11/22/83

TSCA Compliance / Enforcement Strategy


MEMORANDUM                             NOVEMBER 22, 1983

SUBJECT:  TSCA Compliance / Enforcement Strategy

TO:       Alvin L. Alm
          Deputy Administrator

    Attached is a copy of the Compliance / Enforcement Strategy for the
Toxic Substances Control Act ( TSCA ).  The strategy was developed by a work
group composed of Headquarters and Regional TSCA personnel and reflects the
views of all participants.

    The strategy assumes the availability of adequate resources to support a
balanced credible program.  Because of actual resource constraints, however,
the major goals for the TSCA program through FY85 are 1) to provide support
to OTS for rules development and enforcement and 2) to expand the TSCA
cooperative enforcement program.  To meet these goals, we will perform the
following activities through FY85:

    o    Provide regulation development support to OTS for most new rules.

    o    Finalize or modify compliance monitoring strategies for existing
         Section 6 PCB rules and rules under Sections 4, 5, 8, and 13.

    o    Develop policies for the TSCA Policy Compendium as needed.

    o    Finalize or modify enforcement response policies for rules related
         to PCBs, Sections 4 and 8, and the TSCA Civil Penalty System.

    o    Develop guidance for innovative enforcement response remedies
         including voluntary disclosure, environmental audits, and
         settlement with conditions.

    o    Evaluate the TSCA pilot cooperative enforcement program.

                                   - 2 -

    o    Develop a management plan for expanding the pilot TSCA cooperative
         enforcement program.

    o    Develop guidance for the TSCA cooperative enforcement program, give
         grants to a minimum of eight States, provide the necessary
         technical support for inspections, and take all enforcement
         actions.

    As soon as we receive your approval to pursue these activities, they
will be incorporated into the Administrator's Management System with
projected completion schedules.

    Due to anticipated resource limitations, we will be unable to undertake
the following activities through FY85.

    o    Support all appropriate OTS rulemaking.

    o    Develop compliance monitoring strategies and enforcement response
         policies for all new regulations.

    o    Update inspection manuals and provide additional training to
         Regions for TSCA inspections and case preparation including the
         Asbestos in Schools rule, data audits and Section 5.

    o    Improve inspection targeting through the use of predictive models
         to increase the likelihood of finding violators.

    o    Develop programs to promote compliance with TSCA.

    o    Develop a model for determining when sufficient inspections have
         been conducted under a rule to allow redirection of resources to
         another program area.

    o    Improve and expand the FATES system.

    Please let me know if you have questions or would like to further
discuss our plans for implementing the TSCA strategy.

                                       Don R. Clay
                                  /s/  ___________
                                       DON R. CLAY
                                       Acting Assistant Administrator
                                         for Pesticides and
                                         Toxic Substances

Attachment

                   TSCA Compliance Enforcement Strategy

Introduction                                                           1

TSCA Compliance Program Overview                                       1

Previous Compliance / Enforcement Strategies                           4

Present State of Compliance                                            6

Goals and Priorities                                                   7

Plans for Achieving Program Goals                                      9

 Compliance Monitoring Plan                                            9
 Compliance Promotion Plan                                            16
 Noncompliance Response Plan                                          18
 Federal Facilities                                                   21
 Headquarters / Regional Coordination                                 23
 Federal / State Relationship                                         24
 Cross Program Elements                                               26

Program Evaluation                                                    29

Future Guidance                                                       31

Appendix

  TSCA Compliance Program Management Process                     Table 1

  TSCA Case Flow                                                 Table 2

  TSCA Inspections                                               Table 3

  TSCA Enforcement Actions                                       Table 4

                  TSCA Compliance / Enforcement Strategy

Introduction

    This document contains the U.S. Environmental Protection Agency's
( EPA's ) strategy for achieving and maintaining compliance with the
requirements of the Toxic Substances Control Act ( TSCA ) and implementing
regulations.  The document provides an overview of the TSCA compliance
program, a summary of prior strategies, a discussion of the existing state
of compliance, the current goals and priorities of the program, recommended
strategies for attaining these goals, a discussion of the roles of Federal
and State governments in implementing strategy elements, a discussion of
cross program elements, and a description of the system for evaluating the
effectiveness of the strategy.

    It should be noted at the outset that this strategy takes a
comprehensive look at the program and indicates a number of action which
should be taken to implement an effective program.  Based on resource
constraints, the actions which will be taken are limited to those indicated
in the priorities for FY85.

TSCA Compliance Program Overview

Statutory / Regulatory Requirements

    TSCA was enacted by Congress in 1976 to protect human health and the
environment from unnecessary risks of certain chemical substances.  TSCA
gives EPA authority to identify and control harmful chemicals prior to as
well as after their manufacture.  The Agency exercises this authority by
implementing provisions of the Act which require industry to 1) provide
information about the production, distribution, use, exposure, and health
and environmental effects of the chemical; 2) test potentially harmful
chemicals for health and environmental effects; and 3) abide by Agency
prescribed controls on chemicals that pose an unreasonable risk to health or
the environment.

Existing Regulatory Actions

    Through August 1983, the Agency has taken the following actions to
implement major sections of TSCA:

Section 4

    Section 4 allows the Administrator to require by rule that manufacturers
and processors conduct testing for any chemical if EPA finds that 1) the
chemical may present an unreasonable risk of exposure to health and the
environment; or there may be substantial human or environmental exposure to
the chemical; 2) there are insufficient data and experience for determining
or predicting the health or environmental effects of the chemical; and 3)
testing of the chemical is necessary to develop such

                                   - 2 -

data.  The Agency has determined, however, that manufacturers and processors
may also develop Section 4 test data under a Negotiated Testing Agreement
( NTA ) with EPA.  In cases where an NTA is infeasible or proceeds too
slowly or testing is not conducted according to the agreement, the Agency
will issue a test rule.  Under Section 4, EPA has issued 14 Advance Notices
of Proposed Rulemaking or Notices of Proposed Rulemaking and entered into 14
proposed or final NTAs.

Section 5

    Section 5(a) requires manufacturers of new chemical substances ( those
not on the inventory ) and manufacturers / processors of a chemical
substance whose use has been designated as a significant new use to submit a
notice to EPA 90 days before manufacture or processing begins.

    Section 5(e) allows EPA to issue a proposed order effective on the
expiration date of the notification period to ban / restrict the manufacture
/ processing of a chemical for which a Section 5(a) notice has been
submitted if there is inadequate information to evaluate the health or
environmental effects and the substance may present an unreasonable risk.

    Section 5(f) allows EPA to issue an order prior to the expiration of the
notification period to ban / restrict the manufacture or processing of a
chemical for which a notice has been submitted if the Agency determines that
the substance presents or will present an unreasonable risk before a Section
6 rule can protect against such risks.

    Section 5(h) allows EPA, upon application, to exempt from the
notification requirements chemicals 1) produced in small quantities solely
for research and development; 2) used for test marketing purposes; and 3)
which present no unreasonable risks.

    Under Section 5, EPA has promulgated a premanufacture notification
( PMN ) rule; issued 12 Section 5(e) orders covering 25 different chemicals,
and issued 173 test marketing exemptions ( TME's ).  Companies have
withdrawn 22 chemicals when they found EPA was contemplating action under
Section 5(e) or 5(f).  The Agency has suspended review of 28 chemicals at
company request while Agency risk concerns are being addressed.

Section 6

    Section 6 authorizes EPA to promulgate rules to prohibit or limit the
manufacturing, processing, distribution in commerce use or disposal of a
chemical substance or mixture if the Agency finds that these activities or
any combination of them presents or will present an unreasonable risk of
injury to health or the environment.

                                   - 3 -

    Under Section 6, EPA has promulgated rules governing polychlorinated
biphenyls ( PCBs ), chlorofluorocarbons ( CFCs ), dioxin, and asbestos in
schools.

Section 8

    Section 8 authorizes EPA to promulgate rules requiring manufacturers,
processors, and distributors of chemical substances or mixtures to maintain
records and / or submit reports to EPA containing information necessary to
the Agency's hazard assessment for chemical substances or mixtures.

    Under Section 8(a), EPA has promulgated rules governing the reporting of
substances for the chemical inventory, the manufacture or importing of PBB /
Tris, the reporting of data on chemicals for hazard assessment purposes, and
a rule on asbestos manufacture and processing for hazard assessment
purposes.  In addition the Agency has promulgated rules governing
maintenance of allegations of adverse chemical effects under Section 8(c),
reporting of health and safety studies under Section 8(d), and an
interpretive statement governing the requirement under Section 8(e) to
immediately report to the Agency data concerning substantial risk from
chemicals.

