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CHAPTER 5 STATE PROGRAM APPROVAL HANDBOOK OSWER Directive 9650.11 May 11, 1992

CHAPTER 5. DEMONSTRATION OF ADEQUATE ENFORCEMENT PROCEDURES
Contents


OSWER DIRECTIVE 9650.11

CHAPTER 5. DEMONSTRATION OF ADEQUATE ENFORCEMENT PROCEDURES

A. Introduction

To ensure that States have adequate enforcement, EPA requires that States have certain compliance monitoring and enforcement procedures in addition to the legal authorities discussed in the previous chapter. These procedures are necessary to ensure compliance with all UST requirements in both the technical and financial responsibility rules. Furthermore, EPA expects that any State program that incorporates these required procedures will also have the ability to carry them out. That is, EPA will not approve an apparent "paper" program. Beyond this, EPA will not set any numerical resource minimums to determine a State's enforcement capability.

Under §281.22 of the regulations, States seeking program approval are required to submit descriptions of their compliance monitoring and enforcement program in their application. Section 281.22 requires that any related State administrative or judicial review procedures must be submitted as well. In general, EPA considers a comprehensive enforcement program to include procedures for the following areas:

As discussed in more detail below, §§281.40(d) - (g) set forth the procedural requirements for compliance monitoring and enforcement. In developing these requirements, EPA seeks to maintain the flexibility to approve a variety of State programs, and encourages States to use innovative approaches to monitoring compliance and taking enforcement actions. For that reason, the final regulations for State program approval do not specify details of compliance monitoring and enforcement procedures, but rather describe general procedural areas that are necessary for program approval.

In addition, §281.41(b) and (c) state that the burden of proof and degree of knowledge or intent required under State law for establishing violations must be no greater than that which EPA must provide when it brings an action under Subtitle I. Further, a civil penalty assessed, sought, or agreed upon by the State enforcement agency must be appropriate to the violation.

To provide guidance on fulfilling these procedural requirements, this chapter reiterates the overall purpose of each requirement and provides examples of compliance monitoring and enforcement procedures that may accomplish these purposes. Some of these procedures are currently being used in existing State programs. It should be noted, however, that none of the actual compliance monitoring and enforcement procedures described represent an "ideal" or unique UST enforcement program, but serve only as examples of methods that fulfill the purpose of the particular requirement. Further detail on these examples and additional information on State compliance monitoring and enforcement techniques can be found in the EPA handbook on Building State Compliance Programs (August, 1988).

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OSWER DIRECTIVE 9650.11

B. Procedures for Compliance Monitoring

An important purpose of the Federal requirements for adequate enforcement is that States be able to identify violators and bring them into compliance. The final State program approval regulations for adequate enforcement require that States develop certain sets of procedures for collecting and maintaining data on violators. In addition, the State implementing agency must maintain data on the compliance status of the regulated community to monitor the effectiveness of the compliance program and ensure that violations are not repeated.

Specifically, States are required to develop procedures in each of the following four areas:

  1. Record Review: Procedures to receive, evaluate, retain, and investigate records and reports that owners and operators are required to submit to the implementing agency, and procedures to enforce against failure to submit such mandatory reports (§281.40(d));
  2. Inspections: Systematic inspection procedures to determine compliance with program requirements, independent of information supplied by the regulated community, and to provide for enforcement of failure to comply with program requirements (§281.40(e));
  3. Public Reporting: Programs to encourage public effort in reporting violations and to investigate information obtained from the public about suspected violations (§281.40(f)); and
  4. Data Maintenance: Procedures for maintaining the data collected through inspections and record reviews so that the implementing agency can monitor over time the compliance status of the regulated community (§281.40(g)).

In addition, for any compliance monitoring program to be effective, a State should also be able to identify and characterize the regulated community. Thus, procedures for developing an UST inventory are also fundamental to a State's ability to ensure compliance with the regulations.

Guidance for each requirement and examples of compliance monitoring procedure and techniques that fulfill the requirements in each of these areas are described below. Enforcement procedures that fulfill the requirements in §§281.40(d) and (e) are discussed in Section C of this chapter.

