[Federal Register Volume 59, Number 84 (Tuesday, May 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10197]


[[Page Unknown]]

[Federal Register: May 3, 1994]


-----------------------------------------------------------------------


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 59

[FRL-4877-6]

 

Field Citation Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Clean Air Act, as amended (the Act), authorizes EPA to 
implement a field citation program, as part of the Agency's recently-
granted authority for the administrative assessment of civil penalties.
    The Act authorizes EPA to issue field citations for appropriate 
minor violations, defined in todays proposal as those violations 
determined to be minor in nature after consideration of various 
specified factors. EPA also proposes a maximum penalty of $5,000 per 
day for each violation cited, and a maximum cumulative penalty in the 
range of $15,000 to $25,000 per citation.
    Upon receipt of a field citation, a respondent must either pay the 
proposed penalty or submit a request for a hearing. Hearing procedures 
are also proposed in this document.
    EPA expects to implement this program such that in the great 
majority of cases the issuance of a field citation will lead to a quick 
correction of a clear violation and a payment of the assessed penalty.

DATES: Comments: Comments must be received on or before July 5, 1994. A 
public hearing will be held on June 8, 1994 from 1 p.m. to 4 p.m.
    If a written request for a public hearing is received by the Agency 
before June 2, 1994, the Agency will hold a hearing on June 8, 1994 
from 1 p.m. until 4 p.m.

ADDRESSES: Written comments should be submitted in duplicate (if 
possible) to: U.S. Environmental Protection Agency (6102), Attention: 
Air Docket Number A-91-63, 401 M Street, SW., Washington, DC 20460.
    Comments received on this proposed rule will be available for 
inspection from 8 a.m. to 4 p.m., Monday through Friday, excluding 
legal holidays, in Room M-1500, First Floor Waterside Mall, at 401 M 
Street, SW., Washington, D.C. A reasonable fee may be charged by the 
Agency for copying docket materials, pursuant to 40 CFR part 2. The 
docket control number for the field citation rulemaking is A-91-63. All 
written comments on this rule must be identified with this number
    Public Hearing Information. If requested, a public hearing will be 
held at the EPA Education Center Auditorium, which is located on the 
northwest corner of the First Floor of Waterside Mall at 401 M Street, 
SW., Washington, DC. Oral and written statements will be accepted 
during the hearing. However, a person who wishes to make an oral 
presentation must:
    (i) Notify the Agency in writing, and
    (ii) Bring a written copy of the complete comments for inclusion in 
the official record.
    Written requests to schedule or speak at a public hearing shall be 
addressed to: Jane Engert, Field Citation Public Participation Officer, 
Stationary Source Compliance Division (6306W), Office of Air and 
Radiation, US EPA, 401 M Street, SW., Washington, DC 20460.

FOR FURTHER INFORMATION CONTACT: Jane Engert, Stationary Source 
Compliance Division (6306W), Office of Air and Radiation, US EPA, 401 M 
Street, SW., Washington, DC 20460, (703) 308-8677.

SUPPLEMENTARY INFORMATION:

I. Introduction

    This preamble discusses the major issues raised by today's proposed 
action, and EPA's justification for each proposed provision. Sections 
II and III, which follow this introduction, contain a brief outline of 
the proposals statutory authority and background. Section IV outlines 
the major program considerations and the rationale for EPA's proposal 
on each, while Section V presents a section-by-section analysis of the 
proposed rule. The final section in this preamble, Section VI, outlines 
specific regulatory impact analyses.

II. Statutory Authority

    Today's rule is proposed under authority of sections 113(d) and 
301(a) of the Act (42 U.S.C. 7413(d) and 7601(a)).

III. Background of Proposed Rule

    Prior to the passage of the Clean Air Act Amendments of 1990,\1\ 
EPA enforced Clean Air Act provisions through civil or criminal 
judicial enforcement actions and the issuance of administrative orders 
for compliance.\2\ The 1990 Amendments expanded EPA's range of 
enforcement tools by authorizing EPA to issue administrative penalty 
orders (section 113(d)(1) of the Act) and to administratively assess 
civil penalties through field citations issued for minor violations 
(section 113(d)(3) of the Act). EPA expects that these new enforcement 
options will enhance the Agency's ability to enforce the Act. Where 
appropriate, EPA will be able to respond quickly to a violation by 
issuing an administrative penalty order or a field citation, rather 
than commencing a civil judicial enforcement action for penalties. 
While civil and criminal judicial enforcement actions will remain an 
important component of EPA's enforcement program, EPA's new 
administrative authorities will enable it to effectively pursue a broad 
range of violations without the expenditure of resources associated 
with judicial action.
---------------------------------------------------------------------------

    \1\Pub. L. No. 101-549, 104 Stat. 2399 (1990)
    \2\See CAA sections 113 (c)(1), (c)(2), and (b), prior to their 
amendment in 1990.
---------------------------------------------------------------------------

    Section 113(d)(3) of the Act authorizes EPA to implement a field 
citation program to enforce the Act through regulations which establish 
appropriate minor violations for which field citations may be issued. 
The Act requires that the Agency consult with the Attorney General and 
the States, that the maximum civil penalty for a minor violation not 
exceed $5,000 per day of violation, and that field citations be issued 
only by EPA officers or employees designated by the Administrator.
    Section 113(d)(3) of the Act also provides that any person to whom 
a field citation is issued may elect either to pay the proposed penalty 
or to request a hearing in accordance with procedures specified in the 
regulations. It further provides that the penalty assessed in the field 
citation becomes final if a request for a hearing is not made within 
the time specified in the implementing regulations. The Act specifies 
that hearings shall not be subject to the requirements of the 
Administrative Procedure Act (APA), 5 U.S.C. 554 or 556, but shall 
provide a reasonable opportunity to be heard and to present evidence.
    The Act also specifies that payment of a field citation penalty 
shall not be a defense to further enforcement by the United States or a 
State to correct a violation, or to assess the statutory maximum 
penalty pursuant to other authorities in the Act, if the violation 
continues.

IV. Program Considerations

A. Appropriate Minor Violations for Issuance of Field Citations

    EPA expects the field citation program to exhibit several important 
characteristics. First, field citations should be issued for violations 
that are clear cut and truly minor in nature. Second, field citations 
should, in general, be issued shortly after a violation is discovered, 
if not upon discovery. Third, the amount of the penalty assessed and 
other aspects of the program should induce quick correction of the 
violation and payment of the penalty. As required by section 113(d)(3), 
EPA is proposing a definition of minor violation for which field 
citations may be issued. This definition is designed to help implement 
these goals.
    EPA considered several regulatory options for establishing 
appropriate minor violations as directed in the statute. One option was 
inclusion in the rule of a comprehensive list of all possible 
violations suitable for field citations. This approach would appear to 
have several advantages. Explicitly listing each minor violation in the 
rule would provide clear, objective criteria for the issuance of field 
citations, thereby limiting inspector discretion. An inspector would 
need only check the list of appropriate minor violations to determine 
whether a field citation could be issued. This approach would appear to 
both streamline the program and help to achieve national consistency in 
its application.
    A major problem with this option became clear, however, when 
attempts were made to develop such a list of ``minor violations.'' 
Almost any violation might be considered significant or minor depending 
on the circumstances. A regulatory list of all or nearly all possible 
minor violations would therefore be too long to be of any real use, or 
in the alternative, would exclude violations which, given the right 
circumstances, would properly be considered minor.
    In addition, it became clear that an exercise of discretion was 
almost unavoidable in determining whether a violation was minor. This 
was inherent in the view that the specific circumstances, along with 
the kind of violation, were critical in determining whether or not it 
was minor.
    Thus, the option of listing all or nearly all minor violations in 
the regulations would result in a list that was either too long or too 
short to be of significant value. It would also not provide a mechanism 
for channeling the exercise of discretion that appears inherent in the 
decision on whether a violation is minor, and consequently would not 
appear to foster national consistency.
    A second option considered by EPA would define as minor those 
violations limited to particular categories of regulatory requirements 
(e.g., recordkeeping, reporting, labeling, monitoring, workpractice 
standards, etc.). This option, however, exhibits the same basic 
problems as the first option. Here again, violations within these broad 
categories could be considered significant or minor depending on the 
circumstances. This second approach still did not provide a method for 
determining when a violation in one of the broad categories would be 
considered minor.
    Given the importance of the specific circumstances of a violation 
in categorizing it as significant or minor, EPA considered and is today 
proposing a third option. In todays proposal a minor violation would be 
defined as one that is minor in nature, in light of a list of factors 
that must be considered as a whole. This list contains such factors as 
whether the violation is readily recognizable by an officer or employee 
of EPA; the risk and degree of environmental harm resulting from the 
violation; the time, effort, or expense required to correct the 
violation; the frequency and duration of the violation; and the 
importance of the violated requirement to the regulatory program. For 
example, determinations that the violation is manifest; that it poses 
little risk of environmental harm; that it has not been identified in a 
previous enforcement action against the respondent; that it occurred 
once or only for a short period of time; or that correcting it should 
require little time, effort, or expense would be indicators of the 
minor nature of a violation.
    EPA recognizes that this list is not exhaustive of all factors that 
may be relevant to whether a violation is minor in nature. Therefore, 
the definition includes a provision for consideration of other 
appropriate factors. However, the list is indicative of the types of 
factors that EPA will consider in determining whether a violation is 
minor.
    While EPA considers these factors as relevant to determining 
whether or not a violation is minor in nature, information may not be 
available on all of these factors when decisions are made regarding the 
propriety of issuing a field citation. If information is not available 
for any of the factors noted in the proposed list of factors, then that 
factor would be treated as neutral on the issue of whether a violation 
is minor in nature. In addition, EPAs proposal calls for evaluating the 
factors as a whole. Specific requirements are not proposed for each of 
the factors individually, i.e., EPA has not proposed a specific time 
requirement for ``duration of violation'' or a dollar amount for 
``expense required to correct a violation.'' The specific circumstances 
of the violation would be considered in light of all of these factors 
taken as a whole.
    A final factor has been added to the definition of minor violation 
to make clear that EPA reserves all rights to determine the appropriate 
enforcement response to a violation. A violation is not a minor 
violation under the definition proposed today unless it is minor in 
nature as described above, and unless the Agency, in its descretion, 
decides to address it as a minor violation. This is to make it clear 
that the field citation regulations proposed today do not provide a 
basis for respondents to claim that an alleged violation is minor in 
nature and therefore EPA's only available enforcement mechanism is 
issuance of a field citation. Today's proposed regulations are not 
intended to limit in any way EPA's ability to fully exercise its 
enforcement discretion. The Agency reserves the right to determine 
what, if any, enforcement approach is appropriate in a specific case. 
EPA believes this is consistent with Congressional intent for the field 
citation program, as section 113(d)(3) provides that ``[t]he 
Administrator may implement * * * a field citation program through 
regulations establishing appropriate minor violations for which field 
citations * * * may be issued by officers or employees designated by 
the Administrator.'' (emphasis supplied)
    It is important to note that there are circumstances under which 
EPA might conclude that a field citation is not the most appropriate 
enforcement response. For example, if a person or source is the subject 
of an ongoing EPA investigation or if a person or source has an 
aggregation of many minor violations, each of which, if considered 
individually, would be suitable for a field citation, EPA may 
appropriately decide to address those violations through its section 
113(d) administrative penalty authority or through its section 113(b) 
civil judicial authority. A more detailed description of the process 
for determining whether a violation is minor will be presented in the 
guidance document to be developed for implementing this rule.

B. Maximum Penalty

    Under section 113(d)(3), civil penalties assessed in a field 
citation may not exceed ``$5,000 per day of violation.'' EPA proposes 
to interpret this provision such that the maximum $5,000 penalty 
applies for each day, for each separate violation cited in the field 
citation. This interpretation is consistent with the statutory text and 
structure of section 113, and is supported by its legislative history.
    EPA's proposed interpretation of the phrase ``per day of 
violation'' as used in section 113(d)(3) is quite reasonable, given 
EPA's long history of interpreting an identical penalty provision in 
this manner, the civil penalty provision of section 113(b) as it stood 
prior to enactment of the 1990 amendments.\3\ That prior interpretation 
has found support in several judicial decisions.\4\ By using the same 
language as previously found in section 113(b), Congress clearly 
authorized EPA to continue this interpretation for purposes of the new 
field citation program.
---------------------------------------------------------------------------

    \3\Prior to revision in 1990, section 113(b) stated that ``[t]he 
Administrator shall [for owners or operators of major stationary 
sources], and may, in the case of any other person, commence a civil 
action * * * to assess and recover a civil penalty of not more than 
$25,000 per day of violation * * *''
    \4\U.S. v. SCM Corp., 667 F. Supp. 110 (D. Md. 1987); United 
States v. Chevron U.S.A., Inc., 639 F. Supp. 770 (W.D. Tex. 1985).
---------------------------------------------------------------------------

