SB 199: "An Act relating to environmental audits and health and safety audits to determine compliance with certain laws, permits, and regulations; and amending Alaska Rules of Appellate Procedure 202, 402, 602, 603, 610, and 611."
00SENATE BILL NO. 199 01 "An Act relating to environmental audits and health and safety audits to 02 determine compliance with certain laws, permits, and regulations; and amending 03 Alaska Rules of Appellate Procedure 202, 402, 602, 603, 610, and 611." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 09.25 is amended by adding new sections to read: 06 ARTICLE 5. PRIVILEGES AND IMMUNITIES 07 RELATED TO DISCLOSURE OF SELF-AUDITS. 08 Sec. 09.25.450. AUDIT REPORT PRIVILEGE. (a) Except as provided in 09 AS 09.25.455 - 09.25.475, an audit report is privileged and is not admissible as 10 evidence or subject to discovery in 11 (1) a civil action, whether legal or equitable; 12 (2) a criminal proceeding; or 13 (3) an administrative proceeding. 14 (b) A person, when called or subpoenaed as a witness, may not be compelled
01 to testify or produce a document related to an environmental or health and safety audit 02 if 03 (1) the testimony or document discloses an item listed in 04 AS 09.25.490(a)(1) that was made as part of the preparation of an environmental or 05 health and safety audit report and that is addressed in a privileged part of an audit 06 report; and 07 (2) for purposes of this subsection only, the person is a 08 (A) person who conducted a portion of the audit but did not 09 personally observe the relevant physical events; 10 (B) person to whom the audit results are disclosed under 11 AS 09.25.455(b); or 12 (C) custodian of the audit results. 13 (c) A person who conducts or participates in the preparation of an 14 environmental or health and safety audit and who has actually observed physical events 15 of violation may testify about those events but may not be compelled to testify about 16 or produce documents related to the preparation of or a privileged part of an 17 environmental or health and safety audit or an item listed in AS 09.25.490(a)(1). 18 (d) An employee of a state agency may not request, review, or otherwise use 19 an audit report during an agency inspection of a regulated facility or operation or an 20 activity of a regulated facility or operation. 21 (e) To facilitate identification, each document in an audit report shall be 22 labeled "COMPLIANCE REPORT: PRIVILEGED DOCUMENT," or labeled with 23 words of similar import. However, failure to label a document under this section does 24 not constitute a waiver of the audit privilege or create a presumption that the privilege 25 does or does not apply. 26 (f) A party asserting the privilege described in this section has the burden of 27 establishing the applicability of the privilege. 28 Sec. 09.25.455. EXCEPTION: WAIVER. (a) The privilege in AS 09.25.450 29 does not apply to the extent the privilege is expressly waived by the owner or operator 30 who prepared the audit report or caused the report to be prepared. 31 (b) Disclosure of an audit report or information generated by an environmental
01 or health and safety audit does not waive the privilege established by AS 09.25.450 02 if the disclosure is made 03 (1) to address or correct a matter raised by the environmental or health 04 and safety audit and is made only to 05 (A) a person employed by the owner or operator, including 06 temporary and contract employees; 07 (B) a legal representative of the owner or operator; 08 (C) an officer or director of the regulated facility or operation 09 or a partner of the owner or operator; or 10 (D) an independent contractor retained by the owner or 11 operator; 12 (2) under the terms of a confidentiality agreement between the person 13 for whom the audit report was prepared or the owner or operator of the audited facility 14 or operation and a 15 (A) partner or potential partner of the owner or operator of the 16 facility or operation; 17 (B) transferee or potential transferee of the facility or operation; 18 (C) lender or potential lender for the facility or operation; 19 (D) government official or a state or federal agency; or 20 (E) person or entity engaged in the business of insuring, 21 underwriting, or indemnifying the facility or operation; or 22 (3) under a claim of confidentiality to a government official or agency 23 by the person for whom the audit report was prepared or by the owner or operator. 24 (c) A party to a confidentiality agreement described in (b)(2) of this section 25 who violates that agreement is liable for damages caused by the disclosure and for 26 other penalties stipulated in the confidentiality agreement. 27 (d) Information that is disclosed under (b)(3) of this section is confidential and 28 is not subject to disclosure under AS 09.25.110 - 09.25.125. A public entity, public 29 employee, or public official who discloses information in violation of this subsection 30 is guilty of a class B misdemeanor. 31 (e) It is an affirmative defense to an action based on the clerical dissemination
