Part VIII - GPO

1 Tuesday,April 11, 2000 Part VIIIE nvironmentalProtection AgencySmall Business Compliance Policy; NoticeVerDate 20<MAR>2000 19:50 Apr 10, 2000 Jkt 190000 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\ pfrm02 PsN: 11 APN619630 Federal Register/ Vol. 65, No. 70 / Tuesday, April 11, 2000 / NoticesENVIRONMENTAL PROTECTIONAGENCY[FRL 6576 4]Small Business Compliance PolicyAGENCY: Environmental ProtectionAgency (EPA).ACTION: Final Policy : The Environmental ProtectionAgency (EPA) today issues its revisedfinal Small Business Compliance Policyto expand the options allowed under thePolicy for discovering violations and toestablish a time period for Policy was originally titled thePolicy on Compliance Incentives forSmall Businesses. This Policy isintended to promote environmentalcompliance among small businesses byproviding incentives for voluntarydiscovery, prompt disclosure, andprompt correction of violations. ThePolicy accomplishes this in two ways:by setting forth guidelines for theAgency to apply in reducing or waivingpenalties for small businesses that comeforward to disclose and make good faithefforts to correct violations, and bydeferring to State, local and Tribalgovernments that offer these revisions released today includelengthening the prompt disclosureperiod from 10 to 21 calendar days andbroadening the applicability of thePolicy to violations uncovered by smallbusinesses through any means ofvoluntary : This policy is effective May 11, : Additional documentationrelating to the development of thispolicy is contained in the Office ofEnforcement and Compliance Assurance(OECA) public docket (EC P 1999 009).

2 An index to the docket may beobtained by contacting the Enforcementand Compliance Docket and InformationCenter by telephone at (202) 564 2614or (202) 564 2119, by fax at (202) 564 1011, or by email Office hours are8:00 to 4:00 , Monday throughFriday, except legal holidays. Anadditional contact is Ginger Gotliffe(202) 564 7072; fax (202) 564 009; e-mail: INFORMATION:IntroductionFive years ago, EPA reorganized itscompliance programs. Thisreorganization was undertaken byAdministrator Browner with a goal ofmaking EPA s enforcement andcompliance programs more effective inprotecting public health, safety and theenvironment. The reorganization alsoimproved and enhanced EPA s ability toreach out to small businesses withinformation to help them comply withenvironmental requirements. Five yearsafter the reorganization, EPA conductedoutreach efforts to obtain feedback oncompliance and enforcement activities,on ways to further improve publichealth, safety and the environmentthrough compliance efforts, and onactions the Agency has taken over thepast five years.

3 From these and otheroutreach efforts and from meetings andconference calls with interestedstakeholder groups, OECA receivedfeedback that improvements wereneeded to both its Audit Policy and toits Small Business Policy. In response tothat feedback, OECA reviewed ways toimprove these and HistoryEPA issued two incentives policies in1995 and 1996. The Incentives for Self-Policing: Discovery, Disclosure,Correction and Prevention ofViolations, informally known as the Audit Policy, was issued in December1995. See 60 FR 66706 (Dec. 22, 1995).The purpose of the Audit Policy, whichis available to entities of any size, is toenhance protection of human health,safety and the environment byencouraging regulated businesses tovoluntarily discover, promptly disclose,expeditiously correct and preventviolations of federal environmental available to businesses thatqualify for the Audit Policy includereductions in the amount of civilpenalties and no recommendation forprosecution of potential criminalviolations.

4 The Audit Policy has beenrecently modified, and the Final revisedAudit Policy is being published today inthe Federal address the special needs of smallbusinesses EPA issued the Policy onCompliance Incentives for SmallBusinesses, which is commonly calledthe Small Business Policy, in June1996. See 61 FR 27984 June 3, 1996. TheSmall Business Policy implementssection 223 of the Small BusinessRegulatory Enforcement Fairness Act(SBREFA) of 1996. The term smallbusiness will be used throughout thisPolicy, however this term will alsocover entities such as smallgovernments and small organizations asdefined in SBREFA. Under the existingSmall Business Policy, EPA will waiveor reduce civil penalties whenever asmall business makes a good faith effortto comply with environmentalrequirements by discovering violationsas part of a government sponsoredcompliance assistance program or avoluntary environmental audit,promptly disclosing those violations,and correcting them in a timely the small business meets all thecriteria in the policy, includingviolation history, correction timeframe,and lack of harm, EPA will waive 100%of the gravity component of the civilpenalty.