Section 12

    Section 12 authorizes EPA to regulate any chemical produced for export
that presents an unreasonable risk to health or the environment in the
United States.  A person exporting a chemical subject to any regulatory
action under TSCA must notify EPA, which will in turn notify the appropriate
governments.

    Under Section 12, EPA promulgated a rule requiring export notification
for the first annual shipment of a chemical substance for which a Section 4,
5, 6 or 7 action has been proposed or taken.

Section 13

    Section 13 provides that the Secretary of the Treasury shall issue rules
governing the refusal of any chemical substance, mixture, or article into
the U.S. on the ground that it fails to comply with any rule under TSCA or
is otherwise in violation of the Act.

    The Customs Service has issued rules governing imports under TSCA
Section 13.

                                   - 4 -

Anticipated Regulatory Action

    The Agency currently has a substantial number of additional regulations
under each section of TSCA in various stages of development, and that number
will continue to grow over the years, resulting in a consistent increase in
the size of the regulated community.  Regulatory actions anticipated by the
Office of Toxic Substances through FY85 are the following:

Section 4

o   Proposed NTAs and rules                                      10
o   Final NTAs and rules                                         19

Section 5

o   Section 5(e) and 5(f) orders, voluntary actions             120
o   SNURs                                                        40
o   TMEs                                                         80
o   Section 5(h)(4) exemptions                                    3

Section 6

o   Proposed and final rules                                      7

Section 8

o   Proposed and final rules                                      1

Compliance / Enforcement Program Elements

    The responsibilities of the compliance / enforcement program begin
immediately after the Agency makes the decision to begin rulemaking whether
related to data gathering, hazard assessment or chemical control.  The major
elements of the compliance / enforcement program and the division of
responsibility for these elements are summarized in Tables 1, 2, 3, and 4
( See Appendix ).

Previous Compliance / Enforcement Strategies

    In 1978, the Compliance Monitoring Staff ( CMS ), with contractor
support, developed a draft enforcement strategy to give general direction to
the developing TSCA compliance / enforcement program.  That draft defined
four enforcement goals:

o   To ensure public and private responsibility in the handling and use of
    chemicals by enforcing inventory and notification requirements;

o   To ensure compliance with TSCA rules governing the control of chemical
    substances and mixtures to reduce risks to health and the environment;

                                   - 5 -

o   To ensure that adequate accurate information is obtained so that correct
    risk assessments may be made for chemical substances; and

o   To respond to toxic substance emergencies to protect health and the
    environment from unreasonable risk.

Because each of these goals was considered to be equally important, the
strategy established enforcement activity priorities on the basis of three
factors:

o   Efficiency - the amount of potential risk prevention from an enforcement
    activity versus the cost.

o   Integrity - the degree to which a violation if left unchecked affects
    industry's subsequent compliance with TSCA.

o   Visibility - the public's perception of both the seriousness of a
    violation and the Agency's response to it.

Based on an analysis of the compliance program goals against these three
factors, the draft assigned the following priorities to compliance
activities.

o   Priority I - Section 7 imminent hazards, although unlikely to occur
    often, should receive priority when they arise because they pose a major
    visible threat to health or the environment to which EPA must quickly
    respond 1) to prevent additional risk; 2) to maintain the respect of the
    business community; and 3) to gain public confidence.

o   Priority II - Chemical control activities under Sections 6, 5(e) and
    5(f) were considered important to enforce because they are TSCA's most
    powerful weapon for preventing additional risk.  A failure by EPA to
    enforce such well publicized rules is likely to result in a loss of
    credibility for EPA among the regulated community and the public.
    Violations of control regulations are also relatively easy for EPA to
    discover.

o   Priority III - Section 5 PMN and Section 4 compliance activities were
    assigned the third priority because although extremely important to the
    integrity of the TSCA program, the regulations were considered to have
    low visibility and violations were considered more difficult to detect.

o   Priority IV - Compliance activities under Section 8 were assigned the
    lowest priority because these violations are difficult to detect, the
    rules have a moderate impact on program integrity, and generally have
    low visibility.

                                   - 6 -

    EPA has regarded this strategy as a framework for its compliance /
enforcement program.  The strategy is being implemented as an increasing
number of TSCA regulations are promulgated.

Individual Strategies and Enforcement Response Policies

    Generally EPA has developed a specific compliance monitoring strategy
for each rule as it was promulgated.  These strategies contain guidance for
targeting inspections and allocating responsibility for program
implementation.  This guidance is based on an analysis of 1) the importance
and complexity of the regulatory requirements; 2) the nature and size of the
regulated community; and 3) the feasibility of using various tools to detect
a violation.

To date, EPA has issued final strategies for all final / effective rules
except Section 8(d).

    To supplement the overall strategy, the Compliance Monitoring Staff
( CMS ) developed a TSCA Civil Penalty System as a general guide for
assessing administrative civil penalties.  EPA has also developed
enforcement response policies containing guidance governing the choice of
appropriate enforcement actions and application of the TSCA Civil Penalty
System to a specific rule.  Such policies exist in draft or final form for
all regulations.

    Through FY 83, EPA has placed major emphasis on implementing the PCB
strategy, with approximately 90% of all inspection resources devoted to this
effort.  The remainder of the resources have been allocated to limited
compliance monitoring with other rules as they have been promulgated.  This
skewed allocation of priorities has been the result of a combination of
factors including the high violation rate for PCBs, the timing of rule
promulgation, comparative risks associated with violation of the existing
rules, and limited resources which made it impossible to give greater
priority to other areas.

Present State of Compliance

    It is difficult to determine the success of the existing strategies in
promoting compliance and detecting non-compliance for several reasons.  For
most regulations, the exact size and identity of the regulated community is
difficult to determine.  Currently the Agency does not have a comprehensive
data base describing the regulated community or linking various members to
specific regulations.  In addition, the Agency's inability, in many cases,
to inspect a statistically sufficient sample of even the known regulated
community makes it difficult to draw valid conclusions about compliance
rates.  A final order factor

                                   - 7 -

in EPA's difficulty in accurately determining compliance rates is the fact
that the Agency has difficulty in discovering some types of violations such
as those related to Section 5 PMN and Section 8(e) without a tip or
voluntary disclosure on the part of the violator.

Goals and Priorities

Long Term Goals

    Long term goals for the TSCA Compliance / Enforcement Program are the
following:

o   Develop a balanced and credible program which assigns appropriate
    priority to compliance activities based on relative efficiency,
    integrity, and visibility.

o   Support all appropriate OTS rulemaking.

o   Develop compliance monitoring strategies and enforcement response
    policies for all new regulations.

o   Update inspection manuals and provide additional training to Regions for
    TSCA inspections and case preparation including the Asbestos in Schools
    rule, data audits and Section 5.

o   Improve inspection targeting through the use of predictive models to
    increase likelihood of finding violators.

o   Develop programs to promote compliance with TSCA.

o   Develop comprehensive long-term TSCA cooperative compliance /
    enforcement program with the States.

o   Improve compliance / enforcement program evaluation mechanisms.

o   Develop a model for determining when sufficient inspections have been
    conducted under a rule to allow redirection of resources to another
    program area.

Near Term Priorities

    Priorities for the TSCA compliance / enforcement program through FY 85
fall into the following management, compliance monitoring and enforcement
response areas:

                                   - 8 -

Management

o   Provide regulation development support to OTS for most new rules.

o   Finalize or modify compliance monitoring strategies for the PCB rules
    under Section 6 and rules under Sections 4, 5, 8, and 13.

o   Develop policies for the TSCA Policy Compendium as needed.

o   Finalize or modify enforcement response policies for rules related to
    Sections 4, 6, ( PCBs ), and 8 and the TSCA Civil Penalty System.

o   Develop guidance for innovative enforcement response remedies including
    voluntary disclosure, environmental audits, and settlement with
    conditions.

o   Evaluate TSCA pilot cooperative enforcement program.

o   Develop management plan for expanding pilot TSCA cooperative enforcement
    program.

o   Develop FY 85 guidance for TSCA cooperative enforcement program, give
    grants to a minimum of eight States, provide the necessary technical
    support for inspections, and take all enforcement actions.