01 of a privileged audit report that the report was not clearly labeled "COMPLIANCE 02 REPORT: PRIVILEGED DOCUMENT" or words of similar import. The lack of 03 labeling may not be raised as a defense if the defending entity, employee, or official 04 knew or had reason to know that the document was a privileged audit report. 05 Sec. 09.25.460. EXCEPTION: DISCLOSURE REQUIRED BY COURT OR 06 ADMINISTRATIVE HEARINGS OFFICIAL. (a) A court or administrative hearing 07 official with competent jurisdiction may require disclosure of a portion of an audit 08 report in a civil, criminal, or administrative proceeding if the court or administrative 09 hearing official determines, after an in camera review consistent with the appropriate 10 rules of procedure, that the 11 (1) privilege is asserted for a fraudulent purpose; 12 (2) portion of the audit report is not subject to the privilege under 13 AS 09.25.465; or 14 (3) portion of the audit report shows evidence of noncompliance with 15 an environmental or health and safety law and appropriate efforts to achieve 16 compliance with the law were not promptly initiated and pursued with reasonable 17 diligence after discovery of noncompliance. 18 (b) A party seeking disclosure under this section has the burden of proving that 19 (a) of this section applies. 20 (c) Notwithstanding AS 44.62 (Administrative Procedure Act), a decision of 21 an administrative hearing official under (a) of this section is directly appealable to a 22 court of competent jurisdiction without disclosure of the audit report to any person 23 unless so ordered by the court. 24 (d) A person claiming the privilege is subject to sanctions as provided by the 25 Alaska Rules of Civil Procedure if the court finds that the person intentionally or 26 knowingly claimed the privilege for unprotected information as provided in 27 AS 09.25.465. 28 (e) A determination of a court under this section is subject to interlocutory 29 appeal. 30 Sec. 09.25.465. NONPRIVILEGED MATERIALS. (a) The privilege under 31 AS 09.25.450 does not apply to
01 (1) a document, communication, datum, report, or other information 02 required by a regulatory agency to be collected, developed, maintained, or reported 03 under a federal or state environmental or health and safety law; 04 (2) information obtained by observation, sampling, or monitoring by 05 a regulatory agency; or 06 (3) information obtained from a source not involved in the preparation 07 of the environmental or health and safety audit report. 08 (b) This section does not limit the right of a person to agree to conduct and 09 disclose an audit report. 10 Sec. 09.25.470. COURT REVIEW AND DISCLOSURE. (a) If there is 11 reasonable cause to believe a criminal offense has been committed due to violation of 12 an environmental or health and safety law, the attorney representing the state may 13 obtain an audit report for which a privilege is asserted under this Act under a search 14 warrant, criminal subpoena, or discovery as allowed by AS 12 and the Alaska Rules 15 of Criminal Procedure. 16 (b) On receipt of the audit report, the attorney representing the state shall seal 17 the report and may not review or disclose the contents of the report unless otherwise 18 allowed under AS 09.25.450 - 09.25.490. 19 (c) Not later than the 30th day after the date that an audit report is received 20 under (a) of this section, the owner or operator who prepared the report or for whom 21 the report was prepared may file with a court of competent jurisdiction a petition 22 requesting an in camera review to determine whether all or a portion of the report is 23 privileged or is subject to disclosure under AS 09.25.450 - 09.25.490. An owner or 24 operator who fails to file a petition under this subsection within the period specified 25 by this subsection waives the privilege. 26 (d) On the filing of a petition under (c) of this section, the court shall issue an 27 order that 28 (1) schedules the in camera review for a date not later than the 45th 29 day after the date the petition is filed; and 30 (2) authorizes the attorney representing the state to remove the seal 31 from the report to review the report, subject to appropriate limitations on distribution
01 or disclosure of the report that are specified in the order to protect against unnecessary 02 disclosure. 03 (e) The attorney representing the state may consult with enforcement agencies 04 regarding the contents of the report as necessary to prepare for the in camera review. 05 (f) Except as determined by a court, information used in preparation for the 06 in camera review under (e) of this section 07 (1) is confidential; 08 (2) may not be used in an investigation or legal proceeding; and 09 (3) is not subject to disclosure under AS 09.25.110 - 09.25.125. 10 (g) On the motion of a party, a court or the appropriate administrative official 11 shall suppress evidence offered in a civil, criminal, or administrative proceeding that 12 arises or is derived from review, disclosure, or use of information obtained under this 13 section if the review, disclosure, or use is not authorized under this section. A party 14 allegedly failing to comply with this section has the burden of proving that the 15 evidence offered did not arise and was not derived from the unauthorized review, 16 disclosure, or use. 17 (h) The parties may stipulate to entry of an order directing that specific 18 information contained in an audit report is or is not subject to the privilege. 19 (i) A court may compel the disclosure of only those portions of an audit report 20 relevant to issues in dispute in the proceeding. 