Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

While the credit crisis has cooled of the commercial and industrial real estate market, transactions continue to occur at a slower pace.  Allocation of risk and liability for environmental contamination is an important consideration in transactions that involve properties in which manufacturing, transportation or other commercial businesses operated. 

In allocating responsibility for environmental clean up costs and damages, carefully crafted contract language can determine who will be responsible for hundreds of thousands if not millions of dollars in liability.  A federal case from this summer shows Courts will look closely for language demonstrating liabilities are "assumed" during the sale before assigning responsibility for costs or damages to buyers of contaminated property:

Indemnity versus assumption of liability-  Carefully drafted indemnity clauses are important consideration in transactions involving environmental liabilities.  These clauses are used to allocate the risks associated with liability based upon past and future activities that occur on the property.  Recently, the District Court for the Eastern District of Pennsylvania distinguished between indemnity and assumption of liability.  The Court decided their was no direct action available against the purchaser of contaminated property based upon the indemnity clause of a settlement agreement between the seller and buyer Here is what the Court found:

[T]he parties chose to never use the terms "liabilities" or "obligations" and only use the word "assume" in reference to assuming defenses.  There is no language in the settlement agreement that implies that Sunoco agreed to be AR's legal successor...The contracting parties specifically chose the language "shall defend and hold harmless," and did not elect to include any language regarding assumption of liabilities or successor liability.  United States v. Sunoco, Inc. (No. 05-633) (E.D. Pa 2009)

Based on this finding the Court said the United States could not sue Sunoco directly to compel clean up.  The indemnity clause was only triggered by a suit against AR as a prerequisite. 

Going Beyond a Warranty Disclaimer- Land sale contracts will sometimes include "as is" clauses.  Courts will look to interpret the meaning of the clause based upon the contractual language used in the agreement.  An "as is" clause without language demonstrating the buyer "assumes" all environmental liabilities could be interpreted by Courts to be only a disclaimer of any warranties regarding the condition of the property.  In Niecko v. Emro, the Court found assumption of liability had occurred because the contract included the following language:

[Seller] makes no "warranties or reps" as to soil conditions, and that [buyers] assume all responsibility for any damages caused by the conditions on the property upon transfer of title. Niecko v. Emro 973 F.2d 1296 (6th Cir. 1992)

These cases demonstrate that for an assumption of all environmental liabilities to occur, Courts will expect to see express language demonstrating clear intent to transfer that liability. 

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Businesses are increasingly trying to market their products as “green.” Common eco-friendly labels or claims can be found on many products, including labels like “recycled content”, “biodegradable”, and “safe for the environment.” Before making any such claims, businesses should be able to substantiate their claims or risk legal action.

How frequent are false or misleading eco-friendly claims being made on products? A 2007 survey performed by Terrachoice, an environmental marketing agency, gained national attention.  The survey found that of 1,018 common consumer products ranging from toothpaste to printers, 99% were guilty of stretching the eco-truth regarding their products. This practice is commonly referred to as “greenwashing.”

Here are just two examples of what could be considered misleading:

Example 1: A box of aluminum foil is labeled with the claim “recyclable,” without further elaboration. Unless the business establishes whether the claim refers to the foil or the box, the claim is deceptive if any part of the box or the foil cannot be recycled.

Example 2: A product is advertised as “environmentally preferable” which is likely to convey to consumers that this product is environmentally superior to other products. If the manufacturer cannot substantiate this broad claim, the claim would be deceptive.

The Federal Trade Commission can take legal action against unfair or deceptive marketing practices under Section 5 of the FTC Act. To assist businesses in determining how to stay in compliance with the law, the FTC issued the Guide for the Use of Environmental Marketing Claims, commonly referred to as the “Green Guides.” The “Green Guides” provide the following general guidance on substantiating environmental claims:

Any party making an express or implied claim that presents an objective assertion about the environmental attribute of a product, package or service must… rely upon a reasonable basis substantiating the claim…such substantiation will often require competent and reliable scientific evidence, defined as tests, analyses, research, studies or other evidence…

Because of the proliferation of green claims in the marketplace, last year the FTC has decided to perform a formal review of the "Green Guides" which were last updated in 1998.  A final version of the update guide is expected in 2009.  

As an alternative to filing a complaint with the FTC, businesses can take action against their competitors for unsubstantiated or misleading claims by filing a complaint with the National Advertising Division of the Council of Better Business Bureaus, Inc. (NAD).  Between 1988 and 2008, NAD issued nearly 30 decisions pertaining to "green" marketing claims.  While compliance with NAD decision are voluntary, they often lead to the claims being modified or discontinued to prevent a referral to the FTC for more formal action. 