Compliance Monitoring

    In FY 85 inspection priorities are the following:

TSCA Section                                Number of inspections

Section 6 PCB                                       2160 Federal
                                                    1000 State
Section 6 Asbestos                                  1400 Grantee
Section 13 records                                   600
 Section 13                                           100
Section 8                                            500
Section 5                                            300
Section 4                                            175
Section 6 CFC                                         20
Section 12                                            15

                                   - 9 -

These priorities are based on initial EPA budget figures and are a
reflection of anticipated workload.  The Agency will re-examine these
figures based on actual workload, and efficiency, integrity, and visibility
factors and will make appropriate adjustments in the FY85 Operating Plan.

Enforcement Response

    The Agency will attach its highest priority to responding to
noncompliance in the following areas:

o   Section 7 imminent hazards.
o   Violations of Section 5.
o   Major violations of the PCB regulations.
o   Invalid data related to Section 4.
o   Violations of Section 8(e).
o   False data submitted under any TSCA regulation.
o   Violations of the asbestos in schools rule.

    These priorities are based on 1) potential harm to health and the
environment from a failure to correct the violation; 2) difficulty of
discovery and need for immediate deterrence; 3) impact on the TSCA
regulatory process; 4) violation trends in the regulated community; and 5)
the need to vindicate the Agency's authority.  These factors should be
applied to all TSCA regulations each year, resulting in modifications of
this list.

Plans for Achieving Program Goals

    This section discusses the compliance monitoring plan, the compliance
promotion plan, the plan for responding to noncompliance, Headquarters /
Regional coordination, Federal / State relationship, and cross program
issues related to implementation of the overall TSCA compliance /
enforcement strategy.  The section also briefly discusses the importance of
the elements of each plan and indicates which ones can realistically be
implemented in the near term.

Compliance Monitoring Plan

Objectives

    The basic objectives of the compliance monitoring plan are 1) to provide
a visible force for encouraging voluntary compliance; 2) to identify persons
who are likely to be in noncompliance; 3) to collect evidence to support
enforcement actions; 4) to provide a data base for determining compliance by
the regulated community; and 5) to discover issues requiring program
improvements by OTS.

Compliance Monitoring Tools

    Tools available to EPA for monitoring compliance with TSCA are letters,
subpoenas, data reviews, and on-site inspections.

                                  - 10 -

    Letters are used to determine whether specific industries are actually
subject to TSCA requirements when a full scale on-site inspection is not
cost effective.  They are generally used when purposeful noncompliance is
not suspected and the likelihood of a response is good.  Letters may also be
used as a prescreening device to help target persons most likely to be in
violation of TSCA.

    Subpoenas are used in cases of suspected purposeful noncompliance where
the evidence may be destroyed if informally requested.  Specific guidance
for use of the subpoena power under TSCA Section 11(c) is contained in "Use
of TSCA Section 11(c) Subpoena" issued on December 4, 1979.

    On-site inspections are the major method by which EPA monitors
compliance with TSCA.  These inspections are conducted in response to
complaints and on the basis of target selection under a neutral
administrative inspection scheme ( NAIS ).

Referral / Complaint

    While the Agency will, of course, continue to respond to complaints, the
importance of complaints in developing the data base for determining
compliance varies among TSCA regulations and provisions.  For certain
regulations / orders such as those under Section 6, Section 5(e), Section
5(f) and Section 4, violations can be detected with relative ease and little
undue expense during routine inspections because the members of the
regulated community are clearly defined and violations are readily apparent.

For other regulations including most under Section 8 and the Section 5
( PMN ) ( premanufacture notification ) and SNURs ( significant new use
rules ), violations would be very difficult and expensive to detect in the
course of a routine inspection.

    Compliance with the Section 5 PMN rule and Section 5 SNURs, Section
8(e), Section 8(a) rules is extremely important to the Agency's regulatory
decisionmaking process.  Because routine inspections in these areas are
likely to be an inefficient / ineffective use of resources, it is extremely
important that CMS obtain tips, complaints or voluntary disclosures to
conduct an effective compliance monitoring program.  Therefore, CMS should
undertake the following activities to encourage the generation and
transmittal of referrals, tips and complaints:

Set up formal referral systems within the Agency.  By reviewing submissions
from the regulated community or other available data, OTS personnel are in a
position to flag suspected TSCA violations which should be referred to CMS
for compliance monitoring.  Most referral systems between OTS and CMS, with
the exception of the Section 4 referral system, are informal.  As a result,
OTS resources have not been available to consistently supply CMS

                                  - 11 -

with referrals necessary to target inspections.  It is extremely important
to the success of the Section 5 PMN / SNUR and Section 8 compliance /
enforcement programs 1) that formal referral systems be established with OTS
and 2) that OTS fund these referral systems as line items in the budget.

    Referral systems should also be established with other EPA offices
likely to discover potential TSCA violations in the course of their
inspections ( See discussion pp. 26-29 ).

Maintain referral systems with other Agencies.  Under the previous
Administration, the Interagency Regulatory Liaison Group ( IRLG ) was
responsible for establishing a strong formal referral system at both the
Headquarters and Regional levels among EPA, the Food and Drug Administration
( FDA ), the Consumer Product Safety Commission ( CPSC ), and the
Occupational Safety and Health Association ( OSHA ).  Although the formal
systems have been abandoned, strong informal relationships still exist which
should be maintained since they have provided EPA with valuable tips in the
past.

Publicize requirements in the press and at public meetings.  CMS will
periodically encourage the trade press and the general press to write
articles on requirements and compliance efforts particularly for rules for
which routine compliance monitoring is difficult.  Knowledge of TSCA
requirements on the part of company employees and competitors has already
resulted in substantial enforcement cases based on tips.  In addition, in
instances where the public has access to regulated community files as in the
case of the Asbestos-in-Schools rule, the public may wish to monitor
compliance and report to EPA.

Publicize Voluntary Disclosure Policy.  The Agency is currently developing a
policy which will provide remittance of a substantial percentage of the
appropriate civil penalty for persons who voluntarily disclose their
violations.  ( See discussion p. 20 ) Publicizing this policy may be
particularly helpful to CMS in obtaining data on noncompliance under
regulations for which routine inspections are likely to be ineffective.

Routine Inspections

    Routine inspections conducted under a neutral administrative inspection
scheme ( NAIS ) are generally effective to monitor compliance with those
TSCA requirements for which violations can be easily detected through record
checks, visual inspection of equipment and sampling.  Such TSCA requirements
include those under Section 6, Section 5(e) and Section 5(f), Section
5(h)(4) orders and regulations and Negotiated Testing Agreements ( NTAs )
under Section 4.  To ensure that limited inspection resources are used most
effectively and efficiently, the Agency should undertake the following
activities:  1) revise the current system for assigning compliance priority
to rules; 2) improve the targeting scheme for individual regulations to
identify regulated industry categories and individuals most likely to be in
violation; and 3) improve integration of inspections to ensure that broader
monitoring coverage results from a single inspection.

                                  - 12 -

Improve regulatory
ranking system

    Currently CMS has ranked regulations for purposes of resource allocation
according to the following criteria:

o   Protection the regulation offers against potential risk to health or the
    environment relative to other program elements.

o   The importance of the regulation to the total toxics program.

o   The estimated size of the regulated community.

o   The need for a strong Federal presence to encourage compliance.

o   Program needs based on experience gained in prior years.

    This ranking scheme should be revised to include additional factors such
as:

o   The efficiency of routine inspections in discovering noncompliance.

o   The regulated community's history of regulation under TSCA, its history
    of noncompliance, and sophistication.  If the regulated community has
    been previously regulated and effectively inspected, less emphasis could
    be placed on compliance monitoring with subsequent regulations.

o   The likely impact of the rule on the regulated community considering its
    complexity and the cost of compliance.

Improve targeting scheme
for individual regulations

    Strategies for existing rules all contain a neutral administrative
inspection scheme ( NAIS ).  Each neutral scheme includes a set of criteria
designed to help the Agency achieve the best cost / benefit ratio between
the use of compliance monitoring resources and detection of violations of a
TSCA rule.  The criteria applied to all facilities under a neutral scheme
vary with each rule but generally include the following:  violation history,
production volume for specific chemicals, or volume of specific chemicals
used, inspection history, and location.  Inspection targets are selected at
random based on available resources from the facilities identified through
application of the NAIS criteria.

