House Bill 1960 Short Circuits Imposition Of Fines, Penalties For Environmental Violations

House Bill 1960 introduced on January 5 would give a new Regulatory Compliance Officer in each state agency, including DEP, the authority to block an agency from imposing fines and penalties for violations and to rewrite the policies under which fines and penalties are imposed.

The basic premise of House Bill 1960 is if you say you don’t understand a regulation or if you report a violation yourself you shouldn’t have to pay a fine or penalty.  In the process, it requires hiring more state employees and creates a brand new bureaucracy that is not supported by any funding.
As drafted, the bill gives the “Officer” authority to issue an opinion to a company or individual subject to regulation about that company’s responsibilities under agency regulations.

If that opinion is not issued in 20 days or if DEP or other agencies do not provide the opinion upon request, the agency’s failure can be used as a “complete defense in any enforcement proceeding initiated by the agency and evidence of good faith conduct in an other civil or criminal proceeding.”

One of the only limits on this defense in the bill is the opinion must be requested at least 20 days prior to the alleged violation and requested in good faith.  Although the bill does not define when a violation occurs, one accepted definition is when DEP or other agencies issue a formal Notice of Violation covering a date or dates certain.

The bill also empowers the Regulatory Compliance Officer to establish guidelines for waiving any fines or penalties DEP or any state agency would be authorized to impose for violations if the entity being regulated reports a violation to the “Officer” before a fine or penalty is imposed.

To be eligible for this waiver under the bill, the only thing the regulated entity has to do is report the steps it has taken or will take to remedy the violation.

Potential Impacts

DEP alone regulates tens of thousands of businesses, local governments and individuals, and considers about 30,000 new permit applications each year. Any one of these entities could request one or 100 opinions under this proposed program.

Given the bill designates just one “Officer” per agency and provides no funding to support this function, it is a recipe for creating a bureaucratic bottleneck of unprecedented scale and impact given what happens when an opinion is not issued-- a “complete defense” against a civil or criminal action.

A company or regulated entity would be foolish not to request an opinion to cover any sort of potential violation of regulations or permits they could imagine because of the benefit just submitting a request for an opinion-- a “complete defense”-- has.

Giving the Officer sole authority, without public input or review by anyone, to develop guidelines for waiving any fines or penalties by DEP or other agencies just because an entity describes the actions they will take to remedy a violation could effectively relieve any entity from paying any fines or penalties ever.

With respect to DEP, it has had a policy on the books since 1996 to encourage self-reporting of violations, but in the context of a compliance audit done by the company or entity, but not on individual violations as they occur.

DEP already has multiple programs to help companies understand and comply with environmental regulations, frequently on a one-on-one basis.

A Small Business Ombudsman Office to help businesses better understand and comply with environmental regulations was created in 1995.  The DEP Ombudsman works with DEP’s Small Business Compliance Advisory Committee on compliance issues and with individual companies in a true ombudsman role.  

DEP also funds the Environmental Management Assistance Program, a consulting service for small business, that specializes in compliance issues run by Pennsylvania’s Small Business Development Centers.

A better approach to compliance would be to strengthen the Environmental Management Assistance Program, the Penn State Technical Assistance Program (PennTAP) and similar efforts, rather than to add more state employees and creating bureaucratic bottlenecks.

In DEP’s case, the eFACTS inspection and permit management system can be used to identify what the most frequent violations are and use that information to develop education programs to help the regulated community avoid these violations, something DEP has done with existing and new programs in the past.

DEP’s new push to encourage applicants to come to pre-application meetings on permit requirements, at least as much as DEP’s now much reduced staffing allows, is a big help in answering questions about regulations one-on-one.

Senate Resolution 226 introduced by Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee, would require the Legislative Budget and Finance Committee to do an independent performance evaluation of DEP’s permit programs most related to development-- Chapter 102 (Erosion and Sedimentation) and Chapter 105 (Water Obstruction and Encroachment).

The goal of the evaluation is to identify all the root causes of permit delays from staffing, to misunderstood regulations and permit requirements and make recommendations to help speed permit reviews.

House Bill 1960 is now in the House State Government Committee which has been looking at the issue of regulatory and permitting “reforms.”  Rep. Daryl Metcalfe (R-Butler), Majority Chair of the Committee, is a cosponsor of the bill.

Click Here for a sponsor summary of the bill.
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