H. B. 2206

(By Delegates Manuel, Fleischauer, Buchanan,

Rowe, Collins, Doyle and Tomblin)
[Introduced February 24, 1997; referred to the
Committee on the Judiciary.]

A BILL to amend the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new chapter, designated chapter twenty-two-d, relating generally to the creation of a pilot program for environmental audits and self-evaluations; findings of the Legislature; creating a pilot environmental audit program; defining terms; providing for penalty waivers and deferral of enforcement actions; setting forth when penalty wavers are inapplicable; providing for compliance schedule time limits; establishing burden of proof; requiring the facility participating in pilot program to provide documentation necessary to establish eligibility for program; reporting requirements and confidentiality.

Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted by adding thereto a new chapter, designated chapter twenty-two-d, to read as follows:
CHAPTER 22D. ENVIRONMENTAL SELF AUDITS.
ARTICLE 1. ENVIRONMENTAL AUDITS.
§22D-1-1. Legislative findings.
(a) The Legislature finds that environmental protection is enhanced if deficiencies are identified and corrected as soon as possible. The regulated community is often in the best position to rapidly identify deficiencies, promptly correct them, and with suitable advice and approval, to develop and implement a corrective action plan to ensure that the cause has been addressed and that public health and the environment are protected.
(b) The Legislature further finds that the public interest and environmental protection would be best served by providing meaningful incentives to the regulated community to promptly identify and correct deficiencies in environmental compliance and protection.
(c) The Legislature intends to maximize incentives for regulated persons or entities who make good faith efforts to comply with environmental regulations through the use of comprehensive and candid environmental audits and to remedy deficiencies discovered in such audits as promptly as is feasible and in a manner that protects human health and the environment.
(d) Therefore, there is hereby created a pilot program within the bureau of environment to be known as the environmental audit program. The pilot program shall commence no later than the first day of July, one thousand nine hundred ninety-seven, and continue until the thirtieth day of June, two thousand and one, unless sooner terminated by the Legislature. Commencing the first year after the authorized start-up of the pilot program and continuing each year thereafter, the director shall report on the progress of the program to the Legislature, no later than the tenth day of each regular legislative session. The report shall include a discussion of whether the program should be continued or discontinued, any recommended modifications in the program's scope or operation and whether any action is necessary by the Legislature to improve the success of the program. At the end of the pilot program, the director shall make a final report to the Legislature as to whether the program has addressed its goals, objectives and the findings set forth in this section. The director shall recommend whether the program should become permanent, and if so, whether the program should be modified.
§22D-1-2. Definitions.
(a) "Director" means the director of the division of environmental protection or other person to whom the director has delegated authority or duties pursuant to section six or eight, article one of chapter twenty-two of this code.
(b) "Division" means the division of environmental protection.
(c) "Environmental audit" means a voluntary, good faith and comprehensive evaluation of a facility or facilities, or specific activities, processes or management systems, or local counterparts or extensions thereof, or of management systems related to a facility or activity, that is designed to identify and prevent incidents of noncompliance and to promote future compliance with environmental laws. An environmental audit shall be conducted by outside consultants or agents retained by the owner or operator for purposes of performing such an audit.
(d) "Environmental self-evaluation" means a methodical, documented review which accomplishes the objectives defined in "environmental audit" which may be conducted by the owner or operator of a facility, or by the employees of the owner operator, based on a form developed or approved by the director.
(e) "Environmental audit or self-evaluation report" means a set of documents prepared as a result of an environmental audit or self-evaluation, including, but not limited to, sampling results, test results, field notes and records of observations, findings, suggestions, conclusions, drafts, memoranda, drawings, photographs, computer-generated or electronically recorded information, maps, charts, graphs or surveys: Provided, That the information is collected or developed in the course of conducting an environmental audit or self-evaluation. An environmental audit or self-evaluation report may include, but is not limited to, the following:
(1) The scope and date of the audit or evaluation and the information gained therefrom together with conclusions, recommendations, exhibits and appendices;
(2) Memoranda and documents analyzing part or all of the audit or evaluation and discussing implementations issues; and
(3) An implementation plan that addresses correcting past noncompliance, improving current compliance and preventing future noncompliance. The environmental audit and self-evaluation reports include any memorandum, information, communications or documents discussing part or all of the environmental audit, self-evaluation or implementation of compliance plans. Regular inspections, testing, monitoring or reports required by rule, permit, consent decree or court order are not considered part of an audit report or self-evaluation report;
(e) "Environmental law" means any federal, state or local statute, law, ordinance, rule, permit standard or regulation and any order, consent decree, judicial or administrative decision or directive applicable to a facility or the operations of a facility designed to protect or enhance the land, air or water for the protection of human health, natural resources or the environment; and
(f) "Facility" means any site, operation or activity that is subject to regulations or requirements under any environmental law or laws.
§22D-1-3. Requirements for penalty waivers and referral of enforcement actions, authority of director.
(a) In order to encourage owners and operators of facilities to conduct voluntary environmental audits and self-evaluations of their operations to assess and improve compliance with statutory and regulatory requirements and environmental law, the director may provide for penalty waivers and deferral of enforcement actions as part of the environmental audit program. To qualify for penalty waivers and deferral of enforcement actions a facility shall:
