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Text: HSB00190                          Text: HSB00192
Text: HSB00100 - HSB00199               Text: HSB Index
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House Study Bill 191

Conference Committee Text

PAG LIN
  1  1    Section 1.  NEW SECTION.  455H.1  TITLE.
  1  2    This chapter shall be known and cited as the "Environmental
  1  3 Audit Privilege and Immunity Act".
  1  4    Sec. 2.  NEW SECTION.  455H.2  FINDINGS AND DECLARATIONS.
  1  5    The general assembly finds and declares that protection of
  1  6 the environment is enhanced by the public's voluntary
  1  7 compliance with environmental laws and that the public will
  1  8 benefit from incentives to voluntarily identify and remedy
  1  9 environmental compliance issues.  It is further declared that
  1 10 limited expansion of the protection against disclosure and
  1 11 prosecution will encourage voluntary compliance and improve
  1 12 environmental quality.  The provisions of this chapter will
  1 13 not inhibit the exercise of regulatory authority by those
  1 14 persons entrusted with protecting the environment.  Therefore,
  1 15 an environmental audit privilege is provided to protect the
  1 16 confidentiality of communication relating to voluntary
  1 17 environmental audits and limited immunity is provided to
  1 18 improve compliance with environmental laws.
  1 19    Sec. 3.  NEW SECTION.  455H.3  DEFINITIONS.
  1 20    As used in this chapter:
  1 21    1.  "Department" means the department of natural resources.
  1 22    2.  "Environmental audit" means a voluntary, internal
  1 23 evaluation of one or more facilities, processes, or activities
  1 24 regulated under local, state, or federal environmental laws or
  1 25 of a management system related to the facility, process, or
  1 26 activity, that is designed to identify and prevent
  1 27 noncompliance and improve compliance with local, state, or
  1 28 federal environmental laws.  An environmental audit may be
  1 29 conducted by the owner or operator, by an employee of the
  1 30 owner or operator, by an officer or director of the facility
  1 31 or operation, by an independent contractor hired by the owner
  1 32 or operator, or by the owner's or operator's attorney.
  1 33    An environmental audit includes the environmental audit
  1 34 report which is a set of documents containing information
  1 35 generated and collected in the course of conducting an
  2  1 environmental audit.  The report includes, but is not limited
  2  2 to, the report document itself, any supporting documents, file
  2  3 notes and records of observations, samples, analytical
  2  4 results, exhibits, findings, opinions, suggestions,
  2  5 recommendations, conclusions, drafts, memoranda, drawings,
  2  6 photographs, computer-generated or electronically recorded
  2  7 information, maps, charts, graphs and surveys, implementation
  2  8 plans, interviews, discussions, correspondence, and
  2  9 communications related to the environmental audit, if the
  2 10 information is collected and developed for the primary purpose
  2 11 of conducting the environmental audit.  An environmental audit
  2 12 report may have any or all of the following components:
  2 13    a.  A report prepared by the auditor, which may include the
  2 14 scope of the environmental audit, the information gained in
  2 15 the environmental audit, conclusions, and recommendations,
  2 16 together with exhibits and appendices.
  2 17    b.  Memoranda and documents analyzing portions or all of
  2 18 the report and discussing implementation issues.
  2 19    c.  An implementation plan that addresses correcting past
  2 20 noncompliance, improving current compliance, or preventing
  2 21 future noncompliance.
  2 22    d.  Periodic updates documenting progress in completing the
  2 23 implementation plan.
  2 24    3.  "Owner" or "operator" means the person or entity who
  2 25 prepared or caused the environmental audit to be undertaken.
  2 26 "Owner or operator" does not include a prospective purchaser
  2 27 who caused the environmental audit to be undertaken.
  2 28    Sec. 4.  NEW SECTION.  455H.4  PRIVILEGE.
  2 29    1.  An environmental audit shall be privileged and shall
  2 30 not be discoverable or admissible as evidence in any legal
  2 31 action in any civil, criminal, or administrative proceeding,
  2 32 or in response to a regulatory inspection or inquiry, except
  2 33 as otherwise provided in this chapter.