    CMS has begun exploring various mechanisms for improving the likelihood
that targets selected under each neutral scheme are likely to be violators.

                                  - 13 -

PCB Evaluation.  In FY82 CMS in cooperation with Office of Planning and
Resource Management ( OPRM ) and a contractor, Institute for Survey
Research, Temple University, conducted a study designed to analyze the
effectiveness of the PCB compliance monitoring program.  Questionnaires
completed from Regional inspection reports gathered data including
characteristics of various regulated industry categories; reason for
inspection; number and severity of violations upon initial and follow-up
inspections; and the enforcement response taken for each violation.  Two
products resulted from the analysis of the questionnaires:  1) a series of
descriptive tables, and 2) a predictive model.

    The first product was a series of descriptive tables that indicate,
among other factors, violation rates associated with specific industry
categories and the severity of violations associated with specific industry
categories.  CMS is currently using information from the descriptive tables
to modify the PCB strategy for targeting categories of the regulated
community.  The original strategy assigned inspection priority to the
following industry categories based on the estimated quantities of PCBs used
by each:

    Railroads
    Metals
    Chemicals
    Utilities
    Food and Feed
    Paper and Lumber
    Commercial Buildings
    Stone, Clay and Glass
    Textiles
    Mining
    Automobiles

Based on information from the descriptive tables, government facilities,
scrap and salvage yards, and transformer repair shops will be added to the
priority list.  Railroads will be deleted since they are currently being
covered under a consent agreement.  Regions will have the flexibility to
modify the revised PCB priority inspection listing to reflect major Regional
problems.

    CMS also intends to modify existing forms for PCB inspections to
incorporate items from the study questionnaires most pertinent to tracking
violation trends and factors associated with violation.  In the future, CMS
should modify inspection forms for all other TSCA regulations as well.  Such
modifications to the inspection forms and appropriate modifications to the
computer system, FIFRA and TSCA Enforcement System ( FATES ), will
facilitate analysis of factors associated with violation trends and
appropriate modification of targeting strategies.

                                  - 14 -

    The second product, a statistical model, is designed to predict the
likelihood that a specific member of the regulated community is a violator.
In the future, CMS hopes to be able to verify the model and demonstrate its
application in a pilot program to determine whether the targeting efficiency
from suing the model is greater than the targeting efficiency of the current
systems in use.  If the model results in greater targeting efficiency, then
CMS should develop similar models for other major regulations.
Implementation forms and FATES requires resources which are not currently
available.

Prescreening.  Currently, without a referral the Agency has no way of
knowing in advance whether a facility to be inspected is likely to be in
compliance with TSCA.  To send inspectors to a facility in compliance is an
inefficient use of scarce inspection resources.  It is, therefore, desirable
that EPA be able to prescreen the regulated community for potential
violators.  Where necessary to gather data to feed the models or otherwise
prescreen the regulated community, the Agency will explore the use of less
expensive resources such as students or members of the American Association
of Retired Persons ( AARP ) to gather data used to target likely violators
for inspection by EPA or State personnel.  OTS has been conducting a very
successful program using AARP personnel in conjunction  with compliance
monitoring for the Asbestos in Schools rule.  Region IX has also had success
in using students to gather information used in more effectively targeting
potential violators under the PCB rule.  It should be noted, however, that
the requirements of the Paperwork Reduction Act may limit prescreening
efforts.

Improve integration
of inspections

    In the past, most inspection resources have been allocated to individual
TSCA regulations.  As the number of rules under TSCA increases, this system
for allocating limited TSCA compliance resources becomes increasingly
inefficient.  Therefore, CMS intends to formalize and expand its system for
integrating routine inspections.  Currently integration is limited to
combining TSCA and FIFRA data audit / Good Laboratory Practice ( GLP )
inspections, integrating all Section 5 inspections, and loosely integrating
Section 5 and inventory reporting inspections.  The proposed integration
strategy would complement guidance on regulatory ranking and improved
inspection targeting for individual regulations.  It would address 1) which
TSCA regulations are appropriate for integration; 2) which other Agency
regulations are appropriate for integration with TSCA regulations; 3) a
mechanism for integration ; 4) a schedule for developing the integrated list
of targets; and 5) feasibility of using the integrated scheme in conjunction
with complaint inspections.  This integration guidance requires resources at
Headquarters which are not presently available.  Development and
implementation of such guidance, however, would save resources in the long
run.  In the interim, integration of inspections will continue on an ad hoc
basis.

                                  - 15 -

Inspection frequency

    In most cases, the size of the regulated community will be so large that
EPA will be unable to inspect a statistically valid sample.  However, in
instances where the regulated community is of a limited size and compliance
is extremely important, as is the case with laboratories regulated under
Section 4, inspection frequency will be specified in the individual
strategy.

    In the past, limited resources have made it difficult to schedule
follow-up inspections.  The limited follow-up inspections conducted in the
PCB program indicate a strong need for more extensive follow-up inspections
to ensure that major violations have been corrected.  CMS intends to develop
more extensive guidance addressing 1) various follow-up mechanisms, and 2)
criteria for selection.  Such guidance, however, can only be implemented if
sufficient resources are available.

Inspection resources

    Inspections under the TSCA program have been conducted mainly by EPA
inspectors.  However, Agency inspection resources are currently supplemented
by other Federal and State inspectors in three areas.  Under a Memorandum of
Agreement between EPA and FDA, FDA inspectors conduct inspections for TSCA
health effects studies when monitoring compliance of laboratories with their
own Act.  EPA inspectors and scientists may accompany FDA on health effects
inspections.  EPA inspectors and scientists conduct all inspections related
to environmental effects data.  The U.S. Customs Service is responsible for
monitoring compliance with TSCA import requirements.  In addition, some
States conduct PCB inspections under a pilot program which EPA intends to
expand in the future ( See p. 24 ).

Inspection Quality

    The main check on TSCA inspection quality has been accomplished through
review of inspection reports and case files during formal regional reviews
which are conducted every two years.  The CMS will continue to conduct these
reviews in the future.

    To ensure that inspections are conducted properly, the CMS has developed
a TSCA Inspection Manual which provides guidance on inspection techniques,
procedures, and requirements.  In addition to this manual, the program
specific strategies, enforcement responses policies, and policy statements
developed by CMS provide information necessary for the conduct of quality
inspections.  Technical assistance is also available from CMS and the
National Enforcement Investigations Center ( NEIC ).

                                  - 16 -

    Inspector training courses covering the requirements of the various TSCA
provisions and regulations, inspection procedures, and program specific
inspection techniques have been conducted.  Because of the complex nature of
the TSCA compliance program, as discussed below, there is a continuing need
for updating manuals, development of inspector training materials, and
inspector training.  The CMS will undertake these activities if sufficient
resources become available in the future.

    While basic guidance on the conduct of inspections is available, the job
of the TSCA inspector is extremely complex and difficult.  The reason for
this is the scope of TSCA which regulates activities ranging from research
and development to disposal.  For each of the TSCA regulations or statutory
requirements, different inspection techniques are required.

    Inspections to determine compliance with chemical control regulations
lend themselves to traditional inspection techniques such as review of
storage records, visual inspection of equipment, and sampling.  Although the
regulated industries vary from the electric utilities to waste haulers to
aerosol can fillers, the detection of chemical control violations is
normally based on simple visual observations or the results of sampling.

    Inspections to determine compliance with chemical reporting regulations,
on the other hand, do not lend themselves to traditional inspection
techniques and violations are not always readily identifiable.  For
instance, Section 4 laboratory inspections require a knowledge of laboratory
techniques, equipment, and procedures in the areas of :  inorganic
chemistry, organic chemistry, biochemistry, chemical fate and degradation,
ecological effects testing, and health effects testing.  As another example,
Section 5 inspections require a knowledge of:  research and development;
chemical manufacturing processes; chemical analysis; purchasing, inventory,
and sales accounting systems; and chemical sales and marketing techniques.

    Because of the wide range of inspection types required under TSCA, it
may be necessary to use a "core" group of centralized inspectors for certain
types of inspections.  CMS will evaluate the need for this approach as
additional TSCA programs are developed in the future and as more inspections
are conducted under the existing programs.

Compliance Promotion Plan

Objective

    Compliance promotion is an important component of any successful
compliance program.  The objectives of compliance promotion are 1) to ensure
that rules do not impose unreasonable or unenforceable requirements 2) to
educate the regulated community about the requirements of TSCA; 3) to
persuade the regulated community to comply by explaining the reasons for the
requirements; and 4) to encourage corporations to develop institutions
designed to assure compliance.

