normal noncompliance penalty of that small local government must
have a capacity test in place and consistently apply it. EPA requests
comment on the recommended measures presented in the proposed revised
policy.
C. Fencelining
Restricting the scope of activities to the boundaries of some
subset of operations or facilities is called ``fencelining''. In its
January 23, 2002, Federal Register notice, EPA asked if, as a cost
saving measure, the Small Local Governments Compliance Assistance
Policy should countenance ``fenceline'' projects. That is, should the
policy apply if the State and small local government designate one of
the local government's operations (i.e. vehicle fleet maintenance,
provision of drinking water, grounds keeping, etc.), evaluate the local
government's compliance with every environmental requirement that
applies within the fenceline of that operation, and develop and
implement a plan that addresses every environmental concern within that
fenceline?
Nine commenters addressed this point. Four commenters advised
against allowing fenceline projects. Fencelining need not be
incorporated into the policy, three of these four commenters asserted,
because most States already offer statute-specific compliance
assistance with respect to individual local government operations.
These commenters suggested that allowing fencelining would abandon the
policy's primary purpose--helping small local governments achieve and
sustain comprehensive environmental compliance. Fencelining, they
feared, would perpetuate a focus on operations with known or suspected
violations while leaving other potentially more serious noncompliance
at other operations undiscovered and unaddressed.
Three other commenters believed fencelining's probable focus on
known compliance concerns could be used to direct limited compliance
assistance resources to where they are most needed. These commenters,
however, advised limiting fencelining in some way. They suggested
including restrictions to ensure that the policy did not become a
compliance assistance program for one type of operation only, allowing
fencelining only at operations EPA determines to be of particular
concern, or allowing fencelining only at larger local governments where
conducting comprehensive evaluations of all operations would be a
prohibitive drain on available resources.
EPA does primarily intend the policy to promote the provision of
comprehensive environmental compliance assistance to small local
governments. The Agency, however, acknowledges that fencelining can
help States limit the cost of providing comprehensive compliance
assistance to a local government that engages in a wide range of
operations. EPA also notes there is no compelling reason to limit the
scope of a fenceline to just one of a local government's operations. A
State and a participating local government may have the capacity and
the desire to undertake a comprehensive compliance assistance project
incorporating more than one, but less than all, of the local
government's operations.
After reviewing the comments, EPA proposes to defer to States'
decisions to reduce or waive the normal noncompliance penalties for
fenceline projects involving only local governments with between 3,301
and 10,000 permanent residents. With respect to compliance assistance
to small governments with 3,300 or fewer permanent residents, EPA will
generally defer to a State's decision to reduce or waive the normal
noncompliance penalty only if the effort produced an enforceable
agreement to achieve comprehensive compliance at all of the small
government's operations.
EPA seeks comment on whether this approach strikes an appropriate
balance between the Agency's goal of encouraging States to provide
truly comprehensive environmental compliance assistance to small local
governments, and the Agency's goal of encouraging States to provide
some form of comprehensive environmental compliance assistance to local
governments with between 3,301 and 10,000 permanent residents. In
developing this proposal, EPA considered that its Audit Policy and
Small Business Policy currently provide fenceline-based penalty
reductions and waivers to violators (including local governments) that
voluntarily discover, promptly disclose, and expeditiously correct
environmental noncompliance.
If the Small Communities Policy were revised to support fenceline
projects for some local governments, it would still differ from the
Audit Policy and the Small Business Policy in some important ways:
[sbull] Application of the Small Communities Policy is not limited
to
[[Page 57452]]
those violations that are voluntarily discovered.
[sbull] Projects under the Small Communities Policy must result in
an assessment of the local government's compliance with all applicable
environmental requirements, even if the project is confined within the
fenceline of a subset of the local government's operations.
[sbull] The Small Communities Policy gives local governments the
flexibility to prioritize among their violations and develop a schedule
to address all of their noncompliance as expeditiously as practicable
in order of risk-based priority.
D. Environmental Management Systems
An environmental management system (EMS) is an individualized
internal management system designed, documented, and implemented to
identify and manage the environmental impacts of an entity's
operations. Developing and implementing an EMS is an effective way for
a local government to identify the environmental aspects of its
operations and manage its environmental responsibilities for continual
improvement. EPA noted the similarities between the goals of the Small
Communities Policy and the goals of an EMS in its January 23, 2002,
Federal Register notice. Both the policy and an EMS establish a
mechanism for moving a small local government toward sustained
environmental compliance. In the Federal Register notice, the Agency
noted that the primary difference between the two is the policy's focus
on discovering and addressing all of a local governments' environmental
noncompliance and an EMS's focus on implementing a system that provides
for a local government's ongoing management of all its environmental
responsibilities. EPA indicated in the Federal Register notice that if
a small local government receiving comprehensive environmental
compliance assistance from the State were to develop and implement an
EMS as part of its strategy to address its noncompliance, the local
government should incorporate its EMS activities into the written and
enforceable agreement and the schedule required by the policy.
All commenters on this point acknowledged the value of an EMS, but
urged that development and implementation of an EMS, and the associated
resource demands, not be made a condition of EPA deference.
After considering the comments, EPA's has decided the policy, while
not making EMSs mandatory, should provide local governments an
incentive to develop and implement an environmental management system.