    This interpretation is also consistent with Congress' apparent 
objectives for the field citation program as indicated by various 
provisions in section 113 relating to field citations. Congress limited 
the field citation program to ``appropriate minor violations,'' 
established a maximum penalty amount of ``$5,000 per day of 
violation,'' provided a right to a non-APA hearing, and required that 
penalties in this program be assessed after consideration of the 
penalty assessment criteria of section 113(e). These provisions 
indicate that Congress wanted to provide EPA with a flexible 
enforcement tool that would focus on the less significant, presumably 
simpler and less complex violations, with assessment of significantly 
lower penalties than expected through two other civil penalty 
provisions of section 113, administrative penalty orders (section 
113(d)(1)) and judicial civil penalty actions (section 113(b)).
    EPA's proposed interpretation of the maximum penalty amount for the 
field citation program, $5,000 per day for each violation, will lead to 
significantly lower penalty assessments in comparison to these other 
two programs, primarily because of the large reduction in the maximum 
penalty from $25,000 to $5,000, the minor nature of the violations, and 
the penalty assessment criteria in section 113(e). Interpreting ``per 
day of violation'' to mean per day for each violation allows EPA to 
fairly and flexibly implement a field citation program in a manner 
consistent with Congress' apparent objectives for this program. While a 
more restrictive interpretation, such as $5,000 per day of violation no 
matter how many different violations on a specific day, might lead to 
even lower penalty assessments in certain cases, Congress' apparent 
objectives for the field citation program can be met without adopting 
this approach. In fact, a more restrictive interpretation might hinder 
implementation of these goals.
    First, an interpretation that ``per day of violation'' in section 
113(d)(3) imposes a maximum penalty of $5,000 not withstanding the 
number of violations in a day would in certain cases minimize if not 
remove the Agency's ability to fully account for important differences 
between violators when assessing penalties under this program. Two 
violators with different numbers of minor violations on the same day 
would both face the same maximum penalty, possibly removing EPA's 
ability to reflect this difference in the amount of penalty imposed. 
This would appear to run counter to the requirement in section 113(e) 
that EPA consider such differences when assessing penalties under 
section 113(d)(3). Second, in that situation there would be an 
incentive for EPA to issue an administrative penalty order in lieu of a 
field citation, to avoid the apparent unfairness resulting from the 
limitation in discretion embodied in the more restrictive 
interpretation.
    It is unlikely that Congress intended either of these results, and 
EPA's proposed interpretation avoids them without in any way 
sacrificing full implementation of Congress' goals for this program. 
The Agency will be able to fully consider all the factors required 
under section 113(e), including the number of violations, and the field 
citation program will still involve significantly lower penalty amounts 
than the other civil penalty programs in section 113.
    EPA's interpretation is supported by the legislative history in 
section 113(d)(3). The field citation provisions finally adopted by 
Congress originated in the House of Representatives. While an early 
version of the provision called for a maximum penalty of ``$5,000 per 
day for each violation,'' this was changed without explanation to a 
maximum penalty of ``5,000 per day of violation.''\5\ While the House 
Committee Report fails to explain this change in language, it is 
important to note that the phrase ``per day of violation'' had long 
been interpreted by the Agency as establishing a maximum civil penalty 
for each day, for each separate violation. Various judicial decisions 
were consistent with this interpretation.\6\ Congress' adoption of 
language with a long-standing Agency interpretation is strong evidence 
that despite the difference in language between section 113(a) and 
section 113(d)(3), Congress did not preclude EPA's proposed 
interpretation but instead authorized the Agency to adopt the same 
interpretation for the field citation program that EPA had long 
employed for the maximum penalty provision found in the pre-1990 
version of section 113(a).
---------------------------------------------------------------------------

    \5\As originally introduced, the field citation program 
contained a limit of $5,000 ``per day for each violation.'' H.R. 
3030, 101st Cong., 1st Sess. 283 (1989). A similar provision was 
employed for civil judicial penalties under Sec. 113(b) and the new 
authority for administrative penalty orders under Sec. 113(d)(1). 
The Subcommittee on Health and the Environment of the Committee on 
Energy and Commerce retained this provision for judicially imposed 
civil penalties, but for the field citations program limited field 
citations to $5,000 ``per day of violation,'' adopting language from 
the judicial civil penalty provision in the then current Clean Air 
Act. House Subcommittee on Health and the Environment, 101st Cong., 
1st Sess. Amendment in the Nature of a Substitute of H.R. 3030 at 
309 (Comm. Print, November 9, 1989). This version of the field 
citation penalty provision was later reported out by the Committee, 
adopted by the House and finally included in the Clean Air Act 
Amendments of 1990. Pub. L. No. 101-549, 104 Stat. 2399 (1990).
    \6\Supra n. 2.
---------------------------------------------------------------------------

    The legislative history in the Senate also makes it clear that 
Congress intended to authorize EPA's proposed interpretation. In the 
Senate, the bill reported out by the Senate Committee on Environment 
and Public Works authorized a field citation program with a maximum 
civil penalty of ``$5,000 per day for each violation.''\7\ The bill 
passed by the Senate contained a very different provision, establishing 
a $5,000 maximum ``per inspection.''\8\ In conference, the Senate's 
clear mandate for a maximum dollar amount, no matter the number of 
violations, was rejected in favor of the version passed by the House. 
This indicates that Congress did not intend to mandate a similar 
interpretation for the field citation program.
---------------------------------------------------------------------------

    \7\S. Rep. No. 101-228, 101st Cong., 1st Sess. 550 (1989).
    \8\S. 1630, 101st Cong., 2d Sess. (1990).
---------------------------------------------------------------------------

    Finally, EPA's interpretation is supported by the legislative 
history of title II's enforcement provisions. As reported out of the 
Senate Committee on Environment and Public Works, sections 211(d)(1) 
and 205(c) of the Act authorized administrative assessment of civil 
penalties of no more than ``$25,000 per day of violation.''\9\ In 
describing this authority, the Committee Report states that ``[t]his 
section of the bill changes the section 211(d) penalty amount * * * to 
a maximum penalty of $25,000 per day of violation. This penalty amount 
applies to each day for each violation.'' (emphasis supplied)\10\ This 
shows that when Congress used the term ``per day of violation'' in 
amending section 113 it had no intention of barring an EPA 
interpretation that such term meant ``per day for each violation.''
---------------------------------------------------------------------------

    \9\S. Rep. No. 101-228, 101st Cong., 1st Sess. 636 (1989).
    \10\S. Rep. No. 101-228, 101st Cong., 1st Sess. 126 (1989).
---------------------------------------------------------------------------

    On a separate issue, EPA considered several different ways to 
structure the field citation program so that as clear a line as 
possible would be drawn indicating when it was appropriate to issue a 
field citation, and when one of the other civil penalty authorities 
would be more appropriate. This is important, among other things, given 
the decentralized nature of this program and the authority to issue 
citations in the field. One option considered was issuance of internal 
Agency guidance on this point. As discussed in section D of this 
notice, EPA does intend to issue guidance on a wide variety of matters 
related to this program, and an important component of this will 
include guidance on when to issue a citation and when to employ other 
enforcement tools open to the Agency.
    EPA also considered and is proposing establishing a maximum 
cumulative dollar amount that may be assessed in an individual 
citation. This would have the advantage of providing an objective 
indication in the regulations themselves that a more serious compliance 
problem exists and other, more stringent enforcement mechanisms would 
generally be more appropriate. This maximum penalty amount could be 
reached by, for example, a combination of many violations (whether 
occurring on the same or separate days), with low amounts per 
violation, or a smaller number of violations combined with larger 
penalty amounts per violation. Either of these circumstances would 
serve to indicate that a stronger enforcement approach may well be 
appropriate. While such a cap could be included in internal Agency 
guidance, a regulatory cap will provide greater structure for this 
program, at least initially.
    As a variation on the above, EPA considered establishing a maximum 
number of violations that could be included in an individual citation. 
This option, however, might preclude issuance of a field citation where 
the number of violations exceeded the maximum, even if the violations 
were all very minor and would receive a low penalty assessment. For 
this reason EPA is not currently proposing this form of a cap.
    EPA is proposing that the maximum cumulative penalty in an 
individual citation not exceed a dollar amount in the range of $15,000 
to $25,000. EPA invites comment on this range, and whether such a 
dollar cap should be in the regulations or in Agency guidance. EPA is 
also considering and invites comment on whether the penalty cap should 
``sunset'' after a pre-set time period, ranging from one or two years 
to a longer period. Before the cap expired of its own terms, EPA would 
reevaluate whether it should continue, and if appropriate, would revise 
the regulations to extend the cap or some more useful version thereof.

C. Penalty Assessment Policy

    The regulations proposed today define minor violation, establish 
the maximum penalty amount per violation, and address matters 
concerning hearings to contest assessment of a civil penalty through a 
field citation. EPA plans to develop detailed guidance that will 
address many of the other issues concerning implementation of the field 
citation program. The following section discusses important aspects of 
EPA's planned guidance on the penalty amounts to be assessed by field 
citations.
    Penalty assessment under the field citation program will be 
designed to achieve expeditious compliance with the applicable Clean 
Air Act requirements. Although only minor violations of the Act will be 
subject to the program, the penalties must be significant enough to 
deter violations and to ensure a high rate of compliance. On the other 
hand, penalties will generally be significantly lower than amounts that 
could be assessed through other enforcement means. EPA plans to 
incorporate these objectives into a field citation penalty assessment 
policy, which will become a component of the Agency's Clean Air Act 
civil penalty assessment policy.
    The penalty assessment guidance will explain how the Agency intends 
to evaluate the penalty assessment criteria in section 113(e) of the 
Act when determining penalty amounts. The Agency is considering 
assigning standardized penalty amounts to specific categories of 
violations. These standard amounts might then be modified by means of a 
penalty matrix, which would take into account such factors as the 
seriousness of the violation; the degree of environmental harm; or 
other appropriate criteria.
    EPA expects that its penalty assessment guidance will limit the 
discretion of inspectors and others in setting penalty amounts. For 
example, any matrix approach as described above would constrain the 
person issuing the field citation to operate within the limits of the 
matrix. In addition, EPA expects the guidance will establish that where 
the amount of a penalty would be based on specific characteristics of 
the violation and the person issuing the citation has not obtained 
evidence relating to one of the characteristics, then that 
characteristic would be treated as neutral for purposes of penalty 
assessment.

D. Program Implementation

    In addition to guidance on the penalty amounts assessed through the 
field citation program, EPA plans to issue guidance addressing a wide 
variety of other implementation issues. This guidance would be 
carefully designed to spell out and restrict the day-to-day practice 
under this program. EPA believes this approach will facilitate 
achievement of the goals for this program, and still provide the 
flexibility necessary for an enforcement program designed to address a 
wide variety of factual circumstances. This section describes EPA's 
current ideas on certain elements of this program guidance.
    Field citations may be issued either in the field or from an EPA 
office. Violations of reporting requirements, for example, will 
typically involve desk issuance since discovery of these violations 
normally occurs not in the field, but in an office designated to 
receive such reports. Even where a violation is discovered in the 
field, an inspector may elect to return to the office for further 
review or discussion with management prior to issuing a field citation. 
In order to promote consistency, inspectors will be encouraged to 
return to the office for clarification whenever there is any doubt 
regarding the nature of a violation or the appropriate penalty amount. 
During the initial phase of program implementation, the Agency 
anticipates that most field citations will be issued from an EPA 
office, based on field inspections. After a suitable period of 
experience with the program, it is expected that the majority of 
inspection-based citations will be issued on-site. The Agency will then 
establish guidelines for particular situations in which office-only 
issuance would still be recommended, e.g., based on penalties exceeding 
a specified dollar amount, or for other relevant considerations. 
Although State and local employees may not issue federal field 
citations pursuant to this regulation, EPA employees may rely on 
information gathered during State and local inspections as a basis for 
issuing field citations.
    Following discovery of a minor violation and issuance of a field 
citation, the respondent will have thirty days in which to either pay 
the assessed penalty or to request a hearing. EPA reserves the right to 
revoke a field citation, in whole or in part, at any time prior to 
payment of the assessed penalty.
    EPA believes this authority is a necessary safeguard in this 
program. It will allow a reevaluation, before the process has gone very 
far, of whether a citation should have been issued. For example, this 
could involve a reevaluation of whether a filed citation is the most 
appropriate enforcement tool, or could involve the early resolution of 
a citation issued in error.
    As noted above, EPA will prepare detailed guidance for the 
implementation of the field citation program. The guidance will cover 
such broad areas as coordination of inspections with State and local 
agencies, desk issuance as opposed to field issuance, determination of 
whether a violation is minor, and calculation of penalty amounts. The 
guidance will also cover such issues as how to revoke a field citation, 
and how field citations will be recorded and tracked. Finally, the 
guidance will include procedures for determining appropriate penalty 
amounts, and an actual sample of the design and format of the field 
citation.

E. Field Citations as Distinguished From Other Enforcement Authorities

    Under section 113(b) of the Act, the Agency is authorized to 
commence civil judicial enforcement actions against certain violators 
to assess and recover civil penalties of up to $25,000 per day for each 
violation, and/or to seek temporary or permanent injunctions. Civil 
actions under section 113(b) are most advantageous when:
    (1) A compliance schedule or other injunctive relief is necessary 
and an administrative compliance order under section 113(a) is either 
unavailable or inappropriate;
    (2) The violator's compliance history indicates that the compliance 
schedule should be subject to court supervision and contempt remedies; 
or
    (3) Substantial civil penalties are appropriate.
    In 1990, Congress amended section 113 of the Act, providing new 
authority for the Administrator to issue administrative penalty orders 
under section 113(d)(1). These administrative penalty orders, which may 
assess civil penalties of up to $25,000 per day of violation, may be 
issued where:
    (1) The total penalty sought does not exceed $200,000; and
    (2) The first alleged date of violation occurred no more than 
twelve months prior to initiation of the administrative action. The 
Administrator and the Attorney General may, however, jointly determine 
that an administrative penalty action is appropriate for either a 
larger penalty or a longer period of violation.
    Administrative penalties under section 113(d)(1) are most 
advantageous where:
    (1) The violator does not have a compliance history of multiple or 
repeat violations; and
    (2) Court-supervised injunctive relief is not appropriate. 
Additionally, civil judicial action is preferred over administrative 
action where extensive post-filing discovery will be necessary to fully 
develop the circumstances associated with one or more violations, and 
where new legal issues are presented by a case.
    The field citation program under section 113(d)(3) is another new 
enforcement authority provided by the November 15, 1990 Amendments. As 
indicated elsewhere in this preamble, the field citation program 
involves the issuance of citations that assess civil penalties, not 
exceeding $5,000 per day of violation, for minor violations of the Act.
    The focus of the field citation program will be to ensure 
compliance with regulatory requirements that often remain unaddressed 
due to limited Agency resources. The opportunity for streamlined, 
expedited enforcement to address minor violations should save Agency 
resources, reduce court backlogs, and send a clear enforcement message 
to violators that minor violations will not be overlooked.

