CSSB 199(RES): "An Act relating to environmental audits and health and safety audits to determine compliance with certain laws, permits, and regulations."
00CS FOR SENATE BILL NO. 199(RES) 01 "An Act relating to environmental audits and health and safety audits to 02 determine compliance with certain laws, permits, and regulations." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 09.25 is amended by adding new sections to read: 05 ARTICLE 5. PRIVILEGES AND IMMUNITIES 06 RELATED TO DISCLOSURE OF CERTAIN SELF-AUDITS. 07 Sec. 09.25.450. AUDIT REPORT PRIVILEGE. (a) Except as provided in 08 AS 09.25.455 - 09.25.475, an audit report is privileged and is not admissible as 09 evidence or subject to discovery in 10 (1) a civil action, whether legal or equitable; 11 (2) a criminal proceeding; or 12 (3) an administrative proceeding, except for workers' compensation 13 proceedings. 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 all or a portion of the audit but did 09 not personally observe or participate in the relevant instances or events being 10 reviewed for compliance; 11 (B) person to whom the audit results are disclosed under 12 AS 09.25.455(b); or 13 (C) custodian of the audit results. 14 (c) A person who conducts or participates in the preparation of an 15 environmental or health and safety audit and who has actually observed or participated 16 in instances or events being reviewed for compliance may testify about those instances 17 or events but may not be compelled to testify about or produce documents related to 18 the preparation of or a privileged part of an environmental or health and safety audit 19 or an item listed in AS 09.25.490(a)(1). 20 (d) A regulatory agency and an employee of a regulatory agency may not 21 request, review, or otherwise use an audit report during an agency inspection of a 22 regulated facility or operation or an activity of a regulated facility or operation. 23 (e) To facilitate identification, each document in an audit report shall be 24 labeled "COMPLIANCE REPORT: PRIVILEGED DOCUMENT," or labeled with 25 words of similar import. 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 in writing by the owner 30 or operator 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. 29 (e) Disclosure of a portion of an audit report after waiver of the privilege 30 under (a) of this section, after disclosure under (b) of this section, or through any other 31 means may not be construed to waive the privilege established under AS 09.25.450 for
01 any other part of the audit report. 02 Sec. 09.25.465. NONPRIVILEGED MATERIALS. (a) The privilege under 03 AS 09.25.450 does not apply to that part of an audit report that contains 04 (1) a document, communication, datum, report, or other information 05 required by a regulatory agency to be collected, developed, maintained, or reported 06 under an environmental or health and safety law, under a permit issued under an 07 environmental or health and safety law, as a requirement for obtaining, maintaining, 08 or renewing a license, or as a requirement under a contract with the state; 09 (2) information that a regulatory agency obtains by observation, 10 sampling, or monitoring; or 11 (3) information that a regulatory agency obtains from a source that was 12 not involved in the compilation or preparation of the environmental or health and 13 safety audit report. 14 (b) This section does not limit the right of a person to agree to conduct and 15 disclose an audit report. 16 Sec. 09.25.475. VOLUNTARY DISCLOSURE; IMMUNITY. (a) Except as 17 provided by this section, a person who makes a voluntary disclosure of a violation of 18 an environmental or health and safety law is immune from an administrative, civil, or 19 criminal penalty for the violation disclosed, for a violation based on the facts disclosed, 20 and for a violation discovered because of the disclosure that was unknown to the 21 person making the disclosure. 22 (b) A disclosure is voluntary for the purposes of this section only if 23 (1) the disclosure was made promptly after knowledge of the 24 information disclosed is obtained by the person; 25 (2) the disclosure was made in writing by certified mail to an agency 26 that has regulatory authority with regard to the violation disclosed; 27 (3) an investigation of the violation was not initiated or the violation 28 was not independently detected by an agency with enforcement jurisdiction before the 29 disclosure was made using certified mail; under this paragraph, the agency has the 30 burden of proving that an investigation of the violation was initiated or the violation 31 was detected before receipt of the certified mail;
01 (4) the disclosure arises out of a voluntary environmental or health and 02 safety audit; 03 (5) the person who makes the disclosure initiates, within a reasonable 04 time, an appropriate effort to achieve compliance, pursues that effort with due 05 diligence, and corrects or implements a series of measures designed to remedy the 06 noncompliance within a reasonable time; 07 (6) the person making the disclosure cooperates with the appropriate 08 agency in connection with an investigation of the issues identified in the disclosure and 09 agrees under terms of a confidentiality agreement to disclose to the agency, on request 10 of the agency, the part of the audit report that describes the implementation plan or 11 tracking system developed to correct past noncompliance, improve current compliance, 12 or prevent future noncompliance; and 13 (7) the violation did not result in substantial injury to one or more 14 persons at the site or substantial off-site harm to persons, property, or the environment. 15 (c) A disclosure is not voluntary for purposes of this section if it is a report 16 to a regulatory agency required solely by a specific condition of an enforcement order 17 or decree. 18 (d) The immunity established by (a) of this section does not apply and an 19 administrative, civil, or criminal penalty may be imposed under applicable law if the 20 (1) person who made the disclosure knowingly committed the disclosed 21 violation; 22 (2) person who made the disclosure recklessly committed or was 23 responsible for the commission of the disclosed violation and the violation resulted in 24 substantial injury to one or more persons at the site or substantial off-site harm to 25 persons, property, or the environment; 26 (3) offense was committed intentionally or knowingly by a member of 27 the person's management or an agent of the person and the person's policies or lack 28 of prevention systems contributed materially to the occurrence of the violation; or 29 (4) offense was committed recklessly by a member of the person's 30 management or an agent of the person, the person's policies or lack of prevention 31 systems contributed materially to the occurrence of the violation, and the violation
