By Chisum H.B. No. 3459
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to environmental and health and safety audits; providing a
1-3 penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 5(b), Texas Environmental, Health, and
1-6 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
1-7 Statutes), is amended to read as follows:
1-8 (b) Except as provided in Sections 6, 7, and 8[, and 9] of
1-9 this Act, any part of an audit report is privileged and is not
1-10 admissible as evidence or subject to discovery in:
1-11 (1) a civil action, whether legal or equitable; or
1-12 (2) [a criminal proceeding; or]
1-13 [(3)] an administrative proceeding.
1-14 SECTION 2. Section 6, Texas Environmental, Health, and
1-15 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
1-16 Statutes), is amended by amending Subsection (b) and adding
1-17 Subsection (e) to read as follows:
1-18 (b) Disclosure of an audit report or any information
1-19 generated by an environmental or health and safety audit does not
1-20 waive the privilege established by Section 5 of this Act if the
1-21 disclosure:
1-22 (1) is made to address or correct a matter raised by
1-23 the environmental or health and safety audit and is made only to:
1-24 (A) a person employed by the owner or operator,
2-1 including temporary and contract employees;
2-2 (B) a legal representative of the owner or
2-3 operator;
2-4 (C) an officer or director of the regulated
2-5 facility or operation or a partner of the owner or operator; or
2-6 (D) an independent contractor retained by the
2-7 owner or operator;
2-8 (2) is made under the terms of a confidentiality
2-9 agreement between the person for whom the audit report was prepared
2-10 or the owner or operator of the audited facility or operation and:
2-11 (A) a partner or potential partner of the owner
2-12 or operator of the facility or operation;
2-13 (B) a transferee or potential transferee of the
2-14 facility or operation;
2-15 (C) a lender or potential lender for the
2-16 facility or operation;
2-17 (D) a governmental official of [or] a state [or
2-18 federal agency]; or
2-19 (E) a person or entity engaged in the business
2-20 of insuring, underwriting, or indemnifying the facility or
2-21 operation; or
2-22 (3) is made under a claim of confidentiality to a
2-23 governmental official or agency by the person for whom the audit
2-24 report was prepared or by the owner or operator.
2-25 (e) Nothing in this section shall be construed to circumvent
2-26 the protections provided by federal or state law for individuals
2-27 that disclose information to law enforcement authorities.
3-1 SECTION 3. Section 6(d), Texas Environmental, Health, and
3-2 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
3-3 Statutes), is amended to read as follows:
3-4 (d) Information that is disclosed under Subsection (b)(3) of
3-5 this section is confidential and is not subject to disclosure under
3-6 Chapter 552, Government Code. A public entity, public employee, or
3-7 public official who discloses information in violation of this
3-8 subsection is subject to any penalty provided in Chapter 552,
3-9 Government Code [commits an offense. An offense under this
3-10 subsection is a Class B misdemeanor]. It is an affirmative defense
3-11 to the clerical dissemination of a privileged audit report that the
3-12 report was not clearly labeled "COMPLIANCE REPORT: PRIVILEGED
3-13 DOCUMENT" or words of similar import. The lack of labeling may not
3-14 be raised as a defense if the entity, employee, or official knew or
3-15 had reason to know that the document was a privileged audit report.
3-16 SECTION 4. Section 7(d), Texas Environmental, Health, and
3-17 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
3-18 Statutes), is amended to read as follows:
3-19 (d) A person claiming the privilege is subject to sanctions
3-20 as provided by Rule 215 of the Texas Rules of Civil Procedure or to
3-21 a fine not to exceed $10,000 if the court finds, consistent with
3-22 fundamental due process, that the person intentionally or knowingly
3-23 claimed the privilege for unprotected information as provided in
3-24 Section 8 of this Act.
3-25 SECTION 5. Section 7(a), Texas Environmental, Health, and
3-26 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
3-27 Statutes), is amended to read as follows:
4-1 (a) A court or administrative hearings official with
4-2 competent jurisdiction may require disclosure of a portion of an
4-3 audit report in a civil[, criminal,] or administrative proceeding
4-4 if the court or administrative hearings official determines, after
4-5 an in camera review consistent with the appropriate rules of
4-6 procedure, that:
4-7 (1) the privilege is asserted for a fraudulent
4-8 purpose;
4-9 (2) the portion of the audit report is not subject to
4-10 the privilege under Section 8 of this Act; or
4-11 (3) the portion of the audit report shows evidence of
4-12 noncompliance with an environmental or health and safety law and
4-13 appropriate efforts to achieve compliance with the law were not
4-14 promptly initiated and pursued with reasonable diligence after
4-15 discovery of noncompliance.
