ARIZONA STATE SENATE
Phoenix, Arizona
voluntary environmental
performance
Establishes
a voluntary environmental performance (VEP) program that allows organizations
to agree to meet and maintain certain environmental performance standards in
return for regulatory incentives from the Arizona Department of Environmental
Quality (ADEQ). Conditions the
enactment of this act on either the appropriation or donation of $250,000 to
ADEQ to administer this program by July 1, 2001.
During
the 1990s, a national debate took place over the use of environmental audit
programs as a method to encourage organizations to voluntarily disclose
violations of environmental laws and regulations in return for immunity from
liability for those violations. A
number of states adopted such programs during the mid 1990s. Legislation was introduced in Arizona in
both 1995 and 1996 to implement an environmental audit program. In 1995, the
legislation was vetoed by Governor Fife Symington, (S.B. 1290) and in 1996, the
legislation did not make it out of the Legislature.
In
1995, the Environmental Protection Agency developed an Environmental Audit
Policy that included more limited penalty waiver provisions. ADEQ is currently following a similar policy
that allows a waiver of penalties for certain disclosures. Additionally, ADEQ is administering a small
scale EPA pilot project that allows an organization to seek penalty mitigation
in exchange for disclosure of noncompliance relating to negotiated goals and
objectives.
In 1998, the EPA and the
Environmental Council of States signed a joint agreement to pursue regulatory
innovation and a number of states proceeded to enact laws based on the tenets
of the agreement. States included in
this effort include Pennsylvania, Illinois, North Carolina, Florida, California
and Wisconsin. S.B. 1321 is modeled after legislation adopted in some of these
states.
The fiscal impact of S.B.
1321 to the general fund in FY 2001 is $250,000 if an appropriation is made to
meet the condition for enactment.
1. Requires the director of ADEQ to develop and implement a VEP program after consulting with stakeholders. The director is to adopt rules to implement the program.
Requirements for Participation
2. Stipulates that organizations, including political subdivisions, are eligible to participate in the program if the organization or political subdivision:
·
Has
and maintains an appropriate environmental management system that includes an
environmental policy, procedures for complying with environmental laws and
rules, staff training programs to ensure compliance and annual environmental
performance evaluations made available to the public.
·
Maintains
verifiable measures that document compliance with environmental laws and rules
and other performance goals as required pursuant to a cooperative agreement
with ADEQ.
3. Allows the director of ADEQ to establish mandatory program elements for participating organizations beyond those specifically required.
4. Allows the director to establish elective program elements for program participants, such as:
·
Implementation
of programs to assist other organizations by encouraging the transfer of
technology relating to environmental protection.
·
Active
participation in environmental improvement programs.
·
Active
participation in one or more voluntary environmental programs.
·
Role
in community environmental and environmental advisory programs.
·
Implementation
of programs to reward employees for meeting or exceeding environmental
requirements or to discipline employees for failing to meet requirements.
·
Implementation
of programs to reduce adverse environmental impacts relating to the
organization’s products and services.
·
Evaluation
and improvement of environmental management systems.
5. Allows the director to establish additional elective program elements if the elements are designed to improve the environmental quality of the state. These electives must have a reasonable nexus to organization’s type of business.
6. Requires the director to establish application procedures and review as many applications as practicable. If a submitted application is found to be complete or incomplete, the director shall notify the applicant. If incomplete, the notice shall describe the additional information required.
7. Requires the director to enter into one or more cooperative agreements with successful applicants to the program. These agreements are to include the incentives being offered to the organization and the performance required of the organization to receive these incentives.
8. Requires the director to notify an organization if an application cannot be approved and allow the organization to address the areas of deficiency. A decision by the director on whether or not to accept an organization in the program is final and is not subject to administrative or judicial review.
9. Requires the director to make certain documents relating to the application and agreement available to the public for at least 30 days before the director enters into an agreement with an organization to participate in the program. Requires the director to consider the public comments received on a proposed agreement.
10. Stipulates that all disclosures pursuant to a cooperative agreement are public records unless the disclosures are made for the purpose of receiving a civil penalty waiver that is not granted by the director or unless the information is protected from disclosure under state environmental laws (e.g. trade secret). If a civil penalty waiver is not granted, disclosures made to get the waiver may not be introduced by the state as evidence in any proceeding.
