1.1                          A bill for an act 
  1.2             relating to the environment; modifying and making 
  1.3             permanent the environmental improvement pilot program; 
  1.4             amending Minnesota Statutes 1998, sections 114C.20; 
  1.5             114C.21, subdivisions 1, 4, and by adding 
  1.6             subdivisions; 114C.22; 114C.24, subdivisions 2, 3, 4, 
  1.7             and 5; 114C.25; 114C.26; 114C.27; and 114C.28; 
  1.8             repealing Minnesota Statutes 1998, sections 114C.21, 
  1.9             subdivisions 9 and 11; 114C.29; 114C.30; and 114C.31. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1998, section 114C.20, is 
  1.12  amended to read: 
  1.13     114C.20 [ENVIRONMENTAL IMPROVEMENT PILOT PROGRAM 
  1.14  ESTABLISHED.] 
  1.15     An environmental improvement pilot program is established 
  1.16  to promote voluntary compliance with environmental requirements. 
  1.17     Sec. 2.  Minnesota Statutes 1998, section 114C.21, 
  1.18  subdivision 1, is amended to read: 
  1.19     Subdivision 1.  [APPLICABILITY.] As used in sections 
  1.20  114C.20 to 114C.31 114C.28, the terms defined in this section 
  1.21  have the meanings given. 
  1.22     Sec. 3.  Minnesota Statutes 1998, section 114C.21, is 
  1.23  amended by adding a subdivision to read: 
  1.24     Subd. 2a.  [ENVIRONMENTAL MANAGEMENT 
  1.25  SYSTEM.] "Environmental management system" means a documented, 
  1.26  systematic procedure or practice that reflects the regulated 
  1.27  entity's due diligence in preventing, detecting, and correcting 
  2.1   violations of environmental requirements.  Due diligence 
  2.2   encompasses the regulated entity's systematic efforts, 
  2.3   appropriate to the size and nature of its business, to prevent, 
  2.4   detect, and correct violations of environmental requirements and 
  2.5   must be consistent with any criteria used by the United States 
  2.6   Environmental Protection Agency to define due diligence in 
  2.7   federal audit policies or regulations. 
  2.8      Sec. 4.  Minnesota Statutes 1998, section 114C.21, 
  2.9   subdivision 4, is amended to read: 
  2.10     Subd. 4.  [ENVIRONMENTAL AUDIT; AUDIT.] "Environmental 
  2.11  audit" or "audit" means a systematic, documented, and objective 
  2.12  review by a regulated entity of one or more facility operations 
  2.13  and practices related to compliance with one or more 
  2.14  environmental requirements and, if deficiencies are found, a 
  2.15  plan for corrective action.  The regulated entity may use an 
  2.16  evaluation form developed by the regulated entity, prepared by a 
  2.17  consultant, or prescribed or approved by the commissioner.  The 
  2.18  final audit document must be designated as an "audit report" and 
  2.19  must include the date of the final written report of findings 
  2.20  for the audit. 
  2.21     Sec. 5.  Minnesota Statutes 1998, section 114C.21, is 
  2.22  amended by adding a subdivision to read: 
  2.23     Subd. 10a.  [REGULATED MATERIAL.] "Regulated material" 
  2.24  means the chemicals, wastes, or substances generated or released 
  2.25  by a facility that make the facility subject to an environmental 
  2.26  requirement. 
  2.27     Sec. 6.  Minnesota Statutes 1998, section 114C.22, is 
  2.28  amended to read: 
  2.29     114C.22 [AUDITS OR SELF-EVALUATIONS.] 
  2.30     Subdivision 1.  [QUALIFICATION TO PARTICIPATE IN PROGRAM.] 
  2.31  For a facility to qualify for participation in the environmental 
  2.32  improvement program, more than one year two years must have 
  2.33  elapsed since the initiation of an enforcement action that 
  2.34  resulted in the imposition of a penalty involving the facility.  