                                  - 17 -

Tools

    The Agency strives to realize these objectives through a number of
mechanisms at Headquarters and in the Regions.

Rule development

    Representatives of all affected Agency Offices including CMS and the
Office of Legal and Enforcement Counsel ( OLEC ) and the Regions participate
on TSCA rule development work groups.  This wide participation is designed
to promote the inclusion in rules of clearly defined requirements necessary
for TSCA implementation and enforcement.

Compliance Assistance

    At Headquarters, the Agency has established the TSCA Assistance Office
( TAO ) in OTS as required by Section 26(d) of TSCA.  TAO provides Federal
Register notices and other TSCA documents required by the compliance
community and answers industry's questions about regulatory activities on a
toll-free telephone.  The Office holds meetings for public comments on all
major rules and develops educational materials to aid compliance.

    In the past, CMS has worked closely with TAO by 1) reviewing information
materials prepared by TAO for industry, 2) responding to questions posed by
industry through TAO and 3) supplying TAO with appropriate compliance
strategies, enforcement response policies, policy statements and program
manuals for distribution to industry.

    In addition, Agency personnel at Headquarters and the Regions
periodically make presentations at industry seminars and ensure that the
trade press is aware of all major regulatory and related policy
developments.  The Agency will continue to employ these traditional
compliance promotion tools, particularly at the Regional level where
resources have been set aside especially for this purpose.

Corporate institutions

    In addition to these traditional tools, the Agency is exploring the
possibility of implementing several programs designed to encourage industry
to establish its own compliance assurance mechanisms.  To emphasize the need
for immediate reporting to EPA of substantial risk information under Section
8(e), the Agency published a policy statement in 1978 encouraging
corporations to establish internal reporting systems to assure themselves of
the ability to comply with the Section 8(e) requirement.  The Agency plans
to conduct inspections designed to determine whether companies have
established such reporting systems and to encourage their establishment
where they do not exist.

                                  - 18 -

    Companies should also be encouraged to set up a similar system to report
manufacture of new substances without a PMN.  CMS should encourage the
establishment of such systems in conjunction with implementation of the
voluntary disclosure policy ( See p. 20 ).

    Finally, EPA is exploring the possibility of implementing a limited
program of environmental audits designed to foster compliance in a large
number of facilities ( See p. 20 ).

Noncompliance Response Plan

Objective

    The objective of a program for responding to instances of noncompliance
are 1) to ensure that violations and resulting problems are promptly
corrected; 2) to deter similar noncompliance in the future; 3) to quickly
and effectively take equitable enforcement action against the violator.

Traditional Responses

    A broad range of enforcement responses is available under TSCA.  An
enforcement response policy  */  prepared for each regulation under TSCA
contains 1) criteria for selecting an appropriate level of action and 2)
guidance for applying the TSCA Civil Penalty System, where a civil penalty
is the most appropriate response.

  */ There is no enforcement response policy for NTA's since they are not
    enforceable.  The Agency's response to company's failure to adhere to
    the terms of an NTA should be the immediate issuance of a notice of
    proposed rulemaking under TSCA Section 4.



    In addition to the nonstatutory notice of noncompliance, the remedies
under Sections 16 and 17 include civil administrative penalties, criminal
action, injunctive action, and seizure.

Notice of Noncompliance

    A notice of noncompliance is designed to give the alleged violator
notice of a violation and an opportunity to correct it.  The notice is
generally used for first time, minor violations which can be easily
corrected within 30 days.  Regions should request written certification that
the violation has been corrected.

Administrative Civil Penalty

    An administrative civil penalty under Section 16 is the remedy most
frequently used for TSCA violations.  Such penalties proposed in a complaint
signed by the Regional Administrator, Administrator, or Judicial Officer may
be challenged in a hearing before an Administrative Law Judge ( ALJ ).  The
ALJ issues an initial decision and sends it to the Regional Administrator /
Administrator.  This

                                  - 19 -

decision becomes the Administrator's final order unless one of the parties
appeals it to the Administrator, or the Administrator reviews it sua sponte.

A person may appeal the Administrator's final order in an appropriate U.S.
Court of Appeals.

    EPA assesses penalties using rule specific civil penalty policies which
explain how the TSCA Civil Penalty System 45 FR 59770 should be applied to
specific violations of each rule.  Generally the TSCA Civil Penalty System
provides for a two step determination of the penalty assessed by the Agency.

First a gravity based penalty ( GBP ) is selected from a matrix based on the
nature of the violation, the extent of the violation, and the circumstances
of the violation.  For chemical control violations, for example, the size of
the GBP is based on the amount and concentration of the chemical involved
and the probability of harm to health or the environment resulting from a
specific violation.  The GBP is assessed per violation / per day but may be
adjusted up or down based on a number of factors including the violator's
culpability, violations history, ability to pay; ability to continue in
business and such other matters as justice may require.

    The Regions have recently requested modification to that section of the
TSCA Civil Penalty System policy which applies to adjustment factors to
allow them to implement the policy more flexibly and equitably.  Plans exist
to revise the policy in FY84.

Criminal action

    Criminal action under Section 16 is appropriate for knowing and willful
violations which actually or potentially result in serious harm to health or
the environment.  EPA will follow the guidance contained in the Criminal
Enforcement Priorities for the Agency set forth in Robert E. Perry's
memorandum of October 12, 1982.  EPA will identify cases for criminal action
as early in the case development process as possible to ensure that the
potential defendant's rights are protected and to ensure the integrity of
the criminal enforcement process.  When a Region receives information
indicating potential criminal activity, it will refer the matter to the
Criminal Enforcement Division at Headquarters for further investigation and
prosecution.

Injunctive action

    The Agency may initiate injunctive action under Section 17 under the
following circumstances:

o   To restrain any violation under TSCA.
o   To restrain a person from taking any action prohibited under Sections 5
    and 6.
o   To require manufacturers or processors operating in violation of
    Sections 5 or 6:  1) to notify persons in possession of the chemical
    substance; 2) to give public notice of the risk of injury and 3) to
    replace or repurchase the substance.

                                  - 20 -

Seizure

    Finally EPA may request an order for seizure of substances in violation
of the Act under Section 17.

Innovative Responses

    In addition to the traditional responses described above, EPA is
developing innovative enforcement response policies which address
appropriate civil penalty reductions for 1) persons who voluntarily disclose
TSCA violations; 2) persons who conduct environmental audits; and 3) persons
who perform specific acts beyond those normally required to remedy a complex
violation under a "Settlement with Conditions."

Voluntary disclosure policy

    The Agency plans to encourage companies to voluntarily disclose
violations to EPA in return for appropriate penalty reductions.  The
Agency's objective in developing this policy is to improve compliance
monitoring and to expeditiously remedy violations.  The policy would apply
only in instances 1) where violators make disclosures to EPA without prior
knowledge that they are to be inspected by EPA or State inspectors or 2)
where EPA has not previously learned of the violation from other sources
such as the press.  This policy, if successfully implemented, should bring
to the Agency's attention violations which it would not otherwise discover
either for lack of resources or difficulty of detection through on-site
inspection.

Environmental audit policy

    To complement its limited compliance monitoring resources and ensure
that existing violations are promptly corrected, the Agency is exploring the
feasibility of encouraging certain companies to conduct an environmental
audit program.  As currently envisioned, the program would apply to
companies 1) whose violations have come to EPA's attention through
inspection or voluntary disclosure, and 2) which have a large number of
facilities throughout the United States.  The terms of the settlement
agreement would require the company 1) to conduct an audit at each of its
facilities; 2) to certify to the Agency by a stipulated date that each of
these facilities is in compliance with specific provisions of TSCA and will
remain in compliance; and 3) to supply EPA with specified records which the
Agency will use to target follow-up inspections at those company facilities
with the greatest likelihood of violation or the greatest potential for
damage if there is a violation.

    Headquarters would act as an information broker among the Regions 1) to
ensure that Regions with facilities covered by an audit program are able to
reprogram resources targeted at these facilities, and 2) to recommend
targets for follow-up after the audit has been completed.

