75R10659 MI-F
By Chisum H.B. No. 3459
Substitute the following for H.B. No. 3459:
By Talton C.S.H.B. No. 3459
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to environmental and health safety audits.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 5(b), Texas Environmental, Health, and
1-5 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
1-6 Statutes), is amended to read as follows:
1-7 (b) Except as provided in Sections 6, 7, and 8[, and 9] of
1-8 this Act, any part of an audit report is privileged and is not
1-9 admissible as evidence or subject to discovery in:
1-10 (1) a civil action, whether legal or equitable; or
1-11 (2) [a criminal proceeding; or]
1-12 [(3)] an administrative proceeding.
1-13 SECTION 2. Section 6, Texas Environmental, Health, and
1-14 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
1-15 Statutes), is amended by amending Subsection (b) and adding
1-16 Subsection (e) to read as follows:
1-17 (b) Disclosure of an audit report or any information
1-18 generated by an environmental or health and safety audit does not
1-19 waive the privilege established by Section 5 of this Act if the
1-20 disclosure:
1-21 (1) is made to address or correct a matter raised by
1-22 the environmental or health and safety audit and is made only to:
1-23 (A) a person employed by the owner or operator,
1-24 including temporary and contract employees;
2-1 (B) a legal representative of the owner or
2-2 operator;
2-3 (C) an officer or director of the regulated
2-4 facility or operation or a partner of the owner or operator; or
2-5 (D) an independent contractor retained by the
2-6 owner or operator;
2-7 (2) is made under the terms of a confidentiality
2-8 agreement between the person for whom the audit report was prepared
2-9 or the owner or operator of the audited facility or operation and:
2-10 (A) a partner or potential partner of the owner
2-11 or operator of the facility or operation;
2-12 (B) a transferee or potential transferee of the
2-13 facility or operation;
2-14 (C) a lender or potential lender for the
2-15 facility or operation;
2-16 (D) a governmental official of [or] a state [or
2-17 federal agency]; or
2-18 (E) a person or entity engaged in the business
2-19 of insuring, underwriting, or indemnifying the facility or
2-20 operation; or
2-21 (3) is made under a claim of confidentiality to a
2-22 governmental official or agency by the person for whom the audit
2-23 report was prepared or by the owner or operator.
2-24 (e) Nothing in this section shall be construed to circumvent
2-25 the protections provided by federal or state law for individuals
2-26 that disclose information to law enforcement authorities.
2-27 SECTION 3. Section 7(a), Texas Environmental, Health, and
3-1 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
3-2 Statutes), is amended to read as follows:
3-3 (a) A court or administrative hearings official with
3-4 competent jurisdiction may require disclosure of a portion of an
3-5 audit report in a civil[, criminal,] or administrative proceeding
3-6 if the court or administrative hearings official determines, after
3-7 an in camera review consistent with the appropriate rules of
3-8 procedure, that:
3-9 (1) the privilege is asserted for a fraudulent
3-10 purpose;
3-11 (2) the portion of the audit report is not subject to
3-12 the privilege under Section 8 of this Act; or
3-13 (3) the portion of the audit report shows evidence of
3-14 noncompliance with an environmental or health and safety law and
3-15 appropriate efforts to achieve compliance with the law were not
3-16 promptly initiated and pursued with reasonable diligence after
3-17 discovery of noncompliance.
3-18 SECTION 4. Section 9, Texas Environmental, Health, and
3-19 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
3-20 Statutes), is amended to read as follows:
3-21 Sec. 9. [Court] Review OF PRIVILEGED DOCUMENTS BY
3-22 GOVERNMENTAL AUTHORITY [and Disclosure]. (a) Where an audit
3-23 report is obtained, reviewed, or used in a criminal proceeding, the
3-24 administrative or civil evidentiary privilege created by this Act
3-25 is not waived or eliminated for any other purpose [If there is
3-26 reasonable cause to believe a criminal offense has been committed
3-27 under an environmental or health and safety law, the attorney
4-1 representing the state may obtain an audit report for which a
4-2 privilege is asserted under this Act under a search warrant,
4-3 criminal subpoena, or discovery as allowed by the Code of Criminal
4-4 Procedure and the Texas Rules of Criminal Procedure].
