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CP-37 / Environmental Benefit Projects (EBP) Policy

This policy supersedes Commissioner's Policy 37, dated October 7, 2005. Consistent with Department policies, including the Civil Penalty Policy; Order on Consent Enforcement Policy:

  1. The policies and procedures set out in this document are intended solely for the use and guidance of personnel of the New York State Department of Environmental Conservation ("the Department"). They are not intended to create any substantive or procedural rights, enforceable by any party in administrative or judicial litigation.
  2. Any suspension of the civil penalty or case valuations for settlement purposes that the Department undertakes in anticipation of litigation are privileged and protected from disclosure under the Freedom of Information Law, and §3101 of the Civil Practice Law and Rules of the State of New York ("CPLR"). Pursuant to CPLR §4547, all evidence or conduct of negotiations or settlement are inadmissible as evidence as proof of liability for or invalidity of the claim which is disputed or as proof of the amount of damages.
  3. The Department reserves the right to act at variance from the guidelines set forth in this Policy.

I. Summary:

An Environmental Benefit Project (EBP) is a project that an administrative respondent or judicial defendant (hereinafter "respondent") agrees to undertake as part of the settlement of an enforcement matter. The Department may suspend the obligation to pay a portion of a penalty where a respondent agrees to undertake an EBP. Generally, an EBP must improve, restore, protect, or reduce risks to public health or the environment beyond that achieved by a respondent's full compliance with applicable laws and regulations. Examples of EBPs acceptable to the Department are projects that will:

  • conserve, improve, and/or protect the State's natural resources and environment;
  • prevent, control or reduce water, land and air pollution;
  • enhance the health, safety and welfare of the people of the State of New York;
  • enhance the overall economic and social well being of the people of the State of New York;
  • achieve significantly early compliance with environmental laws and regulations or go significantly beyond minimum compliance in performance commitments; or
  • promote compliance with environmental requirements by providing practical and effective education to the public, regulated persons, stakeholders, and others as to the improvement, restoration, protection, or reduction of risks to public health, the environment, or natural resources.

Guided by the criteria set forth in this Policy, the Department retains the discretion to determine whether a settlement will include an EBP. Any EBP must be in addition to actions correcting the violations that are the subject of the enforcement, and in addition to the restoration of any natural resources injured by the violations. Subject to the discretion of the Department, the Department may suspend a portion of the civil penalty for conducting an EBP.

II. Purpose and Background

This policy provides guidance on the use of EBPs in the settlement of enforcement actions. The Department has the authority to prevent and abate pollution, promote restoration and reclamation of despoiled areas and natural resources, and consider the impact upon all natural resources in making a determination in connection with any license, order, permit, certification, or similar action. Courts have determined that the Department's broad authority allows the Commissioner to impose special conditions, not expressly required by law, upon facilities where such conditions are rationally related to protecting the environment and are based upon the nondiscriminatory application of established criteria. This authority includes actions which would advance the state's environmental policy. The broad powers conferred by the Environmental Conservation Law authorize the Commissioner to approve such measures as settlement conditions in lieu of a portion of penalties.

III. Policy

A. Penalty Suspension

  1. Department staff may consider an EBP in evaluating whether to suspend the obligation to pay a portion of the penalty in an enforcement matter. Reduction of assessed penalties by use of an EBP should not detract significantly from the general deterrent effect of the settlement as a whole. Accordingly, virtually every settlement involving an EBP should include a material payable penalty that adheres to and achieves the Department's objectives in assessing penalties as set forth in the Civil Penalty Policy.
  2. The payable penalty shall be calculated as follows:
    1. Department staff will determine what an appropriate penalty would be in the absence of any EBP ("the assessed penalty"), taking applicable penalty and enforcement policies into consideration.
    2. Department staff will determine the monetary value of the EBP based upon the expected cost of implementing the EBP ("EBP value").
    3. Department staff will suspend the obligation to pay $X of the assessed penalty, where X = 85% of the expected cost of implementing the EBP, excluding Respondent's in-kind services. In appropriate circumstances, the obligation to pay an additional portion of the assessed penalty may be suspended in accordance with the Civil Penalty Policy (DEE-1), provided that the final payable penalty is material (consistent with the Civil Penalty Policy). The Order must condition the suspension of the obligation to pay a portion of the assessed penalty on the Respondent's timely compliance with the Order's terms, including the requirement to fully implement the EBP. (The portion of the assessed penalty for which the obligation to pay has been suspended is the "suspended penalty.")
    4. The Respondent shall pay the portion of the assessed penalty for which the obligation to pay has not been suspended ("payable penalty").
      (See Attachment B, the Suspended and Payable Penalty Calculation Worksheet, which the case attorney must complete and submit to the General Counsel with Attachment A.

