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FAQs for Respondents in Enforcement Actions

General SEP questions asked by Respondents
Types of SEPs
Receiving SEP Credit
Administrative Penalty
Respondent Application

Q: What is the difference between a third-party pre-approved SEP and a custom SEP?
A: A third-party pre-approved SEP is an environmental project that has been reviewed and approved by the TCEQ to be performed through a third-party non-profit or governmental administrator. 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 allows a respondent to contribute to a third-party administrator without having to develop or participate in the actual SEP activity. A custom SEP allows a respondent to conduct the SEP activity using its own resources. Custom SEPs may cost more than contributing to a pre-approved SEP or paying the penalty amount to TCEQ.

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 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 a Local Government and want to propose a Compliance SEP (“C-SEP”). What are the procedures?
A: The Enforcement Coordinator will provide the local government with an application. The application and supporting documentation will be submitted and reviewed by the Financial Administration Division for C-SEP eligibility. If eligible, the local government will submit a line-item budget and SEP application for the penalty amount to the SEP Program for processing.

Q: Can we use a SEP for environmental education or research only?
A: These types of projects are considered “indirect” because there is no direct or measurable benefit to the environment. Therefore, the allowable penalty offset is only 33% for these types of projects.

Q: When can I begin the SEP?
A: The SEP is part of the Agreed Order and cannot begin until the Agreed Order has been approved by the Commission. Any work done prior to approval will not receive 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?
A: Texas Water Code Section 7.067 prohibits the TCEQ from allowing a respondent to use a SEP to address the problems that would resolve the violations, with the exception of a C-SEP for a local government.

Q: Can we receive SEP credit for administrative costs?
A: No. Administrative costs are not an allowable SEP expense, with the exception of pre-approved SEPs. Administrative costs are defined by the SEP program as non-direct costs that are not necessary and reasonable for performance of the SEP. Examples include operating costs of the respondent organization, salaries for personnel that are already compensated by the respondent’s organization, or the cost of building and rent.

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Q: Can we receive SEP credit for labor provided by volunteers and/or our employees?
A: No. Labor by respondent’s employees is considered an administrative cost and is not an allowable expense. Contract labor provided by a licensed contractor may receive SEP credit. The penalty offset amount cannot be used to pay volunteers.

Q: Can we receive SEP credit for making needed repairs on our current infrastructure (water or sewer lines, roads, bridges, etc.)?
A: : No, with the exception of the C-SEP for a local government. The SEP program does not otherwise approve projects that a respondent would have an existing obligation to perform.

Q: By performing a SEP, will the administrative penalty be reduced?
A: No. The dollars that are contributed or offset in performance of a SEP have no effect on the penalty amount. Basically, you are paying the penalty to the SEP instead of to the General Revenue Fund.

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 because a SEP will not reduce your total penalty amount. However, in some circumstances, a payment plan may be arranged, if you are willing to contribute to a pre-approved SEP.

Q: What happens if the SEP costs more than the penalty amount?
A: The respondent is required to both spend the minimum penalty offset amount and complete the SEP in its entirety. A custom SEP may require the respondent to spend more than the penalty offset amount to complete the SEP. If the respondent has expended the minimum offset amount but has not completed the SEP, the project will not receive SEP credit until the project is completed.

Q: Do I need to complete the respondent application and why?
A: Yes. An application is required for Custom, Compliance, and Pre-approved SEPs. The application provides the opportunity for the respondent to clearly describe the intended project and estimated costs; it identifies who is responsible for reporting; and helps in the coordination of SEPs.

Q: Where do I get the SEP application?
A: Please visit our Forms page.

If you have any questions regarding the SEP program, please contact the SEP program at 512/239-2223 or by email at sepreports@tceq.texas.gov.

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