OSWER DIRECTIVE 9650.11

1. Identifying the Regulated Community.

To structure an effective compliance monitoring program, a State implementing agency must have a thorough awareness of its regulated community. Examples are provided below of some optional procedures that have been developed for identifying and characterizing UST systems and for keeping track of changes in facility status over time. These are only examples, however, and it is assumed that States do have other procedures that may be perfectly acceptable.

Registration and Permitting. One customary and versatile method for keeping inventory is to require that every facility in the regulated community obtain a registration or permit. Registration and permitting programs vary in the level of information required from the owners and operators, the means of enforcing the program, and the consequences of noncompliance. In general, registration programs require that UST owners and operators obtain an annual license to operate their UST system. In doing so, owners and operators will supply the implementing agency with little more detailed data than that required for notification. For example, the registration programs in Rhode Island and Texas merely require that owners and operators notify the State of changes in the status of the UST system. Permit programs also serve to provide inventory data, although they are usually developed primarily to monitor compliance (as discussed in the following section on Record Review) and thus provide more detailed UST information.

Another means of identifying USTs is to require certain actions from the owner or operator. For example, a State may require that when property containing an UST system is sold, the seller notify the purchaser of State notification and reporting requirements applicable to the UST system. This requirement would not only help keep the data updated, but also would ensure that information is passed on to the next owner or operator.

Alternative Means of Identification. To supplement their data on the regulated community, States may rely upon other State or local government agencies, such as building inspectors or fire departments, to identify UST systems. For example, some State and county agencies incorporate UST requirements into local construction standards by requiring building permits for UST system installation, alteration, or removal, much like any other construction activity. The State or county typically requires these other agencies to submit their observations and information to the UST implementing agency.

States have also used commercial activities to help identify UST systems. For example, Iowa requires that for all property transfers, real estate agents must file a "Real Estate Ground-Water Hazards Statement," in which the agent must note if the property involved contains any UST systems. This statement is filed with the County Recorders Office and can be compared with information submitted by the owners and operators to verify the accuracy of their reports.

OSWER DIRECTIVE 9650.11

2. Record Review.

Under §281.40(d) of the final State program approval regulations, States must develop procedures for collecting and analyzing data submitted by UST system owners and operators. Although owners and operators will be required to submit certain information under State and Federal regulations (for example, reporting releases), States may require additional information as a means of expanding compliance monitoring efforts. By developing a program that encourages owners and operators to submit accurate data on their compliance status, States can reduce the need for resource-intensive inspections. Several techniques for incorporating record reviews into a compliance monitoring program are described below. Compliance outreach, which can enhance the effectiveness of a reporting program, is also discussed.

Permit Programs. Some State programs have reduced their need for resource-intensive inspections by implementing comprehensive permit programs that provide data on compliance. Many States and counties require that all UST systems obtain annual permits as a condition of operation. To obtain these permits, UST system owners and operators must demonstrate by independent means that their UST systems have passed performance standards. States can verify compliance in several ways, such as by inspecting the facility prior to issuing the permit, or by requiring the owner or operator to submit results of tank tightness tests. Once an initial inspection is conducted, States can rely more heavily on periodic reports submitted by owners and operators with permitted systems. States can also reduce the number of comprehensive inspections conducted by increasing the time between major inspections at permitted facilities.

California has developed a comprehensive permit program that is implemented at the county level (and delegated to certain cities). The permit requirements vary from county to county but are generally extensive. In San Mateo County, for example, owners and operators applying for a permit must complete a number of requirements, including conducting a precision test, undergoing an inspection by the county, and installing leak detection equipment. All UST systems in the State require permits for operation, and any tank system that does not pass its county's requirements is taken out of service.

Self-certification. States may also reduce the need for extensive inspections by allowing some owners and operators to certify that they are in compliance. Such self-certification programs have been used in the Occupational Safety and Health Administration for large, independent business chains. In these programs, companies that demonstrate an understanding of the regulations and a good compliance record are given the freedom to self-inspect and submit results to the implementing agency. (This would reduce the number and frequency of inspections that the agency would have to conduct at these facilities.)

