(1) (a) Any energy and carbon management operator that violates this article 60, any rule or order of the commission, or any permit is subject to a penalty of not more than fifteen thousand dollars for each act of violation per day that the violation continues. A violation described in this subsection (1)(a) continues for each day that it is not corrected by the energy and carbon management operator. (b) The commission may impose a penalty by order only after a hearing in accordance with section 34-60-108 or by an administrative order by consent entered into by the commission and the energy and carbon management operator. (c) The commission shall: (I) Promulgate rules that establish a penalty schedule appropriate to the nature of the violation and provide for the consideration of any aggravating or mitigating circumstances. The rules must establish the basis for determining the duration of a violation for purposes of imposing the applicable penalty and include presumptions that: (A) A reporting or other minor operational violation begins on the day that the report should have been made or other corrective action should have been taken and ends when the required report is submitted or other corrective action is commenced; (B) Any other violation begins on the date the violation was discovered or should have been discovered through the exercise of reasonable care and ends when corrective action is commenced; (C) The failure to diligently implement corrective action pursuant to a schedule embodied in an administrative order on consent, order finding violation, or other order of the commission constitutes an independent violation for which the energy and carbon management operator may be subject to additional penalties or corrective action orders imposed by the commission; and (D) The number of days of violation does not include any period necessary to allow the energy and carbon management operator to engage in good faith negotiation with the commission regarding an alleged violation if the energy and carbon management operator demonstrates a prompt, effective, and prudent response to the violation. (II) Publish a quarterly report on its website that specifies, for each penalty assessed in the previous quarter: (A) The actual penalty assessed, including the number of days for which the penalty was assessed and the amount of the penalty per day of violation; (B) The aggravating or mitigating circumstances from the penalty schedule that applied; (C) Whether the violation was part of a pattern of violations; (D) Whether an egregious violation resulted from gross negligence or knowing and willful misconduct; (E) Whether the penalty was assessed after a hearing or by an administrative order by consent; and (F) Any other rationale used in determining the amount of the per-day penalty, duration of the violation, or amount of the penalty actually assessed; and (III) Ensure that the reports prepared pursuant to subparagraph (II) of this paragraph (c) are discussed at the annual departmental presentations made pursuant to section 2-7-203, C.R.S. (d) An energy and carbon management operator subject to a penalty order shall pay the amount due within thirty days after its imposition unless the energy and carbon management operator files a judicial appeal. The commission may recover penalties owed under this section in a civil action brought by the attorney general at the request of the commission in the second judicial district. Money collected through the imposition of penalties must be credited first to any legal costs and attorney fees incurred by the attorney general in the recovery action and then to the environmental response account in the energy and carbon management cash fund created in section 34-60-122 (5). (e) The general assembly declares that the purposes of this subsection (1) are to deter noncompliance and to encourage any out-of-compliance energy and carbon management operators to come into compliance as soon as possible and to those ends intends that, in determining the amount of a penalty, the commission should not reduce the number of days of violation for which a penalty is assessed below that number which the evidence supports. (2) If any person, for the purpose of evading this article 60 or any rule, regulation, or order of the commission, makes or causes to be made any false entry or statement in a report required by this article 60 or by any such rule, regulation, or order, or makes or causes to be made any false entry in any record, account, or memorandum required by this article 60 or by any such rule, regulation, or order, or omits or causes to be omitted from any such record, account, or memorandum full, true, and correct entries as required by this article 60 or by any such rule, regulation, or order, or removes from this state or destroys, mutilates, alters, or falsifies any such record, account, or memorandum, such person commits a class 2 misdemeanor. (3) Any person knowingly aiding or abetting any other person in the violation of any provision of this article 60 or any rule, regulation, or order of the commission commits a class 2 misdemeanor. (4) (a) Any person may submit a complaint to the commission alleging that a violation of this article 60, any rule or order of the commission, or any permit has occurred. If a complaint is received by the commission, the commission or the director shall promptly commence and complete an investigation into the violation alleged by the complaint unless: (I) The complaint clearly appears on its face to be frivolous, falsified, or trivial; or (II) The complainant withdraws the complaint. (b) In investigating a violation alleged by a complaint received pursuant to subsection (4)(a) of this section, the commission or the director shall accept and consider all relevant evidence it receives or acquires, including audio, video, or testimonial evidence, unless the evidence is, on its face, falsified. (c) Whenever the commission or the director has reasonable cause to believe a violation of any provision of this article 60, any rule or order of the commission, or any permit has occurred, including based on a written complaint from any person, the commission or the director shall provide written notice to the energy and carbon management operator whose act or omission allegedly resulted in the violation and require that the energy