4-16 SECTION 6. Section 9, Texas Environmental, Health, and
4-17 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
4-18 Statutes), is amended to read as follows:
4-19 Sec. 9. [Court] Review OF PRIVILEGED DOCUMENTS BY
4-20 GOVERNMENTAL AUTHORITY [and Disclosure]. (a) Where an audit
4-21 report is obtained, reviewed, or used in a criminal proceeding, the
4-22 administrative or civil evidentiary privilege created by this Act
4-23 is not waived or eliminated for any other purpose [If there is
4-24 reasonable cause to believe a criminal offense has been committed
4-25 under an environmental or health and safety law, the attorney
4-26 representing the state may obtain an audit report for which a
4-27 privilege is asserted under this Act under a search warrant,
5-1 criminal subpoena, or discovery as allowed by the Code of Criminal
5-2 Procedure and the Texas Rules of Criminal Procedure].
5-3 (b) Notwithstanding the privilege established under this
5-4 Act, a regulatory agency may review information that is required to
5-5 be available under a specific state or federal law, but such review
5-6 does not waive or eliminate the administrative or civil evidentiary
5-7 privilege where applicable [On receipt of the audit report, the
5-8 attorney representing the state shall seal the report and may not
5-9 review or disclose the contents of the report].
5-10 (c) If information is required to be available to the public
5-11 by operation of a specific state or federal law, the governmental
5-12 authority shall notify the person claiming the privilege of the
5-13 potential for public disclosure prior to obtaining such information
5-14 under Subsection (a) or (b) [Not later than the 30th day after the
5-15 date an audit report is received under Subsection (a), the owner or
5-16 operator who prepared the report or for whom the report was
5-17 prepared may file with a court of competent jurisdiction a petition
5-18 requesting an in camera review to determine whether all or a
5-19 portion of the report is privileged or is subject to disclosure
5-20 under this Act. An owner or operator who fails to file a petition
5-21 under this subsection within the period specified by this
5-22 subsection waives the privilege].
5-23 (d) If privileged information is disclosed under Subsection
5-24 (b) or (c), on [On the filing of a petition under Subsection (c) of
5-25 this section, the court shall issue an order that:]
5-26 [(1) schedules the in camera review for a date not
5-27 later than the 45th day after the date the petition is filed; and]
6-1 [(2) authorizes the attorney representing the state to
6-2 remove the seal from the report to review the report, subject to
6-3 appropriate limitations on distribution or disclosure of the report
6-4 that are specified in the order to protect against unnecessary
6-5 disclosure.]
6-6 [(e) The attorney representing the state may consult with
6-7 enforcement agencies regarding the contents of the report as
6-8 necessary to prepare for the in camera review.]
6-9 [(f) Information used in preparation for the in camera
6-10 review under Subsection (e) of this section:]
6-11 [(1) is confidential;]
6-12 [(2) may not be used in any investigation or legal
6-13 proceeding; and]
6-14 [(3) is not subject to disclosure under Chapter 552,
6-15 Government Code.]
6-16 [(g) Subsection (f) of this section does not apply to
6-17 information a court finds to be subject to disclosure.]
6-18 [(h) On] the motion of a party, a court or the appropriate
6-19 administrative official shall suppress evidence offered in any
6-20 civil[, criminal,] or administrative proceeding that arises or is
6-21 derived from review, disclosure, or use of information obtained
6-22 under this section if the review, disclosure, or use is not
6-23 authorized under Section 8 [this section]. A party having received
6-24 information under Subsection (b) or (c) [allegedly failing to
6-25 comply with this section] has the burden of proving that the
6-26 evidence offered did not arise and was not derived from the
6-27 [unauthorized] review of privileged information[, disclosure, or
7-1 use].
7-2 [(i) The parties may stipulate to entry of an order
7-3 directing that specific information contained in an audit report is
7-4 or is not subject to the privilege.]
7-5 [(j) A court may compel the disclosure of only those
7-6 portions of an audit report relevant to issues in dispute in the
7-7 proceeding.]
7-8 [(k) A court may find a person who discloses information in
7-9 violation of this section in contempt of court and may order other
7-10 appropriate relief.]