Effective use of such a program would require that the State have significant penalties for false certification. Clearly, the State would also need to conduct additional inspections at facilities that have not demonstrated a good compliance record. It would be up to the State to determine whether random inspection of self-certifying facilities was necessary, although it seems reasonable to expect that periodic random inspections would be conducted at all self-certifying facilities, not just at those facilities with a demonstrated record of poor compliance. Random inspections are customarily conducted as part of many State UST programs. Although this method would not be sufficient for determining the compliance status of the entire regulated community, its use for a certain portion of the UST population may enable a State to reduce some of its resource needs for inspections.

Compliance Outreach. The effectiveness of reporting by the regulated community can be enhanced by developing a compliance outreach program. Given the large size of the regulated universe and the limited resources available for compliance monitoring and inspections, the State UST programs will have to rely heavily on voluntary compliance, and outreach is an effective tool for encouraging compliance. States have developed a number of methods to inform the regulated community of its obligations under the State UST program. A common means of reaching the regulated community is to identify certain industry groups as representative of the regulated community and then develop relationships with these groups. For example, Minnesota and Texas have established ongoing communication with the Independent Service Station Organization and the Texas Oil Marketer's Association, respectively.

To reach a wider audience, some State programs use standard communication techniques, such as press releases, public service announcements, and mass mailings. The Maryland Department of Environment has established an advisory committee comprising members from local government, industry, and community groups to aid in communicating UST issues and to encourage the exchange of ideas. The State of Oregon sends a newsletter "Tankline" to all persons in the State who may be connected to the UST community. This newsletter discusses State regulations along with UST technology and practices.

OSWER DIRECTIVE 9650.11

3. Inspections.

Although the final State program approval regulations (§281.40(e)) require States to develop an inspection program, States should be aware that the requirements do not mandate a State to develop "traditional" programs that have specific inspection schedules and a required number of inspections and subsequent enforcement actions. EPA realizes that resource constraints in most States will make it difficult for them to develop the traditional "bean counting" inspection program. Currently, some States do not have sufficient resources to do much more than conduct inspections in response to potential or known violations or releases. Although these States are expected to develop the capability to conduct systematic inspections to detect non-compliance, EPA recognizes that alternative approaches to gathering inspection data may help meet the overall performance goal of ensuring compliance. Several alternative approaches to an inspection program are described below.

Targeted Inspections. One alternative to periodic, random inspections is to develop inspection priorities, taking into account factors such as: (1) the nature and magnitude of the threat; (2) the availability of resources for preventative action; and (3) the results of past leak incidents. For example, some States have targeted their inspections to groups of UST systems that potentially pose greater risk to human health and the environment. Examples of such UST populations include: aging UST systems, which have a greater chance of leaking; UST systems located near sources of drinking water or ground water; and UST systems whose owners or operators have a history of significant violations.

Alternatively, some States have targeted UST-related activities, such as installation or closure, for inspections. For example, in Rhode Island, an inspector must be present at every UST system closure to ensure that no releases have occurred. In San Diego County, California, the UST staff has inspected all new UST system installations and UST system removals since the program was established in 1984. In these types of targeted inspections, compliance is driven by the certainty that at least during one critical event, all UST systems will be examined.

Alternative Inspectors. States can also supplement their basic inspection programs by delegating certain compliance monitoring responsibilities to other governmental entities or to private parties through certification. A number of governmental programs, ranging from fire safety to consumer affairs, require the presence of governmental personnel at UST system sites. Some State and local agencies have incorporated their inspection needs into the inspection programs of these agencies. Specifically, many agencies rely on fire marshals or plumbing inspectors to conduct technical UST inspections when at a facility.

Several States delegate elements of their UST inspections to private parties. New York and Maine, for example, certify UST installers who then must verify that UST system installations meet State requirements. Florida has set up a licensing program for UST installers, testers, and removers. Rhode Island certifies the tank testing procedure developed by companies providing that service, and gives the testing company the responsibility for approving their testers. These approaches reduce the need for the presence of a State inspector at each UST system installation or testing event. Thus, these States can limit their direct involvement to follow-up inspections and possible enforcement actions if an UST system fails the test.

