Summary. The Environmental Protection Agency (EPA) announces today an enforcement policy designed to encourage prompt testing of computer-related equipment to ensure that environmental compliance is not impaired by the Year 2000 ("Y2K") computer bug. Under this policy, EPA states its intent to waive 100% of the civil penalties that might otherwise apply, and to recommend against criminal prosecution, for environmental violations caused during specific tests that are designed to identify and eliminate Y2K-related malfunctions. This policy is limited to testing-related violations disclosed to EPA by February 1, 2000, and it is subject to certain conditions, such as the need to design and conduct the tests well in advance of the dates in question, the need to conduct the tests for the shortest possible period of time necessary, the need to correct any testing-related violations immediately, and other conditions to ensure that protection of human health and the environment is not compromised.

Background. The Y2K issue arises because a number of computerized functions require recognition of a specific year, day, and time, but many computers and computerized equipment recognize only the last two digits of a year's date (i.e., 1998 is 98; 2000 is 00). Therefore, when the calendar changes to the year 2000, computers and equipment with embedded computer chips may have difficulty interpreting the correct date. They may interpret the year to be 1900 or some other year. As a result, some computers and equipment containing embedded computer chips could become permanently unable to function properly. Others may continue to operate, but erroneously, while others simply may stop and need to be restarted. Some may create data that look correct, but in reality contain errors, and some may continue to operate correctly. In addition, some technical experts warn that certain computer-related systems may have trouble functioning properly on more than a dozen other dates arising over the next two years. For example, as to September 9, 1999, the digital representation of that date, 9/9/99 ("four 9s"), may be interpreted as the end of a file or infinity, and, thus, may have unintended consequences. This policy encompasses concerns over computer-related testing problems that may arise as a result of any of the dozen or more dates. Together, these dates are referred to as Y2K for purposes of this enforcement policy.

Emphasis on Testing. The public expects compliance with the nation’s environmental laws, and the regulated community must take all steps necessary to anticipate and resolve potential environmental compliance problems that may result from Y2K-related equipment problems by the dates in question (e.g., 9/9/99 and 1/1/00). In an effort to ensure timely compliance, EPA has adopted this enforcement policy to encourage any necessary testing of computer systems and their related environmental components well in advance of these dates. Under this policy, EPA reiterates its commitment to firm yet fair enforcement of environmental requirements regardless of any potential Y2K-related problems. At the same time, this policy recognizes that regulated facilities can benefit from having an additional measure of predictability concerning how EPA intends to react if such testing results in environmental violations under any of the regulatory enforcement statutes that EPA implements.

Relationship to Y2K Dates. Although the focus of this policy is on testing-related violations that may occur prior to January 1, 2000, EPA notes that with respect to violations occurring after January 1, 2000, the Agency’s longstanding enforcement response and penalty policies will continue to recognize a facility’s good faith efforts and other potentially mitigating factors in determining an appropriate enforcement response. In that regard, facilities that test in accordance with the terms of this policy are likely to be in a more favorable position than facilities that do not, in the event that despite a facility’s best efforts testing cannot correct all Y2K-related deficiencies in a timely manner.

Use of Existing Testing Procedures. Under EPA’s Y2K enforcement policy, regulated facilities who wish to test in advance of the Y2K dates are encouraged first to utilize any existing regulatory or permit procedures that are applicable and that can provide a timely and effective process for testing. For example, the RCRA regulations provide for trial burn testing of hazardous waste (40 C.F.R. § 266.102), research, development, and demonstration permits (§ 270.65), and land treatment demonstrations (§ 270.63). To the extent that existing procedures under any statutory program are appropriate, their use will help to ensure that the federal, state, and/or local agencies and programs that already are best situated to oversee facility testing can remain involved in that process. This enforcement policy does not modify, revoke, or otherwise affect any existing federal, state, or local permit, regulatory, or other (e.g., consent agreement) obligations, including but not limited to any public notice and comment requirements.

Criteria Justifying Application of This Policy. If no existing procedures are applicable, or if none are appropriate given the need to expedite testing, this Y2K enforcement policy states that EPA expects to exercise its discretion to waive 100% of the civil penalties that might otherwise apply and to recommend against criminal prosecution for violations resulting from specific tests, where the facility can meet its burden of demonstrating to EPA that it meets all of the nine criteria below. (Because this policy anticipates immediate correction of violations (see # 5 below), any test-period noncompliance that qualifies for a 100% civil penalty waiver or recommendation against criminal prosecution will not create a significant economic benefit, since compliance costs will not have been avoided or delayed.)

(1) Systematic Design of Testing Protocols. The testing protocols were designed in advance of the testing period, and they reflect a conscientious effort to evaluate the facility’s Y2K-related environmental compliance status and not to circumvent environmental compliance.

(2) Violations Caused By Testing. The specific Y2K-related testing was the direct and proximate cause of the potential violations.