  2.35  In addition, a regulated entity must: 
  2.36     (1) conduct an environmental audit or a self-evaluation 
  3.1   submit findings from the facility's environmental management 
  3.2   system; 
  3.3      (2) for a major facility, prepare a an environmental audit 
  3.4   program pollution prevention plan and submit progress reports in 
  3.5   accordance with sections 115D.07 to 115D.09 subdivision 3; 
  3.6      (3) for a facility that is not a major facility, examine 
  3.7   pollution prevention opportunities steps that could be taken to 
  3.8   eliminate or reduce the generation or release of regulated 
  3.9   materials at the facility; and 
  3.10     (4) submit a report in accordance with subdivision 2. 
  3.11     Subd. 2.  [REPORT.] A regulated entity must submit a report 
  3.12  to the commissioner, and to a local governmental unit if the 
  3.13  report identifies a violation of an ordinance enacted by the 
  3.14  local governmental unit or of another legally binding 
  3.15  requirement imposed by the local governmental unit, within 45 
  3.16  days after the date of the final written report of findings for 
  3.17  an environmental audit or within 45 days after the completion of 
  3.18  a self-evaluation findings from the facility's environmental 
  3.19  management system.  The report must contain: 
  3.20     (1) a certification by the owner or operator of the 
  3.21  facility that the applicable requirements of subdivision 1, 
  3.22  clauses (1) to (4), have been met, including a certification 
  3.23  that the facility's environmental management system meets the 
  3.24  requirements of section 114C.21, subdivision 2a, if the report 
  3.25  contains findings from the facility's environmental management 
  3.26  system; 
  3.27     (2) a disclosure of all violations of environmental 
  3.28  requirements that were identified in the environmental audit or 
  3.29  self-evaluation by the facility's environmental management 
  3.30  system and a brief description of proposed actions to correct 
  3.31  the violations; 
  3.32     (3) a commitment signed by the owner or operator of the 
  3.33  facility to correct the violations as expeditiously as possible 
  3.34  under the circumstances; 
  3.35     (4) if more than 90 days will be required to correct the 
  3.36  violations, a performance schedule that identifies the time that 
  4.1   will be needed to correct the violations and a brief statement 
  4.2   of the reasons that support the time periods set out in the 
  4.3   performance schedule; and 
  4.4      (5) a description of the steps the owner or operator has 
  4.5   taken or will take to prevent recurrence of the violations. 
  4.6      Subd. 3.  [ENVIRONMENTAL AUDIT PROGRAM POLLUTION PREVENTION 
  4.7   PLAN.] An environmental audit program pollution prevention plan 
  4.8   must establish a program identifying the specific technically 
  4.9   and economically practicable steps that could be taken to 
  4.10  eliminate or reduce the generation or release of regulated 
  4.11  materials. 
  4.12     Each environmental audit program pollution prevention plan 
  4.13  must include: 
  4.14     (1) a policy statement articulating upper management 
  4.15  support for eliminating or reducing the generation or release of 
  4.16  regulated materials at the facility; 
  4.17     (2) a description of the current processes generating or 
  4.18  releasing regulated materials that specifically describes the 
  4.19  types, sources, and quantities of regulated materials currently 
  4.20  being generated or released by the facility; 
  4.21     (3) a description of the current and past practices used to 
  4.22  eliminate or reduce the generation or release of regulated 
  4.23  materials at the facility and an evaluation of the effectiveness 
  4.24  of these practices; 
  4.25     (4) an assessment of technically and economically 
  4.26  practicable options available to eliminate or reduce the 
  4.27  generation or release of regulated materials at the facility, 
  4.28  including options such as changing the raw materials, operating 
  4.29  techniques, equipment and technology, personnel training, and 
  4.30  other practices used at the facility.  The assessment may 
  4.31  include a cost benefit analysis of the available options; 
  4.32     (5) a statement of objectives based on the assessment in 
  4.33  clause (4) and a schedule for achieving those objectives.  
  4.34  Wherever technically and economically practicable, the 
  4.35  objectives for eliminating or reducing the generation or release 
  4.36  of each regulated material at the facility must be expressed in 
  5.1   numeric terms based on a specified base year that is no earlier 
  5.2   than 1987.  Otherwise, the objectives must include a clearly 
  5.3   stated list of actions designed to lead to the establishment of 
  5.4   numeric objectives as soon as practicable; 
  5.5      (6) an explanation of the rationale and environmental 
  5.6   benefit for each objective established for the facility; 
  5.7      (7) a listing of options that were considered not to be 
  5.8   economically and technically practicable; and 
  5.9      (8) a certification, signed and dated by the facility 
  5.10  manager and an officer of the company under penalty of section 
  5.11  609.63, attesting to the accuracy of the information in the plan.