OSWER DIRECTIVE 9650.11

4. Public Reporting.

Under the Federal requirements for adequate enforcement (§281.40(f)), States must encourage the public to report violations and must provide the public with information about reporting procedures. In addition to the compliance outreach procedures for the regulated community described above, States are encouraged to develop basic outreach procedures designed to reach the general public. However, this requirement does not mandate States to develop comprehensive outreach programs. Instead, procedures for encouraging communication with the public may be as simple as providing a telephone "hot-line" service for citizens to report observations and suspected violations. Some States use mechanisms such as public notices, newspaper articles, press releases, and mass mailings to inform the public about the UST program. In particular, publicity that focuses on the State's enforcement response to a particular violation may draw public attention to the program. (Publicity of enforcement actions is described in Part C of this chapter).

OSWER DIRECTIVE 9650.11

5. Data Maintenance.

The final State program approval regulations for adequate enforcement (§281.40(g)) require States to develop procedures for maintaining the data collected through inspections and record reviews so that the implementing agency can monitor over time the compliance status of the regulated community. Any such compilation of compliance data must be made available to EPA upon request. This requirement is based on Section 9002 of Subtitle I, which mandates the establishment of State inventories, and emphasizes the necessity of such inventories for effective compliance monitoring.

The Agency intends to limit these requests as much as possible and will negotiate specific reporting requirements with the States as part of the annual State grant process.

OSWER DIRECTIVE 9650.11

C. Procedures for Enforcement Response

The final State program approval regulations require State agencies to have certain legal authorities for enforcement. The specific requirements and guidance for these enforcement authorities were addressed in Chapter 4 on the Attorney General's statement. However, in order to receive program approval, States must also demonstrate that they have enforcement response procedures for exercising these legal authorities. The purpose of enforcement response is to take action against violators, bring them into compliance, and deter other violators. Although the requirements for adequate enforcement do not provide specific details on the requirements for enforcement procedures, §§281.40(d) and (e) (see below) require that States have procedures for enforcing against noncompliance. EPA will evaluate the adequacy of a State's enforcement response procedures and their implementation as a whole.

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OSWER DIRECTIVE 9650.11

Enforcement Response (§281.40)

(d)
State programs must have procedures for receipt, evaluation, retention, and investigation of records and reports required of owners or operators and must provide for enforcement of failure to submit these records and reports.

(e)(1)
State programs must have inspection procedures to determine, independent of information supplied by regulated persons, compliance with program requirements, and must provide for enforcement of failure to comply with the program requirements. States must maintain a program for systematic inspections of facilities subject to regulations in a manner designed to determine compliance or non-compliance, to verify accuracy of information submitted by owners or operators or regulated USTs, and to verify adequacy of methods used by owners or operators in developing that information.

(e)(2)
When inspections are conducted, samples taken, or other information gathered, these procedures must be conducted in a manner (for example, using proper "chain of custody" procedures) that will produce evidence admissible in an enforcement proceeding, or in court.

States seeking program approval are not restricted to "traditional" formal enforcement programs, but instead may prefer to use a combination of formal and informal enforcement techniques. Formal enforcement is considered to include any actions taken under the authority contained in a statute, such as issuing a formal notice of violation or compliance order. In general, two types of compliance orders can be levied: administrative orders and judicial orders, both of which may have accompanying civil penalties. In States that do not have administrative order authority, or where the order is not heeded by the owner or operator, judicial orders and civil penalties typically are sought. Informal enforcement programs include any other actions taken to achieve compliance, such as the issuance of warning letters or undertaking other means of encouraging voluntary compliance.

Although formal enforcement techniques are necessary for an effective enforcement program, EPA recognizes that it may not be reasonable or appropriate for State agencies to carry out formal enforcement responses in all situations. States may often encounter violations that are not significant enough to require formal orders and high penalties. In addition, States may lack the legal staff or funds necessary to carry out such responses in all situations. Thus, a broad range of enforcement tools may be necessary.