Accordingly, the proposed revisions to the Small Communities Policy
create an EMS option that will be available to small local governments
that learn of environmental noncompliance as a result of a State's
inspection of some subset of the small local government's operations.
The revised policy would apply to small local governments that address
their environmental noncompliance by entering into a written and
enforceable agreement with the State establishing a schedule for the
local government to: (1) Correct, as expeditiously as practicable in
order of risk-based priority, the violations the State discovered
during the inspection; and (2) develop and implement an environmental
management system for all of its governmental operations. Local
governments with populations between 3,301 and 10,000 that the State
has determined eligible to participate under the policy may develop and
implement an EMS applicable within a fenceline that incorporates the
operation at which the violations were discovered. Not later than 180
days after the State notifies the local government of the violations
discovered during the inspection, the local government must enter into
an enforceable agreement that establishes a schedule for correcting the
violations, and for developing and implementing an EMS for its
governmental operations. If the local government corrects the
violations before the 180 days have passed, the written and enforceable
agreement it enters into with the State can contain only provisions
related to developing and implementing its EMS. In accordance with the
schedule established by the EMS agreement, but in no event later than
one year after entering into the EMS agreement with the State, a local
government would demonstrate it has developed an EMS by producing and
submitting to the State an EMS manual documenting how it will
accomplish the essential elements of an environmental management
system. Not less than one year, and not more than three years after the
local government submits its EMS manual to the State, the State, or an
independent third party approved by the State, would conduct an EMS
audit to confirm that a local government has been implementing, and is
continuing to implement, its EMS. This process is discussed more fully
in part J of the policy.
EPA proposes the EMS option as an alternative to the process
established by the prior Small Communities Policy. That policy
encourages small local governments to ask the State to perform a
comprehensive environmental evaluation of all the local government's
operations, enter into a written and enforceable compliance agreement
establishing a schedule to correct all of its violations as
expeditiously as practicable in order of risk-based priority, and
correct all of its violations in accordance with that schedule.
The EMS option would establish a process in which the small local
government would, as expeditiously as practicable and in order of risk-
based priority, correct all of the violations discovered by the State
during its inspection of a subset of the local government's operations.
In committing to develop and implement an EMS, the small local
government would be responsible for ensuring performance of the
comprehensive analysis of the environmental aspects of all of its
operations (or in the case of a local government approved for a
fenceline project, all of its operations within the fenceline). If at
any point during the development and implementation of its EMS a small
local government discovers additional noncompliance, it must disclose
these violations to the State as required by laws and regulations or in
accordance with EPA's self-disclosure policies. The State and the small
local government may then amend the terms of their agreement under the
policy's EMS option to incorporate a schedule for correction of the
newly discovered violations. The State and the small local government
may, however, choose to address any noncompliance discovered after the
entry of the EMS option agreement in any manner consistent with this
policy and other EPA enforcement policies and guidelines.
Local governments that wish to develop and implement an EMS should
consult the EPA-sponsored Public Entity EMS Resource Center (PEER
Center) at http://www.peercenter.net, and the nearest of its affiliated Local
Resource Centers. The PEER Center provides case studies of completed
local government EMS projects, process information, and guidance to
local governments who wish to develop and implement an environmental
management system. EPA will continue to support efforts to facilitate
the development of EMS's by small local governments, will work to
ensure State programs have access to EPA EMS tools, services, and
funding, and will recommend that local governments that participate in
State programs implementing the policy be given priority access to the
Local Resource Centers.
[[Page 57453]]
As this option was not described in the January 23, 2002, Federal
Register notice, EPA seeks public comment on this point.
VII. Miscellaneous Issues
In its January 23, 2002, Federal Register notice, EPA solicited
comments on a number of other issues, including possible ways (such as
fencelining) to reduce the States' burden of developing and
implementing a comprehensive environmental compliance assistance
program for small local governments, incentives for States and local
governments to participate in such programs, the relationship between
the policy and environmental management systems, and if a separate
compliance assistance policy is needed for Tribal governments. With the
exception of comments related to fencelining, the comments EPA received
on these issues did not indicate a need for substantive revisions to
the policy in these areas.
A. Burden on States
In addition to fencelining, EPA specifically asked for comment on
four other possible ways to reduce a State's burden of developing and
implementing a comprehensive environmental compliance assistance
program: In-kind contributions from EPA; shifting costs to communities;
tiering; and streamlining.
The commenters supported development and dissemination of in-kind
contributions (i.e. compliance assistance materials, tools, and
services that help implement a comprehensive environmental compliance
assistance program) by EPA. Commenters advised against shifting costs
to small local governments by requiring local governments to evaluate
their own compliance status and devise a strategy to achieve and
sustain environmental compliance as a prerequisite to receiving
compliance assistance from the State. Commenters favored tiering, the
provision of different levels of service to different classes of local
governments, as a way to focus intensive compliance assistance where it
is most needed. Streamlining drew little comment except from those
commenters who pointed out that different branches of Federal
government should always attempt to coordinate related mandates to the
maximum extent possible.
Commenters' support for in-kind contributions from EPA was tempered
by their belief that such contributions would be of limited value, as
State environmental standards often differ from Federal regulations in
some details, and federally-produced materials would not provide
information on State contacts. Shifting costs to small local
governments drew negative comment. Respondents asserted that this
approach, by requiring small local governments to identify their
environmental responsibilities and develop a plan to address their
environmental concerns before requesting assistance from the State,
would be antithetical to the policy's goal of providing compliance
assistance to small local governments unable to understand and address
their environmental responsibilities. Respondents also questioned the
reliability of compliance evaluations performed by untrained
individuals--even if conducted with checklists and guidance materials
provided for that purpose.