                                  - 21 -

    This program, if successfully implemented, will have the following
benefits for the Agency.  It will give the Agency reasonable assurance of
compliance at a large number of facilities based on a single inspection.  It
will allow the Agency to reprogram resources originally aimed at facilities
participating in the environmental audit program to other critical areas.
Finally, it would allow the Agency to target follow-up inspections based on
the greatest potential for harm from violations.

Settlement with Conditions

    Some violations of TSCA require a more flexible approach than assessment
of a civil penalty to be remedied.  The Agency will, therefore, issue a
guidance document in FY84 on the use of "Settlement with Conditions".
Settlement with Conditions ( SWC ) is the term used to refer to settlement
under TSCA Section 16(a)(2)(c) which authorizes EPA to remit a civil penalty
with or without conditions.

    The purpose of the Settlement with Conditions is to enhance the level of
compliance where violations require complex remedies.  In exchange for the
amount of the proposed civil penalty which the Agency promises to remit, the
violator agrees to take extensive and specific remedial actions.  These
actions must exceed those normally expected under the circumstances, must be
taken within a specific time period, and will be strictly monitored by the
Agency.  The remedial actions may be related not only to the violations
discovered by the Agency, but also to other current violations as yet
undiscovered, or to deterrence of future violations.  In addition to
remittance of the penalty, the Agency will also agree to refrain from taking
further enforcement action with respect to the specific situations covered
by the settlement agreement for the term of the agreement, and as long as
the company acts in good faith to abide by the conditions, the Agency will
enter an order remitting the promised portion of the penalty.  If the
company has not met all the conditions, the assessed penalty is due.  The
Agency may then elect to inspect the facility or initiate injunctive action
to remedy the violation.

    The SWC is appropriate for use in cases such as the massive PCB
contamination of the natural gas transmission system of Texas Eastern
Corporation, a case which required complex, long term clean-up.

Federal Facilities

Background

    Executive Order 12088, Federal Compliance with Pollution Control
Standards establishes a government wide program for ensuring Federal
facility compliance with pollution control requirements.  EPA provided
expert support to Federal Agencies and the Office of Management and Budget
in carrying out this

                                  - 22 -

    The EPA Office of Federal Activities has developed a Federal Facilities
Compliance Program Strategy which outlines how EPA Headquarters and Regional
offices will handle Federal Facility compliance activities.  This strategy
covers:

o   Technical Assistance - to ensure cost effective and timely compliance.

o   Compliance Monitoring - to monitor actual compliance.

o   Fiscal Planning Assistance - to assist OMB in evaluating budget requests
    for funds to comply with pollution control requirements and monitor use
    of funds.

o   Resolution of Non-Compliance Disputes - to notify facility managers of
    violations and establish remedial plans.

o   Exemptions - to advise the President, through OMB, on Federal Agency
    recommendations for exemptions.

TSCA

    The Regional offices have routinely conducted PCB compliance monitoring
inspections at Federal facilities.  During FY 1980 and FY 1981 the Regions
conducted 54 inspections at Federal facilities.  This is 3.2% of all PCB
inspections conducted during that time period.  Violations of the PCB
regulations were identified at 36 of the 54 facilities inspected.
Facilities inspected include Department of Defense, Department of Interior,
Post Office, GSA, and Department of Energy.  Regions VIII, IX, and X have
placed a large emphasis on this area recently, because of the amount of
Federal land and number of facilities in the West.  For FY 1983, these three
Regions targeted 67 PCB inspections at Federal facilities.  CMS is currently
reviewing the PCB Enforcement Strategy to determine what percentage of PCB
compliance monitoring resources should be allocated to Federal facilities
compliance.

    In October of 1979, EPA became aware of a potentially serious problem
resulting from GSA's improper storage of PCBs in Bladensburg, Maryland.  EPA
provided technical assistance for GSA's cleanup of this site.  As a result
of this incident, and reports of PCB problems at other GSA facilities, EPA
and GSA initiated a cooperative program for PCB compliance in November 1979.

This cooperative effort is ongoing.

    As part of this program, GSA headquarters notified all GSA regions of
the PCB regulation requirements and initiated a national inventory of GSA
owned PCBs and PCB equipment.  CMS provides technical assistance relating to
PCB Rule requirements and spill clean up activities.

                                  - 23 -

Headquarters / Regional Coordination

    To ensure implementation of the national TSCA compliance / enforcement
strategy, Headquarters and the Regions will communicate through the
following mechanisms:

o   Policy and guidance documents.
o   Reporting and tracking through FATES.
o   Technical assistance and review of inspections and casework.
o   Evaluation of State and Regional programs.

The following is a brief discussion of each of these mechanisms.

Policy and guidance documents.  Policy and guidance documents currently
exist for most phases of the program.  However, these documents will be
revised and others will be developed ( See p. 32 ).  In all cases the
documents will be developed with Regional input.

Reporting and tracking.  FATES ( FIFRA and TSCA Evaluation System ) is CMS's
automated data system which contains independent sub-systems with cross
reference capabilities for TSCA inspections and sample analyses, case
development, grants information, and contract inspections.  FATES is an
integral tool for inspection targeting, providing responses to the Hill, OMB
etc., budget development, and program evaluation.  As such, it must contain
complete, accurate data from the Regions and must be easily accessible to
the Regions as well as Headquarters.

Technical assistance.  Headquarters will continue to provide the Regions
guidance in performing inspections and developing cases.  The Compliance
Monitoring Branch will also continue to coordinate technical assistance for
the Regions through the National Enforcement Investigation Center ( NEIC ).
NEIC provides specialized technical and analytical support in the following
areas:

o   Analysis of PCB, asbestos, CFC, and dioxin samples.

o   Advice on appropriate sampling and analytical techniques for TSCA
    regulated chemicals.

o   Training of State inspectors.

o   Design and operation of a quality assurance program for TSCA State grant
    laboratories.

o   Conducting specialized, multi-regional TSCA investigations as requested.

Headquarters will continue to determine what NEIC resources are needed by
the Regions and where they should be placed.

                                  - 24 -

Evaluation.  Headquarters will continue to advise the Regions regarding the
effectiveness of their Federal programs and oversight of State programs
through informal written and verbal communications as well as on-site visits
including the Regional Reviews ( See p. 29 ).

Federal / State Relationship

Background

    In July 1981, EPA initiated a pilot TSCA Cooperative Enforcement Program
with California, Connecticut, Maryland, Michigan, and Ohio.  The program was
initiated to determine how effectively State resources could be used to
leverage Federal resources in anticipation of the ever increasing number of
rules to be promulgated under TSCA.  EPA anticipates the need for additional
resources particularly in monitoring compliance with Section 6 chemical
control rules which have the greatest visibility and direct impact on the
public.  Although most States do not have authority which parallels that of
TSCA, the Administrator can delegate compliance monitoring authority under
TSCA to the States.  However, the States are limited to conducting only
those inspections which are not likely to involve Confidential Business
Information ( CBI ).  One purpose of the program is to determine the impact
of the absence of independent State authority on the effectiveness of a
cooperative program.

    Under the terms of the pilot agreements, the States have been primarily
conducting inspections to monitor compliance with the PCB rules and
referring cases to EPA for enforcement action.  Preliminary indications are
that the program is working well; however, the Agency will conduct a final
program evaluation early in FY84.

Future Program

    Based on the preliminary indications of success, the Agency has
requested additional resources in FY84 and FY85 to expand the cooperative
program.  This budget request is based on the need to complement Federal
resources to ensure an adequate level of compliance monitoring with existing
and anticipated TSCA regulations.

    The rate of expansion and scope of the program, if approved, will depend
on the following factors:  1) the existence or speed of enactment of State
toxics legislation; 2) State regulatory structure applicable to TSCA rules;
3) apparent State commitment to conduct compliance and enforcement
activities; and 4) the level of Federal funding.  The Agency should prepare
a management plan for expansion of the program in FY84 if adequate resource
levels exist at Headquarters.

                                  - 25 -

Allocation of Responsibility

    Since the States will be limited to monitoring compliance with rules not
likely to involve CBI, they could accept responsibility for most Section 6
rules.  The States will be able to take samples and perform sample analyses
as well.  They would not conduct inspections for Section 5(e) or (f)
restrictions involving production amounts, Section 5(h)(4) or Section 8
since these are likely to involve CBI.

    EPA would perform all enforcement functions until the States enact
appropriate laws and regulations giving them inspection and enforcement
authority.  EPA expects to work with the States to facilitate adoption of
such legislation.