5 Moreover, EPA will defer toState, local and Tribal actions that areconsistent with the criteria set forth inthis Policy. The Small Business Policyprovides penalty reduction as anincentive for small businesses, who areless likely than large businesses to havesophisticated environmental expertise,to ask for compliance assistance. Thispolicy was also simpler for smallbusinesses to are several notable differencesbetween the existing Audit Policy andSmall Business Policy. First, thepolicies allow penalty reduction forviolations discovered in different Audit Policy addresses violationsdiscovered through systematic methodssuch as audits as well as through non-systematic methods. The Small BusinessPolicy applies only to violationsdiscovered through audits and duringgovernment sponsored on-sitecompliance assistance , the penalty reduction grantedby the policies varies. The Audit Policyprovides 100% reduction of the gravitycomponent of the penalty (explainedbelow) for systematic discoveries ( ,part of a regular audit program) and75% for non-systematic discoveries.

6 TheSmall Business Policy grants providesup to 100% reduction of the gravitycomponent of the penalty for violationsdiscovered either through regular auditsor during government sponsored on-sitecompliance assistance , the period within whichviolations must be corrected is the Audit Policy, businessesmust correct a violation within up to 60days of its discovery of the violation toqualify for penalty reduction. Under theSmall Business Policy, a business mustgenerally correct a violation within 180days of its discovery to qualify forpenalty reduction, and within 360 daysif the correction involves pollutionprevention addition to these notabledifferences, the Audit Policy addressesseveral issues not covered by the SmallBusiness Policy; criminal conduct andmulti-facility disclosures. The SmallBusiness Policy is inapplicable forcriminal violations. Violations that mayinvolve criminal conduct can beaddressed under the Audit Policy. In theunlikely situation where a disclosureinvolves a multi-facility business, theAgency will identify the relevantVerDate 20<MAR>2000 19:50 Apr 10, 2000 Jkt 190000 PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 E:\FR\FM\ pfrm02 PsN: 11 APN619631 Federal Register/ Vol.

7 65, No. 70 / Tuesday, April 11, 2000 / Noticesprovisions of the Audit and SmallBusiness to PolicyEPA is today making several majorchanges to the Small BusinessCompliance Policy. All of these changeswill make it easier for small businessesto take advantage of the Small BusinessCompliance Policy. These changesresult from EPA s evaluation ofcomments received on our proposedmodification of the Small BusinessCompliance Policy, which waspublished on July 29, 1999. See 64 following sections discuss thetwo major changes that we have madeto the Small Business CompliancePolicy: expansion of options fordiscovery of violations and lengtheningthe disclosure Expanded Options for Discovery ofViolationsComments submitted to EPAsuggested that this Policy should beexpanded to include violations that arediscovered by a variety of complianceassistance activities, includingparticipation in compliance programs orthe use of tools that have beendeveloped or sponsored by EPA, theStates, and local, private and non-profitassistance providers.

8 Based on itsevaluation of those comments, EPA hasdecided in the revised Small BusinessCompliance Policy to allow smallbusinesses to obtain penalty relief ifviolations are discovered by anyvoluntary means in addition todiscovery as the result of governmentsponsored on-site compliance assistanceactivities or environmental audits. Forexample, voluntary discovery couldresult from compliance managementsystems (CMSs), pollution preventionassessments, participation in mentoringprograms, training classes, use of on-line compliance assistance centers, anduse of checklists. These programs andactivities need not be associated withenvironmental regulatory agencies, butmay be associated with any public,private, or non-profit organization. TheAgency wants to encourageparticipation in those programs oractivities that could increasecompliance, improve efficiency, andreduce are a variety of activities andsources of information that a smallbusiness can use to learn more aboutenvironmental regulatory and the States provide variousforms of compliance assistance.

9 SomeState assistance programs are run asconfidential services to the smallbusiness community. If a small businesswishes to obtain a corrections periodunder this policy after receivingcompliance assistance from aconfidential program, the business mustpromptly disclose the violations to theEPA or the State or Tribal governmentagency which is applying a similarpolicy and comply with the otherprovisions of this Clarify and Lengthen the DisclosurePeriodThis revised Small BusinessCompliance Policy extends the timeperiod within which the small businessmust fully disclose a violation from 10to 21 calendar days. The original Policyrequired prompt disclosure forcompliance assistance discovery and 10day disclosure for discoveries madethrough an environmental the disclosure period to 21calendar days regardless of how theviolation was discovered will give smallbusinesses more opportunity to makeuse of the Small Business CompliancePolicy while allowing EPA to get timelyreporting of violations.

10 Such timelyreporting provides the Agency withclear notice of violations that have ormay have occurred and the opportunityto respond if necessary, as well as anaccurate picture of a given businesses scompliance record. Lengthening thedisclosure period to 21 calendar days isalso consistent with a similar changethat EPA made to the Audit received comment that theremight be situations where smallbusinesses would not able to disclosewithin the 21 calendar day the revised Small BusinessCompliance Policy addresses this the 21 calendar day disclosureperiod has not expired and a smallbusiness knows that it will be unable todisclose within that time period, thesmall business is advised to contact theappropriate EPA Office before theperiod expires to request additionaltime. For situations in which the 21calendar day disclosure period hasalready expired, the Agency may accepta late disclosure in the exceptional case,such as where there are complexcircumstances.