EPA generally agrees with these comments. While the Agency's in-
kind assistance may not be able to meet every need of States and local
governments, EPA believes, in most instances, States will need to make
only minor modifications to incorporate essential State details the
Federal materials may lack. For this reason, EPA will continue its
efforts to make its compliance assistance materials as useful as
possible, and to facilitate dissemination of the assistance to local
governments. EPA also agrees that requiring small local governments to
identify compliance concerns and a strategy for addressing them as a
prerequisite of participation in a State's comprehensive compliance
assistance program could effectively bar entry of the very local
governments the policy was intended to reach. We acknowledge, however,
that States with limited available resources can always establish
eligibility criteria intended to restrict the number of qualifying
applicants. One option would be for a State to establish tiers of
service that allow the local governments defined as small to
participate without first identifying a compliance concern while
requiring larger, more capable local governments to make such a showing
as part of an application process.
In an attempt to promote streamlining, EPA has been an active
participant in the U.S. Small Business Administration's E-Government
project. E-Government is joining Federal agencies together to develop
and pilot an on-line, interactive one-stop compliance assistance
information source for businesses and local governments. Users will
enter the system and complete a profile that describes their
operations. E-Government will then generate links to compliance
assistance resources available from the various Federal agencies that
regulate the user's activities.
Because EPA believes flexibility will allow Federal and State
agencies to make best use of in-kind contributions from EPA, strategies
for shifting costs to local governments, tiering levels of service, and
streamlining among related government mandates, the proposed revised
policy does not require states to take specific actions in these areas.
EPA welcomes comments on this approach.
B. Incentives for Participation
EPA's January 23, 2002, Federal Register notice described potential
benefits of a comprehensive environmental compliance assistance program
for States and small local governments. Benefits to an implementing
State include more complete and accurate assessments of the
environmental compliance status of its small local governments,
measurements of progress toward reducing risks to the health of its
citizens and the environment, and improved ability to plan and budget
for future environmental and infrastructure needs. EPA also discussed
options for recognizing States for their efforts to provide
comprehensive environmental compliance assistance to small local
governments, providing priority access to EPA compliance assistance
tools and services, and the likelihood of EPA funding for pilot
projects.
All comments EPA received in response focused on Federal grants,
which the commenters perceived as the only effective incentive for
States to implement the policy.
To provide an incentive for local government participation, the
Small Communities Policy contemplates that States will reduce or waive
the normal noncompliance penalties for local governments that
participate in their comprehensive environmental compliance assistance
programs. Seven years of limited participation by local governments has
shown this to be an ineffective incentive. In the January 23, 2002,
Federal Register notice, EPA noted that achieving and sustaining
comprehensive environmental compliance created other benefits for local
governments. A participating local government can expect to identify
all its environmental compliance concerns; develop a plan for achieving
and sustaining environmental compliance; learn how to build the
technical, managerial, and financial capacity necessary to meet its
compliance goals; gain assurance it is keeping its residents safe from
environmental risks; and plan and budget for the future operations
confident they will not face surprise
[[Page 57454]]
costs from unforeseen environmental problems. Other benefits to
participating communities may include recognition from EPA or their
states, priority access to EPA compliance assistance tools and
services, or priority access to EPA-funded compliance grants. There are
also indications that local governments that undertake a comprehensive
environmental compliance evaluation and implement a program to ensure
sustained compliance can improve their bond ratings and reduce their
insurance premiums. Commenters generally approved of these incentives
and stressed the importance of public recognition both as a means of
rewarding local governments for their efforts to achieve and sustain
comprehensive environmental compliance and as a way to promote interest
among other local governments.
To the extent yearly budgets allow, EPA's Office of Compliance will
provide pilot grants to a limited number of States to help offset the
resource demands of establishing a program to provide comprehensive
environmental compliance assistance to small local governments. EPA
will continue to work to provide and enhance other incentives for
States. EPA will also continue to develop and expand the various local
government incentives discussed above. As more tools and services are
developed, and as funding for local government recognition becomes
available, EPA will work to ensure coordination with State compliance
assistance programs.
C. Application of the Policy to Tribes
EPA received no comments on whether or not the policy should create
a distinction between States and Tribes that have received EPA approval
for treatment as States. As a result, the proposed revised policy
leaves the policy's effects on Tribal governments unchanged.
VIII. Other Comments
Commenters also suggested that the policy extend eligibility to
non-governmental water systems that supply drinking water to a
population equivalent to the population of a small local government,
and to governmental organizations owned by a consortium of local
governments that individually meet the policy's definition of small
local government, but whose aggregated populations would exceed the
policy's population cap. EPA does not propose making either of these
suggested changes. Non-governmental water systems, even those serving
small populations, represent themselves as having the technical,
managerial, and financial capacity for compliant operation at the time
they contract to offer service at an agreed-upon rate. Noncomplying
non-governmental water systems can obtain penalty relief if they
disclose and correct violations in accordance with the Audit Policy or
the Small Business Policy. Either of those policies may be a better
option than the Small Local Governments Compliance Assistance Policy
for resolving environmental concerns at a single facility that engages
in only one operation. Additionally, unique aspects of the Small Local
Governments Compliance Assistance Policy may not be appropriate (e.g.,
including violations discovered by the regulator) or applicable (e.g.,
performing comprehensive environmental compliance evaluations of
several operations; building technical, managerial, and financial
capacity; and developing a schedule for addressing all violations in
order of risk-based priority) to non-governmental water systems.