F. Role of Inspectors

1. Issuance by Officers/Employees
    Under the Act, field citations ``may be issued by officers or 
employees designated by the Administrator.'' It is the Agency's 
position that section 113(d)(3) does not authorize delegation of 
section 113 field citation authority to State and local officials. The 
legislative history supports this interpretation.\11\ Comments on the 
Agency's position, including any alternative legal analyses or 
interpretations of the statute, are invited.
---------------------------------------------------------------------------

    \11\``The citations are to be issued by Federal officers or 
employees designated by EPA.'' H.R. Rep. No. 101-490, 101st Cong., 
2d Sess. 393 (1990).
---------------------------------------------------------------------------

2. Training and Guidance for Inspectors and Enforcement Officers
    The success of the field citation program will depend on well-
trained inspectors and enforcement officers, skilled at both 
recognizing minor violations and determining appropriate penalty 
amounts. Before implementing this program, EPA will offer a number of 
Regional inspector training sessions to ensure that inspectors and 
enforcement personnel are completely familiar with the program and 
understand the limits of its applicability. In particular, employees 
will be trained to identify minor violations based on the criteria set 
forth in this regulation. They will also be trained to identify 
circumstances in which particular violations might indicate a more 
serious compliance problem that should be handled through a more 
stringent enforcement action.
    In addition to training, inspectors and enforcement officers will 
be given a detailed guidance document containing recommended penalty 
ranges associated with specific categories of violations. In this way, 
inspectors will have a ready reference if they are unsure about a 
particular violation. Moreover, the establishment of appropriate 
penalty amounts in guidance will help to ensure national consistency. 
Whenever there are doubts regarding how to characterize a suspected 
violation, inspectors will be directed to return to the office for 
further evaluation and consultation.

G. Rules Governing Hearings on Field Citations

    In addition to authorizing EPA to implement a field citation 
program, section 113(d)(3) of the Act addresses certain basic 
procedural issues involving hearings on field citations. First, it 
provides that any person to whom a civil penalty is assessed through a 
field citation may elect either to pay the civil penalty or to request 
a hearing on the field citation. Any request for a hearing must be 
within the time period prescribed by the Administrator through 
regulation, and if a hearing is not requested within such time then the 
penalty assessment in the field citation becomes final. Second, this 
section explicitly provides that the hearing on a field citation shall 
not be subject to the Administrative Procedure Act (APA) provisions on 
formal adjudications (5 U.S.C. 554 or 556), but shall provide a 
reasonable opportunity to be heard and to present evidence.
    EPA is proposing three distinct alternatives to implement these 
statutory provisions and establish fair and reasonable procedures to 
govern hearings on field citations. These alternatives are: (1) EPA's 
consolidated, APA penalty assessment procedures under 40 CFR part 22, 
with appropriate revisions; (2) EPA's proposed consolidated, non-APA 
penalty assessment procedures under 40 CFR part 28, with appropriate 
revisions; and (3) new streamlined administrative procedures contained 
in today's proposal. The following section discusses and evaluates each 
of these alternatives. The Agency requests comment on the propriety of 
each of these penalty assessment procedures.
    Procedures for the assessment of field citation penalties must 
reasonably implement the requirements of section 113(d)(3), including 
providing a reasonable opportunity to be heard and to present evidence, 
and must also satisfy procedural due process considerations under the 
Constitution. Determining compliance with both of these requirements 
requires a close comparison between the proposed procedures, the 
factual and legal situations that are expected to arise under this 
program, and the interests at issue, both private and governmental.
    Congress specifically limited field citations to minor violations, 
as defined by the Agency. While EPA's proposed definition of minor 
violation does not specify each and every violation that might be 
considered minor, it does set clear limits on the kinds of violations 
that will be considered minor violations. The many different kinds of 
violations that may meet the definition of minor violation will exhibit 
common features. For example, the typical minor violation will involve 
a clear and straightforward violation, both factually and legally, of 
limited frequency or duration and limited environmental impact. The 
factual and legal issues that EPA expects to arise in field citation 
assessments are, overall, expected to be simple and uncomplicated.
    The basic private interest at stake is the assessment of civil 
penalties of up to a maximum of $5,000 per day for each violation, as 
well as the resources needed to contest such assessments where 
considered appropriate. The maximum penalty is significantly lower than 
the maximum administrative or judicial civil penalties authorized under 
sections 113, 205 and 211 of the Act. The primary governmental interest 
is implementation of a program that fairly fills a gap in EPA's 
enforcement programs, without undue drain on EPA's limited enforcement 
resources. EPA believes this interest is best served by addressing 
minor violations in a straightforward and direct manner, somewhat akin 
to a traffic enforcement program. The deterrence effect from this 
program will come in large part from the issuance of a citation 
immediately upon or shortly after detection of a violation, with final 
assessment of the penalty occurring shortly after issuance of the 
citation.
    EPA has considered these and other factors in evaluating the three 
options proposed today for hearing procedures, and believes all three 
fully implement Congressional intent and satisfy due process 
requirements. The three options draw different balances between 
complexity and simplicity, formality and informality, but are all 
designed to implement a program aimed at simple and uncomplicated 
violations, involving penalties significantly lower than others 
authorized in the Act, and requiring straightforward, quick and fair 
adjudication to obtain the desired deterrent effect without undue drain 
on limited Agency resources.
1. Modified 40 CFR Part 22--Consolidated Rules of Practice Governing 
the Administrative Assessment of Civil Penalties and the Revocation or 
Suspension of Permits
    Under the first Agency proposal, administrative hearings on field 
citations would be conducted pursuant to the procedures established by 
EPAs consolidated APA rules of practice for the administrative 
assessment of civil penalties, 40 CFR part 22. In a separate 
rulemaking, the Agency would propose to amend part 22, where 
appropriate, to make that regulation applicable to field citations.

Basis for Hearing Procedures

    Although the Act explicitly indicates that hearings in field 
citation cases are not subject to the provisions for formal APA 
adjudication, it does not prohibit the Agency from exercising its 
discretion and providing such procedural rights. There are two primary 
benefits in using part 22 to govern hearings on field citations: (1) It 
would consolidate Clean Air Act administrative penalty hearings under 
one set of procedural rules, minimizing the need for the Agency and the 
regulated community to learn and become proficient in more than one set 
of procedures; and (2) it would use a penalty assessment procedure with 
which both the Agency and the regulated community have a great deal of 
experience.
    The Act as amended in 1990 authorizes the Administrator to issue 
administrative penalty orders under section 113(d)(1). These 
administrative penalty orders, which may assess civil penalties of up 
to $25,000 per day of violation, are generally limited to situations 
where the total penalty sought does not exceed $200,000 and where the 
first alleged date of violation occurred no more than twelve months 
prior to initiation of the administrative action. Similar authority was 
provided under sections 205(c) and 211(d)(1) of the Act.
    The penalties contained in administrative penalty orders issued 
under section 113(d)(1) are assessed pursuant to the part 22 
procedures, as are administrative penalties assessed under sections 
205(c) and 211(d)(1). Part 22 was amended to incorporate these 
provisions on February 4, 1992 (57 FR 4318). Thus, using part 22 to 
govern hearings on field citations issued under section 113(d)(3) would 
consolidate all of the Clean Air Act administrative penalty hearings 
under one set of procedures.
    Additionally, the Agency has used part 22 for assessing 
administrative penalties under other environmental statutes since 1980. 
Consequently, both the regulated community and the Agency have 
considerable experience with these procedures, thereby simplifying the 
implementation of the field citation program. As discussed later, minor 
revisions to part 22 procedures would be adopted to account for certain 
statutory provisions in section 113(d)(3) and to account for the types 
of violations and penalties associated with field citations.

Proposed Hearing Procedures

    Under part 22, the field citation would be issued by an EPA officer 
or employee as an administrative complaint. Within twenty days after 
service of the citation, the Respondent must file an answer. In the 
answer, the Respondent may contest the facts in the complaint, the size 
of the penalty, or claim that the Respondent is entitled to judgment as 
a matter of law. If requested by the Respondent, a hearing will be held 
on the issues raised in the citation and answer. The Presiding Officer 
has the discretion to allow the Respondent to amend his answer. A 
default order, which allows the full proposed penalty to be collected, 
may be issued upon motion if the Respondent fails to file an answer.
    The Respondent may simultaneously pursue informal settlement and a 
hearing. During settlement negotiations, the parties may informally 
exchange information, if appropriate. For example, the Agency may 
supply copies of the documentation used to support its case and the 
Respondent might provide any evidence that would tend to disprove the 
allegations or to mitigate the penalty. A written Consent Agreement and 
a proposed Consent Order are submitted for approval by the Regional 
Administrator, if the parties reach a settlement of the claim.
    Either party may file a preliminary motion for an accelerated 
decision if no genuine issues of material fact exist. The Respondent 
may file a motion for dismissal of the citation.
    A mandatory prehearing conference is held to simplify issues; to 
limit the number of potential witnesses; and to address other matters 
that may expedite the hearing. An exchange of witness lists and 
documents occurs at the prehearing conference.
    The hearing is held for the presentation of evidence and testimony 
concerning the facts relating to the violation and to the size of the 
penalty. Except as otherwise provided by the Presiding Officer, 
witnesses are to be examined orally, under oath or affirmation, at the 
hearing. The parties have the right to cross-examine witnesses who 
testify at the hearing. The Presiding Officer may take notice of any 
matter judicially noticed in the Federal courts and of any facts 
falling within the specialized knowledge and expertise of the Agency.
    At the hearing, the Agency has the burden of going forward and 
proving that the violation occurred and that the proposed penalty is 
appropriate. After a prima facie case is established, the Respondent 
has the burden of presenting and going forward with any defense to the 
allegations in the citation. The matters in controversy are determined 
by the Presiding Officer upon a preponderance of evidence.
    The hearing must be transcribed. Within twenty days after the 
transcript is available, the parties may submit proposed findings of 
fact and conclusions of law with supporting briefs. Reply briefs are 
also authorized.
    The Presiding Officer issues the initial decision, which consists 
of findings of fact, conclusions of law, and recommended civil penalty. 
In reaching an initial decision, the Presiding Officer is required to 
consider the statutory penalty assessment criteria listed in section 
113(e), section 205(c) or section 211(d) of the Act, as appropriate. 
For section 113(e), these criteria include: The size of the business; 
the economic impact of the penalty on the business; the Respondent's 
full compliance history; the Respondent's good faith efforts to comply; 
the duration of the violation as established by any credible evidence; 
payment by the Respondent of penalties previously assessed for the same 
violation; the economic benefit of noncompliance; the seriousness of 
the violation; and such other factors as justice may require.
    If the Presiding Officer recommends a penalty different from the 
one proposed by the citation, the initial decision must set forth the 
specific reasons for the increase or decrease. Either party may file a 
motion to reopen the hearing within twenty (20) days of service of the 
initial decision.
    Unless a party appeals to the Environmental Appeals Board (the 
Board) within twenty (20) days of service, or unless the Board elects 
to review it sua sponte, the Presiding Officer's initial decision 
becomes a final order of the Board within forty-five (45) days after 
service. A final order of the Board shall adopt, modify or set aside 
the findings and conclusions of the initial decision. The Board is 
authorized to increase or decrease the assessed penalty, except in the 
case of a default order. A motion for reconsideration of the final 
order may be filed with the Board within ten (10) days after service of 
the final order.

Procedural Due Process

    EPA analyzed the issue of procedural due process with its 
consolidated APA rules of practice when they were promulgated. See 52 
FR 2922 (August 6, 1987) (NPRM) and 57 FR 4316 (February 4, 1992) 
(FRM). In that analysis EPA evaluated and balanced the three factors 
specified by the Supreme Court in Mathews v. Eldridge, 424 U.S. 319 
(1976) for determining whether the administrative procedure provided to 
an individual prior to the deprivation of a property interest meets the 
due process requirements of the Fifth Amendment: the magnitude and 
nature of the individual interest at stake, the risk of an erroneous 
deprivation of that interest and the benefit of additional procedures 
in reducing that risk, and the governmental interest in not providing 
such additional procedures.
    EPA's APA style hearing procedures would certainly satisfy 
procedural due process considerations as well as statutory requirements 
if employed for hearings on field citations. By statute APA 
adjudication procedures are not required. The violations are by 
definition minor in nature and should involve simple and 
straightforward factual and legal situations. In fact, EPA believes 
these procedures provide significantly more process than required by 
the Fifth Amendment for hearings on field citations, and are proposed 
as an option not because of due process considerations but because of 
the expected benefits of having a single set of procedures governing 
all administrative penalty proceedings under the Clean Air Act.
    EPA is also considering certain revisions to the Part 22 procedures 
to account for the minor nature of the violations at issue under the 
field citation program. First, EPA is considering using presiding 
officers that are not administrative law judges. As with other non-APA 
situations, the agency's presiding officers would conduct the hearings 
and take other actions. This would help to conserve the agency's 
administrative law judge resources for APA hearings, with no expected 
reduction in the accuracy of the hearing process. The Agency is also 
considering such revisions as making the prehearing conference optional 
and changing the deadline for default from twenty to thirty days 
following service.
    In addition, EPA is considering limiting appeals from the presiding 
officer to the EAB. Appeals from the initial decision on a field 
citation would not be of right, but would be at the discretion of the 
EAB. For example, a party seeking an appeal from the initial decision 
would file a motion with the EAB seeking leave to appeal. There would 
only be an appeal to the EAB if they granted such motion, or reviewed 
the initial decision sua sponte. Absent such review by the EAB, the 
initial decision of the presiding officer would become the final order 
of the Agency. EPA expects that in the typical situation the EAB would 
not hear an appeal from either party given the expected nature of the 
minor violations. Appeals typically would be limited to cases with 
unique factual or legal circumstances. This would conserve the Agency's 
resources for hearing and deciding administrative appeals, and allow 
their use for APA cases and more complex cases. At the same time, where 
appropriate the EAB could hear an appeal. This would minimize the 
chance of an erroneous deprivation of an individual interest, and at 
the same time maximize the efficient use of scarce Agency resources.
2. Modified 40 CFR Part 28--Consolidated Rules of Practice Governing 
the Administrative Assessment of Civil Penalties Under Various Statutes
    Under the second option considered and proposed by the Agency, the 
hearings on field citations would be conducted pursuant to the 
procedures in EPAs proposed non-APA, consolidated rules of practice for 
the administrative assessment of penalties, with appropriate revisions 
to conform with the Clean Air Act. (See proposed 40 CFR part 28, 56 FR 
29996 (July 1, 1991)). In a separate rulemaking, the Agency would 
propose to amend Part 28, where appropriate, to make that regulation 
applicable to field citations.

