BILL ANALYSIS
C.S.S.B. 1591
By: Brown
Natural Resources
04-21-95
Committee Report (Substituted)
BACKGROUND
Voluntary environmental, health and safety audits are becoming
increasingly important as a tool for responsible businesses to
determine whether they are in compliance with complex and stringent
laws regulating environmental, health, and safety laws. There are
not enough state and federal enforcement personnel to ensure that
all laws are complied with by the companies. This situation has
caused the state to encourage businesses to participate in
voluntary compliance and audit programs.
PURPOSE
As proposed, C.S.S.B. 1591 establishes provisions to encourage
businesses to voluntarily comply with environmental and
occupational health and safety laws by performing audits and
implementing compliance management systems.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.
SECTION BY SECTION ANALYSIS
SECTION 1. SHORT TITLE: Texas Environmental, Health, and Safety
Audit and Compliance Management System Privilege Act.
SECTION 2. PURPOSE. Sets forth the purpose of this Act.
SECTION 3. DEFINITIONS. (a) Defines "audit report," "environmental
or health and safety law," "environmental or health and safety
audit," "owner and operator," "penalty," "person," and "regulated
facility or operation."
(b) Provides that a person acts intentionally for purposes of
this Act if the person acts intentionally within the meaning
of Section 6.03, Penal Code.
(c) Provides that for purposes of this Act, a person acts
knowingly, or with knowledge, with respect to the nature of
the person's conduct when the person is aware of the person's
physical acts. Provides that a person acts knowingly, or with
knowledge, with respect to the result of the person's conduct
when the person is aware that the conduct will cause the
result.
(d) Provides that a person acts recklessly or is reckless for
purposes of this Act if the person acts recklessly or is
reckless within the meaning of Section 6.03, Penal Code.
(e) Requires the term "environmental or health and safety law"
to be construed broadly to fully implement the privilege
established by this Act.
SECTION 4. AUDIT REPORT. (a) Provides that an audit report is a
report that includes each document and communication, other than
those set forth in Section 8 of this Act, from an environmental or
health and safety audit (audit).
(b) Sets forth the general components that may be contained in
a completed audit report.
(c) Authorizes certain types of exhibits and appendices to be
contained in an audit report including supporting information
collected or developed for the purpose of and in the course of
an audit.
(d) Provides that each document in an audit report should be
labelled with a specific heading. Provides that a failure to
label a document does not constitute a waiver of the audit
privilege and does not create a presumption that the privilege
does not apply.
SECTION 5. PRIVILEGE. (a) Provides that an audit report is
privileged.
(b) Provides that except as provided in Sections 6-9, any part
of an audit report is privileged and not admissible as
evidence or subject to discovery in civil actions, criminal
proceedings, or administrative proceedings.
(c) Provides that a person, when called or subpoenaed as a
witness, cannot be compelled to testify or produce a document
related to an audit if the information discloses any item
listed in Section 4 that was made part of the preparation of
an environmental or health and safety audit report and is
considered a privileged part of an audit report; and for
purposes of this subsection only, the person is affiliated
with the audit or audit results.
(d) Prohibits an employee of a state agency from requesting,
reviewing, or otherwise using an audit report during an agency
inspection of a regulated facility or operation, or an
activity of a regulated facility or operation.
(e) Provides that a party asserting the privilege described in
this section has the burden of establishing the applicability
of the privilege.
SECTION 6. EXCEPTION: WAIVER. (a) Provides that the privilege of
this Act does not apply to the extent that the privilege is waived
by the owner or operator who prepared the audit report or caused
the report to be prepared.
(b) Provides that disclosure of an audit report or any
information generated by an audit does not waive the privilege
established in Section 5 if the disclosure meets certain
requirements.
(c) Provides that a party to a confidentiality agreement
described under Subsection (b)(2) who violates that agreement
is liable for damages caused by the disclosure and for any
other penalties stipulated in the agreement.
(d) Provides that information that is disclosed under
Subsection (b)(3) is confidential and is not subject to
disclosure under the open records law, Chapter 552, Government
Code. Provides that a public entity, public employee, or
public official who discloses information in violation of this
subsection commits a Class B misdemeanor.
SECTION 7. EXCEPTION: DISCLOSURE REQUIRED BY COURT OR
ADMINISTRATIVE HEARINGS OFFICIAL. (a) Authorizes a court or
administrative hearings official with competent jurisdiction to
require disclosure of a portion of an audit report in a civil,
criminal, or administrative proceeding if the court or
administrative hearings official makes certain determinations after
an in-camera review consistent with the appropriate rules of
procedure.
(b) Provides that a party seeking disclosure under this
section has the burden of proving that Subsection (a)(1), (2),
or (3) of this section applies.
(c) Provides that notwithstanding Chapter 2001, Government
Code (Administrative Procedure Act), a decision of an
administrative hearings official under Subsection (a)(1),(2),
and (3) is directly appealable to a court of competent
jurisdiction without disclosure to the administrative
tribunal.