  5.12     A summary containing the information described in clause 
  5.13  (5) must be submitted with the facility's initial environmental 
  5.14  audit report.  Subsequent environmental audit reports, submitted 
  5.15  more than one year after the initial submittal, must include a 
  5.16  progress report which describes the success in meeting the 
  5.17  objectives included in the summary.  After the first submission 
  5.18  of the facility's progress report, progress reports are required 
  5.19  only if at least one year has elapsed since the previous 
  5.20  submission of a progress report. 
  5.21     Sec. 7.  Minnesota Statutes 1998, section 114C.24, 
  5.22  subdivision 2, is amended to read: 
  5.23     Subd. 2.  [PENALTIES WAIVED.] If, within 90 days after the 
  5.24  report required in section 114C.22, subdivision 2, is received 
  5.25  by the commissioner or within the time specified in an approved 
  5.26  performance schedule, the owner or operator of a facility 
  5.27  corrects the violations identified in the audit or 
  5.28  self-evaluation by the environmental management system and 
  5.29  certifies to the commissioner that the violations have been 
  5.30  corrected, the state may not impose or bring an action for any 
  5.31  administrative, civil, or criminal penalties against the owner 
  5.32  or operator of the facility for the reported violations. 
  5.33     Sec. 8.  Minnesota Statutes 1998, section 114C.24, 
  5.34  subdivision 3, is amended to read: 
  5.35     Subd. 3.  [EXCEPTIONS.] Notwithstanding subdivisions 1 and 
  5.36  2, the state may at any time bring: 
  6.1      (1) a criminal enforcement action against any person who 
  6.2   knowingly commits a violation under section 609.671; 
  6.3      (2) a civil or administrative enforcement action, which may 
  6.4   include a penalty, under section 115.071 or 116.072, against the 
  6.5   owner or operator of a facility if: 
  6.6      (i) less than three years have elapsed since the owner or 
  6.7   operator was notified about a violation that resulted in the 
  6.8   imposition of a monetary penalty, or less than one year has 
  6.9   elapsed since the final resolution of a notice of violation, an 
  6.10  administrative penalty order, or a civil or criminal lawsuit 
  6.11  that resulted in an enforcement action being taken against the 
  6.12  owner or operator of a facility for a violation of a requirement 
  6.13  that was also shown as having been violated in the report 
  6.14  required under section 114C.22, subdivision 2 that did not 
  6.15  result in the imposition of a monetary penalty; or 
  6.16     (ii) a violation caused serious harm to public, or presents 
  6.17  an imminent and substantial endangerment to, human health or the 
  6.18  environment; or 
  6.19     (iii) a violation is of the specific terms of an 
  6.20  administrative order, a judicial order or consent decree, a 
  6.21  stipulation agreement, or a schedule of compliance; 
  6.22     (iv) a violation has resulted in a substantial economic 
  6.23  benefit which gives the violator a clear advantage over its 
  6.24  business competitors; or 
  6.25     (v) a violation is identified through a legally mandated 
  6.26  monitoring or sampling requirement prescribed by statute, 
  6.27  regulation, permit, judicial or administrative order, or consent 
  6.28  agreement; or 
  6.29     (3) the an enforcement action is against the owner or 
  6.30  operator of a facility to enjoin an imminent threat to public 
  6.31  health or the environment and substantial danger under section 
  6.32  116.11. 