(1) Voluntarily report incidents of noncompliance that are identified in the environmental audit or self-evaluation to the agency no later than ten days after the noncompliance is discovered and before:
(A) The division discovers them through its own actions, inspections or information requests, or
(B) The division receives reports or complaints of the noncompliance from third parties, or
(C) The filing of any citizen suit related to the noncompliance;
(2) Certify that an environmental audit or self-evaluation has been conducted;
(3) Submit a document committing to the corrections of the noncompliance and to taking appropriate measures, as determined by the division, to remedy any environmental or human harm due to the noncompliance within sixty days, or if a longer period is required to correct the violations, include a compliance schedule for correcting the violation that is as expeditious as possible under the circumstances;
(4) Include a description of the steps the facility will take or has taken to prevent the recurrence of the noncompliance; and
(5) Cooperate with the division by providing information as is necessary to determine eligibility for the program, including, at a minimum, providing all requested documents and access to employees and assistance in investigating the noncompliance and any environmental problems related to the noncompliance.
(b) Environmental audit reports or self-evaluation reports do not have to be submitted to the division. However, the division shall require sufficient documentation to determine the extent of the noncompliance and any related environmental damage to determine eligibility for penalty waivers provided in this section. Facilities seeking enforcement deferral or penalty waivers, or both, bear the burden of proving they qualify for the environmental audit program.
(c) If a facility submits a report to the agency based on an environmental audit or self-evaluation, enforcement actions with respect to any violation disclosed in the report will be deferred for at least sixty days or until the period of time specified in the compliance schedule has passed.
(d) Where appropriate, the director may require a facility to enter into a written agreement, administrative consent order or judicial consent decree, particularly where compliance or remedial measures are complex or a lengthy compliance schedule is required.
§22D-1-4. Penalty waivers inapplicable under certain conditions.
(a) If a facility certifies to the director that the instances of noncompliance, revealed by the environmental audit or self-evaluation have been corrected within sixty days or within the period of time specified in the final compliance schedule, the director may impose penalties if one or more of the following have occurred:
(1) A release to the environment or other noncompliance presented a significant hazard to human health or the environment or damage to real property or tangible personal property outside of the facility;
(2) The instance or instances of noncompliance was intentional;
(3) The facility has exhibited a persistent pattern of noncompliance;
(4) The instance or instances of noncompliance resulted in significant economic benefit to the facility; or
(5) The noncompliance violates the terms of any judicial or administrative order or consent agreement.
(b) If an enforcement action is pursued despite corrective actions because of one of the factors identified in subsection (a) of this section, the director shall take into account the fact that the facility self-reported and corrected the violation in deciding the type of enforcement action to pursue and in determining the amount of any penalty that may be sought.
(c) If instances of noncompliance identified in the environmental audit or self-evaluation are not disclosed to the division, the facility does not qualify for waiver of any penalty under the environmental audit program.
(d) The division is not precluded from taking enforcement action against any facility for instances of noncompliance discovered by the division prior to the time the violations are disclosed to the division.
(e) The division is not precluded from pursuing injunctive relief in cases involving an imminent, serious threat to public health or other environment.
(f) In all cases, the division may seek to recover any significant economic benefit gained by the facility from the noncompliance.
§22D-1-5. Compliance schedules.
Compliance schedules that provide for correction in sixty days or less will be presumed to be reasonable. Compliance schedules that exceed sixty days may be reviewed by the director. The director may require the company to revise the compliance schedule if the director determines that the compliance schedule is unreasonably long.
§22D-1-6. Burden of proof; documentation.
In all cases, the regulated facility seeking enforcement deferral or mitigation penalty waiver shall provide sufficient documentation to the division to prove eligibility for the application of this privilege, and bears the burden or proof that waiver or reduction is appropriate and that there has been no significant economic benefit from the noncompliance. The division may not request copies of audit reports or self- evaluation forms in connection with administration of this policy. However, a regulated facility which cannot otherwise demonstrate the nature and extent of its audit practices may produce audit reports or self-evaluation forms voluntarily for that purpose.
§22D-1-7. Reporting requirements; confidentiality.
In order to facilitate a thorough assessment of the environmental audit program, including, but not limited to, whether the program is necessary and beneficial to the corporate and individual citizens of this state, any facility that conducts an environmental audit or self-evaluation, whether it is part of the environmental audit program or not, shall provide sufficient data to the director to enable him or her to compile the reports required by this article.
The director shall maintain the anonymity of the facilities providing this information. Only that information necessary to compile the reports required by this article may be obtained including the following: (a) Type of facility; (b) whether an audit or a self-evaluation was completed; (c) when it was conducted; (d) what if any instances of noncompliance were found; (e) what type of corrective action was taken or planned; (f) did the facility chose to participate in environmental audit program; (g) why or why not.
No person may disclose or be compelled to disclose the identity of any facility providing information to the director solely for use in the reports required by this chapter.

NOTE: The purpose of this bill is to establish a pilot environmental audit program to test the effectiveness of that concept.

This chapter is new; therefore, strike-throughs and underscoring have been omitted.