Basis for Hearing Procedures

    The rules of procedure proposed as 40 CFR Part 28 are intended to 
consolidate under uniform rules of practice the following non-APA 
administrative penalty programs that are currently administered by the 
Agency: Class I administrative penalties under sections 309(g) and 
311(b)(6) of the Clean Water Act, section 109(a) of the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980 
(CERCLA), and section 325(b) of the Emergency Planning and Community 
Right-toKnow Act (EPCRA); and administrative penalties under section 
1423(c) of the Safe Drinking Water Act and sections 325 (c) and (d) of 
EPCRA.
    Part 28 was proposed to consolidate and harmonize certain EPA 
procedural rules and guidance for the administrative assessment of 
civil penalties under various statutes, where Congress gave EPA 
authority to conduct non-APA hearings. In line with this Congressional 
intent, proposed part 28 is designed to provide streamlined 
administrative penalty procedures that are designed to assure the 
protection of basic constitutional rights. Section 113(d)(3) of the Act 
explicitly states that hearings on field citations are not subject to 
the APA provisions for hearings (5 U.S.C. 554), and that recipients of 
a field citation must be provided a reasonable opportunity to be heard 
and to present evidence.
    The basic hearing requirements of the field citation program are 
therefore similar in structure to those programs proposed for inclusion 
under 40 CFR part 28.
    Inclusion of hearings on CAA field citations in part 28 would be 
consistent with the goals stated by EPA when it proposed these 
consolidated rules for non-APA hearing procedures under various 
statutes--reduction of confusion by Agency decision makers and 
enforcement staffs, provision for the regulated community of an 
essentially uniform set of procedural rules, and conformity with 
Congress' and EPA's desire to employ expedited penalty assessment 
procedures. At the same time, the proposed part 28 procedures are 
designed to provide non-APA hearing procedures under a wide range of 
statutory provisions, involving civil penalties ranging from $5,000 for 
each day of violation to $25,000 per violation. This contrasts with the 
field citation program, involving no more than $5,000 per day of 
violation for minor violations of the Act or its implementing 
regulations. In addition, adoption of part 28 procedures for the field 
citation program would also involve two separate procedures for 
administrative assessment of civil penalties under the CAA, parts 28 
and 22. Adding the field citation program to part 28, however, would 
promote a greater potential for non-APA multimedia enforcement actions 
by providing a common administrative forum. As with the part 22 option, 
the currently proposed part 28 procedures would be modified in certain 
ways to account for certain aspects of the field citation program. 
These are discussed later.

Proposed Hearing Procedures

    Under the modified part 28, the field citation would be issued as 
an administrative complaint. Unlike proposed part 28, however, the 
field citation complaints would not require certification by an Agency 
attorney. Within thirty days after service of the citation, the 
Respondent must file a response requesting a hearing. A 90-day 
extension of time to respond may be granted by the complainant.
    As in part 22 practice, the Respondent may simultaneously pursue 
informal settlement and a hearing. During settlement negotiations, the 
parties may informally exchange information, if appropriate. For 
example, the Agency may supply copies of the documentation used to 
support its case and the Respondent might provide any evidence that 
would tend to disprove the allegations or to mitigate the requested 
penalty.
    EPA's experience has been that the great majority of its 
administrative penalty actions conclude by a settlement. Part 28 
explicitly provides settlement procedures and, unlike part 22, would 
allow field citation cases to settle by the simple agreement of the 
parties in a consent order or, if the Respondent chooses, by the 
Respondent's payment of the amount requested by the Agency in the field 
citation itself (or in any superseding pleading). Under part 28, a 
settlement may be reached at any time, even before the deadline for a 
response has passed. In cases of settlement, there is no further 
administrative review, and the Respondent waives its rights to appeal 
the administrative penalty to the appropriate federal court. Pursuant 
to the language of the CAA, consent orders under the Part 28 field 
citation program would allow for the compromise, modification, or 
remission by the Agency, with or without conditions, of any penalty 
requested in the administrative complaint.
    Part 28 would be revised such that failure of the Respondent to 
affirmatively request a hearing in the response would lead to 
assessment of the penalty proposed in the field citation. Under section 
113(d)(3) of the Act, the penalty assessed by the field citation 
becomes final if the Respondent fails to request a hearing within the 
time required by the implementing regulation. Part 28 would also be 
revised to require Agency counsel to file a written explanation for the 
penalty imposed by the field citation no later than five days following 
a Respondent's default by failure to request a hearing. This would 
ensure an adequate administrative record for the penalty imposed.
    Upon the request of a party, or on his own initiative, the 
Presiding Officer may make a summary adjudication of the allegations, 
without further proceedings, whenever he finds that there are no 
material facts in dispute and that a party is entitled to judgment as a 
matter of law. In the same manner, the Presiding Officer may accelerate 
the transmittal of his recommended decision to the Regional 
Administrator if there is no compelling need for additional fact-
finding on remedy issues.
    Either party may request a summary determination or an accelerated 
recommended decision at any time after service of the response, up 
until thirty days before the time set for a hearing. Alternatively, the 
Presiding Officer may summarily determine any of the allegations after 
the time for the exchange of information has run, and after he has 
examined the entire administrative record. The Presiding Officer may 
accelerate the transmittal of the recommended decision, upon finding 
liability in a summary determination or upon stipulation as to 
liability by the parties, if there is no need for further fact-finding 
as to remedy.
    In reaching a recommended decision, the Presiding Officer is 
required to consider the statutory penalty assessment criteria listed 
in section 113(e) of the Act. These criteria include the size of the 
business; the economic impact of the penalty on the business; the 
Respondent's full compliance history; the Respondent's good faith 
efforts to comply; the duration of the violation as established by any 
credible evidence; payment by the Respondent of penalties previously 
assessed for the same violation; the economic benefit of noncompliance; 
the seriousness of the violation; and such other factors as justice may 
require. The Respondent is afforded the opportunity to provide evidence 
of the relevant statutory criteria, including evidence concerning the 
duration of the violation. Part 28 would be revised to incorporate 
these statutory penalty assessment criteria.
    Other than by a motion for summary determination or by a motion for 
an accelerated recommended decision, a field citation may be settled 
preliminarily by a consent order. The consent order includes a penalty 
settlement which has the force and effect of a final order issued by 
the Regional Administrator, except that the consent order is not 
appealable. Part 28 would be revised to provide that, consistent with 
the authority under section 113(d)(2)(B), the consent order may be 
issued with or without conditions.
    Part 28 establishes deadlines to ensure that administrative cases 
do not languish.
    Not later than thirty days following the Respondent's response, the 
Presiding Officer is required to hold a prehearing conference at which 
the parties meet to consider matters which may expedite the disposition 
of the proceedings. The Presiding Officer also sets the time and place 
for further proceedings and schedules an information exchange during 
the prehearing conference, if one is requested.
    The authority to require discovery is limited to exchange of 
certain information. The required information that may be exchanged is 
limited to: (1) Documents intended to be introduced at the proceedings 
under Part 28 that have not already been filed with the Hearing Clerk; 
(2) witness lists, qualifications of expert witnesses and the subject 
matter of intended witness testimony; and (3) information known to the 
Respondent relating to the Respondent's inability to pay a civil 
penalty or relating to any economic advantage accruing to the 
Respondent as a result of his alleged violations of law. Part 28 would 
be revised to expand this last category, by allowing the Agency to 
include the Respondent's good faith efforts to comply with the 
applicable Clean Air Act requirements. Other forms of discovery, 
including interrogatories and the taking of depositions, are not 
permitted unless stipulated to by the parties.
    Except for supplemental materials, the information exchange must 
conclude no later than sixty days following the prehearing conference. 
Since new information concerning witnesses or documents may develop 
after an information response deadline passes, the parties may 
supplement the original information, but not later than seven days 
prior to the hearing.
    In order to provide the parties with incentives to cooperate during 
the discovery phase, there are both mandatory and discretionary 
sanctions for failure to comply with the information exchange 
requirements. For example, if a party fails to timely provide the name 
and all supporting information regarding any witness it intends to 
present at a hearing, such witness may not be presented. Similarly, if 
a party fails to timely produce a document it intends to introduce at 
such a hearing, that document may not be introduced to prove the truth 
of what it asserts. Part 28 would be revised to provide that if the 
Respondent fails to timely provide information regarding its good faith 
efforts to comply with the Act, then that information may not be used 
by the Respondent at the hearing. The Presiding Officer may also impose 
additional appropriate sanctions on a party that fails to fully comply 
with these requirements.
    In conducting the hearing, the Presiding Officer may limit the 
number of witnesses and the scope and extent of both the direct 
examination and cross-examination. Cross-examination is limited to the 
scope of the direct examination. The Presiding Officer may take 
testimony in the form that is the most efficient under the 
circumstances. No matter what form of testimony is permitted, however, 
the Presiding Officer will make adequate provision to ensure that each 
party retains its right of cross-examination if the witness is 
available to testify or is subject to a subpoena.
    The hearing is generally limited to resolving disputed allegations 
as to liability. Remedy issues are generally addressed in the parties' 
closing arguments, unless there is a compelling need for remedy 
testimony. Such need could arise where the underlying facts which are 
material to the statutory penalty assessment factors are disputed.
    As is typical in administrative proceedings, strict adherence to 
the Federal Rules of Evidence is not required under part 28. Testimony 
or documentation that is ``relevant, material or of significant 
probative value'', including hearsay, is admissible, as long as the 
witness presenting the information is subject to cross-examination by 
any opposing party. The Presiding Officer has the discretion to take 
official notice of certain facts, exclusive either of facts relating to 
settlement or relating to a person's challenge to a final State or 
Agency action.
    The proposed part 28 rules contemplate that each party will have an 
opportunity to make an opening statement (with the Agency making its 
opening statement first); that the Agency will put on its prima facie 
case; and that the Respondent thereafter will have an opportunity to 
present its defense.
    Participants may present oral closing arguments at the discretion 
of the Presiding Officer, and such arguments may address both liability 
and remedy issues. The participants may submit supporting documentation 
regarding remedy. If the Presiding Officer does not allow oral closing 
arguments, the Agency anticipates that he would solicit the submission 
of written proposed recommended findings of fact and conclusions of law 
as to liability and remedy.
    Under part 28, the Presiding Officer would be required to: (1) 
Certify the administrative record as complete and as being in 
compliance with the requirements of part 28; (2) make the 
administrative record available to the Regional Administrator; and (3) 
prepare and transmit a recommended decision to the Regional 
Administrator. The Presiding Officer's authority to prescribe a remedy 
would be limited to recommending the withdrawal of the field citation 
or recommending the issuance of an order.
    The decision of the Regional Administrator must be based on 
applicable law and on the administrative record, which includes the 
recommended decision of the Presiding Officer. Upon receipt of the 
Presiding Officer's recommended decision, the Regional Administrator 
may either withdraw the field citation, if he concludes that the Agency 
has not sustained its burden of proof, or issue an order granting the 
requested relief, in whole or in part. Any decision by the Regional 
Administrator must be in writing, supported by clear reasons based on 
the administrative record and applicable law, and include a statement 
of the right to judicial review and of the procedures and deadlines for 
obtaining judicial review. If the Regional Administrator rejects the 
recommendation of the Presiding Officer, the explanation for that 
rejection must be in writing and made part of the administrative 
record.
    The Regional Administrator's order must include a discussion of the 
applicable penalty factors which were considered in the assessment of a 
penalty under the Act, and set forth the penalty assessed. Part 28 
would be revised to limit the Regional Administrator's authority to 
issue a default order by excluding those based on a default for failure 
to respond or to request a hearing (which would become final, pursuant 
to section 113(d)(3) of the CAA, by operation of law).
    Any order issued by the Regional Administrator becomes effective 
thirty days after issuance, unless either the Environmental Appeals 
Board (the Board) suspends the implementation of the order pursuant to 
its sua sponte review authority, or a judicial appeal is taken pursuant 
to section 113(d)(4) of the Act. No person may stay the effective date 
of an administrative order by attempting to appeal it administratively.
    The decision of the Regional Administrator to issue a final 
decision constitutes final Agency action (subject to sua sponte review 
by the Board) on its effective date, for purposes of any judicial 
appeal. Withdrawal of the field citation, however, would not constitute 
final Agency action, unless it occurs without prejudice.
    The Board, on behalf of the Administrator, is authorized to review 
part 28 rulings by Regional Administrators, sua sponte, on issues of 
law. The Board may not become involved in factfinding; second guess the 
penalty amount issued by the Regional Administrator; or review orders 
issued on consent. The Agency anticipates that this review authority 
will be exercised infrequently, but believes that the authority is 
necessary to ensure consistent Agency positions on the applicable law.
    The Board may withdraw a Regional Administrator's order if it 
determines that the Agency lacks jurisdiction to assess a penalty, or 
if it determines that the Respondent is not liable under applicable 
law. The Board shall remand an administrative order if it determines 
that elements of the Respondent's liability are different from those 
found by the Regional Administrator. Under such a remand, the remedy 
should be conformed to the amended conclusions of law. The order shall 
also be remanded if the Board finds that the order fails to provide 
clear reasons for the decision. The Board shall allow the Regional 
Administrator's order to issue unchanged if it finds that the order is 
legally sufficient and it agrees with all material conclusions of law.
    Parties are not permitted under part 28 to administratively appeal 
adverse rulings, either to the Regional Administrator or to the 
Environmental Appeals Board.