As a recent example, this month GP Plastics Corp. accepted a NAD determination that the company modify or discontinue certain advertising claims related to its plastic bags. Advertising by GP Plastics was challenged by a competing provider of plastic bags for the newspaper industry.
NAD did not agree that the claims ‘100 percent oxo-biodegradable’ and ‘completely recyclable’ were substantiated.

One way manufacturers and suppliers can reduce their risk of being the target of a “greenwashing” claim is by obtaining third party verification that their claims are valid. Non-profit organizations and government programs such as EcoLogo, Green-e and U.S. EPA’s Energy Star program offer independent ecolabelling programs that provide some protection.

EcoLogo describes their process as follows:

Provides a Type I eco-label, as defined by the International Organization for Standardization (ISO). This means that the Program compares products/services with others in the same category, develops rigorous and scientifically relevant criteria that reflect the entire lifecycle of the product, and awards the EcoLogo to those that are verified by an independent third party as complying with the criteria.

Green-e describes is more of niche toward carbon offsets and renewable energy:

Green-e is the nation's leading independent consumer protection program for the sale of renewable energy and greenhouse gas reductions in the retail market. Green-e offers certification and verification of renewable energy and greenhouse gas mitigation products.

(Photo: davidgljay/everystockphoto.com)

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During Governor Strickland's State of the State he made the "no new taxes" pledge.  However, the Governor did mention that to balance the budget he will propose "new fees, fines and penalties."  No specifics were provided, however, now that details are beginning to take shape the Governor Strickland has been criticized for his roll out of the nearly 120 fee increases.

While there are more significant fee increases on vehicle registration and other health care related services, this being an environmental blog, I will focus on the new ODNR and Ohio EPA fee increases.  As discussed below, it is going to be more costly for businesses (and residents) to get rid of their waste.  This should create even a greater incentive for businesses to look at their practices and see if there are ways to reduce the amount of waste that has to be disposed of in solid waste landfills.   This could be through process changes that reduce the amount of waste generated or it could be recycling/re-use of waste materials generated.

However, the ability to recycle or re-use solid waste generated as part of business operations is dependent upon Ohio EPA's beneficial re-use rules.  Unfortunately, those rules have not come forward which makes it more difficult for businesses to evaluate their options.  While the fee increases may push evaluation of "greener" alternatives to disposal, businesses face uncertainty as long as clear re-use standards are not established.

Here is a link to a spreadsheet put together by the Ohio Office of Budget Management which shows all the fee increases and the projected revenue (which reaches over $1 billion dollars). Here is a breakdown of the proposed fee increases as it relates to the environment:

Municipal Solid Waste (MSW)
While I was at Ohio EPA, the agency moved from general revenue (GRF) to fees to pay for its programs.  The municipal solid waste tipping fee was chosen because it was a broad based fee that touches residents and businesses.  Due to its broad based application, the Agency could use the funding to support various programs outside of the Division of Solid and Infectious Waste.  Sort of like a tax...right.

The proposed state budget will build upon past fee increases and further increase the MSW tipping fee by $1.25 a ton. This will bring the MSW tipping fee from $3.50 a ton to $4.75 a ton. Of the proposed $1.25 increase,  Twenty-five cents would go to ODNR for the Soil and Water Conservation Districts. The remaining $1.00 will go to Ohio EPA to support various programs.

Construction and Demolition Debris (CDD)
The proposed budget will increase the CDD tipping fee by $2.70 a ton. This will bring the CDD tipping fee from $1.70 a ton to $4.40 a ton. This amounts to an 60% increase in the fees for CDD.  The $2.70 increase would be divided as follows:  $2.25 will go to ODNR for the Soil and Water Conservation Districts and .45 will got to Ohio EPA for operation costs throughout the agency.

Green building practices under the U.S. Green Building Council's LEED program award points for recycling and reuse of construction waste.  With this significant fee increase contractors and project owners should seriously contemplate recycling this material versus disposal even if they are not working on a green building project.

New E-Check Fee
Ohio EPA has proposed an increasing the fee for purchasing new tires by $2.30 per tire.  This fee is projected to generated $15 million in new revenue.  The previous tire fee was used to pay for programs to eliminate tire dumps around the State.  This has been one of the greatest success stories in Ohio.  This increase would be devoted to an entirely new purpose-paying for Ohio's automobile emission testing program (E-check).