  2 34    2.  A person who voluntarily conducts an environmental
  2 35 audit, an officer or employee of the person conducting the
  3  1 environmental audit, or an independent contractor hired by the
  3  2 person to conduct the environmental audit shall not be
  3  3 questioned or examined as to the environmental audit without
  3  4 the consent of the person, or unless ordered to do so by a
  3  5 court of record.  This subsection does not apply if the
  3  6 environmental audit is subject to an exception under section
  3  7 455H.7.
  3  8    3.  The privilege exists as a rebuttable presumption.  A
  3  9 party seeking disclosure of privileged material has the burden
  3 10 to overcome the rebuttable presumption.
  3 11    4.  Failure to comply with review, disclosure, or use
  3 12 prohibitions in this chapter shall be the basis for
  3 13 suppression of any evidence arising or derived from the
  3 14 unauthorized review, disclosure, or use.  The party failing to
  3 15 comply with this chapter shall have the burden of proving that
  3 16 the proffered evidence did not arise and was not derived from
  3 17 the unauthorized activity.
  3 18    Sec. 5.  NEW SECTION.  455H.5  WAIVER OF PRIVILEGE &endash;
  3 19 DISCLOSURE &endash; ORDER.
  3 20    1.  The owner or operator may waive the privilege under
  3 21 section 455H.4.  The privilege cannot be waived except by or
  3 22 with the consent of the owner or operator.
  3 23    2.  The environmental audit may be disclosed under any of
  3 24 the following circumstances without waiving the privilege
  3 25 under section 455H.4:
  3 26    a.  Results of an environmental audit or information
  3 27 generated by the environmental audit may be disclosed to any
  3 28 person employed by the environmental owner or operator of the
  3 29 audited facility or operation, any legal representative of the
  3 30 owner or operator, or any independent contractor retained by
  3 31 the owner or operator to address an issue or issues raised by
  3 32 the environmental audit.
  3 33    b.  Under the terms of a confidentiality agreement between
  3 34 the owner or operator of the facility or operation audited and
  3 35 a potential purchaser of the operation or facility audited.
  4  1    c.  Under the terms of a confidentiality agreement between
  4  2 governmental officials and the owner or operator of the
  4  3 facility or operation audited.
  4  4    d.  To a lender.
  4  5    e.  To the United States environmental protection agency
  4  6 upon the demand of the agency.
  4  7    3.  The existence of an environmental audit is subject to
  4  8 disclosure in a civil, criminal, or administrative proceeding.
  4  9 The party in possession of the environmental audit may assert
  4 10 the privilege.  The party in possession shall not be required
  4 11 to provide the inquiring party with a copy of the
  4 12 environmental audit.
  4 13    4.  The inquiring party may file, with the appropriate
  4 14 court, a petition requesting an in camera review on whether
  4 15 the environmental audit or portions of the environmental audit
  4 16 are privileged or subject to disclosure under this chapter.
  4 17 The inquiring party's failure to file a petition under this
  4 18 subsection shall waive the party's argument that the
  4 19 environmental audit is not privileged.
  4 20    5.  The court shall issue an order scheduling an in camera
  4 21 review, within forty-five days of the filing of the petition.
  4 22    6.   After the in camera review, the court shall issue an
  4 23 order directing whether the information in the environmental
  4 24 audit is subject to disclosure.
  4 25    a.  The order may require disclosure of material for which
  4 26 the privilege is asserted, if the court determines that the
  4 27 privilege is asserted for a fraudulent purpose, the material
  4 28 is not subject to the privilege, or the material, even if
  4 29 subject to the privilege, shows evidence of noncompliance with
  4 30 local, state, or federal environmental laws and appropriate
  4 31 efforts to achieve compliance with local, state, or federal
  4 32 environmental laws were not initiated and pursued with
  4 33 reasonable diligence upon discovery of noncompliance.  The
  4 34 court may compel disclosure of only those portions of a report
  4 35 relevant to the issue in dispute.
  5  1    b.  The order may restrict the distribution and review of
  5  2 the environmental audit or parts of the environmental audit to
  5  3 protect against unnecessary disclosure.
  5  4    7.  The parties may at any time stipulate to entry of an
  5  5 order directing that specific information contained in an
  5  6 environmental audit is or is not subject to the privilege
  5  7 under section 455H.4.