Procedural Due Process

    EPA recognizes that the administrative imposition of penalties for 
minor violations of the Act may affect constitutionally protected 
interests of those against whom actions have been taken. Part 28 
includes precautions to ensure that individuals subject to a finding of 
liability for a civil penalty will have all of the protections that due 
process of law requires. These precautions include an impartial 
Presiding Officer; the right to a hearing on liability, with a right of 
cross-examination; and a final Agency action based solely on the 
administrative record and applicable law. For a detailed due process 
discussion concerning part 28, see the July 1, 1991 proposal at 56 FR 
29997 et seq.
    The part 28 procedures provide all of the procedure necessary to 
meet constitutional due process requirements under the leading Supreme 
Court case, Mathews v. Eldridge, 424 U.S. 319 (1976). In that case, the 
Supreme Court set out a three-part test for determining whether the 
administrative procedure provided to an individual prior to the 
deprivation of a property interest by the government meets the due 
process requirements of the Fifth Amendment. The Mathews test involves 
balancing the magnitude and nature of the individual interest at stake; 
the benefit of additional procedures in reducing the risk of erroneous 
deprivation of that interest; and the governmental interest in not 
providing such additional procedures. Although the part 28 procedures 
streamline the adjudicatory process provided for analogous 
administrative hearings under the APA, those procedures do not 
eliminate any of the constitutional elements of such hearings. The part 
28 procedures grant the person receiving the field citation a full 
opportunity to review the evidence of minor violations, as well as 
address the propriety of the assessed penalty. Since these procedures 
allow for complete adjudication of liability issues, there would be 
little benefit to the Respondent in more extensive or attenuated 
procedures, and disproportionate cost to the Agency and to the public.
    The field citation program will typically address violation and 
penalty issues that are simple and straightforward matters. Since these 
cases should not be complex, their resolution is well-suited to the 
expedited administrative penalty proceedings mandated by Congress and 
included in part 28. For these reasons as well as those noted in the 
July 1, 1991 proposal, EPA believes the proposed part 28 procedures 
would adequately provide for due process in the assessment of penalties 
under the field citation authority.
3. 40 CFR Part 59--Rules Governing Administrative Hearings on Field 
Citations
    The third Agency proposal involves using new procedures for 
conducting administrative hearings requested by persons to whom field 
citations have been issued under section 113(d) of the Act.

Background

    Section 113(d) of the Act provides that any person to whom a field 
citation is issued may either elect to pay the penalty assessment or to 
request a hearing, in accordance with procedures specified in the 
regulation which implements the field citation program. Section 113(d) 
further provides that the penalty assessed in the field citation 
becomes final unless the person to whom it is issued requests a hearing 
within the time specified in the implementing regulation. Section 
113(d)(3) explicitly provides that the hearing is not subject to the 
requirements of a formal adjudicatory hearing under the Administrative 
Procedure Act (APA), 5 U.S.C. 554 or 556. Instead, the hearing must 
provide a reasonable opportunity to be heard and to present evidence.

Basis for Hearing Procedures

    The Congressional intent to afford the Respondent a less formal, 
non-APA hearing is explicit in the legislation. Although such hearing 
must provide the Respondent with a reasonable opportunity to be heard 
and to present evidence, such hearing shall not be subject to the 
procedures under sections 554 or 556 of the APA.
    On July 1, 1991, the Agency proposed non-APA consolidated rules of 
practice for the administrative assessment of civil penalties at 40 CFR 
part 28 (56 FR 29,996). Although the part 28 rules are intended to 
consolidate all other non-APA administrative penalty programs currently 
administered by the Agency under uniform rules of practice, the field 
citation program was excluded from those proposed rules. Programs 
covered by part 28 include Class I administrative penalties under 
section 309(g) of the Clean Water Act, section 109(a) of CERCLA, and 
section 325(b) of EPCRA; and administrative penalties under section 
1423(c) of the Safe Drinking Water Act and sections 325(c) and (d) of 
EPCRA.
    There are several compelling reasons for developing hearing 
procedures that are better suited to the field citation program than 
those provided either by proposed part 28 or the consolidated APA rules 
of practice promulgated at 40 CFR part 22, 45 FR 24363 (April 9, 1980). 
The part 28 rules provide many of the same procedural rights in part 22 
that are designed to comport with APA requirements. These rights 
include prehearing conferences; subpoena authority; discovery rights; 
and cross-examination. The major differences between the two rules are 
that part 28 provides for a Presiding Officer instead of an 
Administrative Law Judge; imposes page limits on written submissions; 
and eliminates the right to appeal the decision of the Presiding 
Officer or Regional Administrator to the Administrator.
    Under the part 28 procedures, resolution of an administrative 
penalty proceeding could take seven or eight months. This lengthy time 
period would diminish the utility of the field citation program in 
addressing minor violations quickly and efficiently.
    Most of the penalty programs covered by the part 28 procedures 
provide for maximum per day per violation penalties well in excess of 
the $5,000 limit authorized for field citations. Using the part 28 
hearing procedures could result in spending more money to adjudicate 
field citation appeals than would be justified by the expected monetary 
recovery.
    Based on the foregoing reasons, the Agency is considering using a 
more streamlined set of hearing procedures drafted specifically to 
apply to the field citation program.
    Today's proposal relies on some of the part 28 provisions which 
ensure expedited proceedings. This proposed option also relies on the 
rules at 33 CFR subpart 1.07, 43 FR 54186 (November 20, 1978), which 
govern hearings on statutory penalties imposed by the Coast Guard.
    Under section 311(b)(6) of the Clean Water Act, the Coast Guard is 
authorized to assess a civil penalty of up to $5,000 against any owner, 
operator or person in charge of a facility or vessel that discharges 
either oil or a hazardous substance. The violator may challenge the 
penalty assessment at a hearing governed by the subpart 1.07 
procedures. The similarities between this program and the field 
citation program make the subpart 1.07 regulations an appropriate model 
for hearing procedures. These Coast Guard procedures were found to 
satisfy due process under the Constitution in U.S. v. Independent Bulk 
Transport, 480 F. Supp. 474 (1979).
    The part 28 regulations were used as a model for the following 
major provisions of the proposed part 59 hearing procedures: the 
Presiding Officer's duties and responsibilities; consent orders; 
prehearing conference; information exchange; post-hearing submissions; 
and review of the Regional Administrator's decision by the 
Environmental Appeals Board.
    The subpart 1.07 regulations were used as a model for the following 
provisions: certain preliminary matters; confidential business 
information; hearing procedures; and the scope of the Regional 
Administrator's authority for issuing a decision.
    The relevant part 28 provisions were selected to ensure fundamental 
fairness while streamlining the procedures available to Respondents. 
The Presiding Officer under part 28 is authorized to exercise a great 
deal of discretion to expedite the presentation of evidence in 
administrative cases. In that regard, the most pertinent authority 
adopted from the part 28 regulations allows the Presiding Officer to 
limit the number of witnesses and the extent of direct examination and 
cross-examination.
    The provisions adopted from subpart 1.07 further streamline the 
administrative process for penalty assessment, while guaranteeing 
fundamental rights. The Respondent is allowed under subpart 1.07 to 
submit written arguments and evidence in lieu of requesting a hearing. 
Such response allows the Presiding Officer to make a determination on 
the administrative record without the delays inherent in conducting the 
prehearing conference, information exchange, and hearing.
    Additionally, the subpart 1.07 provisions allow the Presiding 
Officer to determine the appropriate form of testimony: oral; written; 
or recorded. Subpart 1.07 also simplifies the hearing process by 
allowing the Respondent to present facts, statements, documents and 
other relevant evidence. The relatively informal nature of the 
proceeding provides the opportunity for expedited penalty assessment.

Proposed Hearing Procedures

    Under proposed part 59, the field citation would be issued during 
or shortly after an inspection by an EPA officer or employee. The 
citation is subsequently served upon the Respondent by first class mail 
or equivalent. Within thirty days after service of the citation, the 
Respondent must either request a hearing; provide written evidence and 
arguments in lieu of a hearing; or pay the penalty.
    If the Respondent fails either to request a hearing or to submit 
evidence in lieu of a hearing, he would be in default under section 
113(d)(3) of the Act. That section states that the penalty assessed by 
the field citation becomes final where the Respondent fails to request 
a hearing within the time required by the implementing regulation. In 
the case of a Respondent's default by failure to request a hearing, 
Agency counsel is required under this proposal to file, within ten 
days, a written justification for the penalty imposed by the field 
citation.
    At any time prior to final Agency action, a disputed field citation 
may be settled by a consent order. The consent order may conclude the 
citation in whole or in part, and may contain conditions. Upon service, 
the consent order constitutes a final order that is not appealable. 
Additionally, the field citation may be revoked by the Agency, in whole 
or in part and without prejudice, prior to payment of the penalty.
    Under the proposed part 59 procedures, the prehearing conference is 
optional. The purposes of the conference, which must be held no later 
than thirty days after the Respondent's response, are to simplify 
issues and to attempt to reach stipulations of fact. The Presiding 
Officer may also set the time and place for the hearing and schedule an 
information exchange during the prehearing conference. Within twenty 
days following the prehearing conference, the Presiding Officer may 
issue a written prehearing order to memorialize the rulings made at the 
conference.
    Each party has the authority to require that the other provide it 
with certain information. The information that may be exchanged is 
limited to: (1) Documents intended to be introduced at the hearing that 
have not already been filed with the Hearing Clerk; (2) witness lists, 
qualifications of expert witnesses and the subject matter of intended 
witness testimony; and (3) information known to the Respondent relating 
to the Respondent's inability to pay a civil penalty, economic benefit 
of noncompliance; and good faith efforts to comply with the applicable 
Clean Air Act requirements.
    The hearings on field citations will be conducted by an impartial 
Presiding Officer who, in most cases, will be the Judicial Officer or 
the Regional Judicial Officer. Such Judicial Officer will be an Agency 
employee who may perform other functions within the Agency, but who has 
no prior connection with the case being presided over.
    The Presiding Officer and other officials involved in deciding the 
case are prohibited under today's rule from engaging in ex parte 
contacts with interested parties both inside and outside of the Agency. 
The prohibition applies to the Regional Administrator as well as to his 
advisors.
    The Presiding Officer is required to schedule a hearing 
expeditiously. An extension of time for scheduling the hearing is only 
authorized for good cause and if no prejudice results.
    The hearing procedures provide that the Respondent may be 
represented by counsel. The Agency representative initiates the hearing 
by introducing into evidence the field citation and the relevant 
material supporting its issuance. The Respondent or his counsel may 
then provide facts, statements, arguments, documents, testimony and 
other exculpatory evidence responding to the evidence presented. 
Although the Presiding Officer may limit the number of witnesses and 
determine the appropriate form of testimony, either party has the right 
to cross-examine a witness who has provided direct testimony. The 
opportunity for rebuttal, and response to rebuttal, falls within the 
Presiding Officer's discretion.
    Consistent with the informal nature of the proceedings, the 
Presiding Officer is not bound by the Federal Rules of Evidence. The 
Presiding Officer is, however, authorized to take administrative notice 
of pertinent matters.
    Section 113(e) of the Act contains criteria that must be used in 
assessing whether the field citation penalty is appropriate. Under 
today's proposal, the Presiding Officer is required to consider these 
criteria when reviewing the assessed penalty. Those criteria include: 
The size of the business; the economic impact of the penalty on the 
business; the Respondent's full compliance history; the Respondent's 
good faith efforts to comply; the duration of the violation as 
established by any credible evidence; payment by the Respondent of 
penalties previously assessed for the same violation; the economic 
benefit of noncompliance; the seriousness of the violation; and such 
other factors as justice may require. Some or all of these criteria may 
be relevant to the issues presented in the case before the Presiding 
Officer. The burden of proof with respect to these criteria is assigned 
to the party with access to information concerning the particular 
factor. Consequently, the Agency must provide evidence regarding the 
duration and seriousness of the violation, and the Respondent must 
provide evidence regarding the other criteria.
    EPA is considering adopting a similar approach where the penalty 
assessment becomes final under section 113(d)(3) of the Act because a 
respondent fails either to request a hearing or submit evidence in lieu 
of a hearing within the time required by the regulations. When such a 
default occurs, the penalty assessed by the field citation becomes 
final by operation of section 113(d)(3). As previously discussed, under 
the proposed procedures, Agency counsel would then submit a written 
justification for the record concerning the amount of the assessed 
penalty. EPA is considering adopting a regulatory presumption that in 
cases of such default the penalty assessed in the field citation would 
be presumed to be appropriate with respect to those penalty assessment 
criteria where the regulations would place the burden of going forward 
on the respondent if a hearing had been requested. The purpose of this 
presumption would be to clarify the requirements of section 113(e) in 
such a default situation, and at the same time, reflect the authority 
of the agency to establish reasonable presumptions based on the 
circumstances of a case.
    The hearing will normally be tape recorded, unless the parties 
decide otherwise in the interests of preventing a serious delay in the 
proceedings. Tape recording the proceedings is desirable to develop a 
clear administrative record for later review. Transcription of the 
proceedings is not required, but may be made by a party, at its own 
expense, or may be ordered by the Presiding Officer. Any party causing 
a transcript to be made must provide copies to the other party and to 
the Presiding Officer. The transcript then becomes a part of the 
administrative record.
    The parties are permitted to submit a written statement for the 
Presiding Officer's consideration within a reasonable time after the 
hearing. The written statements, which may only address matters raised 
at the hearing, may be in the form of proposed findings of fact and 
conclusions of law.
    As soon as practicable after the hearing, the Presiding Officer is 
required to prepare a recommended decision in the case based on 
substantial evidence in the administrative record as a whole. The 
recommended decision will recommend either that the field citation be 
affirmed, modified or withdrawn. The recommended decision must be filed 
with the Regional Administrator. Within a reasonable time after receipt 
of the recommended decision, the Regional Administrator may either 
affirm, reverse, modify or remand the case to the Presiding Officer for 
further proceedings. The Regional Administrator may compromise, modify, 
or remit the penalty assessed by the field citation, with or without 
conditions.
    The Regional Administrator must provide the legal and factual basis 
for any modification of the recommended decision. Withdrawal of the 
penalty assessment, which does not constitute final Agency action, 
occurs without prejudice to the Agency.
    Any order issued by the Regional Administrator becomes effective 
thirty days after issuance, unless either the Environmental Appeals 
Board (the Board) suspends the implementation of the order pursuant to 
its sua sponte review authority, or a judicial appeal is taken pursuant 
to section 113(d)(4) of the Act.
    The Board, on behalf of the Administrator, is authorized to review 
the decisions of Regional Administrators, sua sponte, on issues of law. 
The Board may not review fact-finding; second guess the penalty amount 
issued by the Regional Administrator; or overturn orders issued on 
consent.
    The Board may withdraw a Regional Administrator's order if it 
determines that the Agency lacks jurisdiction to assess a penalty, or 
if it determines that the Respondent is not liable under applicable 
law. The Board shall remand an administrative order if it determines 
that elements of the Respondent's liability are different from those 
found by the Regional Administrator. Under such a remand, the remedy 
should be conformed to the amended conclusions of law. The order shall 
also be remanded if the Board finds that the order fails to provide 
clear reasons for the decision. The Board shall allow the Regional 
Administrator's order to issue unchanged if it finds that the order is 
legally sufficient and it agrees with all material conclusions of law.
    Within thirty days after the penalty assessment becomes final, the 
Respondent may appeal to the appropriate United States District Court.