7-11 SECTION 7. Sections 10(a), (b), (d), (f), and (h), Texas
7-12 Environmental, Health, and Safety Audit Privilege Act (Article
7-13 4447cc, Vernon's Texas Civil Statutes), are amended to read as
7-14 follows:
7-15 (a) Except as provided by this section, a person who makes a
7-16 voluntary disclosure of a violation of an environmental or health
7-17 and safety law is immune from an administrative or[,] civil[, or
7-18 criminal] penalty for the violation disclosed.
7-19 (b) A disclosure is voluntary only if:
7-20 (1) the disclosure was made promptly after knowledge
7-21 of the information disclosed is obtained by the person;
7-22 (2) the disclosure was made in writing by certified
7-23 mail to an agency that has regulatory authority with regard to the
7-24 violation disclosed;
7-25 (3) an investigation of the violation was not
7-26 initiated or the violation was not independently detected by an
7-27 agency with enforcement jurisdiction before the disclosure was made
8-1 using certified mail;
8-2 (4) the disclosure arises out of a voluntary
8-3 environmental or health and safety audit;
8-4 (5) the person who makes the disclosure initiates an
8-5 appropriate effort to achieve compliance, pursues that effort with
8-6 due diligence, and corrects the noncompliance within a reasonable
8-7 time;
8-8 (6) the person making the disclosure cooperates with
8-9 the appropriate agency in connection with an investigation of the
8-10 issues identified in the disclosure; and
8-11 (7) the violation did not result in injury or imminent
8-12 and substantial risk of serious injury to one or more persons at
8-13 the site or [substantial] off-site substantial actual harm or
8-14 imminent and substantial risk of harm to persons, property, or the
8-15 environment.
8-16 (d) The immunity established by Subsection (a) of this
8-17 section does not apply and an administrative or [,] civil[, or
8-18 criminal] penalty may be imposed under applicable law if:
8-19 (1) the person who made the disclosure intentionally
8-20 or knowingly committed or was responsible within the meaning of
8-21 Section 7.02, Penal Code, for the commission of the disclosed
8-22 violation;
8-23 (2) the person who made the disclosure recklessly
8-24 committed or was responsible within the meaning of Section 7.02,
8-25 Penal Code, for the commission of the disclosed violation and the
8-26 violation resulted in substantial injury to one or more persons at
8-27 the site or off-site harm to persons, property, or the environment;
9-1 (3) the offense was committed intentionally or
9-2 knowingly by a member of the person's management or an agent of the
9-3 person and the person's policies or lack of prevention systems
9-4 contributed materially to the occurrence of the violation; [or]
9-5 (4) the offense was committed recklessly by a member
9-6 of the person's management or an agent of the person, the person's
9-7 policies or lack of prevention systems contributed materially to
9-8 the occurrence of the violation, and the violation resulted in
9-9 substantial injury to one or more persons at the site or off-site
9-10 harm to persons, property, or the environment; or
9-11 (5) the violation has resulted in a substantial
9-12 economic benefit which gives the violator a clear advantage over
9-13 its business competitors.
9-14 (f) In a civil or[,] administrative[, or criminal]
9-15 enforcement action brought against a person for a violation for
9-16 which the person claims to have made a voluntary disclosure, the
9-17 person claiming the immunity has the burden of establishing a prima
9-18 facie case that the disclosure was voluntary. After the person
9-19 claiming the immunity establishes a prima facie case of voluntary
9-20 disclosure, other than a case in which under Subsection (d) of this
9-21 section immunity does not apply, the enforcement authority has the
9-22 burden of rebutting the presumption by a preponderance of the
9-23 evidence or, in a criminal case, by proof beyond a reasonable
9-24 doubt.
9-25 (h) The immunity under this section does not apply if a
9-26 court or administrative law judge finds that the person claiming
9-27 the immunity has, after the effective date of this Act, (1)
10-1 repeatedly or continuously committed significant [serious]
10-2 violations, and (2) not attempted to bring the facility or
10-3 operation into compliance, so as to constitute a pattern of
10-4 disregard of environmental or health and safety laws. In order to
10-5 be considered a "pattern," the person must have committed a series
10-6 of violations that were due to separate and distinct events within
10-7 a three-year period at the same facility or operation.
10-8 SECTION 8. This Act takes effect September 1, 1997, and
10-9 applies only to an environmental or health and safety audit
10-10 prepared on or after that date.
10-11 SECTION 9. The importance of this legislation and the
10-12 crowded condition of the calendars in both houses create an
10-13 emergency and an imperative public necessity that the
10-14 constitutional rule requiring bills to be read on three several
10-15 days in each house be suspended, and this rule is hereby suspended.