With respect to governmental organizations owned by a consortium of
small local governments, EPA notes that small local governments pool
their resources in this fashion to ensure the resulting organization
will have the technical, managerial, and financial capacity needed to
perform its intended functions. Determining the organization's
eligibility on the basis of the populations of the individual local
governments misstates the size of the tax base and rate base that
support the organization. It also fails to consider that an
organization that can meet the needs of the entire population served
must necessarily be greater in size and sophistication than that of a
similar organization that provides services only to a single small
local government.
A common sentiment among commenters was a conviction that EPA
should maintain the policy's considerable flexibility. Commenters
thought it important that the policy establish outer bounds within
which States have latitude to design a comprehensive environmental
compliance assistance program tailored to the particular needs of their
small local governments. In many respects, the proposed revised policy
provides States more flexibility than the 1995 policy. Local
governments with populations of up to 3,300 are defined as ``small''
and receive all of the policy's benefits without first demonstrating
need. Local governments with populations between 3,301 and 10,000 can
also receive all of the policy's benefits if a State's consistently
applied capacity test determines that the local government lacks the
technical, managerial, or financial capacity to achieve compliance
without the State's assistance. In addition, these larger communities
can participate on a ``fenceline'' basis to reduce the resource demands
on both the State and the local government. The proposed revisions also
increase flexibility by providing the EMS option to States and small
local governments that wish to pursue this alternative. One way in
which the proposed revision may arguably have decreased the States'
flexibility under the policy is in replacing the former term ``small
community'' with the term ``local government''.
IX. Possible EPA Implementation of a Federal Policy Similar to the
Small Local Governments Compliance Assistance Policy
EPA takes the lead in providing compliance assistance to small
local governments and initiating enforcement responses to their
violations when the Agency is responsible for directly implementing a
program, where EPA has primary enforcement authority within a
jurisdiction, or where EPA takes action after consulting with the
primacy or authorized State. EPA could develop a Federal policy similar
to the Small Local Governments Compliance Assistance Policy as a tool
EPA Regions could elect to use, at their discretion, in appropriate
circumstances. If EPA were to adopt a similar policy, the Agency would
reserve the right to determine the circumstances in which such a
Federal policy would apply to the violations of small local
governments. For example, EPA could choose to implement the policy only
when, consistent with the Agency's priority-setting process, the Agency
decides to deploy compliance assurance and enforcement resources to
address small local government noncompliance that is a significant
contributor to impaired waters, as part of a geographic initiative, or
as part of an integrated strategy. Although EPA did not raise this
issue in its January 23, 2002, Federal Register notice, internal Agency
discussions identified the issue as one for possible clarification. EPA
now seeks comment on whether and how the Agency could implement a
Federal policy similar to the proposed Small Local Governments
Compliance Assistance Policy in its compliance assistance and
enforcement activities.
[[Page 57455]]
Dated: September 23, 2003.
Michael M. Stahl,
Director, Office of Compliance.
Small Local Governments Compliance Assistance Policy
A. Introduction and Purpose
The Small Local Governments Compliance Assistance Policy is
intended to promote comprehensive environmental compliance among small
local governments by providing incentives for them to make use of State
compliance assistance programs, environmental audits, environmental
management systems (EMS), or to participate in any activities that may
increase small local governments' understanding of their environmental
requirements and how to comply with those requirements. The policy
accomplishes this by authorizing States \1\ to reduce or waive, in
certain circumstances, the civil penalty EPA guidance would normally
require States to assess for the small local government's environmental
violations, and to use enforcement discretion to provide compliance
incentives for small local governments. EPA acknowledges that States
and small local governments can realize environmental benefits by
negotiating, entering into, and implementing enforceable compliance
agreements and schedules that require local governments to correct all
of their environmental violations expeditiously while allowing the
local government to prioritize among competing environmental mandates
on the basis of comparative risk.\2\ Small local governments can also
realize environmental benefits by entering into enforceable agreements
to develop and implement an EMS to manage the environmental aspects of
their operations. States may provide small local governments an
incentive to request compliance assistance by waiving part or all of
the normal penalty for a small local government's violations if the
criteria of this policy have been met. If a State acts in accordance
with this policy and addresses small local government environmental
noncompliance with compliance assistance in a way that results in the
small local government making reasonable progress toward compliance,
EPA generally will not pursue a separate Federal civil administrative
or judicial action for additional penalties or additional injunctive
relief.
---------------------------------------------------------------------------
\1\ This policy will also apply to the actions of territories
and to the actions of Native American Tribes where conditions have
been met for EPA to treat the Tribe as a State.
\2\ As described below, EPA does not intend that States and
small local governments must prepare a formal comparative risk
assessment as part of the small local government environmental
compliance assistance process. Information avialable from EPA's
National Center for Ecological Assessment at http://www.epa.gov/ncea/ecologic.htm
will help States and local governments identify which
local environmental problems pose the greatest risk to human health,
ecosystem health, and quality of life.