By having a variety of formal and informal enforcement procedures, a State can determine which type of response is most appropriate in a particular situation, depending upon the threat to human health or the environment, the willingness of the violator to cooperate, or a violator's history of noncompliance. A State may want to develop procedures for issuing some of the more formal orders (for example, notice of violation) as an informal response when violations are minor and compliance is expected. For example, in cases of minor violations, a State inspector may issue a simple warning notice or on-site complaint, informing the owner or operator of the requirements and specifying actions necessary to bring the UST system(s) into compliance. Warning notices and on-site complaints may describe potential penalties, but States typically do not have administrative authority to assess a penalty through such notices. However, the threat of more stringent enforcement actions and penalties remains an important factor in the success of using informal notices. The following checklists, one for compliance monitoring procedures and one for enforcement response procedures, outline some of the procedures States may choose to develop when putting together an UST program.

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OSWER DIRECTIVE 9650.11

COMPLIANCE MONITORING CHECKLIST

States are required to have procedures to determine compliance with regulatory requirements and to investigate suspected violations. These procedures will vary greatly among the States but the following checklist provides a brief list of procedures that all States should develop.

Facility Notification and Identification

Record Review

Inspections

Public Reporting

Data Maintenance

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OSWER DIRECTIVE 9650.11

ENFORCEMENT RESPONSE CHECKLIST

States are required to have procedures to take appropriate enforcement action against known violations of UST regulatory requirements. Once again, these procedures will vary greatly among the States but the following checklist provides a brief list of the procedures that the States may choose to develop. [NOTE: The procedures listed below are not mandatory but States are encouraged to have some variation thereof.]

Informal Enforcement Response

Formal Enforcement Response

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OSWER DIRECTIVE 9650.11

Examples of some informal and formal enforcement techniques that may be appropriate for use in UST programs are discussed in detail below.

1. Informal Means of Encouraging Voluntary Compliance.

The type of enforcement response used by a State generally will depend upon the cooperation of the violator and the severity of the violation. Unless a violation is significant or the violator is recalcitrant, States may prefer to negotiate informally with the violator as a first step in obtaining compliance. This is less resource-intensive than more formal actions and encourages a cooperative relationship on the part of the regulated community.

Some States have developed procedures for notifying violators and encouraging their cooperation in correcting a violation without having to obtain compliance orders. Such notices are typically used when the violation appears to have resulted from the violator's unfamiliarity with the regulations. Most of these informal notices, such as Maryland's "Warning Notice" and Rhode Island's "Letter of Noncompliance," require the violator to bring the UST system(s) into compliance. The notice may indicate the potential penalty if actions are not taken, but generally does not have the force of law for imposing penalties.

Several States, including Michigan, Oklahoma, Hawaii, Arizona and Nevada, have used an innovative approach to enforcement which, by notifying the regulated community of its regulatory obligations and putting the burden on owners and operators for self-certifying compliance, encourages voluntary compliance with a minimum expenditure of resources. The States begin by sorting through their databases to identify owners and operators who should be in compliance with release detection requirements. Through a mass mailing, owners and operators are notified of their obligations and appropriate means for achieving compliance, and provided with a form on which the owner certifies the method used to achieve compliance. Non-responders are sent increasingly severe follow-up letters which have the effect of encouraging larger and larger numbers of the compliance group targeted to come into compliance or close tanks. Michigan has followed-up on this informal approach with formal enforcement, by inspecting non-responders and issuing compliance orders, while Arizona has continued with the mass mailing approach by sending administrative orders to recalcitrant violators.

A State may also take advantage of a permit program to convince violators to remedy major violations. As mentioned previously, the implementing agency in any California county can threaten to revoke permits or threaten to remove an UST system completely if major or repeated violations occur. Other States enforce their permit requirements through commercial vendors. In Iowa and Florida, for example, it is illegal for fuel vendors to fill an unregistered UST system. UST programs that encourage participation of local agencies such as fire departments may be able to employ the enforcement authorities of that agency to encourage compliance. For example, in Baltimore County, Maryland, the enforcement responses are tied to building permits. An UST system found to be leaking is considered to have violated the building permit, and the permit is subsequently revoked. Without a permit, the UST system cannot be operated, and its contents must be pumped out until a replacement permit is obtained (after corrective action).