11. Requires the director to establish incentives which may be provided to a participating organization that complies with the mandatory program elements and the agreed to elective program elements. These incentives may include:
·
Total
or partial waiver of civil penalties for noncompliance after the organization enters
into a written cooperative agreement with ADEQ.
·
Extension
of permit terms up to the maximum time allowed by law.
·
Accelerated
review and processing of permit applications.
·
Consolidation
and simplification of reporting and monitoring requirements.
·
Consolidation
of permit applications and the designation of an ADEQ representative to be
responsible for all permitting communications with the organization.
·
Greater
reliance by ADEQ on the organization’s self-monitoring, self-reporting,
self-certification or third party certification in demonstrating compliance
with environmental laws and permits. (The minimum number of required ADEQ
inspections will not be reduced.)
·
Annual
public recognition by the Governor and director, such as state preferred vendor
status, awards, public announcements or news releases.
12. Requires the terms and conditions for the incentives to be included in the cooperative agreement entered into with ADEQ, as well as the standards for sufficient compliance.
13. Specifies that no decision made under the program is an appealable agency action, gives rise to the private right of action allowed by law or a contested case. Any participating organization adversely affected by a decision of the director to grant incentives or to terminate the organization from the program may seek judicial review in superior court. The organization must demonstrate that the director’s decision was arbitrary, capricious or an abuse of discretion.
14. Requires that any cooperative agreement that provides for civil penalty waivers for noncompliance by the participating organization applies only to noncompliance that begins after the organization’s entry into the program. Prohibits penalty waivers if the noncompliance:
·
Does
not create an imminent and substantial hazard to health and the environment and
is discovered by the organization and is not disclosed within 72 hours, or up
to ten days if specified in the agreement, to the director and corrected in a
timely manner as approved by the director.
·
Is
discovered and is not disclosed by the organization before the organization
receives actual notice of a government inspection or investigation that might
reasonably be expected to discover the violation, the issuance of a government
information request related to the noncompliance, the reporting of the
violation to a governmental entity by a whistle-blower employee, the discovery
of the noncompliance by a government agency or the issuance of an
administrative order by a government agency relating to the noncompliance.
·
Results
in serious actual harm to human health or the environment.
·
Violates
the terms of a judicial or administrative order or consent agreement.
15. Prohibits ADEQ from granting a civil penalty waiver to a participating organization if any noncompliance by the organization creates an imminent and substantial hazard to health and the environment, is not disclosed to the director within 24 hours and is not corrected or remediated in a timely manner. ADEQ maintains the discretion to grant a civil penalty waiver if an organization experiences this type of noncompliance and meets these requirements.
16. Allows the director to refuse to grant a civil penalty waiver if the noncompliance results in a significant cost savings for the organization, the noncompliance creates an imminent and substantial hazard to human health or the environment or the organization fails to cooperate with any investigations of the noncompliance problems.
17. Requires all civil penalty waiver requests and agency decisions on the waiver requests to be made available to the public as public records. Disclosures made by a participating organization for the sole purpose of receiving a civil penalty waiver that is not ultimately granted are not considered public records. All penalty waivers are to be in the form of a written mutual agreement, an administrative consent order or a judicial consent judgment.
18. Allows a participating organization to withdraw from the program at any time, upon written notice to the director.
19. Requires the director to terminate a participating organization from the program if the organization makes misrepresentations or omissions in its application or at any time during its participation in the program, the organization or any of its senior agents acting on behalf of the organization are convicted of a felony relating to the administration of or compliance with environmental laws or if the organization fails to comply with environmental requirements without satisfactory correction of the noncompliance. If the noncompliance occurs again, in spite of corrective procedures approved by the director, the director shall terminate the organization’s participation in the program.
20. Allows the director to terminate a participating organization from the program if the organization fails to comply with the terms of the cooperative agreement or if the organization fails to cooperate with the agency in participating in the program.
21. Requires all incentives to be withdrawn upon termination or withdrawal of a participating organization from the program. The organization forfeits any unused incentives.
Environmental Management Pollution
Prevention Fund Program
22. Requires the director to establish an environmental management pollution prevention fund program to provide low cost loans for pollution prevention, toxic use reduction, source reduction, resource recovery, energy efficiency and innovative environmental technology activities.
23. Establishes the environmental management pollution prevention fund consisting of legislative appropriations, grants and donations. Monies in the fund are non-lapsing and are continuously appropriated to the fund, except that administrative costs are subject to annual appropriation. Interest on the fund is credited to the fund.