---------------------------------------------------------------------------
This policy does not apply to any criminal conduct by small local
governments or their employees.
B. Background
This policy implements section 223 of the Small Business Regulatory
Enforcement Fairness Act (SBREFA) of 1996.
C. Who Is Eligible for Compliance Assistance Under This Policy?
This policy applies to State comprehensive environmental compliance
assistance activity related to facilities owned and operated by small
local governments. A local government is defined as an organized unit
of local government, authorized in a State's constitution and statutes,
and established to provide general government to a county,
municipality, city, town, township, village, or borough. A small local
government is a local government that provides public services to 3,300
or fewer permanent residents. A local government that supplies public
services to between 3,301 and 10,000 permanent residents can also
qualify for treatment as a small local government if the State
determines, in accordance with a capacity test (as described below),
that the technical, managerial, and financial capacity of the local
government is so limited that the local government is unlikely to
achieve and sustain comprehensive environmental compliance without the
State's assistance.
This policy supersedes the previous version of the policy titled
the Policy on Flexible State Enforcement Responses to Small Community
Violations, which became effective on November 25, 1995. To the extent
this policy may differ from the terms of applicable enforcement
response policies (including penalty policies) under media-specific
programs, this document supersedes those policies.
D. How Can a Small Local Government Qualify for Penalty Reduction?
This policy seeks to encourage small local governments to achieve
sustained comprehensive environmental compliance in one of two ways. A
small local government can work with the State to identify all of the
local government's environmental noncompliance and then enter into a
written and enforceable agreement establishing a schedule to correct
all of its violations in order of risk-based priority. Alternatively, a
small local government can enter into a written and enforceable
agreement establishing a schedule to: 1. Correct, as expeditiously as
practicable, all violations discovered by the State during an
inspection of some subset of the local government's operations in order
of risk-based priority; and 2. develop and implement an EMS for all of
its governmental operations. EPA's deference to such an exercise of a
State's enforcement discretion in response to a small local
government's violations will be based on an assessment of the adequacy
of the process the State establishes and follows in:
[sbull] Responding expeditiously to a small local government's
request for compliance assistance;
[sbull] Determining which local governments with between 3,301 and
10,000 residents qualify for treatment as small local governments;
[sbull] Assessing the small local government's good faith and
compliance status;
[sbull] Establishing priorities for addressing noncompliance; and
[sbull] Ensuring either prompt correction of all environmental
violations discovered during the State's comprehensive environmental
compliance evaluation of all the local government's operations, or
prompt correction of all violations discovered during a State
inspection of some subset of the local government's operations and
prompt development and implementation of an EMS for all of its
governmental operations.
A State must document all findings and activities that are necessary to
show adherence to the terms of this policy. If the small local
government commits to correct its separate violations in order of risk-
based priority, the State's records must discuss the rationale for
establishing priorities among the violations to be addressed and
explain why the compliance agreement and schedule represents the
shortest practicable time schedule feasible under the circumstances.
EPA will defer more readily to a State that has previously
submitted to the Agency a description of its comprehensive compliance
assistance program for small local governments, thereby allowing EPA to
familiarize itself with the adequacy of the State's processes.
[[Page 57456]]
E. How Should a State Select Participating Local Governments?
EPA intends this policy to apply only to small local governments
unable to satisfy all applicable environmental mandates without
assistance from the State. For the purposes of this policy, local
governments with 3,300 or fewer permanent residents are assumed to need
the State's compliance assistance. Local governments whose permanent
residents number between 3,301 and 10,000 can qualify to receive the
benefits of the policy if the State determines that the technical,
managerial, and financial capacity of the local government is so
limited that the local government is unlikely to achieve and sustain
comprehensive environmental compliance without the State's assistance.
To make this determination, a state must apply a capacity test that
measures such indicators as:
[sbull] The local government finds it difficult to comply with
routine reporting requirements (e.g., the local government has
submitted less than 90 percent of the required drinking water
monitoring reports in the past year);
[sbull] The local government has no operation and maintenance plan
for its utility operations, or has an operation and maintenance plan
that is not routinely followed (e.g., maintenance logs are not
regularly updated, are incomplete, or are not kept at all);
[sbull] The required drinking water sanitary survey has not been
scheduled, or the sanitary survey has been performed, but the local
government has not addressed all identified significant deficiencies;
[sbull] Utility operators are untrained or uncertified, or staffing
of certified operators is inadequate to meet the local government's
needs;
[sbull] Utility systems were installed without State oversight and
approval, or began operating without receiving final operational
approval from the State;
[sbull] Rights essential to the provision of public services are
not clearly established and documented by contract (e.g., the local
government has no contract with the source from which it obtains its
drinking water, or for the disposal of its solid waste);
[sbull] The local government does not have current and approved by-
laws, ordinances, or tariffs in place with respect to each of its
public utility operations;
[sbull] There is no formal organizational structure for operation
and maintenance of the local government's public utilities clearly
identifying the owner, the operator, and the staff and their
responsibilities;
[sbull] Either there are no written job descriptions clearly
defining the responsibilities of public utility staff, or the staff is
unfamiliar with such documents;
[sbull] Staff is untrained or inadequately trained;
[sbull] Written policies covering personnel, customer service, and
risk management either do not exist or are routinely ignored;
[sbull] Lines of communication between public utility staff and
agencies or private sector staff that can provide assistance are
inadequate or nonexistent;
[sbull] The local government does not follow standard accounting
principles in the funding of its public utilities, and either has not
been audited or was issued an adverse opinion following an audit;
[sbull] The local government either does not have an annual budget
for operation of a public utility or has an annual budget that is
inadequate to meet the demands of operation, maintenance, and
environmental compliance;
[sbull] Public utility rates do not include all users or have not
been recently reviewed to examine operational sustainability and
viability;
[sbull] A significant percentage of accounts (either payable or
receivable) are chronically delinquent;
[sbull] Periodic budget reports and balance sheets are either not
produced, or, if produced, have not been approved;
[sbull] The local government's tax base is inadequate to support
needed environmental expenditures; or
[sbull] There are demographic factors that present quantifiable
negative impacts on the local government's capacity.