Energy Extraction Fees

ODNR for its part has proposed a new fee on oil, coal and natural gas extraction.  Together these fees are projected to generate over $7 million in new revenue.  The energy extraction fees have not been warmly received by industry who argue that raising costs on these energy related resources will simply result in increased costs for individuals and businesses around the state.  

As fees go up for use of resources and disposal of waste, businesses have further incentive to examine green alternatives.  This could be improved energy efficiency. establishment of a co-gen facility that could reduce electric fees, recycling, and reduction of waste streams.

(Photo:D'Arcy Norman/everystockphoto.com)

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I am attending the 12th annual EUEC (Energy and Environment Conference) in Phoenix for the early part of this week.  I guess they had to move the conference from previous venues to the Phoenix  Convention Center to accommodate the large number of registrants.  There are over 450 different speakers and presentations. 

My observations from the first day have been as follows:

1)  Despite the terrible economy the interest in environmental, green energy and climate change continues to grow.  It is truly amazing to see the number of companies and organizations in attendance.  There is also a distinct feeling in the air that the change in Administration will mean explosive growth and new opportunities. 

2) The most interesting presentation on the first day was from U.S. EPA's Frank Princiotti. He discussed the prospect of global climate change and the implications for the planet.  But even more interesting was his assessment of the world's ability to meet this challenge.  Despite the many statements that we have the technology right now to address global climate change, his assessment was much more dire.  For example, he said carbon sequestration would not be ready until at least 2020 or 2030 saying his "DOE colleagues would back him on that statement." 

His basic theme was "we need a technology revolution" and even if that happens it will not  be enough to avoid significant impacts from global warming.   We are at best trying to avoid catastrophic impacts from global warming even with very significant mitigation efforts. 

He indicated that efforts to reduce greenhouse gas emissions should be supplemented with other efforts.  Namely man made engineering to reduce the impacts of climate change.  Such as seeding clouds or creating a reflective layer in the earth atmosphere to deflect the suns effects on a warming planet-Now that is a scary proposition.  Man trying to effect the global temperature through quick fix engineering.  But he put up a slide of leading scientists from around the globe that say this must be under serious consideration.

3)  Another interesting presentation was made by Roger Martella, who is no with the law firm of Sidley Austin,  Prior to that he was EPA's general counsel during the Mass v. EPA litigation.  His perspective was that despite the knocks on the Bush Administration the EPA had done a tremendous amount of work on climate change.  In essence, his perspective was the foundation was laid during the Bush Administration EPA for President Obama to move quickly on climate change. He predicted that April 2nd of this year (the 2nd anniversary of Mass. v. EPA) may be the date of a major announcement by the Obama Administration on Climate Change.  Perhaps the endangerment finding will move forward which will trigger regulation under the Clean Air Act of greenhouse gases. 

I look forward to the next couple days.  My first certainly has been enlightening.  My conclusion from the first day is that if President Obama is serious about addressing climate change (and I think he is) most still do not comprehend the magnitude of change that is upon us.

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Today, EPA Administrator-designate Lisa P. Jackson distributed a memo to all employees of EPA.  The memo outlines her and President Obama's philosophy of environmental protection.  The memo is an interesting demarcation of the major changes that are coming in the realm of environmental protection. 

Some priorities Ms. Jackson is very upfront about, such as addressing Climate Change (which notably was identified as the number 1 priority in her memo).  Other policy perspectives are a little less straightforward, but inferences can be made.  Here are my take aways from the memo.

1. Climate Change is a major priority-  The President made reference to it in his inaugural speech.  It is no mistake that its the first bullet on EPA-designate Jackson's list of priorities.  Notably, she includes the following statement:  "As Congress does its work, we will move ahead to comply with the Supreme Court's decision recognizing Pea's obligation to address climate change under the Clean Air Act"  STAY TUNED ON THIS ONE>>>
2. Science will be at the forefront-  Many environmental groups felt that the Bush Administration put science secondary to their end regulatory goals.  The memo is a clear statement that this will change.  What could be the impact?  For one, look for even stronger federal air quality standards (NAAQS) for ozone and fine particles. 
3. Resurgence in Environmental Justice- A very thorny issue and one difficult to address through regulation.  However, the memo mentions making  "people disproportionately impacted by pollution" a priority.  Perhaps they will try to tackle this more aggressively.
4. CAIR-  I may be out on a limb on this one.  In the "improving air quality" priority, Jackson states "we will plug the gaps in our regulatory system as science and the law demand."  I think this is a vague reference to a much stronger CAIR program.
5. Brownfield Redevelopment-  U.S. EPA may put even more emphasis on brownfield programs as a means to accelerate clean up of contaminated sites.  Jackson was criticized in New Jersey for the slow clean ups.  I think the statement -"turning these blighted properties into productive parcels and reducing threats to human health and the environment means jobs and investment in our land" -can't be anything other than a reference to a strong brownfield program.
6. Money for the Great Lakes?-  In the memo, Jackson says the "Agency will make robust use of our authority to restore threatened treasures such as the Great Lakes and the Chesapeake Bay."  I am intrigued at the term "robust use of our authority" in connection with the Great Lakes.  Is this a reference to enforcement rather than the Great Lakes Restoration Plan?
7. Don't underestimate the amount of change coming-  President Obama's buzz word was change.  I don't think there is any area that is about to see more change than environmental regulation in the next four years.  Fasten your seat belts...