4-5 (b) Notwithstanding the privilege established under this
4-6 Act, a regulatory agency may review information that is required to
4-7 be available under a specific state or federal law, but such review
4-8 does not waive or eliminate the administrative or civil evidentiary
4-9 privilege where applicable [On receipt of the audit report, the
4-10 attorney representing the state shall seal the report and may not
4-11 review or disclose the contents of the report].
4-12 (c) If information is required to be available to the public
4-13 by operation of a specific state or federal law, the governmental
4-14 authority shall notify the person claiming the privilege of the
4-15 potential for public disclosure prior to obtaining such information
4-16 under Subsection (a) or (b) [Not later than the 30th day after the
4-17 date an audit report is received under Subsection (a), the owner or
4-18 operator who prepared the report or for whom the report was
4-19 prepared may file with a court of competent jurisdiction a petition
4-20 requesting an in camera review to determine whether all or a
4-21 portion of the report is privileged or is subject to disclosure
4-22 under this Act. An owner or operator who fails to file a petition
4-23 under this subsection within the period specified by this
4-24 subsection waives the privilege].
4-25 (d) If privileged information is disclosed under Subsection
4-26 (b) or (c), on [On the filing of a petition under Subsection (c) of
4-27 this section, the court shall issue an order that:]
5-1 [(1) schedules the in camera review for a date not
5-2 later than the 45th day after the date the petition is filed; and]
5-3 [(2) authorizes the attorney representing the state to
5-4 remove the seal from the report to review the report, subject to
5-5 appropriate limitations on distribution or disclosure of the report
5-6 that are specified in the order to protect against unnecessary
5-7 disclosure.]
5-8 [(e) The attorney representing the state may consult with
5-9 enforcement agencies regarding the contents of the report as
5-10 necessary to prepare for the in camera review.]
5-11 [(f) Information used in preparation for the in camera
5-12 review under Subsection (e) of this section:]
5-13 [(1) is confidential;]
5-14 [(2) may not be used in any investigation or legal
5-15 proceeding; and]
5-16 [(3) is not subject to disclosure under Chapter 552,
5-17 Government Code.]
5-18 [(g) Subsection (f) of this section does not apply to
5-19 information a court finds to be subject to disclosure.]
5-20 [(h) On] the motion of a party, a court or the appropriate
5-21 administrative official shall suppress evidence offered in any
5-22 civil[, criminal,] or administrative proceeding that arises or is
5-23 derived from review, disclosure, or use of information obtained
5-24 under this section if the review, disclosure, or use is not
5-25 authorized under Section 8 [this section]. A party having received
5-26 information under Subsection (b) or (c) [allegedly failing to
5-27 comply with this section] has the burden of proving that the
6-1 evidence offered did not arise and was not derived from the
6-2 [unauthorized] review of privileged information[, disclosure, or
6-3 use].
6-4 [(i) The parties may stipulate to entry of an order
6-5 directing that specific information contained in an audit report is
6-6 or is not subject to the privilege.]
6-7 [(j) A court may compel the disclosure of only those
6-8 portions of an audit report relevant to issues in dispute in the
6-9 proceeding.]
6-10 [(k) A court may find a person who discloses information in
6-11 violation of this section in contempt of court and may order other
6-12 appropriate relief.]
6-13 SECTION 5. Sections 10(a), (b), (d), (f), and (h), Texas
6-14 Environmental, Health, and Safety Audit Privilege Act (Article
6-15 4447cc, Vernon's Texas Civil Statutes), are amended to read as
6-16 follows:
6-17 (a) Except as provided by this section, a person who makes a
6-18 voluntary disclosure of a violation of an environmental or health
6-19 and safety law is immune from an administrative or[,] civil[, or
6-20 criminal] penalty for the violation disclosed.
