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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 an 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 may include, but is not
2 2 limited to, the report document itself, any supporting
2 3 documents, file notes and records of observations, samples,
2 4 analytical 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, 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, recommendations,
2 16 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. "Inquiring party" means any party appearing before a
2 25 court or administrative tribunal.
2 26 4. "Owner or operator" means the person or entity who
2 27 prepared or caused the environmental audit to be undertaken.
2 28 "Owner or operator" does not include a prospective purchaser
2 29 who caused the environmental audit to be undertaken.
2 30 Sec. 4. NEW SECTION. 455H.4 PRIVILEGE.
2 31 1. An environmental audit is privileged and confidential
2 32 and is not discoverable or admissible as evidence in any legal
2 33 action in any civil, criminal, or administrative proceeding,
2 34 or in response to a regulatory inspection or inquiry, except
2 35 as otherwise provided in this chapter.
3 1 2. A person who conducts an environmental audit for an
3 2 owner or operator, an officer or employee of the owner or
3 3 operator conducting the environmental audit, or an independent
3 4 contractor hired by the owner or operator to conduct the
3 5 environmental audit shall not be questioned or examined as to
3 6 the environmental audit without the consent of the owner or
3 7 operator, or unless ordered to do so by a court of record or
3 8 administrative tribunal. This subsection does not apply if
3 9 the environmental audit is subject to an exception under
3 10 section 455H.7.
3 11 3. A violation of the 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. A party failing to
3 15 comply with this chapter shall have the burden of proving that
3 16 the proffered evidence did not derive from the unauthorized
3 17 activity.
3 18 Sec. 5. NEW SECTION. 455H.5 WAIVER OF PRIVILEGE –
3 19 DISCLOSURE – ORDER.
3 20 1. An 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 owner or operator of the audited
3 29 facility or operation, any legal representative of the owner
3 30 or operator, or any independent contractor retained by the
3 31 owner or operator to address an issue or issues raised by the
3 32 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 of the owner or operator by the owner or
4 5 operator.
4 6 e. To the United States environmental protection agency
4 7 upon the demand of the agency by the owner or operator.
4 8 3. The existence of an environmental audit is subject to
4 9 disclosure in a civil, criminal, or administrative proceeding.
4 10 The party in possession of the environmental audit may assert
4 11 the privilege. The party in possession shall not be required
4 12 to provide an inquiring party with a copy of the environmental
4 13 audit.
4 14 4. The inquiring party may file, with the appropriate
4 15 court or administrative tribunal, a petition requesting an in
4 16 camera review of whether the environmental audit or portions
4 17 of the environmental audit are privileged or subject to
4 18 disclosure under this chapter. The inquiring party's failure
4 19 to file a petition under this subsection shall waive the
4 20 party's argument that the environmental audit is not
4 21 privileged.
4 22 5. The court or administrative tribunal shall issue an
4 23 order scheduling an in camera review within forty-five days of
4 24 the filing of the petition.
4 25 6. After the in camera review, the court or
4 26 administrative tribunal shall issue an order directing whether
4 27 the information in the environmental audit is subject to
4 28 disclosure.
4 29 a. The order may require disclosure of information for
4 30 which the privilege is asserted if the court or administrative
4 31 tribunal determines any of the following:
4 32 (1) The privilege is asserted for a fraudulent purpose.
4 33 (2) The material is not subject to the privilege.
4 34 (3) The material, even if subject to the privilege, shows
4 35 evidence of noncompliance with local, state, or federal
5 1 environmental laws and appropriate efforts to achieve
5 2 compliance with local, state, or federal environmental laws
5 3 were not initiated and pursued with reasonable diligence upon
5 4 discovery of noncompliance.
5 5 (4) The material, even if subject to the privilege, shows
5 6 that violations of local, state, or federal environmental laws
5 7 were intentional, or shows that violations of local, state, or
5 8 federal environmental laws resulted in substantial harm to the
5 9 public health or the environment.
5 10 The court or administrative tribunal may compel disclosure
5 11 of only those portions of a report relevant to the issue in
5 12 dispute.
5 13 b. The order may restrict the distribution and review of
5 14 the environmental audit or parts of the environmental audit to
5 15 protect against unnecessary disclosure.
5 16 7. The parties may at any time stipulate to entry of an
5 17 order directing that specific information contained in an
5 18 environmental audit is or is not subject to the privilege
5 19 under section 455H.4.