B. Criteria for an Acceptable Respondent

  1. As part of the settlement of an enforcement matter, the Department shall evaluate the eligibility of a respondent to undertake an EBP, which will include consideration of the respondent's history of compliance with law, regulation and relevant permits or licenses.
  2. The Department retains discretion to decide whether a respondent is eligible to enter into a settlement that includes an EBP.

C. Core Criteria for an Acceptable Project

The following conditions will guide the Department's determination as to whether an EBP may be considered in a settlement:

  1. A project must be in addition to all existing legal obligations of the respondent; and
  2. A project must provide a discernible benefit to the environment or public health, or must reduce risks to the environment or public health.

D. Project Priorities and Preferences

  1. The Department should give priority to projects that benefit the immediate geographic area or community where the violation(s) occurred.
  2. The Department should give preference to the following types of EBPs:
    1. Projects that have a direct programmatic nexus to the violation(s).
    2. Projects that benefit a Potential Environmental Justice Area.
    3. Projects that have a pollution prevention component.
  3. The Department should give preference to an EBP that is specified within the settlement document ("specified EBP"). If an appropriate EBP has not been identified at the time of settlement, the EBP may be determined later ("unspecified EBP") provided that the settlement document specifies the value of the EBP and requires the respondent to provide financial assurance pending project identification where deemed appropriate by the Department.
  4. In lieu of either a specified or unspecified EBP, the Department may allow the payment of funds ("EBP funds") to a third party approved by the Department to be used for Department-accepted EBPs. For the purposes of calculating the payable penalty under section III.A., above, the EBP value shall be the amount of funds paid to the third party. In such cases, once the respondent has paid the EBP funds the respondent shall have no further obligation for implementing the EBP.

E. Unacceptable Projects

Unacceptable projects include:

  1. Projects that the respondent is otherwise legally required to perform, for example by statute, regulation, permit, or other legal instrument.
  2. Projects that the respondent already intended to perform (i.e., projects that the respondent was going to do anyway).
  3. Projects that would:
    1. Cover or reimburse costs the Department would incur during the normal course of business, including paying for Department staff, except that the Commissioner or General Counsel may authorize an EBP that includes the reimbursement of extraordinary expenses incurred by the Department in the implementation or oversight of a specific EBP ;
    2. Generate revenue for the Department.

F. Other considerations

  1. The project should not primarily benefit the respondent.
  2. An EBP shall not result in the Department extending the time within which a respondent must correct a violation.
  3. Educational projects must be implemented by a third party that is not affiliated with the respondent. The education project must be directed at enhancing the public's or the regulated community's understanding of adverse environmental impacts to the affected resource and at preventing such impacts, or be designed to assist members of the community affected by the violations in understanding and preventing negative health and environmental impacts.
  4. An EBP must comply with all applicable laws and should be consistent with all applicable policies.