    In addition, EPA would provide training for State inspectors and
chemists, review of laboratory capability and quality assurance capacity,
and program for State laboratories.

Program Oversight

    EPA has primary responsibility for cooperative program oversight
although States are closely involved in the process.

Program guidance and priorities.  The States would continue to be given an
opportunity to participate in the development of annual program guidance.
Although the guidance will contain Federal priorities, the States would be
able to tailor these priorities to fit their specific circumstances.  EPA
and each State will negotiate for the performance of specific outputs on the
basis of State priorities and productivity factors contained in the
guidance.

Program evaluation.  Major elements of the Regional evaluation of State
programs includes:

o   Quarterly reports by the States of their accomplishments compared to the
    types and numbers of inspections projected in the cooperative agreement.

o   Midyear and end of year on-site evaluations based on a uniform
    evaluation protocol which contains both quantitative and qualitative
    evaluation factors.  The States are given an opportunity to review
    evaluation reports before they become final.

o   Training and close informal review of the quality of State activities.

This level of reporting and on-site reviews would be necessary until the
program is well established to ensure that any problems can be corrected as
soon as they arise.

                                  - 26 -

Cross / Program Elements:  TSCA Relationship to Other Laws
Administered By EPA

    TSCA regulations and associated compliance monitoring activities
directly impact other environmental laws and regulations administered by
EPA.  For this reason, close cooperation with other EPA program and
enforcement offices is a required component of the overall TSCA compliance
monitoring strategy.  To date, coordination has for the most part been
informal and is usually undertaken on a case by case basis.  As additional
TSCA regulations become effective and as the overall TSCA compliance program
expands, more formal coordination mechanisms should be developed.  Areas of
coordination and TSCA impact on other programs are briefly described below.

TSCA Section 8

    Under TSCA Section 8, "Reporting and Retention of Information", EPA may
collect a wide variety of information on the manufacture and processing of
chemical substances.  This information may be used by the Agency for TSCA
regulatory purposes or for decision making and regulatory development under
other laws including the Resource Conservation and Recovery Act, the Clean
Air Act, and the Clean Water Act.  The component of the TSCA compliance
monitoring program to monitor industries' compliance with section 8
reporting will ensure that the Agency has an accurate and complete data base
for regulatory decision making.  The Section 8(a) Inventory rule was used to
gather information used by OSWER and information from the Section 8(a)
asbestos rule will be used by OSHA and CPSC.  Therefore, a mechanism for
coordinating compliance monitoring activities with the other affected
office(s) must be developed.

Hazardous Waste Programs

    TSCA compliance monitoring activities interface with EPA and State
hazardous waste programs in a large number of areas under both the
Comprehensive Environmental Response, Compensation, and Liability Act
( CERCLA ) and the Resource Conservation and Recovery Act ( RCRA ).  While
TSCA chemical control regulations are designed to prevent disposal problems
with regulated substances, PCBs and dioxins constitute major problems at a
large number of the hazardous waste sites regulated under CERCLA.  Since the
TSCA chemical control regulations for PCBs and dioxins govern the handling,
storage, and disposal of these substances, decisions relating to removal and
disposal of wastes from both Superfund and non-Superfund sites must take
these regulations into account.  Although clean-up plans are often discussed
with the Office of Waste Programs Enforcement and between TSCA and hazardous
waste personnel at the Regional level, no formal coordination system to
ensure that waste site cleanups comport with TSCA regulations currently
exists.

    TSCA civil and criminal investigations relating to illegal disposal of
PCBs often require close cooperation with State and Federal hazardous waste
enforcement offices which may also have gathered evidence or have knowledge
relating to TSCA violations.  Again this coordination is undertaken on a
case by case basis.

                                  - 27 -

    The Compliance Monitoring Staff and regional TSCA programs are supplying
information on TSCA Dioxin rule inspections to the Office of Hazardous Waste
Enforcement.  The Compliance Monitoring Staff is also represented on the
various Dioxin Task Groups currently working on this problem.

    Information on spills of PCBs and other TSCA regulated chemicals
required to be reported under CERCLA may supply TSCA compliance personnel
with information on potential problems and enforcement cases.

    While storage and disposal of PCBs are currently regulated solely under
TSCA, it is anticipated that RCRA requirements for PCBs will be merged with
those of TSCA.  The same holds true for dioxins which are currently
regulated under TSCA but are not categorized as a hazardous waste under
RCRA.  A RCRA rule covering dioxins has been proposed.  As mentioned above,
TSCA investigations of illegal disposal often require close coordination
with State officials where States have been granted primacy under RCRA.

FIFRA

    Use of oil containing any PCBs as a pesticide carrier has been
prohibited under TSCA.  While compliance with this prohibition is monitored
primarily through the FIFRA registration program, potential violations could
be investigated under either TSCA, or FIFRA.  Additional TSCA regulation of
chemicals may have a similar impact on pesticides.  Hazardous pesticide
precursors, intermediates, and waste products which are not directly
regulated under FIFRA are regulated under TSCA.  Since the TSCA and FIFRA
compliance programs are managed by the same programs at Headquarters and in
the Regions, coordination of these programs is facilitated.

    In another area, the TSCA Laboratory Inspection / Data Audit program
directly complements the FIFRA program so that information is shared, and
inspections under FIFRA and TSCA are coordinate and conducted in conjunction
with one another whenever possible.

Water Programs

    PCB spill reporting requirements under the Clean Water Act ( CWA )
supply TSCA compliance monitoring personnel with information on spill
problems and possible enforcement cases.  National Pollutant Discharge
Elimination System permit requirements for PCBs and dioxins and State and
Federal CWA monitoring activities ( STORET ) can serve as a source of
information on the TSCA regulated community.  Clean-up of sediments
contaminated with TSCA regulated chemicals requires close coordination
between TSCA, water, and hazardous waste offices.  To date coordination has
occurred mainly for PCB cleanups in the Great Lakes, Hudson River,
Housantonic River, and New Bedford Harbor.

                                  - 28 -

    Another problem area is the contamination or potential contamination of
surface and ground water by PCBs leaching from hazardous waste sites.
Groundwater contamination with chemicals could lead to TSCA regulations
limiting the use and handling of a chemical or to enforcement actions and
injunctive actions to require clean-ups or other actions for chemicals
currently regulated under TSCA.  This will require close coordination and
sharing of monitoring information with State, local, and Federal water
enforcement officials especially in situations involving drinking water.
Situations have arisen where CMS has shared information and expertise on PCB
monitoring with the Drinking Water Program relating to use of PCB containing
paint in water storage tanks.

    There is also a direct relationship between TSCA requirements and the
permit requirements for ocean dumping ( at sea incineration ) of TSCA
regulated chemicals under the Marine Protection Research and Sanctuaries
Act.  As an example, a permit issued for at sea incineration of dioxin
containing wastes meets the RCRA permit requirement for dioxin disposal, and
this kind of dioxin disposal qualifies for an exemption from the TSCA
section 6 Dioxin Rule.

    Again, no formal coordination system between the water programs and TSCA
compliance program exists.  As additional chemicals are regulated under
TSCA, this activity will increase and coordination and sharing of monitoring
data will increase in importance.  For instance, TSCA section 4 testing
relating to environmental fate of chemicals may directly impact effluent and
water quality guideline decisions.  This testing will be monitored during
TSCA laboratory inspections / data audits to determine the reliability of
the laboratories and accuracy of the test reports.

Air Programs

    PCB incinerators and other authorized PCB activities must be in
compliance with the requirements of the Clean Air Act.  As additional
chemicals are regulated under TSCA, the interface between TSCA regulations
and Clean Air Act requirements will expand, as will the need for cooperation
and sharing information between the air and TSCA compliance programs for
facilities regulated under both Acts.

    The Asbestos in Schools Rule requires that Local Education Agencies
( LEAs ) identify the location of friable asbestos-containing material and
keep records of their activities regarding inspection, sampling and
analysis.  In addition, if asbestos is found, the LEAs must notify parents
and staff of the location of the asbestos.  The rule does not require the
removal of the friable asbestos-containing material.  However, the rule does
exempt from its requirement any school which removes or encapsulates friable
asbestos-containing materials before June 28, 1983.  The rule does not
require that the schools keep records of the removal or encapsulation
activities.  Some LEAs claim the exemption in order to avoid notifying
parents and staff.

