Supplemental Environmental Projects (SEPs) I M P R O V I N G T H E T E XA S E N V I R O N M E N T Briony Haechten, SEP Coordinator And Meaghan Bailey, SEP Attorney TCEQ Office of Legal Services Important SEP Information http://www.tceq.texas.gov/legal/sep Presentation Objectives
Supplemental Environmental Project (SEP) SEP Offset Types of SEPs C-SEPs Custom SEPs Third-Party Administrator SEPs SEP Numbers Contact Information Supplemental Environmental Project (SEP) What is a SEP? An enhancement project that offsets
an administrative or civil penalty in an enforcement matter An environmental enhancement project that offsets an administrative penalty in an enforcement matter Purpose of SEPs Prevent pollution Reduce the amount of pollutants reaching the environment
Enhance the quality of the environment Contribute to public awareness of environmental matters Texas Water Code 7.067(b)(2) Violation Media = SEP Media Air Violations = AIR (AQ SEPs) Water Violations = WQ, MWD, EAQ, PWS, WR (WQ SEPs) Waste Violations = MSW, IWD, IHW, PST (WQ SEPs)
SEP Preference Projects that benefit the Community in which the alleged violation occurred SEP Preference Projects that benefit the community in which the alleged violation occurred Levels of Community City
Levels of Community County Texas River Basin (WQ) City Texas Aquifer (WQ) Texas Air Control Region (AQ) County Texas River Basin (WQ)
Texas Aquifer (WQ), or Texas Air Control Region (AQ) Texas River Basins Map of Texas River Basins Texas River Basins Major Aquifers in Texas Map of Major Aquifers in Texas Major Aquifers of Texas
Texas Air Quality Control Regions SEP: How Does it Work in Terms of Money? SEP Offset SEP Offset Perform a SEP in lieu of paying the General Revenue Fund SEP Offset SEPs do not reduce penalty amount
Perform or contribute to a SEP in lieu of paying an assessed penalty to the General Revenue Fund SEP Credit is earned by: SEPs do not reduce penalty amount SEP Performing or Custom SEP; and/or Credit aisCompliance earned by:
Performing a Compliance or Custom SEP; and/or Contributing to a Third-Party Administrator SEP Contributing to a Third-Party Administrator SEPs are not SEPs areGRANTS!!! not GRANTS!!!
Enforcement $$ are used for SEPs! Enforcement $$ are used for projects! How SEP Offsets are Determined Type of Organization For Profit (Corporations)/Individuals Local Governments/Nonprofit Organizations Environmental Benefit Direct Indirect Mixed Penalty Percentage Offset
Types of SEPs Compliance SEP or C- SEP (Local Government Only) Custom SEP (Any Respondent)
Contribution to Pre-Approved SEP (Any Respondent) Penalty Percentage SEP Offset Indirect benefit: Corporation 33%; NFP /Govt 33% Mixed benefit: Corporation 50%; NFP/Govt 50% Direct benefit: Corporation 50%; NFP/Govt 100% General SEP Policy The commission may consider a respondent's willingness to contribute to a supplemental
environmental project that is approved by the commission, giving preference to projects that benefit the community in which the alleged violation occurred General SEP Policy The commission may not approve a project that is necessary to bring a respondent into compliance with environmental laws or necessary to remediate environmental harm caused by the respondents alleged
violation* EXCEPTION!! * Compliance SEP EXCEPTION!! *Compliance SEP (C-SEP) The commission may approve a supplemental environmental project that is necessary to bring a respondent into compliance with environmental laws or that is necessary to remediate environmental harm caused by the
respondents alleged violation if the respondent is a local government (LG) Local Government Defined As: School district County Municipality Junior college district River authority Water district or other special district (not water supply corporation) Political subdivision created under the constitution or Texas statute
Texas Water Code 7.067(b)(1) C- SEPs Two paths to a C-SEP: Automatic or Financially Qualified Performed by the Respondent (LG) as part of a TCEQ Agreed Order NEED FOR CORRECTIVE ACTION Automatic C-SEP The LG has not previously committed a
violation at the same site with the same underlying cause in the preceding 5 years, as documented in a TCEQ order; and Did not agree, before the date the commission initiated the enforcement action, to perform the project. (SB 394, 84th Legislature, effective June 19, 2015) Financially Qualified C-SEP The LG does not qualify for an automatic C-SEP and must undergo a financial assessment. (HB 2694, 82nd Legislature, effective September 1, 2011)
For Financial Assessment: Contact Financial Administration Division www.tceq.texas.gov/adminservices/financial-assurance/revenue/contact_us.html Or call, 512.239.0300 C- SEPs Repair structure(s) or equipment that may be the cause of the LGs non-compliance with an environmental law OR Remediation of environmental harm caused
by LGs alleged violation, such as a cleanup of a spill Custom SEPs Performed by the respondent as part of a TCEQ Agreed Order Projects most considered DIRECT quantifiable benefit to the environment Projects must be fully completed within 365 days from the effective date of the Agreed Order to earn SEP Credit
Custom SEPs Failure to complete a Custom SEP will result in the Respondent paying the entire assessed penalty in addition to whatever funds were spent on the project Custom SEPs usually cost more than the assessed penalty (SEP Offset Amount) Custom SEPs SEPs must be accepted PRIOR to any Feasibility study Budgeting discussions
Planning Implementation (NO REIMBURSEMENTS) *Information gathering is okay! Types of Custom SEPs first time water service to low-income residents who are using shallow or contaminated wells Extend first time sewer service to low-income residents who are using failing septic systems
Extend Dam repairs for dams from the Agencys list of high risk dams Collection events for proper disposal at NO COST TO CITIZENS Used Tires HHW
(Batteries, used paint, used oil, antifreeze) Electronics Large municipal solid waste (appliances without Freon) Erosion control project on a creek, river, or lake with a natural embankment (Photos and maps are required with application) Beautification and flood control projects are NOT considered as Erosion Control Projects!