and carbon management operator remedy the violation. The notice must be served personally or by certified mail, return receipt requested, to the energy and carbon management operator or the energy and carbon management operator's agent for service of process and must state the provision alleged to have been violated, the facts alleged to constitute the violation, and any corrective action and abatement deadlines the commission or director elects to require of the energy and carbon management operator. (d) As used in this subsection (4), "director" means the director of the commission. (5) (a) If an energy and carbon management operator fails to take corrective action required pursuant to subsection (4) of this section, or whenever the commission or the director has evidence that a violation of this article 60, or of any rule or order of the commission, or of any permit has occurred, under circumstances deemed to constitute an emergency situation or under circumstances that cause or threaten to cause a significant adverse impact to public health, safety, welfare, the environment, or wildlife resources that require immediate action, the commission or the director may issue a cease-and-desist order to the energy and carbon management operator whose act or omission allegedly resulted in the violation. The cease-and- desist order must require action by the energy and carbon management operator as the commission or director deems appropriate. The order must be served personally or by certified mail, return receipt requested, to the energy and carbon management operator or the energy and carbon management operator's agent for service of process and must state the provision alleged to have been violated, the facts alleged to constitute the violation, the time by which the acts or practices cited are required to cease, and any corrective action the commission or the director elects to require of the energy and carbon management operator. (b) The commission or the director may require an energy and carbon management operator to appear for a hearing before the commission no sooner than fifteen days after the issuance of a cease-and-desist order; except that the energy and carbon management operator may request an earlier hearing. At any hearing concerning a cease-and-desist order, the commission shall permit all interested parties and any complaining parties to present evidence and argument and to conduct cross-examination required for a full disclosure of the facts. (c) In the event that an energy and carbon management operator fails to comply with a cease-and-desist order, the commission may request the attorney general to bring suit pursuant to section 34-60-109. (6) If the commission determines, after a hearing conducted in accordance with section 34-60-108, that an energy and carbon management operator has failed to perform any corrective action imposed under subsection (4) of this section or failed to comply with a cease-and-desist order issued under subsection (5) of this section, the commission may issue an order suspending, modifying, or revoking the operator's permit or permits or suspending or revoking the operator's license to conduct oil and gas operations or may take other appropriate action. An energy and carbon management operator subject to an order that suspends, modifies, or revokes a permit or that suspends or revokes the operator's license to conduct oil and gas operations shall continue the affected operations only for the purpose of bringing the affected operations into compliance with the permit or modified permit and must bring the affected operations into compliance under the supervision of the commission. Once the affected operations are in compliance to the satisfaction of the commission and any penalty not subject to judicial review or appeal has been paid, the commission may reinstate the permit or the license to conduct oil and gas operations. (7) (a) The commission or the director shall issue an order to an energy and carbon management operator to appear for a hearing before the commission in accordance with section 34-60-108 whenever the commission or the director has evidence that an energy and carbon management operator is responsible for: (I) Gross negligence or knowing and willful misconduct that results in an egregious violation; (II) A pattern of violation of this article 60, any rule or order of the commission, or any permit; (III) A violation of this article 60, any rule or order of the commission, or any permit, if such violation results in a commission order imposing a penalty of one million dollars or more; (IV) A violation that caused a major adverse impact, as defined in the commission's rules, to public health, safety, welfare, the environment, or wildlife resources and the violation is the third violation in the state in one year that caused a major adverse impact, as defined in the commission's rules, to public health, safety, welfare, the environment, or wildlife resources; or (V) A violation that caused death or serious bodily injury to an individual. (b) If the commission finds, after the hearing conducted pursuant to subsection (7)(a) of this section, that the energy and carbon management operator is responsible under the legal standards specified in subsection (7)(a) of this section, the commission may issue an order that prohibits the issuance of any new permits to the energy and carbon management operator, suspends any or all of the energy and carbon management operator's certificates of clearance, suspends the operator's license to conduct oil and gas operations, or any combination of the three. If the energy and carbon management operator demonstrates to the satisfaction of the commission that the operator has brought each of the violations into compliance and that any penalty not subject to judicial review or appeal has been paid, the commission may vacate the order. (c) In a hearing conducted pursuant to this subsection (7), the commission may consider as evidence violations for which enforcement was commenced prior to May 16, 2024, in determining whether to prohibit the issuance of any new permits to the operator, suspend any or all of the operator's certificates of clearance, suspend the operator's license to conduct oil and gas operations, or any combination of the three.
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