C O M M I S S I O N E R

D O U G G O E H R I N G



### N ORTH 

### D AKOTA 

### D EPARTMENT OF 

### A GRICULTURE

S TATE C APITOL 600 E. B OULEVARD A VE

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. 602 B ISMARCK , ND 58505

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8 0 0 - 2 4 2 - 7 5 3 5 Equal Opportunity in Employment and S ervices ndda@nd.gov www.agdepartment.com

Revised Summary of North Dakota’s Anhydrous Ammonia Regulatory Authority and

General Components of a Proposed RMP Enforcement Pr ogram

April 18, 2013

Section 112(l) of the CAA establishes a framework f or formal delegation of RMP enforcement authority to States when a State’s program for impl ementing and enforcing an accident prevention program is at least as stringent as the federal program. According to the February 1998 document, Risk Management Programs under Clean Air Act Sectio n 112(r) Guidance for Implementing Agencies , EPA can approve a State’s request for delegation when:

A. The authorities in the State program are adequa te to ensure compliance by all sources within the State,

B. The State demonstrates that it has adequate author ity and adequate resources to implement the program, and

C. The State’s schedule for implementing the progra m is sufficiently expeditious.

The purpose of this document is to summarize North Dakota’s anhydrous regulatory authority and assert our position that we have adequate autho rity and resources to implement and enforce the RMP provisions of the CAA for agricultural anhy drous ammonia sources. The document

also discusses additional considerations that will be included in an RMP memo of understanding.

Condition 1: The authorities in the State program a re adequate to ensure compliance by all

sources within the State

The North Dakota Agriculture Commissioner is provid ed regulatory authority over anhydrous ammonia facilities by two Chapters of the North Dak ota Century Code (N.D.C.C.), namely Chapters 19-20.2 and 19-20-3. Copies of each of th ese statutes are included with this request.

N.D.C.C. 19-20-2 N.D.C.C. 19-20.2 provides general authority for the Agriculture Commissioner to license and regulate anhydrous ammonia storage facilities with a capacity exceeding six thousand gallons and anhydrous ammonia nurse tanks. The Chapter con tains a number of engineering requirements for anhydrous ammonia tanks, valves, f ittings, hoses, and other equipment to ensure that anhydrous ammonia tanks and appurtenanc es are structurally sound and maintained. The Chapter also includes siting requirements that contain minimum distances betweenPage 2

anhydrous ammonia storage tanks and adjoining prope rty lines, residences, places of public assembly, and institutional residences.

N.D.C.C. 19-20.2 provides authority for the NDDA en ter any public or private premises to inspect equipment and respond to complaints. If vi olations are found, N.D.C.C. 19-20-2 allows the NDDA to issue cease and desist orders, revoke o r suspend facility licenses, and issue civil penalties up to $5,000 per violation. Persons viol ating the Chapter are also subject to criminal penalties and a class A misdemeanor.

The authority provided to the NDDA under N.D.C.C. 1 9-20.2 is directly relevant to the RMP requirements for agricultural anhydrous ammonia fac ilities under Section 112(r) of the CAA. First, the federal RMP regulation requires anhydrou s ammonia sources of 10,000 pounds or more to comply with the RMP provisions. All of the anhy drous ammonia storage facilities licensed

under N.D.C.C. 19-20.2 would also be covered under Section 112(r) of the CAA, meaning that we already have a definitive list of the anhydrous sources in the state that need to be regulated under the RMP, including their physical locations. Second, we already have a regulatory relationship with the anhydrous ammonia industry, a nd this relationship could be easily expanded to include the risk management program.

Please note that the threshold tank capacity for re gulation under N.D.C.C. 19-20.2 is 6,000 gallons (approximately 30,900 lbs), while the thres hold for regulation under the RMP is 10,000 lbs (approximately 1,941 gallons). This may raise questions about NDDA’s ability to regulate

containers between those two threshold amounts. ND DA would still have authority under the risk management program to regulate those container s from 1,941 gallons to 6,000 gallons. However, based on our knowledge of agricultural pra ctices, there are no tanks in that size range used in agriculture that fall under the authority o f the CAA.