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Senator Tom Niehaus has introduced S.B. 372 bill to extend the effectiveness of Ohio's Environmental Audit Privilege law for another five years.  The law is set to expire on January 1, 2009.  It was a hard fought battle for businesses to get the Audit Privilege law on the books in the late 90's.  While the law was watered down to address U.S. EPA concerns, it remains a valuable tool for some businesses. The law is intended to reward those companies that proactively evaluate their compliance with environmental requirements. 

What is the Ohio Environmental Audit Privilege law?  It is provides immunity from civil penalties if a company voluntarily discloses environmental violations to the appropriate State Agency that were uncovered as a result of an environmental compliance audit.  Note: a civil penalty can still be assessed even after a valid disclosure if the company enjoyed a "economic benefit" as a result of the violation, meaning delayed compliance gave it a competitive advantage.

As a further incentive to utilize the law, the content of an environmental audit report is privileged and not admissible as evidence in a civil or administrative proceeding. (See R.C. §3745.71(C) for exceptions to the privilege provisions)  This provision is meant to reduce exposure to third party suits as a result of environmental violations.

How frequently do businesses use the Audit Privilege Law?  In my experience the law has been used infrequently by Ohio businesses.  During my time at the Ohio EPA, I oversaw the processing of Audit Privilege disclosures.  I would estimate that the Agency received, on average, around four or five disclosures per year during my tenure. 

Why isn't the Audit Privilege Law used more frequently?  I was always puzzled why more companies did not take advantage of the Audit Privilege law.  Some may believe it is better to correct the violation and wait and see if it is discovered by the Agency.  With so many entities to inspect, some companies think it is better to take this risk the violation is discovered than have their disclosure denied for a technical flaw and face an enforcement action.

Other companies may think the administrative costs of performing an audit are too high.  Or some may be under the mistaken belief that Ohio's five year statute of limitations on environmental enforcement actions provides a better shield from penalties.  Just keep in mind that the trigger for the statute of limitations in R.C. §3745.31 is when the Agency "actually knew or was informed" of the violation.  So the Agency must be aware of the violation for the clock to run.

What are some of the reasons a request for coverage is denied?  The disclosure must be voluntary, which means it must not be required by some environmental law.  During my time at Ohio EPA, by far the most frequent reason a company was denied coverage was the disclosure of the violation was required by some other environmental law.  Of those companies denied coverage for this reason, most were Title V permitted sources under the Clean Air Act.   Title V sources are required to disclose violations as part of their permit terms and conditions.  However, even in these cases, the Agency frequently reduced penalties to reward the early disclosure of violations.

Here are additional requirements to be deemed a voluntary disclosure (See R.C.§3745.72(B)):

1. Prompt disclosure
2. Reasonable effort to achieve compliance as quickly as practicable
3. Cooperate with the State Agency who is charged with investigating the disclosure
4. Disclosure not required by law, prior litigation, or a prior order
5. The company disclosing has no knowledge or reason to know of an Agency had previously commenced an investigation or enforcement action regarding the violations

What is involved in filing a disclosure to the appropriate state agency?  Unlike environmental permitting or grant applications, the submission to Ohio EPA to receive coverage under the Audit Privilege law is actually pretty minimal. R.C. §3745.72(C) requires that all disclosures must be in writing, dated, and hand delivered or sent by certified mail to the Director.  The written disclosure must include the following information: 

1. the name, address, and telephone number of the owner or operator of the business making the disclosure;
2. the name, title, address, and telephone number of one or more persons associated with

   the owner or operator who may be contacted regarding the disclosure;

3. a brief summary of the alleged violation of environmental laws, including, without

   limitation, the nature, date, and location of the alleged violation to the extent that the

   information is known by the owner or operator; and

4. a statement that the information is part of an environmental audit report and is being

   disclosed under R.C. §3745.72 in order to obtain the immunity provided by that section.