  5  8    Sec. 6.  NEW SECTION.  455H.6  VIOLATION.
  5  9    If a person, party, public entity, public employee, or
  5 10 public official divulges or disseminates all or any part of
  5 11 the information contained in an environmental audit in
  5 12 violation of this chapter or of an order issued by a court
  5 13 under section 455H.5, the person, party, public entity, public
  5 14 employee, or public official is liable for any damages caused
  5 15 by the divulgence or dissemination of the information and
  5 16 incurred by the person for whom the environmental audit was
  5 17 prepared.  A violation of this chapter shall also result in a
  5 18 civil penalty not to exceed ten thousand dollars payable to
  5 19 the aggrieved party.
  5 20    A person who violates this section shall be guilty of a
  5 21 simple misdemeanor and may be found in contempt of a court by
  5 22 a court of record.
  5 23    If the environmental audit otherwise meets the requirements
  5 24 of this chapter, a disclosure or dissemination in violation of
  5 25 this chapter or of an order issued by a court under section
  5 26 455H.5 shall not abrogate the privilege under section 455H.4.
  5 27    This section shall not affect provisions providing
  5 28 employees protection under the following federal provisions,
  5 29 42 U.S.C. } 5851, 42 U.S.C. } 300j-9(i), 42 U.S.C. } 9610, 33
  5 30 U.S.C. } 1367, 15 U.S.C. } 2622, 42 U.S.C. } 6971, and 42
  5 31 U.S.C. } 7622, which provide protection against discriminatory
  5 32 actions taken by employers against employees who report
  5 33 environmental noncompliance.
  5 34    Sec. 7.  NEW SECTION.  455H.7  EXCEPTIONS.
  5 35    The privilege under section 455H.4 shall not extend to any
  6  1 of the following:
  6  2    1.  Documents, communications, data, reports, or other
  6  3 information required to be collected, developed, maintained,
  6  4 reported, or otherwise made available to a regulatory agency
  6  5 pursuant to local, state, or federal environmental laws or
  6  6 regulations.  However, the privilege shall extend to any
  6  7 observations, findings, opinions, suggestions, or conclusions
  6  8 derived from the above by the person conducting the
  6  9 environmental audit.
  6 10    2.  Information obtained by observation, sampling, or
  6 11 monitoring by any regulatory agency.
  6 12    3.  Information obtained from a source independent of the
  6 13 environmental audit.
  6 14    Sec. 8.  NEW SECTION.  455H.8  VOLUNTARY DISCLOSURE.
  6 15    1.  A person who makes a voluntary disclosure of an
  6 16 environmental violation to the department is immune from any
  6 17 administrative or civil penalty associated with the issues
  6 18 disclosed and is immune from any criminal penalties for
  6 19 negligent acts associated with the issues disclosed.  The
  6 20 person shall provide information supporting the claim that the
  6 21 disclosure is voluntary at the time that the disclosure is
  6 22 made to the department.  The person creates a rebuttable
  6 23 presumption that the disclosure is voluntary.  To rebut the
  6 24 presumption that a disclosure is voluntary, the department or
  6 25 other party has the burden of proving that the disclosure was
  6 26 not voluntary.
  6 27    2.  The disclosure of information is voluntary if both of
  6 28 the following circumstances apply:
  6 29    a.  The disclosure arises out of an environmental audit.
  6 30    b.  The person making the disclosure uses reasonable
  6 31 efforts to pursue compliance and corrects the noncompliance
  6 32 within a reasonable period of time after completion of the
  6 33 environmental audit.  Where the evidence shows the
  6 34 noncompliance is the failure to obtain a permit, reasonable
  6 35 effort may be demonstrated by the submittal of a complete
  7  1 permit application within a reasonable time.  Disclosure of
  7  2 information required to be reported by local, state, or
  7  3 federal law is considered to be voluntary disclosure and the
  7  4 immunity provisions in this section are applicable.
  7  5    3.  If a person is required to make a disclosure relating
  7  6 to a specific issue under a specific permit condition or under
  7  7 an order issued by the department, the disclosure is not
  7  8 voluntary with respect to that issue.
  7  9    4.  Except as provided in this section, this section does
  7 10 not affect the authority of the department to require any
  7 11 action associated with the information disclosed in any
  7 12 voluntary disclosure of an environmental violation.