Procedural Due Process

    As noted previously, Mathews v. Eldridge requires consideration of 
three factors in evaluating whether the proposed administrative 
procedures satisfy the Fifth Amendment's due process requirements. The 
relevant factors are: (1) The private interest that will be affected; 
(2) the risk of an erroneous deprivation of this interest and the 
probable value, if any, of additional or substitute procedural 
safeguards; and (3) the Government's interest including the function 
involved and the fiscal or administrative burdens that the additional 
procedural requirements would entail.
    The private interest at stake is payment of a civil penalty. The 
maximum amount that may be assessed, $5,000 per day of violation, is 
significantly less than the penalty that may be assessed under the 
other civil penalty authorities in the Act. In addition, EPA's proposed 
rules would establish a maximum amount that might be assessed in any 
one citation. It is also expected that the actual penalties assessed 
per violation will generally be less than the statutory maximum. The 
circumstances expected in the great majority of cases is a proper focus 
for assessing due process concerns. Chemical Waste Management, Inc. v. 
U.S.E.P.A., 873 F.2d 1477, 1484 (D.C. Cir. 1989). In addition, the 
straightforward and simple hearing procedures proposed would minimize 
the cost for private parties to contest assessment of a field citation.
    The procedures proposed in this third option should minimize the 
risk of an erroneous deprivation of property. Under the proposed rules, 
a respondent would be served with a citation that clearly identified 
the alleged violation and provided a reasonable opportunity to request 
a hearing. If a hearing was requested, it would be presided over by a 
neutral agency official that had no prior connection with the action, 
including investigative or prosecutorial functions. The Presiding 
Officer also would have no interest in the outcome of the action. This 
offers the respondent a hearing before a neutral and unbiased tribunal, 
and clearly minimizes any risk of error from institutional or other 
bias.
    The parties have the right to discover, before the hearing, all the 
information necessary to provide for a fair and adequate hearing. 
Parties may obtain the names of all witnesses that will be presented, 
along with a brief description of the witnesses qualifications and the 
subject matter of the testimony, and they may obtain each document that 
will be introduced by the other party. Since the violations involved 
will be minor in nature and are expected to typically involve simple 
and straightforward factual and legal circumstances, this should 
provide a respondent with all the information needed to adequately 
contest a citation. In addition, the citation would typically have been 
issued immediately upon or shortly after the violation is detected, 
providing respondents with ample opportunity to investigate the 
circumstances of an alleged violation. In these circumstances, 
additional discovery would not be expected to significantly advance the 
accuracy of the final decision.
    The hearing allowed under the proposed rules would provide 
respondents with several options in presenting relevant evidence, 
limited by the authority of the Presiding Officer to determine the 
manner of testimony that is most efficient in resolving an issue. 
Written and oral testimony are both acceptable, as well as testimony 
provided by other means. Respondents may offer any facts, statements, 
explanations, documents, testimony or other exculpatory evidence that 
is relevant to issues at the hearing. A right of cross-examination is 
provided, although EPA is considering limiting cross-examination to 
situations determined appropriate by the Presiding Officer. This form 
of hearing clearly meets the requirements of section 113(d)(3), and 
provides respondents with a fair opportunity to present evidence and 
argument on relevant issues. Given the simple and straightforward 
nature of the minor violations expected in the program, additional 
procedures would not significantly reduce the risk of an erroneous 
imposition of a civil penalty. A right to cross-examine witnesses, as 
compared to limiting cross examination to situations where deemed 
appropriate by the Presiding Officer, would allow for additional cross-
examination only where the Presiding Officer, a neutral official, had 
already determined it was inappropriate. A right to cross-examination 
would increase the accuracy of the hearing only in those limited cases 
where a Presiding Officer had mistakenly denied crossexamination. EPA 
expects this kind of mistake would occur infrequently, and a right to 
cross-examine, therefore, would not significantly increase the accuracy 
of the proceedings in the great bulk of cases.
    The Presiding Officer is afforded substantial discretion to tailor 
the hearing procedures to the individual facts and circumstances of 
each case. The Presiding Officer, may, for example, hold prehearing 
conferences, regulate the course of the hearing, including the form and 
extent of testimony and crossexamination, take official notice of 
matters, and request a written statement from the parties post-hearing. 
This flexibility should increase the accuracy of the proceedings, and 
reduce the value of mandating additional procedures. See Chemical Waste 
Management, 873 F.2d at 1483.
    After the hearing, parties may submit written statements to the 
Presiding Officer, such as recommended findings of fact and conclusions 
of law, at the discretion of the Presiding Officer. The Presiding 
Officer then prepares and transmits a recommended decision that is 
forwarded to the Regional Administrator for issuance of a final 
decision. There is no administrative appeal to the Administrator, 
except the Board may review a decision sua sponte. This provides for at 
least one level of review above the Presiding Officer, and in some 
cases a second level of review by the Board, establishing a clear 
mechanism to correct potential errors in the recommended decision. It 
should also promote consistency within a region, as well as national 
consistency if and when issues of national importance arise.\12\
---------------------------------------------------------------------------

    \12\Given the minor nature of the violations at issue, EPA 
rarely expects review by the Board.
---------------------------------------------------------------------------

    Additional procedures, such as a right to comment on the 
recommended decision, would not significantly add to the accuracy of 
these procedures. Respondents would already have had a full opportunity 
to present their position on the issues at the hearing, and could 
submit proposed findings and conclusions at the request of the 
Presiding Officer. All of this would be in the administrative record, 
and available to the Regional Administrator. Additional right to 
comment would not be expected to be of significant benefit, given the 
minor nature of the factual and legal issues involved.
    The government's primary interest, as previously described, is to 
implement an effective citation program without an unnecessary drain on 
limited enforcement resources. An effective program calls for issuance 
of a citation immediately or shortly after detection of a violation, 
with a final resolution accomplished shortly after issuance of the 
citation. This will maximize the deterrent effect of the field citation 
program, and minimize the amount of resources necessary to achieve this 
goal. The proposed hearing procedures meet these objectives by using 
simplified and streamlined procedures, with a relatively limited time 
needed to complete all procedures necessary to a final decision on 
assessment of a penalty.
    Since the field citation program fills a gap in EPA's enforcement 
program, it is reasonable to expect that a large number of citations 
will be issued in each region, addressing simple, easy to prove 
violations and assessing small monetary penalties. While the nature of 
the violations and the penalty should act to limit the number of 
hearings requested by respondents, it is reasonable to expect that a 
significant number of hearings may be requested if EPA issues a large 
number of citations. In that context, any additional procedures run the 
risk of significantly increasing the administrative burden and length 
of field citation proceedings. This could quickly make the program 
inefficient and a drain on government resources, given the small 
potential penalties and the limited environmental concerns involved for 
most minor violations.
    EPA believes the proposed part 59 procedures faithfully implement 
Congressional intent for the field citation program, and satisfy 
procedural due process concerns. This belief is bolstered by judicial 
acceptance of similar procedures in a variety of related situations. 
See Chemical Waste Management, Inc. (court upheld EPA's non-APA hearing 
procedures for issuance of administrative orders concerning corrective 
action orders under section 3008(h) of RCRA); United States v. 
Independent Bulk Transport, Inc., 480 F. Supp. 474 (S.D. NY 1979) 
(court upheld non-APA hearing held by Coast Guard in assessing less 
than the maximum $5,000 civil penalty per unlawful discharge under the 
Federal Water Pollution Control Act).

H. Design of Field Citations

    Field citations will be of a standardized format nationwide, and 
will be issued in triplicate. The following information shall be 
included on the field citation:
    (1) Date and time of violation(s);
    (2) Inspector's name, title, and office;
    (3) Name and address of source;
    (4) Name and telephone number of owner/operator or his/her 
representative;
    (5) Specific violation(s);
    (6) Location/source/description of violation(s);
    (7) Proposed penalty;
    (8) Notification of the 30-day deadline to either pay the penalty 
or request a hearing;
    (9) Address to which payment must be sent;
    (10) Address to which a request for a hearing must be sent;
    (11) Inspector's signature;
    (12) Space for signature indicating receipt; and
    (13) Citation number.
    The actual format of the citation will be published in the Agency's 
guidance document.

V. Section-by-Section Analysis

A. Section 59.1  Purpose and Scope

    This section of the proposed rule states EPA's authority to develop 
a field citation program and explains that procedures developed in this 
part will be used in administering the field citation program. The 
section acknowledges the twin goals of the field citation program: 
ensuring compliance with the Act and providing for expedited 
enforcement.

B. Section 59.2  Use of Number and Gender

    This section clarifies that words in the singular also include the 
plural, and those in the masculine gender also include the feminine, 
and vice versa.

C. Section 59.3  Computation of Time

    This section provides that any time period specified in these rules 
shall begin the day following the event from which the period begins, 
and shall include Saturdays, Sundays, and Federal legal holidays.

D. Section 59.4  Definitions

    This section provides definitions of terms used in part 59.

E. Section 59.5  Determination of Minor Violation and Maximum Proposed 
Penalty

    This section describes the process that will be used to determine 
whether a violation is minor. Each violation will be evaluated 
according to the proposed list of factors provided. A violation will be 
determined as minor through evaluation of the factors, considered as a 
whole.
    Criminal violations will not be addressed under the field citations 
program. Criminal enforcement action may be pursued for the violations 
described in section 113(c). These violations include ``knowing'' 
violations such as knowing endangerment, in which a person knowingly 
releases a hazardous air pollutant, with the knowledge that the release 
is placing another person in imminent danger of death or serious bodily 
injury.
    This section also provides the proposed maximum civil penalty for a 
minor violation as $5,000 per day of violation, and defines a field 
citation's total proposed penalty as the sum of each individual minor 
violation's proposed penalty.
Subpart B--Rules Governing Hearings on Field Citations

F. Section 59.6  Scope of These Rules

    This section outlines the purpose of Subpart B, which is to 
establish streamlined administrative procedures for conducting hearings 
under section Sec. 113(d)(3) of the Act.

G. Section 59.7  Issuance and Service of Field Citations

    This section describes who may issue field citations and what 
should be contained therein. The section also details requirements for 
service of a field citation. The statute limits the authority to issue 
field citations to EPA officers or employees.

H. Section 59.8  Presiding Officer

    This section describes the role and responsibilities of the 
Presiding Officer. There are no specific qualification requirements 
except that the Presiding Officer be neutral to the controversy. In 
most cases the Presiding Officer will be the Regional Judicial Officer. 
The Presiding Officer is authorized to take certain actions, but also 
must abide by the limitations imposed under subsection (c).

I. Section 59.9  Hearing Clerk

    This section describes the role and responsibilities of the Hearing 
Clerk, who shall be designated by the Regional Administrator.

J. Section 59.10  Representation by Counsel

    This section outlines a respondent's right to be represented by 
counsel. Following notification of such representation, all further 
notification shall be directed to that counsel.

K. Section 59.11  Preliminary Matters

    This section describes the process by which a hearing is requested 
and scheduled. It also details the Presiding Officer's discretion in 
granting delays, continuances, and permission to amend a response or 
raise new issues prior to a scheduled hearing.

L. Section 59.12  Revocation of Field Citation

    This section sets forth the Agency's authority to revoke a field 
citation, in whole or in part, at any time before the penalty amount 
becomes final.

M. Section 59.13  Request for Confidential Treatment

    This section describes the basis for, and procedure by which a 
respondent may request confidential treatment of a document or portion 
thereof.

N. Section 59.14  Consent Agreements and Consent Orders

    This section outlines the basis for a consent agreement, through 
which the Agency and the respondent formally agree to a civil penalty, 
with or without conditions. Thereafter, the Presiding Officer shall 
enter a consent order in accordance with the terms of the consent 
agreement. The consent order may be filed at any time prior to final 
Agency action, and constitutes a final order that may not be appealed.

O. Section 59.15  Prehearing Conference

    This section provides the Presiding Officer with the discretion to 
conduct a prehearing conference, and sets forth matters appropriate for 
discussion during such conference.

