Tips for Respondents in Enforcement Actions
Types of SEPs
- Q: What is the difference between a third-party pre-approved and a custom SEP?
- Q: Should we do a pre-approved SEP or a custom SEP?
- Q: Can we get an extension on time while developing our custom SEP proposal?
- Q: We are thinking about proposing a custom SEP. What criteria does the TCEQ look for?
Allowable Expenses
Receiving SEP Credit
- Q: Can we receive SEP credit for correcting things cited in TCEQ notices of enforcement or for performing projects that will help us come into compliance with environmental rules?
- Q: Can we receive credit for administrative costs?
- Q: Can we receive SEP credit for labor provided by volunteers?
- Q: Can we receive credit against an administrative penalty for the labor of employees on a SEP at an overtime rate?
- Q: Our city needs to make repairs on its infrastructure (water or sewer lines, roads, bridges). Can we receive SEP offset credit for making needed repairs?
Administrative Penalty
- Q: Will performing a SEP reduce the administrative penalty a respondent is required to pay?
- Q: We don’t have the money to pay an administrative penalty. Should we consider a SEP as a means to save money?
- Q: What if a respondent does not complete a custom SEP but has already spent the amount of its administrative penalty?
Respondent Application
- Q: As the respondent, do I need to complete the respondent application and why?
- Q: Where do I get the SEP application?
Q: What is the difference between a third-party pre-approved and a custom SEP?
A: A third-party pre-approved SEP is one that has been reviewed and approved in advance by the TCEQ. A respondent may choose to contribute to this kind of SEP, which is operated by a third-party non-profit or governmental authority. A custom SEP is a respondent-operated SEP.
Q: Should we do a pre-approved SEP or a custom SEP?
A: A pre-approved SEP would allow you to contribute to a third-party administrator without having to develop or participate in the actual SEP activity. A custom SEP would allow you to conduct the actual SEP activity; however, it may cost more than contributing to a pre-approved SEP or paying the fine to the TCEQ. Generally it is the respondent’s choice.
Q: Can we get an extension on time while developing our custom SEP proposal?
A: Possibly. The Enforcement Division director requires that an application for a viable custom SEP be submitted before approving an extension of time for completing the SEP review. An extension must be approved in writing by the division director.
Q: We are thinking about proposing a custom SEP. What criteria does the TCEQ look for?
A: The TCEQ uses the following general criteria to determine whether a SEP would be acceptable:
- The project must be environmentally beneficial (how will the respondent be able to quantify the benefit?).
- The project must be done in conjunction with the settlement of an enforcement action.
- Except in the case of a Compliance SEP for a Local Government, the project cannot be used to correct the violation (must go beyond what is required to fix the problem).
- Other elements considered: Does the project meet state, regional, or community environmental priorities?
Q: Can we use a SEP for environmental education or research only?
A: Education and research projects are not encouraged because they do not have a direct benefit or an actual measurable reduction in pollution. The SEP program intends for funds to be applied to projects that have a direct and quantifiable environmental benefit.
The amount of SEP offset credit is based on the amount of direct benefit from the specific project. Education and research projects are only eligible to offset 1/3 of the payable penalty. Projects that do have a direct and measurable environmental benefit, but also have an ancillary education component, may offset up to 50 percent of the penalty.
Q: Can we receive SEP credit for correcting things cited in TCEQ notices of enforcement or for performing projects that will help us come into compliance with environmental rules?
A: No, except in the case of a Compliance SEP for a Local Government. Texas Water Code Section 7.067 prohibits the TCEQ from allowing a non-Local Government respondent to use a SEP to address problems that would help the respondent resolve the violations.
Q: Can we receive credit for administrative costs?
A: No. Administrative costs are not an allowable SEP expense. Administrative costs are defined by the SEP program to be non-direct costs that are not necessary and reasonable for performance of the SEP, such as the operating costs of the respondent organization, salaries for personnel that are already compensated by the respondent organization, or the cost of buildings and rent.
Q: Can we receive credit for labor provided by volunteers?
A: No.
Q: Can we receive credit against an administrative penalty for the labor of employees on a SEP?
A: The SEP policy was revised in 2009 regarding credit for labor. Labor expenses are sometimes allowed, depending on the type of project and whether the employees are already being paid by you for their time. Labor that is an allowed SEP expense may be credited, upon TCEQ approval, at an actual regular hourly rate.
Q: Our city needs to make repairs on its infrastructure (water or sewer lines, roads, bridges). Can we receive SEP offset credit for making needed repairs?
A: No, except in the case of a Compliance SEP for Local Government. The program does not otherwise approve projects which a respondent would have an existing obligation to perform.
Q: Will performing a SEP reduce the administrative penalty a respondent is required to pay?
A: No, the dollars that are contributed or offset in performance of an environmental project have no effect on the penalty amount; instead, the penalty is directed toward the SEP.
Q: We don’t have the money to pay an administrative penalty. Should we consider a SEP as a means to save money?
A: No. A SEP is not intended to benefit a respondent financially. Your financial hardship should not lead you to consider a SEP as a means to pay less. However, in some circumstances, a payment plan may be arranged if you are willing to contribute to a pre-approved SEP.
Q: What if a respondent does not complete a custom SEP but has already spent the amount of its administrative penalty?
A: The respondent is required to both spend the minimum SEP offset amount and complete the SEP in its entirety. A custom SEP usually requires that the respondent spend more than the SEP offset amount to complete the SEP. If the respondent has expended the minimum offset amount but has not completed the SEP, it may not receive credit for the SEP until the project is completed.
Q: As the respondent, do I need to complete the respondent application and why?
A: Yes. An application is required for custom and pre-approved SEPs as well as for a Compliance SEP. The application serves many purposes. Mainly, it helps you as the respondent to clearly describe your intended project and estimated costs, it includes a certification from you that, except in the case of a Compliance SEP for a Local Government, you have no obligation to perform (or contribute to) the SEP, and it helps in the development of custom SEPs as well as the coordination of contributions to third-party administrators.
Q: Where do I get the SEP application?
A: Please visit our Forms page.