6-21 (b) A disclosure is voluntary only if:
6-22 (1) the disclosure was made promptly after knowledge
6-23 of the information disclosed is obtained by the person;
6-24 (2) the disclosure was made in writing by certified
6-25 mail to an agency that has regulatory authority with regard to the
6-26 violation disclosed;
6-27 (3) an investigation of the violation was not
7-1 initiated or the violation was not independently detected by an
7-2 agency with enforcement jurisdiction before the disclosure was made
7-3 using certified mail;
7-4 (4) the disclosure arises out of a voluntary
7-5 environmental or health and safety audit;
7-6 (5) the person who makes the disclosure initiates an
7-7 appropriate effort to achieve compliance, pursues that effort with
7-8 due diligence, and corrects the noncompliance within a reasonable
7-9 time;
7-10 (6) the person making the disclosure cooperates with
7-11 the appropriate agency in connection with an investigation of the
7-12 issues identified in the disclosure; and
7-13 (7) the violation did not result in injury or imminent
7-14 and substantial risk of serious injury to one or more persons at
7-15 the site or [substantial] off-site substantial actual harm or
7-16 imminent and substantial risk of harm to persons, property, or the
7-17 environment.
7-18 (d) The immunity established by Subsection (a) of this
7-19 section does not apply and an administrative or [,] civil[, or
7-20 criminal] penalty may be imposed under applicable law if:
7-21 (1) the person who made the disclosure intentionally
7-22 or knowingly committed or was responsible within the meaning of
7-23 Section 7.02, Penal Code, for the commission of the disclosed
7-24 violation;
7-25 (2) the person who made the disclosure recklessly
7-26 committed or was responsible within the meaning of Section 7.02,
7-27 Penal Code, for the commission of the disclosed violation and the
8-1 violation resulted in substantial injury to one or more persons at
8-2 the site or off-site harm to persons, property, or the environment;
8-3 (3) the offense was committed intentionally or
8-4 knowingly by a member of the person's management or an agent of the
8-5 person and the person's policies or lack of prevention systems
8-6 contributed materially to the occurrence of the violation; [or]
8-7 (4) the offense was committed recklessly by a member
8-8 of the person's management or an agent of the person, the person's
8-9 policies or lack of prevention systems contributed materially to
8-10 the occurrence of the violation, and the violation resulted in
8-11 substantial injury to one or more persons at the site or off-site
8-12 harm to persons, property, or the environment; or
8-13 (5) the violation has resulted in a substantial
8-14 economic benefit which gives the violator a clear advantage over
8-15 its business competitors.
8-16 (f) In a civil or[,] administrative[, or criminal]
8-17 enforcement action brought against a person for a violation for
8-18 which the person claims to have made a voluntary disclosure, the
8-19 person claiming the immunity has the burden of establishing a prima
8-20 facie case that the disclosure was voluntary. After the person
8-21 claiming the immunity establishes a prima facie case of voluntary
8-22 disclosure, other than a case in which under Subsection (d) of this
8-23 section immunity does not apply, the enforcement authority has the
8-24 burden of rebutting the presumption by a preponderance of the
8-25 evidence or, in a criminal case, by proof beyond a reasonable
8-26 doubt.
8-27 (h) The immunity under this section does not apply if a
9-1 court or administrative law judge finds that the person claiming
9-2 the immunity has, after the effective date of this Act, (1)
9-3 repeatedly or continuously committed significant [serious]
9-4 violations, and (2) not attempted to bring the facility or
9-5 operation into compliance, so as to constitute a pattern of
9-6 disregard of environmental or health and safety laws. In order to
9-7 be considered a "pattern," the person must have committed a series
9-8 of violations that were due to separate and distinct events within
9-9 a three-year period at the same facility or operation.
9-10 SECTION 6. This Act takes effect September 1, 1997, and
9-11 applies only to an environmental or health and safety audit
9-12 prepared on or after that date.
9-13 SECTION 7. The importance of this legislation and the
9-14 crowded condition of the calendars in both houses create an
9-15 emergency and an imperative public necessity that the
9-16 constitutional rule requiring bills to be read on three several
9-17 days in each house be suspended, and this rule is hereby suspended.