Ohio Governor Kasich’s recently-introduced Mid-Biennium Budget Review Environment bill (HB 490) would revise R.C. § 6111.99 to significantly increase criminal penalties for violations of Ohio’s water pollution laws.

Under current Ohio law, certain criminal violations of Ohio’s water pollution laws, such as water pollution acts, falsification of data, or criminal violations of orders, rules or permits are classified as misdemeanors punishable by a fine of up to $25,000 and imprisonment of up to one year.  The proposed legislative revisions, however, would establish culpable mental states for such violations by re-classifying knowing criminal violations of these provisions as felonies subject to a fine of up to $25,000 and imprisonment of up to four years.  Reckless criminal violations of these provisions as well as water pollution laws pertaining to waste minimization and treatment plans, waste injection tonnage fees or industrial waste disposal plans would be classified as misdemeanors subject to a fine of up to $10,000 and imprisonment for up to two years.  The proposed revisions also specify that each day of violation is a separate offense and authorize cost recovery by state agencies or political subdivisions which respond to such violations.  HB 490 proposes similar penalty increases for violations of Ohio’s Oil and Gas Law administered by the Ohio Department of Natural Resources.  See, R.C. §§ 1509.33; 1509.99.

The proposed changes purportedly are in response to several recent incidents of illegal dumping, including that involving a Youngstown, Ohio oil and gas services company whose owner US DOJ alleges directed employees to discharge drilling waste and brine water into a storm sewer that fed directly into the Mahoning River on as many as 20 separate occasions.  According to testimony from Ohio EPA Director Craig Butler, the proposed changes are “important … to ensure Ohio does not have to rely on the federal government’s more stringent standards to respond to violations that occur within our borders.”  Federal regulators have issued guidance critical of state enforcement programs which lack sufficient penalty authority or provisions to adequately ensure compliance with the environmental programs under their charge.

If enacted, the enhanced statutory penalties in HB 490 promise additional risks and potential liabilities for current and prospective businesses and entities subject to Ohio’s water pollution laws.  Regulated businesses and entities should expect more Ohio-led water enforcement actions, enhanced penalties and less prosecutorial discretion from state officials enforcing such violations.  Moreover, the potential enactment of these increased penalties may portend a trend of similar enactments by other states seeking to stem criminal activity associated with recent fracking incidents.

The Ohio General Assembly is currently on summer recess, but has scheduled several post-election lame duck sessions during which it is slated to address these proposed changes and the other remaining aspects of Governor Kasich’s Mid-Biennium Budget Review. Squire Patton Boggs will continue to monitor and provide updates on activity related to this legislation.