Are there good reasons to use Ohio's Environmental Audit Privilege Law if it is renewed?  Yes.  During my tenure, I was not aware of any enforcement action that was pursued against a company that made a valid and voluntary disclosure.  Just make sure you are not required to report by some other environmental law. 

I think the law may be ideal for companies that recently purchased a new facility or company.  Performing an environmental audit after such an acquisition is an excellent way to ensure your house is order. 

Also, the audit is a good way to have a third party to evaluate your compliance status.  You can always choose to not file the disclosure if you think its not to your advantage for some reason.

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Federal hazardous waste regulations (RCRA) have long been referred to as management from "cradle to grave."  In order meet this management principle, the regulations require detailed paper work and reporting from both small and large businesses. 

Failure to maintain the proper paper work can result in significant penalties or even change your regulatory status which will have even greater implications.  Just in 2008, Ohio EPA Division of Hazardous Waste Management (DHWM) has taken 24 formal enforcement actions that included assessment of civil penalties.  Those penalties have ranged from $4,000 to $75,000.  Many of the actions were against small to medium sized businesses.

In addition, hazardous waste enforcement cases will often be reported in the newspaper, even in the small town local newspaper.  If you want to avoid the bad publicity and a costly fine, it pays to review your company's paper work practices. 

A recent EHS blog post provided a good example of the dangers of missing paperwork. 

But in the absence of any documentation that showed the facility never generated more than 2200 lbs of waste in a calendar month, the inspector assumed incorrectly that the facility generated all the wastes that were shipped out in August of 2001 in that month. [shipped out more than 2200 lbs in the month] The reality was that the wastes in the two shipments made in August had been accumulated over the past several months.

The fact the company did not maintain good records resulted in the inspector citing them for being a Large Quantity Generator (LQG) even though in reality the company was a Small Quantity Generator (SQG).  Without the proper records, the inspector's conclusion becomes difficult to refute.

Ohio EPA has identified the most frequently cited RCRA violations in Ohio.  Reviewing the following list of frequent  categories of violations is a good place to start in determining if your company is property managing hazardous waste. 

• Waste Determination- The regulations require all waste to be evaluated.  This is often an area overlooked by businesses. Failing to evaluate just one barrel of waste can result in a citation. Ohio EPA developed a handy fact sheet that is worth reviewing to get yourself familiar with these requirements.
• Annual Reports-  All LQG must submit a report by March 1st for the preceding year.  Review your files to makes sure you have submitted annual reports. 
• Container Management- Must inspect your hazardous waste storage areas at least once a week and maintain a log documenting those inspections.  Ohio EPA has provided a hazardous waste storage inspection log sheet that can be used to maintain your records.
• Emergency Equipment Inspections- SQG and LQG must maintain a log of inspections showing all emergency equipment (fire suppression, spill containment, alarms) were inspected as recommended by the manufacturer or supplier of the equipment.  Ohio EPA also has a emergency equipment inspection log sheet you can use to maintain these required records.
• Used Oil Storage-  All containers use to store used oil must be properly labeled with a sign that says "used oil."  Using terms like "hazardous waste" or "waste oil" is not sufficient.
• Large Quantity Tank Systems-  All LQG's that use tanks to store hazardous waste must inspect the tank once "each operating day."  A log of inspections must be maintained. According to an Ohio EPA fact sheet, this means each day the tank is in use.  Even if workers are not on-site seven days a week.

(photo from flickr: Ashe-Villian)

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PTIO Program is Launched-  Effective June 30, 2008 Ohio EPA finalized this new permit program which combines the Permit to Install (PTI) and Permit to Operate (PTO) into a single permit for non-Title V facilities.  Facilities will no longer have to apply for a separate PTO.  This program is intended to deal with Ohio EPA's backlog of PTOs which is in the thousands.  Ohio EPA's new PTIO application is up and must be used for new permits.

Electronic Reporting through Air Services- Effective June 30, 2008 Ohio EPA transitioned from its STARship electronic air reporting software to Air Services.  Air Services is part of Ohio EPA's larger effort to transition to more web based business interaction with the regulated community.  Following the release of the Air Services software, both Title V and Synthetic Minor Title V facilities will be required to use the eBusiness Center: Air Services for all emissions reporting, Title V Annual Compliance Certifications, Title V and other permitting applications.