Reporting: C-SEPs and Custom SEPs Typical Reporting Documents required for Compliance and Custom SEPs: Itemized list of expenses Paid receipts, invoices, and matching payment records Work logs for contracted labor Detailed map showing location(s) of the project Dated photographs: before, during and after the project Certified/notarized Quantifiable Environmental Benefit
TRANSPARENCY! TRANSPARENCY! TRANSPARENCY! Compliance and Custom SEPs: Unallowable Costs SEPs will not cover administrative costs or organizations operating costs including:
Reporting expenses Handling of finances Project coordination Liability, or Equipment breakdowns Electronics Recycle old computers Collection Event Millions of
Tires Several tire graveyards are located throughout the state of Texas Wastewater Projects (Continued) Third-Party Administrators Third-Party SEPs are performed by a governmental or non-profit organization that has a SEP Agreement with TCEQ are called Third-Party Administrator SEPs Third-Party Administrators
Third-Party SEPs are performed by a LG or nonprofit organization that has a SEP Agreement with TCEQ and are called Third-Party Administrators Third-Party Administrator SEPs Types of Third-Party SEPs Cleanup Projects: Collection events (tires, HHW, etc.) Air Projects: School bus replacement, energy efficiency upgrades, air monitoring networks, etc.
Water Quality Projects: Wastewater and drinking water assistance for low-income households, water quality monitoring networks, etc. Habitation Restoration, Preservation, and Acquisition Projects Third-Party Administrator SEPs LG or nonprofit organization submits application to become a Third-Party Administrator TCEQ reviews the submission and if approved, a SEP Agreement is executed
Includes details of the project and an estimated budget with all allowable costs Preference for direct benefit SEPs Project is included in the Pre-Approved List on SEP website and available for contributions from respondents Contributions are voluntary; NO GUARANTEE OF FUNDING
Third-Party Administrator SEPs Respondent contributes allowable SEP Offset Amount to Third-Party Administrator within Respondents community Only after a SEP has been approved by the Commission, do not pay early Third-Party Administrator must have separate FEE-FREE and NON-INTEREST-BEARING BANK account for all SEP funds
No commingling of funds Must pay vendors from SEP bank account Third-Party Administrator performs the SEP and reports quarterly to TCEQ No other obligation from Respondent Third Party Administrator SEPs:
Quarterly Reports Identify whether SEP contributions have been received Identify whether SEP Funds are being spent timely Within one year Reasonable extensions available Ensure SEP expenditures are allowable under the SEP Agreement Verify that SEP Funds are not being commingled with non-SEP Funds
Third Party Administrator SEPs: Quarterly Reports Documentation required: Completed Quarterly Report Form Copy of bank statement for the bank account holding SEP Funds Invoices for allowable costs Paid receipts for allowable costs Work logs for contracted labor Any other documentation required under the SEP Agreement Third-Party Administrator SEPs: Allowable Costs
Types of Allowable Expenses Supplies Materials Equipment Contracted labor Types of Allowable Admin Costs (10% of the direct cost of the project) Salary and fringe benefits Travel and per diem
Overhead costs Third-Party Administrator SEPs: Current Third-Party Administrators AQ SEPs WQ SEPs Houston-Galveston Armand Bayou Nature AERCO
Southeast Texas Regional Planning Commission Texas Congress of Parents and Teachers (PTA) Texas Association of RC&D Center Galveston Bay Foundation Gulf Coast Waste Disposal Authority
National Audubon Society Texas Association of RC&D Third-Party Administrator SEPs To see a complete list of Pre-Approved Third-Party Administrator SEPs: www.tceq.texas.gov/legal/sep/pre-approved-s eps.html Armand Bayou Nature Center- Volunteers Planting
Armand Bayou Nature Center- Replanting Seeds Galveston Bay Foundation- Placing Reef Domes Galveston Bay Foundation- Sign SEP Numbers: Bar Chart: Total Administrative Orders FY 2012, 1,826 Orders issued Total Administrative Orders
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