N.D.C.C. 19-20-3 The second Chapter, N.D.C.C. 19-20-3, was enacted b y the state legislative assembly in early 2011 in anticipation of NDDA requested delegated au thority for the risk management program. This Chapter gives the Agriculture Commissioner aut hority to determine compliance with the RMP requirements set forth in Section 112 of the CA A [42 U.S.C. 7401 et seq.] by allowing the Commissioner authority to:

1. Request information from any person that: a. Sells, stores, or handles anhydrous ammonia for agricultural purposes; and b. Is required to comply with the risk management p rogram requirements;

2. Conduct inspections of any person that: a. Sells, stores, or handles anhydrous ammonia for agricultural purposes; and b. Is required to comply with the risk management p rogram requirements; and

3. Obtain and review risk management plans required under 40 Code of Federal Regulations, part 68, as amended through June 30, 2 011, and other records applicable to any person that: a. Sells, stores, or handles anhydrous ammonia for agricultural purposes; and b. Is required to comply with the risk management p rogram requirements.Page 3

N.D.C.C 19-20.3 also provides the Agriculture Commi ssioner with enforcement authority when RMP violations are identified. Specifically, the C hapter states that the Commissioner may: 1. Bring an action to enjoin a violation or a thre atened violation;

2. Issue a cease and desist order; and

3. Impose a civil penalty through an administrative hearing in an amount not exceeding ten thousand dollars per day for each violation.

North Dakota is confident that the authority provid ed in N.D.C.C. 19-20.3 is adequate to allow us to conduct inspections and access records necess ary to verify compliance with the RMP provisions of the CAA. The Chapter also provides le gal authority for us to access and review risk management plans from regulated sources. And, if n on-compliance is identified, N.D.C.C. 19- 20.3 allows us to levy enforcement actions consiste nt with federal authority.

Condition 2: The State demonstrates that it has ade quate authority and adequate resources to implement the program The legal authority to enforce the RMP requirements for agricultural anhydrous ammonia facilities under the CAA is discussed above. Copies of N.D.C.C. 19-20.2 and 19-20.3 are included with this request.

We are confident that we have adequate resources to implement a successful RMP regulatory program and establish an effective regulatory prese nce. Our anhydrous ammonia regulatory program consists of five persons. These are listed in Table 1 below.

Table 1. NDDA staff involved with the anhydrous amm onia regulatory program.

Title Name Role Pesticide, Feed & Fertilizer

Director Jim Gray General program oversight, budget

administration

Fertilizer Specialist Spencer Wagner Operational pr ogram oversight, inspector supervision, case review, facility inspections, outreach

Inspector Darrell Haseleu Facility inspections, out reach

Inspector Eric Delzer Facility inspection, outreach

Administrative Assistant Brandy Kiefel Administrati ve support

The 2011 legislative assembly appropriated two new inspectors to provide for more effective oversight of the anhydrous ammonia industry in Nort h Dakota. These two inspectors have been

hired and are listed in Table 1 above. The fertili zer specialist and two inspectors will spend the vast majority of their time on anhydrous ammonia re gulation, including the RMP program if and when it is delegated to North Dakota. The division director and administrative assistant will contribute to the program in addition to other duti es.

N.D.C.C. 19-20.2 requires that all licensed anhydro us ammonia facilities be inspected at least once every five years. There are currently 368 lic ensed facilities in the state, meaning thatPage 4

approximately 70 must be inspected per year; note t hat there are no restrictions on inspecting those facilities more often than once every five ye ars. Our plan would be to conduct RMP compliance checks and education with those licensed facilities when we are there conducting inspections for the engineering requirements found in N.D.C.C. 19-20.2. Almost all of the 368 licensed anhydrous facilities in the state will be subject to RMP requirements. Therefore, we would be able to conduct close to 74 RMP inspection s per year.

In addition, we plan on conducting annual safety an d compliance meetings throughout the state each winter when inclement weather prevents staff f rom performing inspections. It is our opinion that these safety and compliance meetings w ill be an effective tool in increasing awareness of the RMP requirements and improving com pliance.

With three employees devoted almost totally to anhy drous ammonia regulation and outreach, it is our opinion that we have ample resources to impleme nt an RMP regulatory program for anhydrous ammonia sources in North Dakota.

Condition 3: The State’s schedule for implementing the program is sufficiently expeditious North Dakota is ready to immediately assume the RMP delegated authority. The two new anhydrous ammonia inspectors have been hired and ar e currently on staff. The authority created by N.D.C.C. 19-20.3 takes effect immediately upon A gency delegation of the RMP program.

Other considerations We recognize the need to ensure a smooth transition between the EPA and NDDA for implementation and enforcement of the RMP provision s for agricultural anhydrous ammonia sources. We also recognize the need for appropriat e oversight of the program by EPA to reassure the Agency and the general public that the NDDA is adequately administering the program. Therefore, we support the following provis ions be included in a memo of understanding (MOU) between the EPA and NDDA:

EOY reports A reporting function would be useful to allow the N DDA to summarize its RMP regulatory activities for a given time period, discuss program successes and challenges, and identify

relevant issues. Similar to what is done with the FIFRA program, NDDA would support submission of an end-of-year report to EPA Region 8 at the end of each federal fiscal year. The report should include information on the number of RMP inspections conducted, number and description of RMP compliance assistance activities , types of violations identified, notable cases, description of enforcement actions taken, and other information related to the RMP program.