                                  - 29 -

    The Clean Air Act ( CAA ) requires that anyone who removes asbestos-
containing material during a renovation must notify EPA or a designated
State agency.  Thus, any school which claims an exemption from the Asbestos
in Schools Rule based on removal of all friable asbestos-containing material
must also have filed a removal notification under the CAA.

    The Agency should design a procedure for cross checking claims for
exemptions from the Asbestos in Schools Rule with notifications of removal
filed under the CAA.  Since the Asbestos in Schools Rule does not require
the school to keep records of its removal actions, checking the
notifications filed under the CAA may be the only way of verifying the
claimed exemption from the rule.  Cross checking would discourage a school
from claiming an unwarranted exemption or from failing to comply with the
CAA.

Program Evaluation

    A system for evaluating the effectiveness of the TSCA compliance /
enforcement program must define 1) specific areas for evaluation; 2)
measures of program success; and 3) mechanisms for performing the
evaluation.

Evaluation areas

    Major areas for evaluation include:  1) adherence by EPA and the States
to quantitative and qualitative performance commitments; 2) the extent of
compliance with TSCA by the regulated community.

Measures of success

    The adherence by EPA and the States to quantitative and qualitative
performance commitments can be measured by the following factors:

o   Implementation of proposed management improvements.
o   Adherence to inspection output commitments.
o   Adherence to inspection procedures required in guidance.
o   Number, promptness, success and adequacy of enforcement actions.
o   Accuracy and timeliness of data entry and retrieval.

    The extent of compliance with TSCA by the regulated community will be
more difficult to measure.  Because of the relative youth of the program,
the diversity and complexity of the various regulations, and the difficulty
in clearly identifying members of the regulated community, there is no
single clear measure for gauging the extent of compliance for the regulated
community.

                                  - 30 -

The following types of measures may be used for gauging compliance with data
gathering / risk assessment regulations.

o   Percentage of the regulated universe in compliance.
o   Trends in major types of violations.
o   Achievement of information levels which OTS determines are necessary to
    make a regulatory decision.
o   Percentage of accurate information submitted.
o   Trends in submissions over time.

Measures of compliance with control regulations include the following:

o   Percentage of the known regulated universe in compliance.
o   Percentage of minor, substantial, and major violations by industry
    category.
o   Trends in types of violations by industry category.

The Agency can best measure its success in achieving compliance when it has
developed 1) an adequate data base for identifying members of the regulated
community and 2) predictive model designed to select those members most
likely to be in violation.  At that stage, the Agency can consider its
program a success if only 13% of those persons inspected under a neutral
scheme are violators of TSCA.

Evaluation mechanisms

    The major mechanisms to be used in program evaluation are the following:

o   FATES - The FIFRA and TSCA Enforcement System contains data on
    inspections and sampling, case development, grants and contract
    inspections.  This data will be analyzed to determine whether program
    commitments were met.  The FATES system could be modified to generate
    descriptive tables ( See p 13-14 ) which could be used to better target
    inspection areas based on an analysis of major types of violations, and
    violation trends associated with regulated industry categories.
    However, such a modification cannot be implemented without additional
    resources.

o   Regional Reviews - A team of Headquarters and Regional personnel visits
    each Region every two years to conduct a thorough program review.  The
    review concentrates on Regional program organization; performance of
    outputs; adherence to national guidance in the performance of
    inspections and development of cases; and the need for improved /
    expanded Headquarters support of Regional activities in specific areas.

                                  - 31 -

    Approximately four weeks after the on-site review, Headquarters submits
a written report to the Region covering all program elements that were part
of the review.  The report notes both positive and negative aspects of the
region's toxic substances compliance / enforcement program and includes
recommendations for changes to be implemented by the Region and
Headquarters.  The Director of the Compliance Monitoring Staff conducts a
follow-up visit with the Regional Administrator to go over any issues raised
by the review which require further discussion.

Program Modification

    EPA uses data from FATES and the Regional reviews to modify the
compliance / enforcement program as necessary and to give input to OTS
concerning regulatory changes necessary to facilitate compliance monitoring,
enforcement, or compliance.

Future Guidance

    The following is a list of guidance documents by category which should
be issued to support a comprehensive compliance / enforcement program.  */

  */ A comprehensive list of existing compliance / enforcement guidance
    documents is included in the appendix of the TSCA Compliance /
    Enforcement Guidance Manual.

Policies

    The TSCA Compliance Program Policy Compendium is a compilation of policy
statements interpreting TSCA statutory and regulatory requirements.
Currently there are six established policies ( PCB and CFC ) and four
policies under development.  Additional policies will be added as issues
arise.

Manuals

    The TSCA Inspection Manual contains inspection procedures for monitoring
compliance with TSCA.  The manual has been developed as a series of
coordinated volumes.

o   Volume One:  TSCA Base Manual -- provides general information relating
    to the Act and procedures for conducting inspections under Section 11.
o   Volume Two:  PCB Inspection Manual -- provides specific information
    necessary for conducting PCB inspections.
o   Volume Three:  CFC Inspection Manual -- provides specific information
    for conducting CFC Inspections.
o   Volume Four:  PMN Inspection Manual -- provides information to conduct
    PMN inspections.

Much of this material is already out of date and must be revised.  In
addition volumes must be developed for the data audit program and for other
rules as they are promulgated.

                                  - 32 -

    The TSCA Compliance / Enforcement Guidance Manual currently under
development by CMS and the Office of Legal and Enforcement Policy will
provide general information on the different types of enforcement responses
to TSCA violations and provide instructions necessary to prepare TSCA cases.

As rule specific enforcement response policies are developed, they will be
included in the Appendix.

Enforcement Response Policies

    The TSCA Enforcement Response Policies ( ERPs ) are developed for all
appropriate rules promulgated under the authority of TSCA.  The enforcement
response policies include criteria for selecting the appropriate level of
enforcement action for violations of a specific rule, and in the instances
where the civil administrative penalty is appropriate, the policies explain
how to use the general TSCA Civil Penalty System.  ERP's which must be
revised or finalized include those for PCBs, CFCs, reporting rules
( Sections 8 and 12 ), Section 4, and Section 5.  In addition, the section
on adjustment factors in the TSCA Civil Penalty System must be revised.

    Settlement with Conditions Guidance.  This document which contains
guidance for establishing performance schedules and remitting civil
penalties in cases of complex violations of TSCA will be finalized early in
FY84.

    Environmental Audits.  This document will provide guidance for entering
into agreements with violators to certify compliance at their other
facilities based on an audit conducted by the company.

    Non-profit Entities.  A policy should be developed for the appropriate
level of enforcement action to be taken against non-profit entities who
violate TSCA.

Compliance Monitoring Strategies

    TSCA Compliance Monitoring Strategies are developed for all rules
promulgated under TSCA.  Each strategy is based on an analysis of 1) the
importance and complexity of the regulatory requirements; 2) the nature and
size of the regulated community; and 3) the feasibility of using various
tools to detect a violation.  Strategies must be issued or revised for
Section 4 rules and data audits, Section 5, Section 8 and Section 13.

Cooperative Enforcement Guidance

    TSCA Cooperative Enforcement Program Guidance is issued to inform States
wishing to participate of 1) application requirements 2) program priorities
and 3) allocation of responsibilities between EPA and the States.  Interim
guidance must be prepared for FY84.  If the program is expanded guidance
must be issued annually.

    A TSCA Cooperative Enforcement Program Management Plan must be developed
if expansion of the existing pilot program is approved.  The plan would
include:  1) criteria for state participation; 2) a plan for encouraging
State participation and 3) a schedule for phased expansion.

OMITTED TEXT:  Table 1 - TSCA Compliance Program Management Process; Table 2
- TSCA Case Flow

                                                                Table 3

                             TSCA Inspections

Existing                     Effective
Requirements                 Date           FY79      80    81   82    83

Chemical Control             1978-1982       645     690   879  2164  1914

Data Gathering               1976-1983

Hazard Assessment                 1983

                                                                Table 4

                       TOXIC SUBSTANCES CONTROL ACT

                            ENFORCEMENT ACTIONS

                                       FY 79   FY 80   FY 81   FY 82   FY 83

Notice of Noncompliance Issued           45     102     112     276     372

Administrative Actions Initiated         22      70     115     101     294

Criminal Actions Initiated                0       2       0       2       5
                                         __     ___     ___     ___     ___
Total Enforcement Actions Initiated      67     174     227     379     671

  */ As of September 30, 1983
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