  6.33     Sec. 9.  Minnesota Statutes 1998, section 114C.24, 
  6.34  subdivision 4, is amended to read: 
  6.35     Subd. 4.  [GOOD FAITH CONSIDERATION.] If the state finds 
  6.36  that one of the conditions in subdivision 3 exists, the state 
  7.1   must take into account the good faith efforts of the regulated 
  7.2   entity to comply with environmental requirements in deciding 
  7.3   whether to pursue an enforcement action, whether an enforcement 
  7.4   action should be civil or criminal, and what, if any, penalty 
  7.5   should be imposed.  In determining whether the regulated entity 
  7.6   has acted in good faith, the state must consider whether: 
  7.7      (1) when noncompliance was discovered, the regulated entity 
  7.8   took corrective action that was timely under the circumstances; 
  7.9      (2) the regulated entity exercised reasonable care in 
  7.10  attempting to prevent the violations and ensure compliance with 
  7.11  environmental requirements; 
  7.12     (3) the noncompliance resulted in significant economic 
  7.13  benefit to the regulated entity; 
  7.14     (4) prior to implementing the audit or self-evaluation 
  7.15  program or the environmental management system, the regulated 
  7.16  entity had a history of good faith efforts to comply with the 
  7.17  environmental requirements; 
  7.18     (5) the regulated entity demonstrated good faith efforts to 
  7.19  achieve compliance since implementing an environmental auditing 
  7.20  or self-evaluation program or the environmental management 
  7.21  system; and 
  7.22     (6) the regulated entity has demonstrated efforts to 
  7.23  implement pollution prevention opportunities. 
  7.24     Sec. 10.  Minnesota Statutes 1998, section 114C.24, 
  7.25  subdivision 5, is amended to read: 
  7.26     Subd. 5.  [VIOLATIONS DISCOVERED BY THE STATE.] Nothing in 
  7.27  sections 114C.20 to 114C.31 114C.28 precludes the state from 
  7.28  taking any enforcement action the state is authorized to take 
  7.29  with respect to violations discovered by the state prior to the 
  7.30  time a regulated entity has submitted to the commissioner a 
  7.31  report that meets the requirements of section 114C.22, 
  7.32  subdivision 2. 
  7.33     Sec. 11.  Minnesota Statutes 1998, section 114C.25, is 
  7.34  amended to read: 
  7.35     114C.25 [GREEN STAR EMBLEM AWARD.] 
  7.36     A regulated entity may display at a facility a "green star" 
  8.1   emblem award designed by the commissioner if: 
  8.2      (1) the regulated entity qualifies for participation in the 
  8.3   environmental improvement program under section 114C.22; 
  8.4      (2) the scope of the regulated entity's audit examines the 
  8.5   facility's compliance with applicable environmental 
  8.6   requirements; 
  8.7      (3) the regulated entity certifies that all violations that 
  8.8   were identified in the audit or self-evaluation of the facility 
  8.9   were corrected within 90 days or within the time specified in an 
  8.10  approved performance schedule or certifies that no violations 
  8.11  were identified in the audit or self-evaluation; and 
  8.12     (3) (4) at least one year has two years have elapsed since 
  8.13  the final resolution of a notice of violation, an administrative 
  8.14  penalty order, or a civil or criminal an enforcement action 
  8.15  involving the regulated entity.  
  8.16     After consulting with each other, however, the commissioner 
  8.17  or the county may issue an award if the enforcement action 
  8.18  resulted from minor violations.  If the regulated entity is 
  8.19  located in a metropolitan county, the commissioner and the 
  8.20  county must also consult with the metropolitan council before 
  8.21  issuing a green star award.  
  8.22     The emblem award may be displayed for a period of two years 
  8.23  from the time that the commissioner determines that the 
  8.24  requirements of this section have been met.  A facility 
  8.25  submitting findings from its environmental management system is 
  8.26  not eligible to receive an award unless the findings are part of 
  8.27  an audit which examines the facility's compliance with 
  8.28  applicable environmental requirements. 
  8.29     Sec. 12.  Minnesota Statutes 1998, section 114C.26, is 
  8.30  amended to read: 
  8.31     114C.26 [ACCESS TO DOCUMENTS.] 