P. Section 59.16  Information Exchange

    This section outlines the responsibilities of each party, both in 
serving information requests and in providing information requested by 
the other party. The exchange of information shall proceed according to 
the schedule established by the Presiding Officer.

Q. Section 59.17  Subpoenas

    This section establishes the Presiding Officer's right to subpoena 
the testimony of witnesses or the production of documents, or both, and 
establishes the manner by which subpoenas shall be served.

R. Section 59.18  Hearing Procedures

    This section outlines the basic requirements for the conduct of the 
proceeding. It also establishes the rights and responsibilities of the 
Presiding Officer and of each party in presenting or receiving 
evidence, testimony, responses and rebuttals. Either party has the 
right to cross-examine any witness who has provided direct testimony, 
however, such crossexamination is limited to the issues presented in 
direct testimony. The overall format for the proceeding is informal, 
and the Presiding Officer has the discretion to offer opportunities for 
rebuttal and response to rebuttal.

S. Section 59.19  Penalty Assessment Criteria

    This section establishes the criteria which shall be considered by 
the Presiding Officer in reviewing the penalty amount requested by the 
field citation, and assigns the burden of proof for each criterion 
either to the Respondent or to the Agency.

T. Section 59.20  Transcript or Recording of Hearing

    This section provides that all hearings will be tape recorded 
unless both parties agree and the Presiding Officer directs otherwise. 
A verbatim transcript will not normally be prepared, however, this 
section outlines the requirements and procedure to be followed if 
either party or the Presiding Officer should specially request that 
such a transcript be prepared.

U. Section 59.21  Post-Hearing Submissions

    The Presiding Officer may request a written statement from each 
party following the conclusion of the hearing. Such statements are 
limited to those matters raised at the hearing.

V. Section 59.22  Recommended Decision

    This section describes the procedural requirements for preparing, 
transmitting, and filing a recommended decision.

W. Section 59.23  Decision of the Regional Administrator

    The Regional Administrator must issue a final decision that either 
affirms, reverses, or modifies the recommended decision, or remands the 
case to the Presiding Officer for further proceedings. This section 
describes the procedures the Regional Administrator shall follow in 
concluding actions taken under this part. The Regional Administrator's 
decision must be based on applicable law and the administrative record, 
which includes the recommended decision of the Presiding Officer. The 
final decision becomes effective thirty days following the date of 
issuance.

X. Section 59.24  Sua Sponte Review

    This section describes the role of the Environmental Appeals Board 
in reviewing the Regional Administrator's decision. The thirty-day 
period for this review coincides with the thirty-day period before a 
final decision becomes effective.

Y. Section 59.25  Payment of Assessed Penalty

    This section outlines the deadline and method of payment for civil 
penalties assessed pursuant to this part.

VI. Administrative Requirements

A. Executive Order 12866

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is a ``significant regulatory action.'' As 
such, this action was submitted to OMB for review. Changes made in 
response to OMB suggestions or recommendations will be documented in 
the public record.

B. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., 
whenever an agency is required to publish a general notice of 
rulemaking for any proposed or final rule, it must prepare and make 
available for public comment a regulatory flexibility analysis that 
describes the impact of the rule on small entities (i.e., small 
businesses, small organizations, and small governmental jurisdictions). 
The Administrator may certify, however, that the rule will not have a 
significant impact on a substantial number of small entities. In such 
circumstances, a regulatory flexibility analysis is not required. The 
expected impact of this proposed rule is negligible. The rule creates 
no new requirements, small or large, and is procedural in nature. 
Accordingly, I hereby certify that these proposed regulations will not 
have a significant impact on a substantial number of small entities. 
These regulations, therefore, do not require a regulatory flexibility 
analysis.

C. Paperwork Reduction Act

    These proposed rules do not contain any information collection 
requirements subject to OMB review under the Paperwork Reduction Act of 
1980 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 59

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Labeling, Penalties, Reporting and recordkeeping 
requirements.

    Dated: April 15, 1994.
Carol M. Browner,
Administrator.
    Part 59 is proposed to be added to 40 CFR chapter I to read as 
follows:

PART 59--FIELD CITATION PROGRAM

Subpart A--Scope of Program

Sec.
59.1  Purpose and scope.
59.2  Use of number and gender.
59.3  Computation of time.
59.4  Definitions.
59.5  Determination of minor violation and maximum proposed penalty.

Subpart B--Rules Governing Hearings on Field Citations

59.6  Scope of these rules.
59.7  Issuance and service of field citations.
59.8  Presiding officer.
59.9  Hearing clerk.
59.10  Representation by counsel.
59.11  Preliminary matters.
59.12  Revocation of field citation.
59.13  Request for confidential treatment.
59.14  Consent agreements and consent orders.
59.15  Prehearing conference.
59.16  Information exchange.
59.17  Subpoenas.
59.18  Hearing procedures.
59.19  Penalty assessment criteria.
59.20  Transcript or recording of hearing.
59.21  Post-hearing submissions.
59.22  Recommended decision.
59.23  Decision of the regional administrator.
59.24  Sua Sponte review.
59.25  Payment of assessed penalty.

    Authority: 42 U.S.C. 7413(d).

Subpart A--Scope of Program


Sec. 59.1  Purpose and scope.

    Section 113(d)(3) of the Clean Air Act (42 U.S.C. 7413(d)) 
authorizes EPA to implement a field citation program. The regulations 
in this part establish the standards and procedures which will apply to 
all field citations issued by EPA under this authority. The field 
citation program is designed both to deter minor violations of the Act 
and to expedite enforcement against such violations.


Sec. 59.2  Use of number and gender.

    As used in this part, words in the singular also include the plural 
and words in the masculine gender also include the feminine and vice 
versa, as the case may require.


Sec. 59.3  Computation of time.

    In computing any period of time prescribed or allowed in this part, 
except as otherwise provided, the day of the event from which the 
designated period begins to run shall not be included. Saturdays, 
Sundays, and Federal legal holidays shall be included. When a stated 
time expires on a Saturday, Sunday or legal holiday, the stated time 
period shall be extended to include the next business day.


Sec. 59.4  Definitions.

    In this part:
    (a) Act means the Clean Air Act, as amended (42 U.S.C. 7401 et 
seq.).
    (b) Agency or ``EPA'' means the United States Environmental 
Protection Agency.
    (c) Administrator means the Administrator of the United States 
Environmental Protection Agency, or the Administrator's delegate.
    (d) Complainant means the Agency, acting through any Agency 
employee authorized by the Administrator to initiate an action under 
this Part, or authorized to conclude such an action, in whole or in 
part, upon consent.
    (e) Consent agreement means a written agreement executed by 
Complainant and Respondent, consisting of:
    (1) Stipulations by the parties establishing subject matter 
jurisdiction;
    (2) An admission by Respondent that it had violated the Act as 
alleged in the field citation or a statement by Respondent that it 
neither admits nor denies such violation; and
    (3) Agreement as to the assessment of a stated civil penalty, with 
or without conditions.
    (f) Consent order means an order entered by the Presiding Officer 
in accordance with the consent agreement of the parties.
    (g) Field citation means an administrative complaint which is 
issued by the complainant as a document that:
    (1) Names one or more respondents;
    (2) Alleges one or more minor violations of applicable law, stating 
with reasonable specificity the nature of the alleged violations; and
    (3) Proposes that a penalty be assessed upon the respondent as 
authorized by applicable law.
    (h) Hearing clerk means the person authorized by the Administrator 
or Regional Administrator to serve as hearing clerk.
    (i) Minor violation means a violation which is:
    (1) Minor in nature as determined by one or more relevant factors 
listed in Sec. 59.5(a) and
    (2) Addressed by the Agency as a minor violation.
    (j) Penalty means the civil penalty assessed against a respondent 
under this part for one or more minor violations of the Act.
    (k) Presiding officer means the person designated by the 
Administrator or Regional Administrator to preside at hearings 
conducted under this part.
    (l) Regional Administrator means the Administrator of the Regional 
Office of the EPA Region in which the alleged violation occurred, or 
any officer or employee thereof to whom his authority has been duly 
delegated.
    (m) Respondent means any person named in the field citation.


Sec. 59.5  Determination of minor violation and maximum proposed 
penalty.

    (a) The following factors shall be considered in determining 
whether a violation is minor under the Act:
    (1) Whether the violation is readily recognizable;
    (2) Risk of environmental harm;
    (3) Time required to correct the violation;
    (4) Effort required to correct the violation;
    (5) Expense required to correct the violation;
    (6) Frequency of the violation;
    (7) Duration of the violation;
    (8) Importance of the violated requirement to the specific program; 
and
    (9) Other factors as appropriate.
    Criminal violations shall not be addressed through issuance of 
field citations.
    (b) The maximum civil penalty which may be proposed for each minor 
violation shall not exceed $5,000 per day for each violation. The total 
cumulative penalty proposed in a field citation is the sum of the 
proposed penalties corresponding to each minor violation alleged in the 
field citation. The maximum cumulative penalty which may be proposed in 
any single field citation is (insert dollar amount from $15,000 to 
$25,000).

Subpart B--Rules Governing Hearings on Field Citations


Sec. 59.6  Scope of these rules.

    This subpart sets forth procedures for the issuance of field 
citations and for the administration of administrative hearings on 
field citations under section 113(d)(3) of the Act.


Sec. 59.7  Issuance and service of field citations.

    (a) A field citation may be issued by the complainant to any person 
for any minor violation of the Act or for any minor violation of any 
regulations promulgated under the Act.
    (b) A field citation shall list:
    (1) Each alleged minor violation;
    (2) The penalty amount proposed for each violation;
    (3) The total proposed penalty amount; and
    (4) The address of the Regional office issuing the field citation; 
the address of the Federal repository to which payment of the proposed 
penalty may be sent; and the address of the Hearing Clerk to whom a 
request for a hearing shall be submitted.
    (c) A field citation shall be served on the respondent personally 
or by certified mail, return receipt requested (or any other manner of 
service that is no less speedy and reliable), with an attached 
certificate of service. Service upon a corporation, partnership or 
other unincorporated association shall be made personally, or by 
certified mail, return receipt requested (or by any other manner of 
service that is no less speedy and reliable), directed to an officer, 
partner, managing or general agent, or to any person authorized by 
appointment or by federal or State law to receive service of process. 
Service upon a federal agency, State or municipal government, State or 
municipal agency or other instrumentality thereof shall be made in the 
manner prescribed by the applicable law for service of process.
    (d) Proof of service of the field citation shall be made by 
affidavit of the person making personal service, or by properly 
executed return receipt, and shall be filed with the Hearing Clerk.


Sec. 59.8  Presiding officer.

    (a) The Presiding Officer shall have the authority to:
    (1) Issue subpoenas pursuant to Sec. 59.17 for the attendance and 
testimony of witnesses and for the production of relevant information 
and documents.
    (2) Issue or modify a prehearing order pursuant to Sec. 59.15(c);
    (3) Schedule and further limit the information exchange pursuant to 
Sec. 59.16;
    (4) Impose sanctions pursuant to Sec. 59.16 or to aid in the 
maintenance of order and the efficient and impartial administration of 
justice; and
    (5) Certify the administrative record and set forth and transmit a 
recommended decision pursuant to Sec. 59.22.
    (b) The Presiding Officer shall, in a timely fashion:
    (1) Carry out his duties as required by this part;
    (2) Oversee and direct the activities of the Hearing Clerk in an 
action under this part;
    (3) Schedule activities of the parties pursuant to the requirements 
of this part; and
    (4) Take any other action necessary for the maintenance of order 
and for the efficient and impartial adjudication of allegations arising 
in an action under this part.
    (c) The Presiding Officer shall not:
    (1) Have any prior connection with the action before him, including 
the performance or supervision of investigative or prosecutorial 
functions;
    (2) Have any interest in the outcome of the action;
    (3) Grant an extension, delay or continuance to a party based on a 
party's request for information pursuant to law outside the scope of 
this part;
    (4) Allow the introduction of any document or testimony into the 
administrative record relating to settlement of the instant action; or
    (5) Dismiss the field citation.


Sec. 59.9  Hearing clerk.

    The Regional Administrator shall designate a Hearing Clerk. After 
the filing of a field citation by the Complainant with the Regional 
Hearing Clerk, the Hearing Clerk shall:
    (a) Timely notify each party in writing of the name of the 
Presiding Officer designated to preside over the case;
    (b) Record the date of receipt of each document received regarding 
the action;
    (c) Timely notify the Presiding Officer of the receipt of any 
document filed with the Clerk by either party;
    (d) Perform such other functions as required by the Presiding 
Officer to assist him in carrying out his responsibilities under this 
part; and
    (e) Perform such ministerial and clerical functions as required by 
the Regional Administrator or by the Environmental Appeals Board to 
assist each in carrying out its responsibilities under this part.


Sec. 59.10  Representation by counsel.

    The respondent has the right to be represented at all stages of the 
proceedings by counsel. Following notification that a respondent is 
represented by counsel, all further communications regarding the 
proceedings shall be directed to that counsel.


Sec. 59.11  Preliminary matters.

    (a) Within 30 days after receipt of the field citation, the 
respondent, or counsel for the respondent, may:
    (1) Request a hearing;
    (2) Provide any written evidence and arguments in lieu of a 
hearing; or
    (3) Pay the penalty proposed in the citation. A hearing must be 
requested in writing and must specify the issues which are in dispute. 
Any request for hearing shall be filed with the Hearing Clerk.
    (b) The right to a hearing is waived if the respondent fails to 
submit the request to the Hearing Clerk within thirty (30) days after 
service of the field citation.
    (c) If the respondent fails to respond to the field citation in 
accordance with the provisions of this section, the penalty proposed in 
the field citation shall be final and immediately payable. The Agency 
shall file with the Hearing Clerk, no later than ten (10) days 
following the respondent's failure to respond, a written explanation 
supporting the penalty amount requested by the field citation.
    (d) The Presiding Officer shall promptly schedule all hearings. The 
Presiding Officer shall grant such delays or continuances as may be 
necessary or desirable in the interest of fairly resolving the case.
    (e) The respondent may amend the response no later than ten (10) 
days prior to the scheduled hearing date. Issues raised later than ten 
(10) days before the scheduled hearing may be presented only at the 
discretion of the Presiding Officer.


