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Rules & Regs: There Are Numerous Annual And Semi-Annual Reports That Are Required Of Any Firm That Uses Or Purchases Regulated Chemicals And Materials

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Depending on location, there are numerous annual and semi-annual reports that are required of any firm that uses or purchases regulated chemicals and materials. In addition to the actual reports, there are voluminous records that must be maintained and annual calculations performed to demonstrate compliance.
Many firms do not believe that these reports and records are important, that they just add to the paperwork required by the regulatory agencies. That is until they either get an inspection or apply for financial assistance (mortgages, lines of credit, etc.) from a lending institution. In the first instance, it costs money, in the second, money can and will be denied. Failure to maintain compliance with these requirements has resulted in property becoming worthless, loss of value of
the business proper, and tenants being evicted from their leased facilities.
The reporting requirements can be broken down into two basic categories; environmental related, and labor related. These categories can be further reduced to the level of jurisdiction; federal, state, county, and local.
On the federal level, environmental reporting includes the Tier I, Tier II, and Tier III (Form R or SARA [Superfund Amendment and Reauthorization Act] Report) required under CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act) and the various Right-to-Know regulations. In addition, annual Generators Reports are mandated under RCRA (Resource Conservation and Recovery Act). This latter responsibility has been delegated to the states but the EPA, the jurisdictional authority for RCRA, retains the right to collaterally and independently investigate and prosecute RCRA violations.
The specific report that a firm must file is predicated on the volume of material purchased over the course of a calendar year, stored onsite at any given point in time, or removed in any single month.
Firms that have NPDES (National Pollution Discharge Elimination Systems) or SPDES (State Pollution Discharge Elimination Systems) permits have additional reporting requirements in augmentation to the CERCLA and RCRA reports. Firms that are subject to the CAA (Clean Air Act) may also have additional reporting burdens under that set of regulations; especially if they are classified as a Title V Facility.

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For the purposes of this article, we will only address the Tier reports.
On the whole, each agency creates a list of which chemicals/materials are covered for each reporting
level. Each report has threshold values that, once exceeded, mandate that the report be filed. Firms using EHS’s (Extremely Hazardous Substances) in their processes must report the presence and volume of these chemicals to both the local planning commission and the local fire department or first emergency responder depending on locality. The Federal EPA promulgates lists of chemicals that are subject to Tier I, II, & III reporting requirements as well as those that are designated as EHS’s. Local and state agencies can add to these lists but cannot detract from them. In the continental United States, California has the longest state list of regulated chemicals and New York City has the longest local list of regulated chemicals.
The Tier I report is an overview of all chemicals and materials used in specific processes at a given facility. The chemicals covered are essentially all materials for which an MSDS (Material Safety Data Sheet) has been developed. The MSDS’s are a basic component of all the reporting mandates. The Tier I report is due by March 1st of each year. In some jurisdictions, only one Tier I report is required. A revision or subsequent filing would only be required if there were changes in or additions to the initial report. The Tier I is normally filed with the local fire department, emergency planning commission, and local and state environmental agency. The Tier I is not filed with the EPA. As the filing requirements and frequency requirements differ from jurisdiction to jurisdiction, it is best to check with your local agency to determine what your requirements are for the Tier I report.
The Tier II report is predicated on the maximum volume of storage on any given day in a covered facility. Filing of the Tier II preempts the filing of the Tier I as it is a more involved document. The Tier II must be filed annually with the appropriate agencies. In some areas that are not mandated by the EPA, a copy of the Tier II must be filed with the federal
agency. The Tier II is due by March 1st of each calendar year. The Tier II must be filed with the appropriate MSDS’s for the materials being reported. The civil penalties for failure to file a Tier II report are significant. In addition, we have encountered instances where insurance carriers either refused to honor a claim or decreased the coverage based solely on the failure to file this report.
The Tier III report, also known as the Form R or TRI (Toxic Release Inventory) Report, is the most complex of the reports to prepare and submit. Unlike the Tier I and II reports, which are primarily based on storage quantities, the Tier III report is predicated on annual usage and releases of covered chemicals and materials. The Tier III report must be
filed with the EPA, the state agency, the LEPC Local Emergency Planning Commission), and various other local agencies.
The Tier III is also a public record and is released by the EPA to involved civilian environmental groups on an annual basis. Failure to file a Tier III report can lead to civil penalties of up to $50,000.00 per day for non-compliance.
Criminal penalties are also provided for in this category.
Many firms take the position that there are no means by which the EPA can determine how much of a specific
chemical that they purchase or store. This is a false sense of security. With the advent and wide distribution of computer systems, the government can now track a specific firm’s purchases by pressing a button. In addition, under RCRA as well as CERCLA, manufacturers and suppliers of regulated chemicals now have to report to the government who bought what and how much.
For the purposes of determining storage, the maximum volume of a single purchase is the determining factor. Usage is determined by adding all the purchases made in a single calendar year. If the agency decides to check your status, it
isn’t very hard to accomplish.
There are exemptions provided for filing the Tier II and III reports. There are no exemptions provided for the Tier I unless no chemicals or regulated materials are stored. The primary exemption provided for is relative to volumes; total maximum volume stored and total volume used over the course of a year. To claim these exemptions, annual calculations and computations are required. These calculation and computations do not have to filed with the agencies but must be kept on file and presented to an agency inspector if so requested.
The calculations consist primarily of a listing of all regulated chemicals and materials purchased during the prior year. The largest single purchase constitutes the storage volume for that material. If any of these values exceed
threshold reporting values, a report must be prepared and filed.
The computations address chemicals and materials, including metal alloys, that are mixtures or have more then one component. To complete the computations, the total volume of the material listed in the calculations is used. The
total volume is then multiplied by the percentage of composition (taken from the MSDS) of the regulated material.
For example; if the firm purchased 22,000 pounds of Solvent 123 during the previous year and Solvent
123 contains 60% Trichloroethylene (a listed chemical under SARA) the computation would be 22,000 X .60 = 3,200 pounds of Trichloroethylene and a Tier III report would be required. Likewise, if the single largest purchase during the year was 2 drums of Solvent 123 the computation for the Tier II would be such; 110 gals X 11 pounds per gallon = 1,210 pounds X .60 = 726 pounds Trichloroethylene (threshold value is 500 pounds) and a Tier II would also be required.
Metal purchases are also computed the same way except that another factor is entered; the percentage of material that is otherwise used (melted, ground, etc.). The otherwise used category is a process that changes the form or
state of the material (solid to dust, solid to liquid. etc.). For metals and materials that are subject to the otherwise used
category, only those components that exceed the otherwise used calculation must be reported on the Tier III.
The next question that frequently comes up is, “How long do we have to keep a copy of these reports
and calculations?”. Although the regulations usually mandate only five year retention, we recommend that these records and reports, along with waste removal records and mass balance computations, be archived indefinitely. The reason for this is simple. These records and reports are one of the means by which any firm can
demonstrate compliance over time.
This becomes especially important when applying for financial assistance, a mortgage, a lease, or when
attempting to sell a piece of industrial/commercial property. They are also acceptable documents through which past practices can be demonstrated. This is important from the aspect that there is no statute of limitations on environmental enforcement actions and firms can be held liable for business practices that occurred many, many years before. CERCLA provides for financial recovery for investigations and cleanups of contaminations even after more
then thirty years after the incident.
It might be a pain and there may not be any direct cost recovery in meeting these requirements but
not to meet them will only leave your firm out in the breeze and wishing that you had not neglected them. After the inspector leaves is no time to wish you had; it’s too late then.

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