21 (j) A court may find a person who discloses information in violation of this 22 section in contempt of court and may order other appropriate relief. 23 Sec. 09.25.475. VOLUNTARY DISCLOSURE; IMMUNITY. (a) Except as 24 provided by this section, a person who makes a voluntary disclosure of a violation of 25 an environmental or health and safety law is immune from an administrative, civil, or 26 criminal penalty for the violation disclosed. 27 (b) A disclosure is voluntary for the purposes of this section only if 28 (1) the disclosure was made promptly after knowledge of the 29 information disclosed is obtained by the person; 30 (2) the disclosure was made in writing by certified mail to an agency 31 that has regulatory authority with regard to the violation disclosed;
01 (3) an investigation of the violation was not initiated or the violation 02 was not independently detected by an agency with enforcement jurisdiction before the 03 disclosure was made using certified mail; 04 (4) the disclosure arises out of a voluntary environmental or health and 05 safety audit; 06 (5) the person who makes the disclosure initiates an appropriate effort 07 to achieve compliance, pursues that effort with due diligence, and corrects the 08 noncompliance within a reasonable time; 09 (6) the person making the disclosure cooperates with the appropriate 10 agency in connection with an investigation of the issues identified in the disclosure; 11 and 12 (7) the violation did not result in injury to one or more persons at the 13 site or substantial off-site harm to persons, property, or the environment. 14 (c) A disclosure is not voluntary for purposes of this section if it is a report 15 to a regulatory agency required solely by a specific condition of an enforcement order 16 or decree. 17 (d) The immunity established by (a) of this section does not apply and an 18 administrative, civil, or criminal penalty may be imposed under applicable law if the 19 (1) person who made the disclosure intentionally or knowingly 20 committed or was responsible for the commission of the disclosed violation; 21 (2) person who made the disclosure recklessly committed or was 22 responsible for the commission of the disclosed violation and the violation resulted in 23 substantial injury to one or more persons at the site or off-site harm to persons, 24 property, or the environment; 25 (3) offense was committed intentionally or knowingly by a member of 26 the person's management or an agent of the person and the person's policies or lack 27 of prevention systems contributed materially to the occurrence of the violation; or 28 (4) offense was committed recklessly by a member of the person's 29 management or an agent of the person, the person's policies or lack of prevention 30 systems contributed materially to the occurrence of the violation, and the violation 31 resulted in substantial injury to one or more persons at the site or off-site harm to
01 persons, property, or the environment. 02 (e) A penalty that is imposed on a person for violation of an environmental or 03 health and safety law when the person has made a voluntary disclosure under (a) of 04 this section but is not granted immunity because of (d) of this section may, to the 05 extent appropriate and not prohibited by law, be mitigated by factors such as 06 (1) the voluntariness of the disclosure; 07 (2) efforts by the disclosing party to conduct environmental or health 08 and safety audits; 09 (3) remediation; 10 (4) cooperation with government officials investigating the disclosed 11 violation; or 12 (5) other relevant considerations. 13 (f) In a civil, administrative, or criminal enforcement action brought against 14 a person for a violation for which the person claims to have made a voluntary 15 disclosure, the person claiming the immunity has the burden of establishing a prima 16 facie case that the disclosure was voluntary. After the person claiming the immunity 17 establishes a prima facie case of voluntary disclosure, other than a case in which under 18 (d) of this section immunity does not apply, the enforcement authority has the burden 19 of rebutting the presumption by a preponderance of the evidence or, in a criminal case, 20 by proof beyond a reasonable doubt. 21 (g) In order to receive immunity under this section, a facility conducting an 22 environmental or health and safety audit must give notice to an appropriate regulatory 23 agency of the fact that it is planning to commence the audit. The notice must specify 24 the facility or portion of the facility to be audited, the anticipated time the audit will 25 begin, and the general scope of the audit. The notice may provide notification of more 26 than one scheduled environmental or health and safety audit at a time. Once initiated, 27 an audit shall be completed within a reasonable time not to exceed six months unless 28 an extension is approved by the governmental entity with regulatory authority over the 29 regulated facility or operation based on reasonable grounds. 30 (h) The immunity under this section does not apply if a court or administrative 31 law judge finds that the person claiming the immunity has, on or after the effective