Sec. 59.12  Revocation of field citation.

    At any time before the penalty proposed by the field citation 
becomes final, the Complainant may revoke the field citation, in whole 
or in part, without prejudice.


Sec. 59.13  Request for confidential treatment.

    (a) A request for confidential treatment of a document or portion 
thereof may be made by the respondent on the basis that the information 
is:
    (1) Confidential financial information, trade secrets, or other 
material exempt from disclosure by the Freedom of Information Act (5 
U.S.C. 552);
    (2) Required to be held in confidence by 18 U.S.C. 1905; or
    (3) Otherwise exempt by law from disclosure.
    (b) The respondent must submit the request for confidential 
treatment to the Presiding Officer in writing and must state the 
reasons justifying nondisclosure. Failure to make a timely request may 
result in a document being considered as nonconfidential and subject to 
release.


Sec. 59.14  Consent agreements and consent orders.

    (a) At any time before final Agency action, the complainant and the 
respondent may settle an action, in whole or in part, by agreeing upon 
a civil penalty, with or without conditions. The parties shall 
memorialize such an agreement in the form of a consent agreement. The 
Presiding Officer shall thereafter enter a consent order in accordance 
with the terms of the consent agreement. Such consent order may not be 
appealed to federal court by either party.
    (b) If the filing of the consent order with the Hearing Clerk 
pursuant to paragraph (a) of this section does not wholly conclude the 
action, the Presiding Officer shall promptly inform the parties of the 
schedule of the remaining proceedings.


Sec. 59.15  Prehearing conference.

    (a) Within thirty (30) days following receipt of the respondent's 
response to the field citation, the Presiding Officer may, in his 
discretion, hold a prehearing conference. The Presiding Officer may 
conduct the conference in person or by telephone.
    (b) At the prehearing conference, the Presiding Officer:
    (1) May attempt to simplify issues and assist the parties in 
reaching a stipulation as to facts that are not in dispute;
    (2) May, upon request of either party, schedule an exchange of 
information in accordance with Sec. 59.16;
    (3) Shall establish a time and place for the hearing; and
    (4) May discuss other appropriate matters.
    (c) The Presiding Officer may issue a prehearing order to the 
parties, no later than twenty (20) days following the conference, which 
memorializes the rulings of the Presiding Officer made at the 
prehearing conference.


Sec. 59.16  Information exchange.

    (a) Subject to any limitation imposed by the Presiding Officer in a 
prehearing order issued pursuant to Sec. 59.15(c) each party shall 
provide, in writing, the following information:
    (1) The name of each witness it intends to present at the hearing 
and the subject matter of the intended testimony; and
    (2) Each document it intends to introduce at the hearing.
    (b) The respondent shall provide the following information in 
writing, to the Agency:
    (1) If the respondent contends that it is unable to pay the 
proposed penalty, the respondent shall submit financial information in 
support of such claim, including, but not limited to, complete copies 
of its federal income tax returns for the previous three years;
    (2) The respondent's net profits, delayed or avoided costs, or any 
other form of economic benefit resulting from any activity or failure 
to act by the respondent which is alleged in the field citation; and
    (3) The respondent's good faith efforts to comply with the 
applicable Clean Air Act requirements.
    (c) The parties shall conduct the exchange of information according 
to the schedule established by the Presiding Officer pursuant to 
Sec. 59.15(c).
    (d) Each party shall file its information exchange with the Hearing 
Clerk and shall simultaneously serve copies thereof personally or by 
certified mail (or any other manner of service that is no less speedy 
and reliable), with an attached certificate of service, upon the other 
party and the Presiding Officer.
    (e) The Presiding Officer has the discretion to impose on any party 
that fails to comply with the requirements of this section any sanction 
that is just and proper.


Sec. 59.17  Subpoenas.

    (a) The Presiding Officer may, on his own initiative or at the 
request of either party, subpoena the testimony of witnesses or the 
production of documents, or both, for a hearing conducted pursuant to 
Sec. 59.16.
    (b) The Presiding Officer shall serve the subpoena upon its 
recipient in the manner prescribed for the service of a field citation 
pursuant to Sec. 59.7(d).
    (c) The Presiding Officer shall file a copy of the subpoena with 
the Hearing Clerk.


Sec. 59.18  Hearing procedures.

    (a) The Presiding Officer shall conduct a fair and impartial 
proceeding in which each party has a reasonable opportunity to be heard 
and to present evidence. Each witness shall testify in the form 
determined by the Presiding Officer to be most efficient in resolving 
an issue. Forms of testimony include oral testimony provided in person 
or by other means, and written or otherwise recorded testimony. The 
Presiding Officer may limit the number of witnesses and the scope and 
extent of any direct examination or cross-examination as necessary to 
protect the interests of justice and conduct a reasonably expeditious 
hearing.
    (b) The Agency representative shall present the field citation and 
the evidence supporting its issuance, and any other material that is 
pertinent to the issues to be determined by the Presiding Officer. The 
respondent has the right to examine, and to respond to or rebut, the 
field citation and any proffered evidence and material. The respondent 
may offer any facts, documents, testimony or other exculpatory evidence 
which bears on appropriate issues, or which may be relevant to the size 
of an appropriate penalty. Any opposing party has a right of 
crossexamination after the introduction of a witness' direct testimony. 
A party shall not cross-examine regarding a matter that is outside of 
the scope of the direct examination. The Presiding Officer may require 
the authentication of any written exhibit or statement.
    (c) At the close of the respondent's presentation of evidence, the 
Presiding Officer may allow the introduction of rebuttal evidence by 
the Agency representative. The Presiding Officer may allow the 
respondent to respond to any such evidence submitted by the Agency.
    (d) In receiving evidence, the Presiding Officer is not bound by 
the Federal Rules of Evidence. In evaluating the evidence presented, 
the Presiding Officer shall give due consideration to the reliability 
and relevance of each item of evidence.
    (e) The Presiding Officer may take notice of matters which are not 
subject to reasonable dispute and are commonly known in the community, 
or are capable of accurate and ready determination by resort to sources 
whose accuracy cannot reasonably be questioned. Prior to taking notice 
of a matter, the Presiding Officer shall give each party an opportunity 
to show why notice should not be taken. In any case in which notice is 
taken, the Presiding Officer shall place in the record a written 
statement of the matter as to which notice was taken with the basis for 
such notice, including either a statement that the parties consented to 
notice being taken or a summary of any party's objections.


Sec. 59.19  Penalty assessment criteria.

    (a) The Presiding Officer shall consider the following criteria in 
reviewing the penalty proposed in the field citation:
    (1) The size of the business;
    (2) The economic impact of the penalty on the business;
    (3) The respondent's full compliance history, and good faith 
efforts by the respondent to comply;
    (4) The duration of the violation as established by any credible 
evidence (including evidence other than the applicable test method);
    (5) Payment by the respondent of penalties previously assessed for 
the same violation;
    (6) The economic benefit of noncompliance;
    (7) The seriousness of the violation; and
    (8) Such other factors as justice may require.
    (b) The burden of going forward with respect to criteria in 
paragraphs (a)(1), (2), (3), (5), and (6) of this section, is on the 
respondent. The burden of going forward with respect to criteria in 
paragraphs (a)(4) and (7) of this section is on the Agency. The burden 
of going forward with respect to criterion in paragraph (a)(8) of this 
section is on the party proffering such factors. Failure of the 
respondent to meet its burden with respect to any applicable criterion 
shall mean that a penalty amount that is appropriate in light of other 
criteria shall also be appropriate in light of such criterion for which 
the respondent failed to meet its burden.


Sec. 59.20  Transcript or recording of hearing.

    (a) The hearing shall be tape recorded unless the parties agree and 
the Presiding Officer directs otherwise. A verbatim transcript will not 
normally be prepared, but may be ordered by the Presiding Officer if 
deemed necessary to permit a full and fair review and resolution of the 
case. If not so ordered by the Presiding Officer, a party may, at its 
own expense, cause a verbatim transcript to be made. The party causing 
the verbatim transcript to be made shall submit one (1) copy to the 
Presiding Officer and one (1) copy to the other party.
    (b) The transcript or recording of the hearing, together with all 
written submissions made by the parties, shall become part of the 
administrative record for the proceeding.


Sec. 59.21  Post-hearing submissions.

    The Presiding Officer may request, within a reasonable time 
following the conclusion of the hearing, that the parties submit a 
written statement for his consideration including, but not limited to, 
proposed recommended findings of fact and conclusions of law. Such 
written statement shall be limited to the matters raised at the 
hearing.


Sec. 59.22  Recommended decision.

    (a) Within a reasonable time after the conclusion of the hearing, 
the Presiding Officer shall:
    (1) Certify the administrative record as complete;
    (2) Make the administrative record available to the Regional 
Administrator; and
    (3) Prepare and transmit a recommended decision to the Regional 
Administrator. The recommended decision shall address all material 
issues of fact or law properly raised by the respondent, and shall 
recommend that the field citation be affirmed, modified or withdrawn. 
The recommended decision shall be based on substantial evidence in the 
administrative record, taken as a whole, and shall provide citations to 
relevant material contained in that record.
    (b) The Presiding Officer shall file a copy of the recommended 
decision with the Hearing Clerk at the time of its transmittal to the 
Regional Administrator. The Hearing Clerk shall immediately serve each 
party with a copy of the recommended decision.


Sec. 59.23  Decision of the regional administrator.

    (a) Following receipt of the recommended decision, the Regional 
Administrator shall issue a final decision that either affirms, 
reverses, or modifies the recommended decision or remands the case to 
the Presiding Officer for further proceedings. The Regional 
Administrator's decision may compromise, modify, or remit the penalty 
requested by the recommended decision, with or without conditions.
    (b) If the Regional Administrator rejects the recommendation of the 
Presiding Officer, in whole or in part, the decision shall include a 
written explanation for that rejection that states each point of 
disagreement with the recommendation of the Presiding Officer. If the 
Regional Administrator determines that the proposed penalty assessment 
must be withdrawn, such action may be done without prejudice.
    (c) The Regional Administrator's decision shall be supported by 
clear reasons and by the administrative record and shall include a 
statement of the right to judicial review and of the procedures and 
deadlines for obtaining judicial review. The decision shall be 
comprised of the Regional Administrator's findings of fact, conclusions 
of law, and assessment of an appropriate penalty after taking into 
account all applicable statutory and penalty factors.
    (d) For purposes of appeal, the final decision of the Regional 
Administrator pursuant to this part shall be deemed issued five (5) 
days following the date of mailing of the decision to the respondent. 
The final decision becomes effective thirty (30) days following its 
date of issuance unless an appeal is taken pursuant to section 
113(d)(4) of the Clean Air Act, 42 U.S.C. 7413(d)(4) before that date. 
The issuance of the final decision by the Regional Administrator 
pursuant to this section constitutes final Agency action on its 
effective date.


Sec. 59.24  Sua Sponte review.

    The Environmental Appeals Board may, on its own initiative, within 
thirty (30) days of the date of issuance by the Regional Administrator 
of a final decision pursuant to Sec. 59.23, suspend implementation of 
such decision for the purpose of reviewing its conclusions of law or 
its sufficiency under Sec. 59.23(c). The Environmental Appeals Board, 
after such review, may amend its conclusions of law, withdraw the field 
citation, remand the case for appropriate action to the Regional 
Administrator, or may allow the decision to issue unchanged. In any 
action in which the Environmental Appeals Board acts pursuant to this 
section, the provisions of Sec. 59.23 shall apply, except that:
    (a) The Regional Administrator who issued the final decision shall 
be deemed the recommending Presiding Officer for purposes of 
Sec. 59.22;
    (b) Upon suspension of the final decision, the Environmental 
Appeals Board shall be deemed the Regional Administrator for purposes 
of Sec. 59.23;
    (c) The Regional Administrator's decision, except for its findings 
of fact, shall be deemed a recommended decision; the Regional 
Administrator's findings of fact are findings for purposes of this part 
and are not subject to review by the Environmental Appeals Board;
    (d) If the Environmental Appeals Board does not amend the Regional 
Administrator's conclusions of law nor determine that the order is 
insufficient under Sec. 59.23(c), the Regional Administrator's penalty 
determination is not subject to review. If the Environmental Appeals 
Board amends the Regional Administrator's conclusions of law or 
determines insufficiency, the Regional Administrator's penalty 
determination shall be remanded by the Environmental Appeals Board to 
the Regional Administrator for appropriate action, except that if the 
Environmental Appeals Board determines that the respondent is not 
liable for the violations alleged under applicable law, then the 
Environmental Appeals Board shall withdraw the field citation and the 
final decision of the Regional Administrator without remand;
    (e) If the Environmental Appeals Board allows the final decision to 
issue unchanged, the requirements of Sec. 59.23(c) shall not apply;
    (f) If the Environmental Appeals Board amends or remands the 
decision, the requirements of Sec. 59.23(c) to make findings of fact 
and to assess the appropriate penalty shall not apply; and
    (g) The Environmental Appeals Board's decision to suspend 
implementation of a final decision shall not be deemed final Agency 
action for the purposes of Sec. 59.23(d).


Sec. 59.25  Payment of assessed penalty.

    Except as may otherwise be provided by applicable law and the 
provisions of any applicable consent order, the respondent shall pay, 
within thirty (30) days of the effective date of the final decision, 
any civil penalty assessed pursuant to this part by forwarding to the 
address provided by the field citation a cashier's or certified check, 
payable to ``Treasurer, The United States of America.''

[FR Doc. 94-10197 Filed 5-2-94; 8:45 am]
BILLING CODE 6560-50-P