5 20 Sec. 6. NEW SECTION. 455H.6 EXCEPTIONS.
5 21 The privilege under section 455H.4 shall not extend to any
5 22 of the following:
5 23 1. Documents, communications, data, reports, or other
5 24 information required to be collected, developed, maintained,
5 25 reported, or otherwise made available to a regulatory agency
5 26 pursuant to local, state, or federal environmental laws or
5 27 regulations. However, the privilege shall extend to any
5 28 observations, findings, opinions, suggestions, or conclusions
5 29 derived from the above by the person conducting the
5 30 environmental audit.
5 31 2. Information obtained from observation, sampling, or
5 32 monitoring by any regulatory agency.
5 33 3. Information obtained from a source independent of the
5 34 environmental audit.
5 35 Sec. 7. NEW SECTION. 455H.7 VIOLATIONS.
6 1 1. If a person, party, public entity, public employee, or
6 2 public official divulges or disseminates all or any part of
6 3 the information contained in an environmental audit in
6 4 violation of this chapter or violates an order issued by a
6 5 court or administrative tribunal under section 455H.5, the
6 6 person, party, public entity, public employee, or public
6 7 official is liable for actual damages caused by the divulgence
6 8 or dissemination of the information and incurred by the owner
6 9 or operator for whom the environmental audit was prepared. A
6 10 violation of this chapter shall also subject the violator to
6 11 punitive damages of not more than ten thousand dollars.
6 12 2. A person who violates an order rendered pursuant to
6 13 section 455H.5 shall be guilty of a simple misdemeanor and may
6 14 be found in contempt of court by a court of record.
6 15 3. If the environmental audit meets the requirements of
6 16 this chapter, a disclosure or dissemination in violation of
6 17 this chapter or of an order issued by a court or
6 18 administrative tribunal under section 455H.5 shall not
6 19 abrogate the privilege under section 455H.4.
6 20 4. This section shall not affect the enforceability of any
6 21 of the following federal provisions providing protection
6 22 against discriminatory actions taken by employers against
6 23 employees who report environmental noncompliance: 42 U.S.C. }
6 24 5851; 42 U.S.C. } 300j-9(i); 42 U.S.C. } 9610; 33 U.S.C. }
6 25 1367; 15 U.S.C. } 2622; 42 U.S.C. } 6971; and 42 U.S.C. }
6 26 7622.
6 27 Sec. 8. NEW SECTION. 455H.8 VOLUNTARY DISCLOSURE OF
6 28 ENVIRONMENTAL VIOLATION – IMMUNITY.
6 29 1. An owner or operator who makes a voluntary disclosure
6 30 of an environmental violation, which is revealed as a result
6 31 of an environmental audit, to the department is immune from
6 32 any administrative or civil penalty associated with the issues
6 33 disclosed and is immune from any criminal penalties for
6 34 negligent acts associated with the issues disclosed. The
6 35 owner or operator shall provide information supporting the
7 1 claim that the disclosure is voluntary at the time that the
7 2 disclosure is made to the department. The owner or operator
7 3 creates a rebuttable presumption that the disclosure is
7 4 voluntary by providing such information at the time of
7 5 disclosure. To rebut the presumption that a disclosure is
7 6 voluntary, the department or other party has the burden of
7 7 proving that the disclosure was not voluntary.
7 8 2. The disclosure of information is voluntary if both of
7 9 the following circumstances exist:
7 10 a. The disclosure arises out of an environmental audit and
7 11 relates to the privileged information.
7 12 b. The person making the disclosure uses reasonable
7 13 efforts to pursue compliance and corrects the noncompliance
7 14 within a reasonable period of time after completion of the
7 15 environmental audit. Where the evidence shows the
7 16 noncompliance is the failure to obtain a permit, reasonable
7 17 effort may be demonstrated by the submittal of a complete
7 18 permit application within a reasonable time. Disclosure of
7 19 information required to be reported by local, state, or
7 20 federal law is considered to be voluntary disclosure and the
7 21 immunity provisions in this section are applicable.
7 22 3. If a person is required to make a disclosure relating
7 23 to a specific issue under a specific permit condition or under
7 24 an order issued by the department, the disclosure is not
7 25 voluntary with respect to that issue.