(3) Testing Need, Timing & Length. The specific testing that caused the potential violations was:

1. necessary to determine the effectiveness of specific Y2K-related modifications in ensuring environmental compliance;
2. part of a comprehensive testing program designed to correct all Y2K deficiencies at the facility;
3. conducted well in advance of the Y2K dates in question (i.e., normally at least 30 days in advance of the dates in question); and
4. conducted for the shortest possible period of time in order to determine the effectiveness of such modifications, not to exceed a testing period of 24 hours in duration.

Where a facility, without making any modifications, tests existing equipment in order to determine whether Y2K-related problems may affect its environmental compliance status, the specific testing was:

5. necessary to determine the effectiveness of its existing operations in ensuring environmental compliance;
6. part of a comprehensive testing program designed to correct all Y2K-related deficiencies at the facility;
7. conducted well in advance of the Y2K dates in question (i.e., normally at least 30 days in advance of the dates in question); and
8. conducted for the shortest possible period of time in order to ascertain the effectiveness of its existing operations in ensuring environmental compliance, not to exceed a testing period of 24 hours in duration.

(4) Absence of Harm. The violations that may have occurred during testing did not result in creation of a potentially imminent and substantial endangerment (as EPA defines such threats under its RCRA § 7003 policies), or serious actual harm. Notwithstanding any civil penalty waivers or recommendations against criminal prosecution that may be appropriate under this policy, EPA retains its authority to seek any injunctive relief that it deems necessary, regardless of the level of harm, potential harm, or lack thereof.

(5) Immediate Correction. All violations ceased at the end of the test or were corrected immediately thereafter (within 24 hours).

(6) Expeditious Remediation. The facility expeditiously remediated, as specified by EPA, any releases or other adverse health or environmental consequences.

(7) Reporting. The facility has met in a timely fashion all legal requirements for reporting the violations (e.g., CERCLA § 103). Where the violations are not legally required to be reported, the facility nevertheless reported the violations to EPA as expeditiously as practicable under the circumstances (ordinarily no more than 30 days after when the violations occurred absent unusual circumstances justifying a longer period), but in all cases no later than February 1, 2000.

(8) Retesting. Any retesting conducted prior to the Y2K dates in question meets all the criteria outlined in this policy and includes modifications to earlier testing and/or operating conditions that are reasonably designed to achieve full compliance.

(9) Cooperation. The facility provides any information requested by EPA as necessary to determine whether a 100% penalty waiver or recommendation against criminal prosecution is appropriate, consistent with the facility’s legitimate legal rights and privileges.

Other Potentially Relevant Enforcement Policies. Other existing EPA self-policing and compliance assistance policies may continue to be utilized where they are not inconsistent with this policy. For example, EPA’s Audit Policy (formally entitled, "Incentives for Self-Policing: Discovery, Correction and Prevention of Violations," 60 Fed. Reg. 66706 (Dec. 22, 1995)) and Small Business Policy (formally entitled, "Policy on Compliance Incentives for Small Business," 61 Fed. Reg. 27984 (June 3, 1996)) potentially could be applied to any violations that result from Y2K-related equipment problems that occur during and/or after the testing period described in this policy. In addition, EPA’s criminal enforcement policies guiding both the exercise of investigative discretion (formally entitled, "The Exercise of Investigative Discretion," Jan. 12, 1994) and implementation of EPA’s Audit Policy (formally entitled, "Implementation of the Environmental Protection Agency’s Self-Policing Policy for Disclosures Involving Potential Criminal Violations," Oct. 1, 1997) may be relevant in certain cases during and/or after the testing period described in this policy.

Public Disclosure of Y2K-Related Testing Violations. Similar to EPA’s January 1997 memorandum concerning Confidentiality of Information Received Under Agency’s Self-Disclosure Policy, EPA will make publicly available any disclosures under this Y2K enforcement policy, consistent with EPA’s confidential business information (CBI) provisions found at 40 C.F.R. Part 2, but only after these matters are formally resolved.

Cooperation With States. EPA will encourage States to join this approach for addressing violations of environmental programs that they implement and enforce. EPA will coordinate closely with States concerning violations of delegated program requirements.

Disclaimer. This enforcement policy does not constitute final Agency action. It does not create any rights, duties, obligations, or defenses, implied or otherwise, in any persons or entities. It sets forth factors that EPA intends to use in the exercise of its enforcement discretion, and it is not intended for use in pleading, at hearing, at trial, or in any adjudicatory context.

Public Comment. Given the need to expedite testing and address potential compliance concerns prior to the Y2K dates that are fast-approaching, EPA developed this policy quickly and without seeking extensive input from outside the Agency. Nevertheless, EPA will consider any general comments on this policy or concerns related to Y2K-related compliance. Any such comments or concerns may be directed to Gary A. Jonesi, Senior Counsel for Strategic Litigation, EPA Office of Regulatory Enforcement, at 202-564-4002 (202-564-0011 FAX) (jonesi.gary@epamail.epa.gov). Individual facility-specific concerns also may be directed to the EPA regional offices listed below: