SB 0755 - Fiscal Note

Fiscal Note - SB 0755 - Environmental Audit Improvement Program

L.R. NO.  2942-01
BILL NO.  SB 755
SUBJECT:  Environmental Audit Improvement Program
TYPE:     Original
DATE:     January 29, 1996



                              FISCAL SUMMARY
                    ESTIMATED NET EFFECT ON STATE FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999


Total Estimated
Net Effect on All
State Funds                     $0                  $0                $0

                   ESTIMATED NET EFFECT ON FEDERAL FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999


Total Estimated
Net Effect on All
Federal Funds                   $0                  $0                $0

                    ESTIMATED NET EFFECT ON LOCAL FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999
Local Government                $0                  $0                $0




                              FISCAL ANALYSIS

ASSUMPTIONS

The Department of Health assumed this proposal would have no fiscal impact to
their agencies.

The Department of Natural Resources (DNR) assumes this legislation, by
establishing an environmental audit improvement program which includes the
elimination of certain environmental penalties when conditions specified in
the bill are met, seeks to improve the environment by encouraging
environmental cleanups.  Because the universe of non- compliance with
environmental laws is unknown, the DNR cannot estimate the increased
resources that would be necessary to implement this legislation.

DNR would be required to receive applications from facilities wishing to
participate in the program.  The DNR would be required to review and approve
or disapprove the compliance schedules.

The DNR would not be allowed to impose punitive penalties in a civil case or
monetary punitive penalties in a criminal case involving ordinary negligence
against the owner or operator of the facility for the voluntarily disclosed
violations provided a facility corrects all violations according to the
approved compliance plan.


When determining whether to pursue a civil enforcement action, the proposal
requires the DNR determine whether an owner or operator acted in good faith,
including considering the owner or operator applied to and participated in
the program.  According to DNR, they currently evaluate the assessment of
environmental penalties in cases where the non-compliance was discovered by
means of voluntary disclosure or by the submission of environmental audits.

The department is unable to project revenues resulting from penalties and
court awards.  This proposed  legislation seeks to reduce these penalties and
court awards, therefore revenues related to these types of activities would
be reduced.  The department cannot project the number of cases and the amount
of penalties that would be reduced under this legislation.

Oversight assumes there may be an unknown reduction in the revenue from
fines, penalties and court awards as a result of this proposal.  Oversight's
research revealed other states have enacted similar legislation.  In
Minnesota, two FTE were needed to implement the legislation.  Which resulted
in six environmental audit reports  being received to date. Oregon did not
require any additional staff.  Colorado reported the volume of reports
received was very low.  Additional DNR staff could be considered if the
volume of compliance plans submitted for review is substantial.

Based on the February 27, 1995 vote of the Oversight Subcommittee on a
similar proposal, all fiscal impact to state and federal funds have been
shown as $0 impact.

FISCAL IMPACT - State Government FY 1997   FY 1998   FY 1999
                                (10 Mo.)

                                       0         0         0

FISCAL IMPACT - Local Government FY 1997   FY 1998   FY 1999
                                (10 Mo.)

                                       0         0         0

DESCRIPTION

This act establishes an environmental audit program within the Department of
Natural Resources for entities regulated by the Department.  To participate,
an operator must apply to the Department, submit a dated environmental audit
report, commit to correct violations expeditiously, and submit a compliance
plan.  All minor violations shall be corrected within 90 days of the date of
application and other violations shall be corrected within 270 days.  The
Director shall approve or disapprove of the compliance schedule based upon
the nature and consequences of the violations, the economic circumstances of
the facility, and the time required to implement pollution prevention
strategies.  The Department shall not initiate enforcement action for the
term of the approved compliance schedule, as long as the facility meets the
schedule.  Information contained in an audit report may be deemed closed
pursuant to Chapter 610, RSMo.

The Department could seek civil and criminal penalties for a  facility which
fails to meet the compliance schedule, which is found to have violated the
same environmental law within the      three years prior to the submission of
the application, which caused serious harm, or which presents an imminent
threat to the public health or the environment.

When determining the amount of any penalty, the Department shall consider the
cost of corrective actions in relation to the economic benefit and the amount
of savings accruing to the operator for his failure to comply with the law.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.

SOURCES OF INFORMATION

Department of Natural Resources
Department of Health

AGENCIES NOT RESPONDING

Office of the Attorney General