G. Settlement Document Language

  1. Specified EBPs:
    1. Settlement documents that provide for specified EBPs should contain the following provision:
      1. "Respondent must implement the EBP described in the approved implementation plan set forth in Schedule A ("EBP Implementation Plan"), which is attached hereto and is an enforceable part of this Order.
  2. Unspecified EBPs:
    1. Settlement documents that provide for unspecified EBPs should contain the following provisions:
      1. "Respondent must implement an EBP that complies with the Department's Environmental Benefit Projects Policy (CP-37) and must expend not less than [insert the calculated EBP value in dollars] in the implementation. If the project is completed for less than the calculated EBP value, the Respondent shall, at the sole discretion and direction of the Department, either pay the remaining balance as penalty, or implement one or more additional, Department-approved EBPs having a cost no less than the remaining balance."
      2. "Within 30 days of the effective date of this Order, unless the Department determines that additional time is warranted and grants an extension in writing, Respondent shall submit to the Department a description of and plan for an EBP that includes a schedule for implementation ("EBP Implementation Plan"), which is subject to the Department's review and approval, Respondent shall make such changes to the EBP Implementation Plan as the Department may require. If the EBP Implementation Plan has not been approved by the Department within one year of the effective date of this Order, then the amount set forth in [preceding paragraph] shall be paid as a penalty for the violations set forth herein. Upon the Department's approval, the EBP Implementation Plan shall be an enforceable part of this Order."
        (As necessary, i.e., for lengthy EBP implementations, the EBP Plan must include a schedule for periodic accounting, and for completing all EBP work.)
  3. All EBPs:
    1. Settlement documents that provide for an EBP, except for those provided for in III.D.4., above, should contain the following provisions:
      1. "Within thirty (30) days of completion of the EBP, Respondent must complete and submit to the Department an affidavit of completion, as set forth in Attachment ___, together with an accounting of costs."
        (For an example of an acceptable affidavit of completion, see Attachment C.)
      2. "The Department shall be the sole judge of whether Respondent has complied with the terms of this Order as it relates to satisfactory implementation of any EBP(s)."
      3. "Any statements, whether oral or written, that Respondent (or a third party at the request of the Respondent) makes with respect to the EBP will include language stating that the project was undertaken as part of the resolution of an enforcement matter brought by the Department for applicable violation(s)."
    2. A respondent may be required to establish and maintain with the Department evidence of financial responsibility or security ("financial assurance") sufficient to implement the EBP. If the Department determines that financial assurance is appropriate, then the Department shall identify the form of financial assurance required in the Order. The financial assurance requirements shall not place the Department in the position of directing and controlling the money to pay for the implementation of the EBP.

IV. Responsibility:

  1. The responsibility for interpretation and update of this document shall reside with the General Counsel or his/her designee.
  2. The case attorney is responsible for timely advising Regional and Division Director(s) of an EBP proposed as part of an Order or Judgment/Decree, and coordinating with appropriate personnel.
  3. Division and Regional Directors shall provide the support necessary for the approval and implementation of EBPs so that EBPs and implementation plans meet the requirements of this Policy and so that the Department can determine whether the EBPs have been implemented in compliance with the settlement document or EBP Implementation Plan.

V. Procedure:

  1. The General Counsel or designee must approve every EBP.
  2. The case attorney must submit a complete EBP proposal package to the General Counsel or his/her designee, which shall be privileged and confidential attorney-client communication, is protected by deliberative process privilege, and is exempt from release under FOIL or discovery and must contain the following:
    1. A description of the pending violations and pertinent background information;
    2. A description of the proposed EBP (in the case of a specified EBP);
    3. A description of the merits of the settlement proposal in the context of the enforcement matter;
    4. A completed EBP Evaluation Worksheet (Attachment A);
    5. A completed Suspended and Payable Penalty Calculation Worksheet (Attachment B);
    6. For specified EBPs, a schedule for implementation and completion;
  3. Any EBP that is (i) valued at $100,000.00 or more or (ii) that is to be implemented in more than one region may only be approved by the Commissioner, or the Commissioner's designee, in consultation with the General Counsel.
  4. After appropriate Central Office review, the General Counsel will inform the case attorney whether to incorporate the proposed EBP into the settlement document.

VI. Related References

DEE-1: Civil Penalty Policy

DEE-2: Order on Consent Enforcement Policy

ATTACHMENT A

EBP EVALUATION WORKSHEET SCREENING CRITERIA

Check if true or completed:

PAYABLE PENALTY

__The payable penalty is material and adheres to and achieves the Department's objectives in assessing penalties as set forth in the Civil Penalty Policy.

RESPONDENT ELIGIBILITY

__The respondent is eligible to undertake an EBP.

CORE CRITERIA

__The proposed EBP will be in addition to all regulatory or other compliance obligations of the respondent.
__The proposed EBP will provide a discernible benefit to the environment or public health, or will reduce risks to the environment or public health.

PROJECT ACCEPTABILITY:

__The proposed EBP does not include activities the respondent is otherwise legally required to perform.
__The respondent did not already intend to perform the project (i.e., the respondent was not going to do the project anyway).
__ Except as may be provided in section III.E.3.a. of CP-37, the Environmental Benefit Projects Policy, the proposed EBP will neither cover costs the Department would incur during the normal course of business, generate revenue for the Department, nor pay for Department staff.