The State must document the capacity test it applied and all
findings it made to support its determination of incapacity, and
maintain that documentation in records accessible for EPA review.
EPA's evaluation of the appropriateness of a State's small local
government comprehensive environmental compliance assistance program
will depend in part on whether the State uses adequate measures of
technical, managerial, and financial capacity to ensure that only those
local governments that truly need assistance were assessed
noncompliance penalties that were reduced or waived beyond the extent
normally allowed by EPA enforcement policies and guidance.
Not less than quarterly, a State should provide EPA with a list of
local governments participating in its small local government
environmental compliance assistance program to ensure proper State and
Federal coordination on enforcement activity. In addition to any
records related to a finding of a local government's incapacity, a
State must keep records of contacts between the State and participating
local governments, results of compliance assessments, actions taken by
the local government to achieve compliance, any written compliance
agreements and schedules, and any assessments of a local government's
adherence to the terms of its compliance agreement and schedule should
be kept in the State's files accessible for review by EPA.
F. How Should a State Assess a Local Government's Good Faith?
In considering whether a State has established and is following an
adequate process for assessing a small local government's good faith,
EPA generally will look at such factors as the participating local
government's candor in contacts with State regulators and the local
government's efforts to comply with applicable environmental
requirements. Measures of a small local government's good faith
include:
[sbull] Prompt self-disclosure of known violations;
[sbull] Attempts to comply or a request for compliance assistance
prior to the initiation of an enforcement response;
[sbull] Willingness to participate in a comprehensive compliance
evaluation;
[sbull] Prompt correction of known violations;
[sbull] Willingness to remediate harm to public health, welfare, or
the environment;
[sbull] Readiness to enter into a written and enforceable
compliance agreement establishing a schedule to correct all of its
violations as expeditiously as practicable in order of risk-based
priority, or to enter into a written and enforceable agreement
establishing a schedule to correct all known violations as
expeditiously as practicable in order of risk-based priority and to
develop and implement an EMS for all of its governmental operations;
and
[sbull] Adherence to the terms of the agreement and to the
schedule.
G. What Is the Scope of Compliance Evaluation and Assistance a State
Should Offer?
EPA intends this policy to encourage States to offer local
governments comprehensive compliance assistance. Accordingly, a State's
actions under the policy should promote an evaluation, performed by
qualified personnel, of the small local government's compliance status
with respect to all applicable environmental requirements. EPA
acknowledges that a comprehensive
[[Page 57457]]
evaluation becomes more difficult to perform and requires more State
resources as the size of the local government increases and as the
local government offers more services to its residents. For this
reason, the policy will allow ``fenceline'' projects at local
governments with between 3,301 and 10,000 permanent residents if the
State applies a capacity test consistent with the criteria described in
part E of this policy and determines that the technical, managerial,
and financial capacity of the local government is so limited that the
local government is unlikely to achieve and sustain comprehensive
environmental compliance without the State's assistance. A fenceline
project is one that limits its scope to those activities conducted
within a subset of the local government's operations.
A State's assessment of a local government's compliance status
should include:
[sbull] A comprehensive evaluation of compliance with every
applicable environmental requirement at all of the small local
government's municipal operations (see, Profile of Local Government
Operations, EPA 310-R-001, http://www.epa.gov/compliance/resources/publications/assistance/sectors/notebooks/government.html
; or the Local
Government Environmental Assistance Network, http://www.lgean.org) or, in the
case of local governments with between 3,301 and 10,000 permanent
residents that qualifies for participation after application of the
State's capacity test, a comprehensive evaluation of compliance with
every applicable environmental requirement within the fenceline of a
defined subset of the local government's operations;
[sbull] The local government's current and anticipated future
noncompliance with those requirements;
[sbull] The comparative risk to public health, welfare, or the
environment of each current and anticipated future noncompliance; and
[sbull] The local government's compliance options.
In addition, EPA recommends that the process developed by the State
include consideration of regionalization and restructuring as
compliance alternatives. In the case of fenceline projects, the State
should consider if compliance benefits can be achieved by consolidating
staff and processes of the designated operations with other
governmental operations within the local government. The State's
process should also include consideration of the impact of promulgated
regulations scheduled to become effective in the future.
This policy is also intended to encourage States to provide
participating local governments incentives to develop and implement
environmental management systems (EMSs). The EMS aspects of this policy
are discussed in part J, below.
H. How Should a Small Local Government Set Priorities for Addressing
Violations?