01 date of this Act, 02 (1) repeated or continuously committed serious violations; and 03 (2) not attempted to bring the facility or operation into compliance, so 04 as to constitute a pattern of disregard of environmental or health and safety laws; in 05 order to be considered a pattern, the person must have committed a series of violations 06 that were due to separate and distinct events within a three-year period at the same 07 facility or operation. 08 (i) A violation that has been voluntarily disclosed and to which immunity 09 applies must be identified in a compliance history report as being voluntarily disclosed. 10 Sec. 09.25.480. CIRCUMVENTION BY REGULATION PROHIBITED. A 11 regulatory agency may not adopt a regulation or impose a condition that circumvents 12 the purpose of AS 09.25.450 - 09.25.490. 13 Sec. 09.25.485. RELATIONSHIP TO OTHER RECOGNIZED PRIVILEGES. 14 AS 09.25.045 - 09.25.490 do not limit, waive, or abrogate the scope or nature of a 15 statutory or common law privilege, including the work product doctrine and the 16 attorney-client privilege. 17 Sec. 09.25.490. DEFINITIONS. (a) In AS 09.25.450 - 09.25.490, 18 (1) "audit report" means a report that includes each document and 19 communication, other than those set out in AS 09.25.465, produced from an 20 environmental or health and safety audit; general components that may be contained 21 in a completed audit report include 22 (A) a report, prepared by an auditor, monitor, or similar person, 23 that may include a description of the scope of the audit, the information gained 24 in the audit, findings, conclusions, recommendations, exhibits, and appendices; 25 the types of exhibits and appendices that may be contained in an audit report 26 include supporting information that is collected or developed for the primary 27 purpose of and in the course of an environmental or health and safety audit, 28 including 29 (i) interviews with current or former employees; 30 (ii) field notes and records of observations; 31 (iii) findings, opinions, suggestions, conclusions,
01 guidance, notes, drafts, and memoranda; 02 (iv) legal analyses; 03 (v) drawings; 04 (vi) photographs; 05 (vii) laboratory analyses and other analytical data; 06 (viii) computer generated or electronically recorded 07 information; 08 (ix) maps, charts, graphs, and surveys; and 09 (x) other communications associated with an 10 environmental or health and safety audit; 11 (B) memoranda and documents analyzing all or a portion of the 12 materials described in (A) of this paragraph or discussing implementation 13 issues; and 14 (C) an implementation plan or tracking system to correct past 15 noncompliance, improve current compliance, or prevent future noncompliance; 16 (2) "environmental or health and safety audit" means a systematic 17 voluntary evaluation, review, or assessment of compliance with environmental or 18 health and safety laws or a permit issued under those laws conducted by an owner or 19 operator, an employee of the owner or operator, or an independent contractor of 20 (A) a regulated facility or operation; or 21 (B) an activity at a regulated facility or operation; 22 (3) "environmental or health and safety law" means 23 (A) a federal or state environmental or occupational health and 24 safety law; or 25 (B) a rule, regulation, or municipal ordinance adopted in 26 conjunction with or to implement a law described by (A) of this paragraph; 27 (4) "intentionally" has the meaning given in AS 11.81.900; 28 (5) "knowingly" has the meaning given in AS 11.81.900; 29 (6) "owner or operator" means a person who owns or operates a 30 regulated facility or operation; 31 (7) "penalty" means an administrative, civil, or criminal sanction
01 imposed by the state to punish a person for a violation of a statute or rule; the term 02 does not include a technical or remedial provision ordered by a regulatory authority; 03 (8) "recklessly" has the meaning given in AS 11.81.900; 04 (9) "regulated facility or operation" means a facility or operation that 05 is regulated under an environmental or health and safety law. 06 (b) To fully implement the privilege established under AS 09.25.450 - 07 09.25.490, the term "environmental or health and safety law" shall be construed 08 broadly. 09 * Sec. 2. AS 12.45 is amended by adding a new section to read: 10 Sec. 12.45.052. PRIVILEGE RELATING TO CERTAIN SELF-AUDITS. An 11 audit report based on an environmental or health and safety audit is privileged under 12 AS 09.25.450 - 09.25.490. 13 * Sec. 3. COURT RULES. (a) AS 09.25.460(c), enacted by sec. 1 of this Act, has the 14 effect of amending Alaska Rules of Appellate Procedure 602, 603, 610, and 611 by providing 15 for interlocutory appeal of certain decisions of administrative hearing officials as a matter of 16 right and by limiting disclosure of certain documents during the pendency of the appeal unless 17 disclosure is ordered by the court. 18 (b) AS 09.25.460(e), enacted by sec. 1 of this Act, has the effect of amending Alaska 19 Rules of Appellate Procedure 202 and 402 by providing for interlocutory appeal of certain 20 decisions of a court as a matter of right. 21 * Sec. 4. APPLICABILITY. The privilege created by AS 09.25.450 - 09.25.490, added 22 by sec. 1 of this Act, applies to environmental or health and safety audits that are conducted 23 on or after the effective date of this Act.