24. Defines terms and provides an intent clause.
25. Conditions the enactment of the VEP act on either: a) the appropriation of at least $250,000 to ADEQ by July 1, 2001; or b) the receipt of at least $250,000 in donations to fund the program by July 1, 2001.
26. Allows ADEQ to accept donations and grants for the VEP program and requires the agency to report by December 1 of each year to the Joint Legislative Budget Committee the amount of grants received.
27. Requires donations to fund the VEP program to be made directly to the State Treasurer. The Treasurer will transfer the donations to ADEQ at the beginning of each quarter, except for the first $250,000, which is to be transferred immediately in order to be available to satisfy the conditional enactment if necessary.
28. Prohibits the Treasurer from disclosing the identity or amount of the donations received to ADEQ and requires the Treasurer to report the amount of donations received for the VEP program annually.
29. Repeals the VEP act on December 31, 2004.
30. Provides for a general effective date.
Amendments Adopted by GES Committee
1.
Requires
the director of ADEQ to consider the public comments received on a proposed VEP
agreement between an organization and the agency.
2.
Requires
the director to terminate the participation of an organization that repeatedly
fails to comply with environmental laws, orders or judgements and fails to
implement the procedures approved by the director to comply with the VEP
agreement.
3.
Clarifies
that the waiver of penalties as an incentive for a participating agency is a
waiver of civil penalties only.
Stipulates that in order to qualify for a waiver of civil penalties, the
organization must disclose the noncompliance that would have resulted in the
civil penalties within 72 hours of discovery.
Amendments
Adopted by Committee of the Whole
1.
Allows
political subdivisions to participate in the VEP program.
2.
Allows
the director of ADEQ to establish mandatory program elements for participating
organizations beyond those specifically required.
3.
Clarifies
that a participating organization must have both qualitative measures to
document compliance with environmental laws and rules and other performance
goals included in the cooperative agreement with ADEQ.
4.
Allows
elective program elements to accomplish either one of the following: measurable
improvement or enhancement of statewide environmental quality.
5.
Stipulates
that protected information under state environmental quality laws is not
required to be disclosed by a participating organization under the terms of a
cooperative agreement.
6.
Prohibits
disclosures made by a participating organization to ADEQ for a civil penalty
waiver from being introduced as evidence in any proceeding if ADEQ does not
grant the waiver.
7.
Specifies
that the termination of an organization from the program based on a felony
conviction(s) in state or federal court must be based on those convictions
being related to the administration of or compliance with environmental laws or
regulations.
8.
Eliminates
ADEQ’s authority to solicit or accept gifts for the environmental management
pollution prevention fund.
9.
Makes
technical and conforming changes.
Amendments
Adopted by the House of Representatives
1. Makes a technical change.
1.
Clarifies
that all disclosures made by participating organizations are public records
unless they are made for the sole purpose of receiving a civil penalty
waiver and that waiver is not granted.
2.
Prohibits
ADEQ from granting a civil penalty waiver to a participating organization if
any noncompliance by the organization creates an imminent and substantial
hazard to health and the environment, is not disclosed to the director within
24 hours and is not corrected or remediated in a timely manner. ADEQ has the
discretion to grant a civil penalty waiver if an organization experiences this
type of noncompliance and meets these requirements.
3.
Extends,
for the purpose of maintaining eligibility for any civil penalty waivers, the
time frame for the mandatory disclosure to ADEQ of noncompliance that does not
create an imminent and substantial hazard from 72 hours to a time not to exceed
ten days as specified in the agreement entered into between the director and
the organization.
4.
Adds
a second option to trigger the conditional enactment, which is the receipt of
$250,000 in grants or donations before July 1, 2001. Extends the time for the existing option for the Legislature to
appropriate $250,000 from the general fund to July 1, 2001.
5.
Allows
ADEQ to accept donations and grants for the VEP program and stipulates the
requirements for receiving and accounting for these donations and grants.
GES 2/7/00 DPA 8-0-1-0 ENV 3/7/00 DPA 7-0-0-2
APPROP W/D 3rd
Read 3/24/00 53-1-6-0
3rd Read 2/28/00 29-0-1-0 Final Read 4/10/00 56-1-3-0
Final Read 4/10/00 29-0-1-0
Signed by Governor 4/17/00
Chapter 263
Prepared by Senate Staff
April 25, 2000