01 resulted in substantial injury to one or more persons at the site or substantial off-site 02 harm to persons, property, or the environment. 03 (e) A penalty that is imposed on a person for violation of an environmental or 04 health and safety law when the person has made a voluntary disclosure under (a) of 05 this section but is not granted immunity because of (d) of this section may, to the 06 extent appropriate and not prohibited by law, be mitigated by 07 (1) the voluntariness of the disclosure; 08 (2) efforts by the disclosing party to conduct environmental or health 09 and safety audits; 10 (3) remediation; 11 (4) cooperation with government officials investigating the disclosed 12 violation; and 13 (5) other relevant considerations. 14 (f) In order to receive immunity under this section, a facility conducting an 15 environmental or health and safety audit must give notice by certified mail to an 16 appropriate regulatory agency of the fact that it is planning to commence the audit. 17 The notice must specify the facility or portion of the facility to be audited, the date the 18 audit will begin and end, and the general scope of the audit. Immunity under this 19 section is available only for information and documents first produced or obtained 20 during the time period specified in the notice. The notice may provide notification of 21 more than one scheduled environmental or health and safety audit at a time. Once 22 initiated, an audit shall be completed within the time period specified in the notice 23 unless an extension is approved by the governmental entity with regulatory authority 24 over the regulated facility or operation based on reasonable grounds. 25 (g) A regulatory agency may not initiate an inspection, monitoring, or other 26 investigative activity based solely on the receipt of a notice under (f) of this section. 27 The agency has the burden of proving that an inspection, monitoring, or other 28 investigative activity initiated after receipt of a notice under (f) of this section was not 29 initiated based solely on the receipt of the notice. 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 an unreasonable number of times or continuously 03 committed violations that are the same as, or similar to, the violation for which 04 immunity is sought under this section; and 05 (2) not attempted to bring the facility or operation into compliance, so 06 as to constitute a pattern of disregard of environmental or health and safety laws; in 07 order to be considered a pattern, the person must have committed a series of violations 08 that were due to separate and distinct events within a three-year period at the same 09 facility or operation. 10 (i) A violation that has been voluntarily disclosed and to which immunity 11 applies must be identified in a compliance history report as being voluntarily disclosed. 12 Sec. 09.25.485. RELATIONSHIP TO OTHER RECOGNIZED PRIVILEGES. 13 AS 09.25.450 - 09.25.490 do not limit, waive, or abrogate the scope or nature of a 14 statutory or common law privilege, including the work product doctrine, the attorney- 15 client privilege, and any other privilege recognized by a court with appropriate authority in 16 this state. 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 voluntary 17 evaluation, review, or assessment of compliance with environmental or health and 18 safety laws or a permit issued under those laws conducted randomly, regularly, 19 spontaneously, or in response to a particular event by an owner or operator, an 20 employee of the owner or operator, or an independent contractor of 21 (A) a regulated facility or operation; or 22 (B) an activity at a regulated facility or operation; 23 (3) "environmental or health and safety law" means 24 (A) a federal or state environmental or occupational health and 25 safety law; or 26 (B) a rule, regulation, or municipal ordinance adopted in 27 conjunction with or to implement a law described by (A) of this paragraph; 28 (4) "intentionally" has the meaning given in AS 11.81.900; 29 (5) "knowingly" has the meaning given in AS 11.81.900; 30 (6) "owner or operator" means a person who owns or operates a 31 regulated facility or operation;
01 (7) "penalty" means an administrative, civil, or criminal sanction 02 imposed by the state to punish a person for a violation of a statute or rule; the term 03 does not include a technical or remedial provision ordered by a regulatory authority; 04 (8) "recklessly" has the meaning given in AS 11.81.900; 05 (9) "regulated facility or operation" means a facility or operation that 06 is regulated under an environmental or health and safety law. 07 (b) To fully implement the privilege established under AS 09.25.450 - 08 09.25.490, the term "environmental or health and safety law" shall be construed 09 broadly. 10 * Sec. 2. AS 12.45 is amended by adding a new section to read: 11 Sec. 12.45.052. PRIVILEGE RELATING TO CERTAIN SELF-AUDITS. An 12 audit report based on an environmental or health and safety audit is privileged under 13 AS 09.25.450 - 09.25.490. 14 * Sec. 3. APPLICABILITY. The privilege created by AS 09.25.450 - 09.25.490, added 15 by sec. 1 of this Act, applies to environmental or health and safety audits that are conducted 16 on or after the effective date of this Act.