  7 13    5.  Upon application to the department, the time period
  7 14 within which a noncompliance item is corrected under
  7 15 subsection 2 may be extended if it is not practical to correct
  7 16 the noncompliance within a two-year period.  The grant of an
  7 17 extension by the department shall not be unreasonably
  7 18 withheld.  If the department denies an extension, the
  7 19 department shall provide the requesting party with a written
  7 20 explanation of the reasons for the denial.  A request for de
  7 21 novo review of the department's decision may be made to the
  7 22 appropriate court.
  7 23    Sec. 9.  NEW SECTION.  455H.9  ABROGATION OF OTHER
  7 24 PRIVILEGES.
  7 25    This chapter shall not limit, waive, or abrogate the scope
  7 26 or nature of any statutory or common law privilege, including
  7 27 the work product doctrine, the attorney client privilege, and
  7 28 the self-critical analysis privilege.  
  7 29                           EXPLANATION
  7 30    This bill creates the "Environmental Audit Privilege Act",
  7 31 which protects disclosure of environmental audits and provides
  7 32 immunity from penalties for actions which voluntarily disclose
  7 33 the existence of an environmental violation.  The bill finds
  7 34 that the protection of the environment is enhanced by the
  7 35 public's voluntary compliance with environmental laws and the
  8  1 benefit to the public from incentives to voluntarily identify
  8  2 and remedy environmental compliance issues.
  8  3    The bill provides that an environmental audit is privileged
  8  4 and not discoverable as evidence in any legal action.
  8  5 Environmental audit is defined as a voluntary internal
  8  6 evaluation designed to identify and prevent noncompliance with
  8  7 local, state, or federal environmental laws and includes the
  8  8 environmental audit report which contains documents and
  8  9 information generated and collected in the course of
  8 10 conducting an environmental audit.  The audit privilege exists
  8 11 as a rebuttable presumption.  Failure to comply with the
  8 12 review, disclosure, and use of prohibitions in the bill is
  8 13 considered the basis for suppression of any evidence arising
  8 14 from or derived from the unauthorized review, disclosure, or
  8 15 use of information.
  8 16    The bill provides that the owner or operator may waive the
  8 17 environmental audit privilege.  It provides for disclosure of
  8 18 the audit in limited circumstances without waiving the
  8 19 privilege.  A person who wishes to obtain audit information
  8 20 may file a petition for in camera review.  The court is
  8 21 required to schedule an in camera review within 45 days.  The
  8 22 court will issue an order directing whether the audit or
  8 23 portions of the audit is subject to disclosure.
  8 24    The bill provides that any person or any party, public
  8 25 entity, employee, or official who divulges or disseminates
  8 26 information in violation of an order is liable for damages,
  8 27 subject to a civil penalty of up to $10,000, is guilty of a
  8 28 simple misdemeanor, and may be found in contempt of court.
  8 29 The bill does not change employees' rights to disclose
  8 30 violations without violating the chapter under federal
  8 31 "whistleblower" provisions.
  8 32    The bill allows for limited immunity for a voluntary
  8 33 disclosure of an environmental violation by a person to the
  8 34 department of natural resources.  A person who voluntarily
  8 35 discloses a violation is immune from administrative and civil
  9  1 penalties and criminal penalties for negligence that are
  9  2 associated with the issues disclosed.
  9  3    Voluntary disclosure is limited to disclosure arising out
  9  4 of an audit and the person makes reasonable efforts to pursue
  9  5 compliance and correct the noncompliance within a reasonable
  9  6 period of time after completion of the audit.  A disclosure
  9  7 which is required under a specific permit condition or under
  9  8 an order issued by the department of natural resources is not
  9  9 considered to be voluntary.  The bill allows for the
  9 10 department to issue a compliance extension.  The bill does not
  9 11 limit, waive, or abrogate any common-law privilege, including
  9 12 the work product doctrine, attorney-client privilege, and the
  9 13 self-critical analysis privilege.  
  9 14 LSB 1968HC 76
  9 15 js/jj/8
     

Text: HSB00190                          Text: HSB00192
Text: HSB00100 - HSB00199               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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