For violations or releases that require cleanups, States may develop techniques that encourage the owner or operator to take responsibility for remedying releases. For example, Minnesota has a program that encourages voluntary cleanup from responsible parties without having to use traditional enforcement techniques. To provide an incentive, the State has a trust fund that reimburses costs to responsible parties who are in compliance when a release is discovered, as long as they cooperate with the State in achieving an agreed-upon level of cleanup. The "hammer" for encouraging voluntary compliance is an aggressive State cleanup and cost recovery program supplemented by penalties for unresponsive owners and operators. Florida has implemented a similar program that provides amnesty from cleanup costs as long as the owners have complied with certain requirements and have been cooperative. In addition to cost recovery programs that provide reimbursement or amnesty to cooperative owners or operators, some States provide no-cost oversight of corrective action if the responsible party cooperates.

OSWER DIRECTIVE 9650.11

2. Formal Enforcement Responses.

For an effective program, a State must have procedures for carrying out formal enforcement actions in certain situations. These enforcement actions may be needed to compel compliance with regulatory requirements, to compel corrective action, or to compel cost recovery. Formal enforcement responses generally include authority to issue civil administrative compliance orders or penalties. Although administrative authority is not required for program approval, EPA encourages States to obtain such authority (including penalty authority) as a cost-effective enforcement mechanism. In addition, judicial authorities, which are required for program approval, will be needed to address certain violations (e.g., a certain degree of environmental harm), and to back up other enforcement responses if compliance has not been achieved. States must also have adequate procedures for implementation of judicial authorities.

States can undertake to make "traditional" authorities an effective part of their UST program. For example, a State may want to develop streamlined administrative hearing procedures for minor violations, or to develop judicial case strategies or priorities with the Attorney General. Since these traditional approaches may be resource-intensive, States may wish to consider developing expedited formal enforcement procedures such as field citations and other alternative means of obtaining compliance. Regardless of the procedures chosen by the State, its enforcement program considered as a whole needs to meet the requirement of adequate enforcement of compliance.

In general, field citations are modified administrative orders issued on site by inspectors when violations are discovered. In general, a field citation can be any of a number of legal entities, including a notice of violation, an administrative order, a short-form settlement agreement, or a summons, but in each case the citation is issued on site by an inspector when a clear-cut violation is discovered. Using the citations, the inspector typically assesses a low to moderate penalty at the site and requires that violators correct the violation within a short time period. Appeal procedures can also be expedited, usually using informal conferences or specially-appointed administrative law judges, to review citations. New Mexico uses a two-pronged approach in its field citation program: non-correctable violations are assessed immediate penalties on-site, whereas, for correctable violations, the citation requires that the violation be addressed within thirty days and a certificate of compliance submitted or a compliance order and penalty will be issued. For States that have the necessary statutory authority, cease-and-desist orders are also an effective and efficient alternative to administrative orders for compelling compliance. Such orders may require violators to cease operation of their UST systems, may revoke the operating permit, or may require that tanks be pumped until empty, or closed, if necessary. These cease-and-desist orders do not necessarily include a penalty, but are effective in reducing the environmental threat caused by the violation. The advantage of these less formal procedures is that they allow for tailored on-site settlement of the violation without requiring extensive administrative resources.

OSWER DIRECTIVE 9650.11

3. Enforcement Outreach.

As a supplement to compliance outreach, enforcement outreach can be a useful tool for encouraging compliance in any enforcement program. States can encourage compliance by publicizing enforcement responses. For example, the implementing agency could publicize violations in local or national newspapers. Currently, some State programs use press releases of patterns of violations to encourage marketers to assess their compliance status. For example, Rhode Island has had considerable success in influencing compliance efforts through adverse publicity stimulated by press releases accompanying violations. Alabama required a violator to place a statement in the Alabama Oilmen's Newsletter in which he admitted that he had violated the regulations and was taking actions to return to compliance.

If a State finds a pattern of violations among a chain of outlets of one owner or operator, the State could require that violator to initiate a self-auditing program in lieu of a highly-publicized, intensive State inspection. This type of enforcement outreach has been used in numerous enforcement settlements under the Toxic Substances Control Act, the Clean Air Act, and the Resource Conservation and Recovery Act.

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