States seeking EPA's deference should require small local
governments to correct any identified violations of environmental
regulations as soon as possible, taking into consideration the local
government's technical, managerial, and financial capacities, and the
State's ability to assist in strengthening those capacities. A small
local government should address all of its violations in order of risk-
based priority.\3\ While information regarding assessment of
environmental risks is available from EPA's National Center for
Ecological Assessment at http://www.epa.gov/ncea/ecologic.htm, the Agency
expects that the comparative risk between violations will, in most
instances, be apparent. For example, violations presenting a risk of
ingestion or inhalation of, or contact exposure to, acute toxins must
be a local government's highest priority for remediation and
correction. Any identified violation or circumstance that may present
an imminent and substantial endangerment to, has caused or is causing
actual serious harm to, or presents a serious threat to, public health,
welfare, or the environment is to be addressed immediately in a manner
that abates the endangerment or harm and reduces the threat. Activities
necessary to abate the endangerment or harm and reduce the threat posed
by such violations or circumstances are not to be delayed while the
State and small local government establish and implement the process
for assigning priorities for correcting other violations.
---------------------------------------------------------------------------
\3\ EPA does not intend that local governments should be
permitted to delay addressing low-risk violations that can be easily
and quickly corrected without impeding progress on long-term
compliance efforts undertaken to address high-risk violations.
---------------------------------------------------------------------------
I. How Can the State Ensure Prompt Correction of Violations?
If the small local government cannot correct all of its violations
within 180 days of the State's commencement of compliance assistance to
the local government, the State and the local government should, within
180 days of the State's commencement of compliance assistance to the
local government, enter into and begin implementing a written and
enforceable compliance agreement incorporating a schedule \4\ that:
---------------------------------------------------------------------------
\4\ Neither a State nor a local government may unilaterally
alter or supersede a local government's obligations under existing
Federal administrative orders or federal judicial consent decrees.
---------------------------------------------------------------------------
[sbull] Establishes a specified period for correcting all
outstanding violations in order of risk-based priority; \5\
---------------------------------------------------------------------------
\5\ States may allow weighing of unique local concerns and
characteristics, but the process should be sufficiently standardized
and objective that an impartial third person using the same process
and the same facts would not reach significantly different results.
Public notification and public participation are an importation part
of the priority setting process.
---------------------------------------------------------------------------
[sbull] Incorporates interim milestones that demonstrate reasonable
progress toward compliance;
[sbull] Contains provisions to ensure continued compliance with all
environmental requirements with which the local government is in
compliance at the time the agreement is entered; and
[sbull] Incorporates provisions, where they would be applicable to
the small local government, to ensure future compliance with any
additional already promulgated environmental requirements that will
become effective after the agreement is signed.
Consultation with EPA during the drafting of a compliance agreement
and schedule and the forwarding of final compliance agreements and
schedules to EPA are recommended to ensure appropriate coordination
between the State and EPA.
J. What Is Required of a Small Local Government That Elects To Address
Its Noncompliance by Developing and Implementing an Environmental
Management System?
Small local governments that learn of environmental violations as a
result of the state's inspection of some subset of the small local
government's operations may address their noncompliance by entering
into a written and enforceable agreement establishing a schedule to:
(1) Correct the violations discovered by the state; and (2) develop and
implement an environmental management system for all of its
governmental operations. Local governments with between 3,301 and
10,000 permanent residents that the State has determined eligible to
participate under the policy on a fenceline basis, may develop and
implement an EMS for operations within the designated fenceline. The
local government must enter into such an agreement with the State not
later than 180 days after the State notifies the local government of
the violations discovered during the inspection. The local government
must either correct
[[Page 57458]]
those violations within the same 180 days or include, as part of the
EMS agreement it enters into with the State, a written and enforceable
agreement that establishes a schedule to correct the violations in
accordance with the usual terms of this policy.
As part of its schedule, the EMS agreement will include a deadline,
not later than one year after entry into the agreement, for the local
government's submission to the State of its EMS manual (see element 9,
below), and a commitment to ensure the performance of an EMS audit not
less than one year and not more than three years after the submission
of its EMS manual (see element 16, below). The EMS manual must contain
policies, procedures, and standards explaining and showing how the
small local government's EMS conforms to and will accomplish these
essential elements of an EMS:
1. Environmental policy--The local government must develop a
statement of its commitment to environmental excellence and use this
statement as a framework for planning and action.
2. Environmental aspects--The local government must identify which
of its activities, products, and services have impacts on the
environment and what those impacts are.
3. Legal and other requirements--The local government must identify
the environmental laws and regulations that apply to its operations.
4. Objectives and targets--The local government must establish
goals for its operations that are consistent with its environmental
policy, that will eliminate the gap between the local government's
current procedures and an accepted EMS framework, and that will reduce
the environmental impacts of its operations.
5. Environmental management program--The local government must plan
specific actions that will achieve its objectives and targets.
6. Structure and responsibility--The local government will
establish roles and responsibilities for staff and management to
implement the environmental management system, and provide adequate
resources.
7. Training, awareness and competence--The local government will
have a plan to ensure its employees are trained and capable of carrying
out their environmental responsibilities.
8. Communication--The local government will establish a process for
internal and external communications on environmental management
issues.
9. EMS documentation--The local government will maintain
information both on its environmental management system and necessary
for its operation. As part of this effort, the local government prepare
an EMS manual that contains the policies, procedures, and standards
explaining and showing how the local government's EMS conforms to and
will accomplish the essential EMS elements. In accordance with the
schedule established by its EMS agreement, and in no event later than
one year after entering into the EMS agreement, the local government
will submit a copy of its EMS manual to the State as proof that the
local government has developed an EMS.