SECTION 8. NONPRIVILEGED MATERIALS. (a) Sets forth information to
which the privilege described under this Act does not apply.
(b) Provides that this section does not limit the right of a
person to agree to conduct and disclose an audit report.
SECTION 9. COURT REVIEW AND DISCLOSURE. (a) Authorizes the
state's attorney to obtain an audit report for which a privilege is
asserted under this Act under a search warrant, criminal subpoena,
or discovery as allowed by the Code of Criminal Procedure and the
Texas Rules of Criminal Procedure if there is reasonable cause to
believe a criminal offense has been committed under an
environmental or health and safety law.
(b) Requires the state's attorney to seal the audit report on
receipt and may not review or disclose the contents of the
report.
(c) Authorizes the owner or operator who prepared the report
or for whom the report was prepared to file by the 30th day
after the date an audit report is received, with the court of
competent jurisdiction a petition requesting an in-camera
review to determine whether all or a portion of the report is
privileged or subject to disclosure. Provides that an owner
or operator who fails to file a petition within the specified
period waives the privilege.
(d) Requires the court, on the filing of a petition under
Subsection (c), to issue an order that schedules the in-camera
review for a certain date; and authorizes the state's attorney
to remove the seal from the report to review it.
(e) Authorizes the state's attorney to consult with
enforcement agencies regarding the contents of the report to
prepare for the in-camera review.
(f) Sets forth provisions regarding the information used in
preparation for the in-camera review under Subsection (e).
(g) Provides that Subsection (f) of this section does not
apply to information a court finds to be subject to
disclosure.
(h) Requires a court or the appropriate administrative
official to suppress evidence offered in any civil, criminal,
or administrative proceeding that arises or is derived from
review, disclosure, or use of information obtained under this
section if the review, disclosure, or use is not authorized
under this section. Provides that a party allegedly failing
to comply with this section has the burden of proving that
evidence offered did not arise and was not delivered from the
unauthorized review, disclosure, or use.
(i) Authorizes the parties to stipulate to entry of an order
directing that specific information contained in an audit
report is or is not subject to the privilege.
(j) Authorizes a court to compel the disclosure of only those
portions of an audit report relevant to issues in dispute in
the proceedings.
(k) Provides that a person commits an offense if the person
commits certain acts.
(l) Provides that an offense under Subsection (k) is a Class
B misdemeanor.
(m) Authorizes a court to find a person who discloses
information in violation of this section in contempt of court
and to order other appropriate relief.
SECTION 10. VOLUNTARY DISCLOSURE; IMMUNITY. (a) Provides that
except as provided by this section, a person who makes a voluntary
disclosure of a violation of an environmental or health and safety
law is immune from an administrative, civil, or criminal penalty
for the violation disclosed.
(b) Sets forth acts that make disclosure voluntary.
(c) Provides that a disclosure is not voluntary for purposes
of this section if it is a report to a regulatory agency
required solely by a specific condition of an order or decree.
(d) Provides that the immunity established under Subsection
(a) of this section does not apply. Authorizes an
administrative, civil, or criminal penalty to be imposed under
applicable law if the person or a member of the person's
management intentionally or knowingly committed the disclosed
violation; or the person or a member of the person's
management who made the disclosure recklessly committed the
violation resulting in substantial off-site harm to persons,
property, or the environment.
(e) Sets forth the appropriate mitigating factors of a penalty
that is imposed under Subsection (d).
(f) Provides that in a civil, administrative, or criminal
enforcement action brought against a person for a violation
for which the person claims to have made a voluntary
disclosure, the person claiming the immunity has the burden of
establishing a prima facie case that the disclosure was
voluntary. Provides that after the person claiming the
immunity establishes a prima facie case of voluntary
disclosure other than a case in which under Subsection (d) of
this section immunity does not apply, the enforcement
authority has the burden of rebutting the presumption by a
preponderance of the evidence or, in a criminal case, by proof
beyond a reasonable doubt.
SECTION 11. CIRCUMVENTION BY RULE PROHIBITED. Prohibits a
regulatory agency from adopting a rule or imposing a condition that
circumvents the purpose of this Act.
SECTION 12. APPLICABILITY. Makes application of this Act
prospective.
SECTION 13. RELATIONSHIP TO OTHER RECOGNIZED PRIVILEGES.
Provides that this Act does not limit, waive, or abrogate the scope
of nature of any statutory or common law privilege, including the
work product doctrine and the attorney-client privilege.
SECTION 14. AMENDMENT; OPEN RECORDS LAW. Amends Chapter 552,
Government Code, by adding Section 552.124, as follows:
Sec. 552.124. EXCEPTION: CERTAIN AUDITS. Provides that any
documents or information privileged under the Texas
Environmental, Health, and Safety Audit Privilege Act are
excepted from the requirements of Section 552.021.
SECTION 15 Emergency clause.
Effective date: upon passage.