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New Owners Incentives

New owners with environmental compliance obligations are encouraged to audit their operations, disclose and quickly correct any instances of non-compliance and implement measures to prevent future violations. To promote this kind of activity, the Department of Environmental Conservation (Department) will waive monetary penalties associated with non-compliance. These incentives help protect the environment and could provide the new owner with an immediate economic advantage.

The Department's Environmental Audit Incentive Policy applies to public and private entities regulated by the Department and offers special considerations for new owners within the first 60 calendar days after acquisition. New Owners must act fast to take advantage of these special considerations which include broader penalty waivers and longer disclosure time frames. Speak to the Department's Audit Policy Contact today to see how these incentives can work for you.

What benefits can accrue to a New Owner under the policy?

New owners that simply disclose discovered violations will avoid the monetary penalties associated with these instances of non-compliance. Other incentives are available for regulated entities that enter into an environmental audit agreement with the Department. Your Audit Policy Contact can provide additional information on entering into an audit agreement.

Who qualifies as a New Owner?

A new owner must verify that prior to acquisition:

  1. the new owner was not responsible for environmental compliance at the facility which is the subject of the disclosure, did not cause the violations being disclosed and could not have prevented their occurrence; and
  2. the new owner had no connection to the facility or significant relationship to the prior owner.

Can a New Owner be excluded from eligibility?

Yes, a New Owner can be excluded under very limited circumstances. If a new owner operates another regulated facility in New York, received notice of a violation for that facility and was uncooperative in remedying the subject violations, the New Owner could be deemed ineligible. A New Owner would not be deemed ineligible based upon the sole actions of the prior owner.

What Types of Violations Can Be Disclosed By a New Owner?

Violations of New York law and regulations discovered by an eligible regulated entity through an environmental audit, or discovered by the Department, its contractors, or other state, federal or local government agencies during pollution prevention or compliance assistance may be eligible for penalty mitigation. However the following violations are excluded from eligibility:

  1. a violation of an administrative or judicial order;
  2. a violation of the terms of any response, removal or remedial action covered by a written agreement;
  3. a violation discovered through Department inspection activities, including information requests and review of records related to inspection activities;
  4. a violation reported to a Federal, State or local agency by a member of the public or a "whistleblower" employee.

Do the Violations Need to be Discovered Through a Formal Third Party Environmental Audit?

No. Environmental audit activities include, but are not limited to: a formal audit by a third-party; an informal compliance review by a facility employee; and a compliance assessment conducted pursuant to a facility's environmental management system. Also, new owners may identify the scope of their disclosure. Disclosure may consist of a single violation or may include a variety of violations from one or more environmental regulatory programs.

What if I Discover a Violation That is Required to be Self-Reported Pursuant to Federal or State statute, Regulation, Permit or Order?

If you are an eligible new owner, the fact that the violation is required to be self-reported does not preclude your ability to self disclose and receive penalty mitigation.

What Should a New Owner do to Disclose a Violation?

First, as you proceed with the acquisition of the business ensure that you have an effective plan to understand whether any violations of New York law and regulations exist. Also, be aware that the terms for new owner disclosures are only applicability if the violation is disclosed within 60 days of acquisition. If you are considering the disclosure of violations, please contact the DEC contact for the region you are located.

What Timelines are Associated With Correcting a Disclosed Violation?

A new owner must correct all disclosed violations expeditiously, consistent with any applicable time frame and protocol prescribed by law and regulation, and as may be directed by the Department in writing. Where no time frame is specified elsewhere, correction of the violation(s) should not exceed 60 days after disclosure to the Department, unless an alternate time frame is established as part of an environmental audit agreement or agreed to by the Department in writing. Correcting violations includes remediating any environmental harm associated with the violations, as well as implementing procedures to prevent future violations. The regulated entity must secure all permits, approvals and authorizations required by law; and comply with all existing and applicable statutes, regulations, permits, Orders, or any other legally binding obligation. Department oversight of remedial activity will be implemented where appropriate.


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