10. Document control--The local government will establish a system
to ensure effective management of documents related to the EMS and to
environmental activities.
11. Operational control--The local government will establish a
system to identify, plan, and manage its operations consistent with its
objectives and targets.
12. Emergency preparedness and response--The local government will
identify potential emergencies with environmental impacts and develop
procedures for preventing them and for responding to them if
unprevented.
13. Monitoring and measurement--The local government will monitor
key EMS activities and track performance. One periodic measure will be
an assessment of compliance with legal requirements.
14. Nonconformance and corrective and preventative action--The
local government will identify and correct deviations from its EMS, and
take actions to prevent their recurrence.
15. Records--The local government will maintain and manage records
of EMS performance.
16. EMS audit--Not less than one year, and not more than three
years after the local government submits its EMS manual to the State,
the State, or an independent third approved by the State, will conduct
an EMS audit to confirm that a local government has been and is
continuing to implement its EMS.
17. Management review--The local government must provide for
periodic review of its EMS by local government management, with the
goal of continual improvement of both the system and environmental
performance.
A fuller explanation of these 17 essential elements and of the EMS
process can be found in Environmental Management Systems: An
Implementation Guide for Small and Medium-Sized Organizations (EPA
Document Number EPA 832-B-01-001; available electronically at
http://www.epa.gov/OW-OWM.html/iso14001/ems2001final.pdf). Additional guidance
and information regarding how to obtain assistance from a local EMS
resource center can be found at http://www.peercenter.net.
During the development and implementation of its EMS, the small
local government may discover violations that were unknown to it at the
time of its entry into the EMS agreement with the State. Such
violations must be disclosed to the State as required by regulations or
in accordance with EPA self-disclosure policies. The small local
government and the State may agree to modify the terms of the terms of
the agreement and schedule to incorporate correction of these
violations. The small local government and the State may also to
consider discovery of additional violations a separate event that can
be resolved in any manner consistent with the terms of this policy and
EPA enforcement policies and guidelines. An assessment of whether or
not the local government has corrected all discovered violations as
expeditiously as practicable in order of risk-based priority should be
part of the EMS audit.
K. What Are the Limits on EPA Deference?
EPA reserves all of its enforcement authorities. EPA will generally
defer to a State's exercise of its enforcement discretion in accordance
with this policy, except that EPA may require immediate with respect to
any violation or circumstance that may present an imminent and
substantial endangerment to, has caused or is causing actual serious
harm to, or presents a serious threat to, public health, welfare, or
the environment.\6\
---------------------------------------------------------------------------
\6\ EPA will regard as a matter of national significance any
violation or circumstance that may present an imminent and
substantial endangerment to, has caused or is causing actual serious
harm to, or presents a serious threat to, public health, welfare, or
the environment that is left unaddressed by a small local government
participating in a State environmental compliance assistance
program. Such circumstances require consultation with or the
concurrence of, as appropriate, the Assistant Administrator for
Enforcement and Compliance Assurance or his or her delegatee before
initiation of an EPA enforcement response.
---------------------------------------------------------------------------
The Small Local Governments Compliance Assistance Policy does not
apply if, in EPA's judgment:
[sbull] A State's small local government environmental compliance
assistance program process fails to satisfy the adequacy criteria
stated above; or
[sbull] A State's application of its small local government
environmental compliance assistance program process fails, in a
specific case, to provide adequate protection to public health and the
environment because it neither
[[Page 57459]]
requires nor results in reasonable progress toward either achievement
of environmental compliance or implementation of an adequate EMS by a
date certain.
Where EPA determines that this policy does not apply, and where EPA
elects to exercise its enforcement discretion, other EPA enforcement
policies remain applicable. The State's and EPA's options in these
circumstances include discretion to take or not take formal enforcement
action in light of factual, equitable, or local government capacity
considerations with respect to violations that had been identified
during compliance assistance and were not corrected. Neither the
State's actions in providing, nor in failing to provide, compliance
assistance shall constitute a legal defense in any enforcement action.
However, a local government's good faith efforts to correct violations
during compliance assistance may be considered a mitigating factor in
determining the appropriate enforcement response or penalty in
subsequent enforcement actions.
Nothing in this policy is intended to release a State from any
obligations to supply EPA with required routinely collected and
reported information. As described above, States should provide EPA
with lists of participating small local governments and copies of final
compliance agreements and schedules. States should also give EPA
immediate notice upon discovery of a violation or circumstance that may
present an imminent and substantial endangerment to, has caused or is
causing actual serious harm to, or presents serious threats to, public
health, welfare, or the environment.
This policy has no effect on the existing authority of citizens to
initiate a legal action against a local government alleging
environmental violations.
This policy sets forth factors for consideration that will guide
the Agency in its exercise of enforcement discretion. It states the
Agency's views as to how the Agency intends to allocate and structure
enforcement resources. The policy is not final agency action, and is
intended as guidance only. This policy is not intended for use in
pleading, or at hearing or trial. It does not create any rights,
duties, obligations, or defenses, implied or otherwise, in any third
parties.
[FR Doc. 03-25137 Filed 10-2-03; 8:45 am]
BILLING CODE 6560-50-P