1-1 By: Brown S.B. No. 1585
1-2 (In the Senate - Filed March 14, 1997; March 24, 1997, read
1-3 first time and referred to Committee on Natural Resources;
1-4 April 18, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 10, Nays 0; April 18, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1585 By: Brown
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to environmental and health safety audits.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subsection (b), Section 5, Texas Environmental,
1-13 Health, and Safety Audit Privilege Act (Article 4447cc, Vernon's
1-14 Texas Civil Statutes), is amended to read as follows:
1-15 (b) Except as provided in Sections 6, 7, and 8[, and 9] of
1-16 this Act, any part of an audit report is privileged and is not
1-17 admissible as evidence or subject to discovery in:
1-18 (1) a civil action, whether legal or equitable; or
1-19 (2) [a criminal proceeding; or]
1-20 [(3)] an administrative proceeding.
1-21 SECTION 2. Section 6, Texas Environmental, Health, and
1-22 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
1-23 Statutes), is amended by amending Subsection (b) and adding
1-24 Subsection (e) to read as follows:
1-25 (b) Disclosure of an audit report or any information
1-26 generated by an environmental or health and safety audit does not
1-27 waive the privilege established by Section 5 of this Act if the
1-28 disclosure:
1-29 (1) is made to address or correct a matter raised by
1-30 the environmental or health and safety audit and is made only to:
1-31 (A) a person employed by the owner or operator,
1-32 including temporary and contract employees;
1-33 (B) a legal representative of the owner or
1-34 operator;
1-35 (C) an officer or director of the regulated
1-36 facility or operation or a partner of the owner or operator; or
1-37 (D) an independent contractor retained by the
1-38 owner or operator;
1-39 (2) is made under the terms of a confidentiality
1-40 agreement between the person for whom the audit report was prepared
1-41 or the owner or operator of the audited facility or operation and:
1-42 (A) a partner or potential partner of the owner
1-43 or operator of the facility or operation;
1-44 (B) a transferee or potential transferee of the
1-45 facility or operation;
1-46 (C) a lender or potential lender for the
1-47 facility or operation;
1-48 (D) a governmental official of [or] a state [or
1-49 federal agency]; or
1-50 (E) a person or entity engaged in the business
1-51 of insuring, underwriting, or indemnifying the facility or
1-52 operation; or
1-53 (3) is made under a claim of confidentiality to a
1-54 governmental official or agency by the person for whom the audit
1-55 report was prepared or by the owner or operator.
1-56 (e) Nothing in this section shall be construed to circumvent
1-57 the protections provided by federal or state law for individuals
1-58 that disclose information to law enforcement authorities.
1-59 SECTION 3. Subsection (a), Section 7, Texas Environmental,
1-60 Health, and Safety Audit Privilege Act (Article 4447cc, Vernon's
1-61 Texas Civil Statutes), is amended to read as follows:
1-62 (a) A court or administrative hearings official with
1-63 competent jurisdiction may require disclosure of a portion of an
1-64 audit report in a civil[, criminal,] or administrative proceeding
2-1 if the court or administrative hearings official determines, after
2-2 an in camera review consistent with the appropriate rules of
2-3 procedure, that:
2-4 (1) the privilege is asserted for a fraudulent
2-5 purpose;
2-6 (2) the portion of the audit report is not subject to
2-7 the privilege under Section 8 of this Act; or
2-8 (3) the portion of the audit report shows evidence of
2-9 noncompliance with an environmental or health and safety law and
2-10 appropriate efforts to achieve compliance with the law were not
2-11 promptly initiated and pursued with reasonable diligence after
2-12 discovery of noncompliance.
2-13 SECTION 4. Section 9, Texas Environmental, Health, and
2-14 Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
2-15 Statutes), is amended to read as follows:
2-16 Sec. 9. [Court] Review OF PRIVILEGED DOCUMENTS BY
2-17 GOVERNMENTAL AUTHORITY [and Disclosure]. (a) Where an audit
2-18 report is obtained, reviewed, or used in a criminal proceeding, the
2-19 administrative or civil evidentiary privilege created by this Act
2-20 is not waived or eliminated for any other purpose [If there is
2-21 reasonable cause to believe a criminal offense has been committed
2-22 under an environmental or health and safety law, the attorney
2-23 representing the state may obtain an audit report for which a
2-24 privilege is asserted under this Act under a search warrant,
2-25 criminal subpoena, or discovery as allowed by the Code of Criminal
2-26 Procedure and the Texas Rules of Criminal Procedure].