Electronic Reporting of Surface Water Reports-  If you are using paper reporting or SWIMware to submit monthly-operating-reports (MORs) for NPDES permit compliance you need to quickly transition to Ohio EPA's new electronic reporting system.  Ohio EPA indicates it expects to cease accepting MORs by "end of the  summer". SWIMware has been replaced by the new online system called e-DMR, Electronic Discharge Monitoring Reporting System. The term, MORs (Monthly Operating Reports) is now being referred as DMRs (Discharge Monitoring Reports). The new reporting system is entirely web-based and accessible via any internet connection.

Ohio Diesel Grant Awards Announced-  On July 29th the Ohio Department of Development announced the recipients of the grants for diesel retrofit and repower projects for vehicles and fleets.  The award recipients originally submitted applications back in February.  The implementation of the Diesel Emission Reduction Grant (DERG) program was plagued with a number of issues that resulted in the rejection of a large number of applications and delay in announcing awards.  The Ohio Diesel Coalition is working in conjunction with the various State agencies to improve the grant process in the second round.  The Department of Development is expected to release the second request for proposals (RFP) in August. 

Brownfield Redevelopment- Clean Ohio Assistance Fund (COAF)-  As of July 1, 2008 the Ohio Department of Development has begun accepting applications for COAF grants to pay for Phase II site assessments (up to $300,000) and clean ups (up to $750,000) of brownfield properties.  ODOD has approximately $11.4 million to award.  To qualify the property must be in a designated priority investment area (see map).

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In the most recent issue of Builder's Exchange, a construction attorney in my office (Jim Dixon) and I wrote an article discussing asbestos regulations as they pertain to contractors working at a job site. 

The article was intended to raise awareness in the construction industry that contractors can be liable for asbestos violations even if they do not perform asbestos remediation activities.  If you are the the prime contractor on a job or even a contractor given supervisory authority, the asbestos notification requirements could apply to both you and the owner of the building equally.  Failure to perform the requisite survey or provide the required notice in advance of demolition or renovation work is the most common enforcement action taken by Ohio EPA.  As set forth in the article, make sure you verify the owner has complied with the asbestos regulations before starting work at the site.

(Photo: Ktheory/everystockphoto.com)

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On June 17, 2008 Governor Strickland signed H.B. 285 which requires agencies to waive fines and penalties for paperwork violations that are first time offenses committed by a small business.  I certainly agree that that this is welcome relief for the small business owners that must navigate a myriad of federal, state and local paperwork requirements.  However, be careful if you are a small business owner, the bill doesn't give a free pass for all paperwork violations.

First, you better make sure you are considered a small business.  You may think you are, but under the bill a series of federal government regulations really decides whether you are classified as a small business.  (Isn't it somewhat ironic that a bill trying to address paperwork requires you to consult a forty-four page table of industrial classifications to determine whether your business constitutes a small business)  Small business classifications are based upon the North American Industry Classification System (NAICS) and the cutoffs are either annual revenue or the number of employees. 

Second, was it really a paperwork violation?  The bill says a "paperwork violation" is the violation of a law that mandates the collection of information by a state agency.  Sounds simple enough, but as a lawyer I think this is a vague definition. 

CAUTION:  I doubt a violation of permit or needed authorization is going to be considered paperwork under this definition.  As an example, the most common violation Ohio EPA takes enforcement against is for failure to provide notice of demolition or construction activities for purposes of asbestos compliance.   In 2007, Ohio EPA imposed 13 fines against companies for failure to file the notice.  Better make sure you keep filing those notices whether you are the owner of the property or a primary contractor for the project.

Third, even if you get by the first two steps, if your paperwork violations are related to environmental compliance you may still be in hot water.  The bill allows Agency's to still impose fines if, among other exceptions, the following apply to your situation:

• The violations is considered to present a direct danger to public health or safety....or presents "the risk of severe environmental harm", as determined by the head of the state agency
• The violation is a failure to comply with a federal requirement for a program that has been delegated to a state agency for enforcement and the state is required to impose a fine
• Also, a fine may be reinstated if you have subsequent violations

When I was at Ohio EPA all enforcement actions had to come across my desk prior for approval.  In my experience, it was uncommon to impose a fine for purely paperwork violations if a small businesses was at fault.  In the instances we did impose a fine, it certainly could fall within one of the exceptions discussed in this post.

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