PRIORITIES:

Geographic nexus:

__The proposed EBP will be implemented in the immediate geographic area or community where the violations occurred.

PREFERENCES:

Programmatic nexus:

__The proposed EBP has a direct programmatic nexus to the violations.

Environmental Justice:

__The proposed EBP will benefit an Environmental Justice area that is located within the immediate geographic area or community where the violation(s) occurred

Specified vs. unspecified EBP:

__The proposed EBP is specified in the settlement document, or
__The settlement document specifies the value of the EBP and includes the relevant language set forth in section III.H. of CP-37, the Environmental Benefit Projects Policy.

OTHER CONSIDERATIONS

__The proposed EBP does not primarily benefit the respondent.
__The EBP does not result in the Department extending the time within which a respondent must correct a violation.
__If the EBP is an educational project, it will be implemented by a third party that is not affiliated with the Department or respondent; is directed at understanding and preventing adverse environmental impacts to the affected resource; or is designed to assist members of the affected community in understanding and preventing negative impacts to the environment.
__The EBP complies with all Department policies.

NOTICE TO APPROPRIATE PERSONNEL

__The case attorney has timely advised Regional and Division Director(s) of the EBP proposed as part of this settlement, and has coordinated with appropriate personnel.

ATTACHMENT B

SUSPENDED AND PAYABLE PENALTY CALCULATION WORKSHEET

Calculation Worksheet
Steps Amount
Step 1: Assessed Penalty
If there were no EBP and applicable penalty policies were applied,
the appropriate assessed penalty would be:
$ ___________________
Step 2: EBP value
The EBP value (the expected cost of implementing the EBP, excluding
Respondent's in-kind services) is:
$ ___________________
Step 3: Suspended penalty
The amount of the assessed penalty which the Order suspends
Respondent's obligation to pay is:
EBP value
x 0.85
$ ___________________
Step 4: Additional suspended penalty (if any)
The additional amount, if any, of the assessed penalty that the Order
suspends Respondent's obligation to pay in accordance with the
Civil Penalty Policy is:
$ ___________________
Step 5: Total suspended penalty
Add amounts arrived at in Steps 3 and 4 and enter below in Step 6 as
"Total suspended penalty."
$ ___________________
Step 6: Payable penalty
The payable penalty shall be:
(a) The difference arrived at after subtracting the total Suspended
Penalty from the Assessed penalty,

OR

(b) A material payable penalty as determined by the case attorney
and approved by the General Counsel
(a) Assessed penalty
- Total suspended penalty
$ ____________________

OR

(b)
$ ____________________1

1 As required by the Civil Penalty Policy, virtually every settlement involving an EBP should include a payable penalty component.

ATTACHMENT C

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of the Violation of the Environmental
Conservation Law ("ECL") of the State of New York,
and Title 6 of the Official Compilation of Codes, Rules
and Regulations of the State of New York ("6 NYCRR") by:

[RESPONDENT NAME],

Respondent

AFFIDAVIT OF
COMPLETION

Case No:
__________________

[NAME OF RESPONDENT'S AUTHORIZED REPRESENTATIVE], being duly sworn, deposes and says as follows, subject to the penalty of law:

  1. I am employed by [NAME OF RESPONDENT] ("Respondent') and hold the title of [TITLE/POSITION] with Respondent. I have held this position with Respondent since [DATE]. My general job duties include [BRIEF DESCRIPTION OF DUTIES].
  2. I am authorized to make this affidavit on behalf of Respondent in this matter.
  3. On behalf of Respondent I hereby certify the following:
    1. Respondent is not otherwise legally required to perform the Environmental Benefit Project ("the EBP") required by the Order on Consent dated __________ in this matter ("the Order").
    2. Respondent did not already intend to perform the activities that comprise the EBP.
    3. Documentation of the completion of the EBP and of the expenditures for implementation of the EBP is attached hereto.
    4. Respondent has fulfilled the requirements of the Order in relation to the EBP.

BY: ___________________________

TITLE: ___________________________

DATED: ___________________________

Sworn to before me this
______ day of _______________ 20 ______.

_____________________________________
NOTARY PUBLIC

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