7 26 4. Except as provided in this section, this section does
7 27 not affect the authority of the department to require any
7 28 action associated with the information disclosed in any
7 29 voluntary disclosure of an environmental violation.
7 30 5. Upon application to the department, the time period
7 31 within which a noncompliance item is corrected under
7 32 subsection 2 may be extended if it is not practical to correct
7 33 the noncompliance within a two-year period. The department
7 34 shall not unreasonably withhold the grant of an extension. If
7 35 the department denies an extension, the department shall
8 1 provide the requesting party with a written explanation of the
8 2 reasons for the denial. A request for de novo review of the
8 3 department's decision may be made to the appropriate court.
8 4 Sec. 9. NEW SECTION. 455H.9 ABROGATION OF OTHER
8 5 PRIVILEGES.
8 6 This chapter shall not limit, waive, or abrogate the scope
8 7 or nature of any statutory or common-law privilege, including
8 8 the work product doctrine, the attorney-client privilege, and
8 9 the self-critical analysis privilege.
8 10 EXPLANATION
8 11 This bill creates the "Environmental Audit Privilege and
8 12 Immunity Act", which protects disclosure of environmental
8 13 audits and provides immunity from penalties for actions which
8 14 voluntarily disclose the existence of an environmental
8 15 violation. The bill finds that the protection of the
8 16 environment is enhanced by the public's voluntary compliance
8 17 with environmental laws and that the public benefits from
8 18 incentives to voluntarily identify and remedy environmental
8 19 compliance issues.
8 20 The bill provides that an environmental audit is privileged
8 21 and not discoverable as evidence in any legal action.
8 22 Environmental audit is defined as a voluntary internal
8 23 evaluation designed to identify and prevent noncompliance with
8 24 local, state, or federal environmental laws and includes the
8 25 environmental audit report which contains documents and
8 26 information generated and collected in the course of
8 27 conducting an environmental audit. A violation of the review,
8 28 disclosure, or use prohibitions in the bill is considered the
8 29 basis for suppression of any evidence arising from or derived
8 30 from the unauthorized review, disclosure, or use of
8 31 information.
8 32 The bill provides that an owner or operator may waive the
8 33 environmental audit privilege. It provides for disclosure of
8 34 the audit in limited circumstances without waiving the
8 35 privilege. A person who wishes to obtain audit information
9 1 may file a petition for in camera review. The court or
9 2 administrative tribunal is required to schedule an in camera
9 3 review within 45 days. The court or administrative tribunal
9 4 shall issue an order directing whether the audit or portions
9 5 of the audit are subject to disclosure. The bill provides
9 6 that an audit may be disclosed if the privilege is asserted
9 7 for a fraudulent purpose, if the material is not subject to
9 8 the privilege, if appropriate efforts to achieve compliance
9 9 with local, state, or federal environmental laws were not
9 10 initiated and pursued with reasonable diligence, if violations
9 11 were intentional, or if violations resulted in substantial
9 12 harm to the public health or the environment.
9 13 The bill provides that any person, party, public entity,
9 14 employee, or official who divulges or disseminates information
9 15 in violation of the privilege or an order is liable for actual
9 16 damages and is subject to punitive damages of up to $10,000.
9 17 A person who violates an order rendered under the Act is
9 18 guilty of a simple misdemeanor and may be found in contempt of
9 19 court. The bill does not change employees' rights to disclose
9 20 violations under federal "whistleblower" provisions.
9 21 The bill allows for limited immunity for a voluntary
9 22 disclosure of an environmental violation by an owner or
9 23 operator to the department of natural resources. An owner or
9 24 operator who voluntarily discloses a violation is immune from
9 25 administrative and civil penalties and criminal penalties for
9 26 negligence that are associated with the issues disclosed.
9 27 Voluntary disclosure is limited to disclosure arising out
9 28 of an audit and to instances when the owner or operator makes
9 29 reasonable efforts to pursue compliance and correct the
9 30 noncompliance within a reasonable period of time after
9 31 completion of the audit. A disclosure which is required under
9 32 a specific permit condition or under an order issued by the
9 33 department of natural resources is not considered to be
9 34 voluntary. The bill allows for the department to issue a
9 35 compliance extension. The bill does not limit, waive, or
10 1 abrogate any common-law privilege, including the work product
10 2 doctrine, attorney-client privilege, and the self-critical
10 3 analysis privilege.
10 4 LSB 1660HH 77
10 5 tm/jj/8
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