Targeting scheme The effectiveness of any regulatory program depends on establishing an effective regulatory presence and appropriately allocating resources. O ur current anhydrous ammonia regulatory authority under N.D.C.C. 19-20.2 requires that each licensed storage facility be inspected at least once every five years. Since almost all of these fa cilities would also be covered under the RMP regulation, we would envision conducting RMP inspec tions and compliance assistance with eachPage 5

facility when we conduct the engineering inspection under N.D.C.C. 19-20.2. This would ensure that each facility have an RMP inspection at least once every five years.

Upon formal delegation of enforcement authority fro m EPA, the North Dakota Department of Agriculture will implement the RMP inspection/audit program as follows:

A. Will inspect regulated agricultural anhydrous am monia facilities in the state and gather all necessary information to verify compliance with the RMP provisions under Section 112(r) of the CAA.

B. Will obtain and review risk management plans fro m regulated entities, coinciding with the inspection process under A above, to ensure com pliance with RMP provisions of the CAA. We will also assist facilities in developing and implementing risk management plans.

C. Will expand and develop existing capabilities in order to contact and inform affected owners/operators of the Section 112(r)(7) program, arrange and/or participate in 112(r)(7) meetings and forums with communities, distribute 11 2(r)(7) fact sheets and other literature to affected parties, respond to inquirie s via telephone and in writing, and perform other forms of outreach to increase complia nce with and awareness of RMP requirements.

D. When violations are identified, we will take enf orcement action consistent with the authority provided by N.D.C.C. 19-20.3 and consiste nt with its enforcement response policy. North Dakota will provide EPA Region 8 wit h a copy of its enforcement response policy and will work with EPA to finalize the policy and ensure that it provides adequate regulatory pressure to drive compliance.

Enforcement response strategy NDDA envisions using a combination of compliance as sistance and regulatory pressure to gain compliance with the RMP provisions of the CAA. As with any regulatory program, the regulatory response must be fair and consistent. A n enforcement response policy will be developed that considers several factors when deter mining an appropriate penalty. These factors will include such things as:

a. the willfulness of the violation, b. the gravity of the violation, including the ris k to human health or the environment, c. an entity’s regulatory history,

d. the number of violations identified, e. the economic benefit gained by the person who a llowed or committed the violation, f. the person’s level of cooperation with regulato rs, and g. the effect the penalty will have on the person’ s ability to continue in business.

A draft enforcement response policy is included wit h RMP delegation request. NDDA welcomes the opportunity to work with EPA to finali ze the enforcement response policy and develop a framework for regulatory responses that i s adequate to drive compliance.Page 6

Compliance Tracking Tracking enforcement activities and compliance will be essential to identify compliance trends, areas for regulatory focus, and to measure success. Upon delegation of the RMP program, NDDA will develop a compliance tracking database to manage data associated with inspections and compliance audits. The database will capture k ey data fields, such as contact information for the inspected entity, violations that were identifi ed, our regulatory response, and follow up

information once violations are corrected. The dat abase will allow the NDDA to search for past inspection activities at a given location, identify types of violations across the industry, and allow for data queries and reporting to identify trends. We envision that the database will have a GIS component to allow us to express inspection activit ies and regulated entities in a map-based format to ensure consistent regulatory oversight.

Joint inspections NDDA recognizes that EPA Region 8 has expertise and experience in conducting RMP inspections. We also recognize that EPA staff membe rs will continue conducting RMP inspections in North Dakota for regulated facilitie s other than agricultural anhydrous ammonia facilities. To allow for cross-training and collab oration, we would welcome periodic joint inspections with NDDA and EPA inspectors. These jo int inspections would be voluntary and could cover two scenarios, one involving NDDA inspe ctors observing EPA inspections of nonanhydrous facilities, and the other involving an EP A inspector observing NDDA inspections of agricultural anhydrous ammonia facilities. In eith er case, the joint inspections allow the inspectors to ask each other questions, observe inv estigative techniques, and offer constructive feedback. The MOU should include a description of how the agencies will select facilities for joint inspections, and the frequency at which those joint inspections may occur.

Accident reporting Accidents may occur at regulated facilities. NDDA will investigate these accidental releases, but also recognizes the need to inform EPA. If EPA des ires NDDA to do so, we would notify Region 8 of accidents that cause environmental dama ge, personal injury, property damage, or

involve releases of 100 lbs or more.

Referral process There may be instances when NDDA fails to bring a r egulated facility into compliance, even after exerting its maximum regulatory authority. Or , there may be times in which NDDA identifies a potential conflict of interest with a regulated facility based on a variety of factors. In these cases, NDDA would like to have an option avai lable whereby a case could be referred to EPA Region 8 for Agency action and consideration. The MOU should describe a process for referrals and those criteria to be used to identify which cases are to be referred.