2-27 (b) Notwithstanding the privilege established under this
2-28 Act, a regulatory agency may review information that is required to
2-29 be available under a specific state or federal law, but such review
2-30 does not waive or eliminate the administrative or civil evidentiary
2-31 privilege where applicable [On receipt of the audit report, the
2-32 attorney representing the state shall seal the report and may not
2-33 review or disclose the contents of the report].
2-34 (c) If information is required to be available to the public
2-35 by operation of a specific state or federal law, the governmental
2-36 authority shall notify the person claiming the privilege of the
2-37 potential for public disclosure prior to obtaining such information
2-38 under Subsection (a) or (b) of this section [Not later than the
2-39 30th day after the date an audit report is received under
2-40 Subsection (a), the owner or operator who prepared the report or
2-41 for whom the report was prepared may file with a court of competent
2-42 jurisdiction a petition requesting an in camera review to determine
2-43 whether all or a portion of the report is privileged or is subject
2-44 to disclosure under this Act. An owner or operator who fails to
2-45 file a petition under this subsection within the period specified
2-46 by this subsection waives the privilege].
2-47 (d) If privileged information is disclosed under Subsection
2-48 (b) or (c) of this section, on [On the filing of a petition under
2-49 Subsection (c) of this section, the court shall issue an order
2-50 that:]
2-51 [(1) schedules the in camera review for a date not
2-52 later than the 45th day after the date the petition is filed; and]
2-53 [(2) authorizes the attorney representing the state to
2-54 remove the seal from the report to review the report, subject to
2-55 appropriate limitations on distribution or disclosure of the report
2-56 that are specified in the order to protect against unnecessary
2-57 disclosure.]
2-58 [(e) The attorney representing the state may consult with
2-59 enforcement agencies regarding the contents of the report as
2-60 necessary to prepare for the in camera review.]
2-61 [(f) Information used in preparation for the in camera
2-62 review under Subsection (e) of this section:]
2-63 [(1) is confidential;]
2-64 [(2) may not be used in any investigation or legal
2-65 proceeding; and]
2-66 [(3) is not subject to disclosure under Chapter 552,
2-67 Government Code.]
2-68 [(g) Subsection (f) of this section does not apply to
2-69 information a court finds to be subject to disclosure.]
3-1 [(h) On] the motion of a party, a court or the appropriate
3-2 administrative official shall suppress evidence offered in any
3-3 civil[, criminal,] or administrative proceeding that arises or is
3-4 derived from review, disclosure, or use of information obtained
3-5 under this section if the review, disclosure, or use is not
3-6 authorized under Section 8 of this Act [this section]. A party
3-7 having received information under Subsection (b) or (c) of
3-8 [allegedly failing to comply with] this section has the burden of
3-9 proving that the evidence offered did not arise and was not derived
3-10 from the [unauthorized] review of privileged information[,
3-11 disclosure, or use].
3-12 [(i) The parties may stipulate to entry of an order
3-13 directing that specific information contained in an audit report is
3-14 or is not subject to the privilege.]
3-15 [(j) A court may compel the disclosure of only those
3-16 portions of an audit report relevant to issues in dispute in the
3-17 proceeding.]
3-18 [(k) A court may find a person who discloses information in
3-19 violation of this section in contempt of court and may order other
3-20 appropriate relief.]
3-21 SECTION 5. Subsections (a), (b), (d), (f), and (h), Section
3-22 10, Texas Environmental, Health, and Safety Audit Privilege Act
3-23 (Article 4447cc, Vernon's Texas Civil Statutes), are amended to
3-24 read as follows:
3-25 (a) Except as provided by this section, a person who makes a
3-26 voluntary disclosure of a violation of an environmental or health
3-27 and safety law is immune from an administrative or[,] civil[, or
3-28 criminal] penalty for the violation disclosed.