  8.32     Subdivision 1.  [PUBLIC ACCESS.] After receipt by the 
  8.33  commissioner of a report that complies with section 114C.22, 
  8.34  subdivision 2, the state may not request, inspect, or seize a 
  8.35  final audit report, draft audit papers, a self-evaluation form, 
  8.36  the notes or papers prepared by the auditor or the person 
  9.1   conducting the self-evaluation in connection with the audit or 
  9.2   self-evaluation, or the internal documents of a regulated entity 
  9.3   establishing, coordinating, or responding to the audit or 
  9.4   self-evaluation, other than the report required in section 
  9.5   114C.22, subdivision 2, except in accordance with the agency's 
  9.6   policy on environmental auditing, as adopted by the agency on 
  9.7   January 24, 1995 provided that the regulated entity is in 
  9.8   compliance with its commitments under sections 114C.22 and 
  9.9   114C.23. 
  9.10     This subdivision does not restrict the ability of the state 
  9.11  to seek monitoring, testing, or sampling data, or information 
  9.12  about the location or nature of spills, releases, or threatened 
  9.13  releases related to a suspected violation even if the 
  9.14  information is contained in an audit report, draft audit papers, 
  9.15  or other document protected under this subdivision. 
  9.16     Subd. 2.  [THIRD-PARTY ACCESS.] After receipt by the 
  9.17  commissioner of a report that complies with section 114C.22, 
  9.18  subdivision 2, the final audit report, draft audit reports, the 
  9.19  self-evaluation form, any notes or papers prepared by the 
  9.20  auditor or by the person conducting the self-evaluation in 
  9.21  connection with the audit or self-evaluation, and the internal 
  9.22  documents of a regulated entity establishing, coordinating, or 
  9.23  responding to the audit or self-evaluation covered by the report 
  9.24  are privileged as to all persons other than the state provided 
  9.25  that the regulated entity is in compliance with its commitments 
  9.26  under sections 114C.22 and 114C.23. 
  9.27     Subd. 3.  [NONWAIVER OF PROTECTIONS.] Participation by a 
  9.28  regulated entity in the environmental improvement program does 
  9.29  not waive, minimize, reduce, or otherwise adversely affect the 
  9.30  level of protection or confidentiality that exists, under 
  9.31  current or developing common or statutory law, with respect to 
  9.32  any other documents relating to an environmental audit or 
  9.33  self-evaluation. 
  9.34     Subd. 4.  [EXCEPTIONS.] Nothing in this section or any 
  9.35  policy or rule adopted by the agency on environmental auditing 
  9.36  shall limit the ability of: 
 10.1      (1) the state to seek any information that the state deems 
 10.2   necessary to investigate, prevent, or respond to a situation 
 10.3   that presents an imminent and substantial endangerment to human 
 10.4   health or the environment; 
 10.5      (2) the state to seek any information the state deems 
 10.6   necessary to respond to a continuing violation of any 
 10.7   environmental requirement; 
 10.8      (3) the state to seek information as part of a criminal 
 10.9   investigation; or 
 10.10     (4) the federal government to seek any information it is 
 10.11  authorized to obtain under federal law. 
 10.12     Sec. 13.  Minnesota Statutes 1998, section 114C.27, is 
 10.13  amended to read: 
 10.14     114C.27 [NO EFFECT ON OTHER RIGHTS.] 
 10.15     Sections 114C.20 to 114C.29 114C.28 do not affect, impair, 
 10.16  or alter: 
 10.17     (1) rights of a regulated entity that chooses not to 
 10.18  participate, or is not eligible to participate, in the 
 10.19  environmental improvement pilot program; or 
 10.20     (2) rights of other persons relative to the matters 
 10.21  addressed by the environmental improvement pilot program. 
 10.22     Sec. 14.  Minnesota Statutes 1998, section 114C.28, is 
 10.23  amended to read: 
 10.24     114C.28 [REPORTING REQUIRED BY LAW.] 
 10.25     Nothing in sections 114C.20 to 114C.31 114C.28 alters the 
 10.26  obligation of any regulated entity to report releases, 
 10.27  violations, or other matters that are required to be reported by 
 10.28  state or federal law, rule, permit, or enforcement action. 
 10.29     Sec. 15.  [REPEALER.] 
 10.30     Minnesota Statutes 1998, sections 114C.21, subdivisions 9 
 10.31  and 11; 114C.29; 114C.30; and 114C.31, are repealed.