3-29 (b) A disclosure is voluntary only if:
3-30 (1) the disclosure was made promptly after knowledge
3-31 of the information disclosed is obtained by the person;
3-32 (2) the disclosure was made in writing by certified
3-33 mail to an agency that has regulatory authority with regard to the
3-34 violation disclosed;
3-35 (3) an investigation of the violation was not
3-36 initiated or the violation was not independently detected by an
3-37 agency with enforcement jurisdiction before the disclosure was made
3-38 using certified mail;
3-39 (4) the disclosure arises out of a voluntary
3-40 environmental or health and safety audit;
3-41 (5) the person who makes the disclosure initiates an
3-42 appropriate effort to achieve compliance, pursues that effort with
3-43 due diligence, and corrects the noncompliance within a reasonable
3-44 time;
3-45 (6) the person making the disclosure cooperates with
3-46 the appropriate agency in connection with an investigation of the
3-47 issues identified in the disclosure; and
3-48 (7) the violation did not result in injury or imminent
3-49 and substantial risk of serious injury to one or more persons at
3-50 the site or, [substantial] off-site, substantial actual harm or
3-51 imminent and substantial risk of harm to persons, property, or the
3-52 environment.
3-53 (d) The immunity established by Subsection (a) of this
3-54 section does not apply and an administrative or[,] civil[, or
3-55 criminal] penalty may be imposed under applicable law if:
3-56 (1) the person who made the disclosure intentionally
3-57 or knowingly committed or was responsible within the meaning of
3-58 Section 7.02, Penal Code, for the commission of the disclosed
3-59 violation;
3-60 (2) the person who made the disclosure recklessly
3-61 committed or was responsible within the meaning of Section 7.02,
3-62 Penal Code, for the commission of the disclosed violation and the
3-63 violation resulted in substantial injury to one or more persons at
3-64 the site or off-site harm to persons, property, or the environment;
3-65 (3) the offense was committed intentionally or
3-66 knowingly by a member of the person's management or an agent of the
3-67 person and the person's policies or lack of prevention systems
3-68 contributed materially to the occurrence of the violation; [or]
3-69 (4) the offense was committed recklessly by a member
4-1 of the person's management or an agent of the person, the person's
4-2 policies or lack of prevention systems contributed materially to
4-3 the occurrence of the violation, and the violation resulted in
4-4 substantial injury to one or more persons at the site or off-site
4-5 harm to persons, property, or the environment; or
4-6 (5) the violation has resulted in a substantial
4-7 economic benefit which gives the violator a clear advantage over
4-8 its business competitors.
4-9 (f) In a civil or[,] administrative[, or criminal]
4-10 enforcement action brought against a person for a violation for
4-11 which the person claims to have made a voluntary disclosure, the
4-12 person claiming the immunity has the burden of establishing a prima
4-13 facie case that the disclosure was voluntary. After the person
4-14 claiming the immunity establishes a prima facie case of voluntary
4-15 disclosure, other than a case in which under Subsection (d) of this
4-16 section immunity does not apply, the enforcement authority has the
4-17 burden of rebutting the presumption by a preponderance of the
4-18 evidence or, in a criminal case, by proof beyond a reasonable
4-19 doubt.
4-20 (h) The immunity under this section does not apply if a
4-21 court or administrative law judge finds that the person claiming
4-22 the immunity has, after the effective date of this Act, (1)
4-23 repeatedly or continuously committed significant [serious]
4-24 violations, and (2) not attempted to bring the facility or
4-25 operation into compliance, so as to constitute a pattern of
4-26 disregard of environmental or health and safety laws. In order to
4-27 be considered a "pattern," the person must have committed a series
4-28 of violations that were due to separate and distinct events within
4-29 a three-year period at the same facility or operation.
4-30 SECTION 6. This Act takes effect September 1, 1997, and
4-31 applies only to an environmental or health and safety audit
4-32 prepared on or after that date.
4-33 SECTION 7. The importance of this legislation and the
4-34 crowded condition of the calendars in both houses create an
4-35 emergency and an imperative public necessity that the
4-36 constitutional rule requiring bills to be read on three several
4-37 days in each house be suspended, and this rule is hereby suspended.
4-38 * * * * *