PRINTER'S NO. 396
No. 381 Session of 1997
INTRODUCED BY BRIGHTBILL, WENGER, O'PAKE, ARMSTRONG, HELFRICK,
HART, ROBBINS, RHOADES, THOMPSON, MADIGAN, CORMAN, LEMMOND
AND MELLOW, FEBRUARY 6, 1997
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, FEBRUARY 6, 1997
AN ACT
1 Providing for the establishment of a privilege for environmental
2 audit reports; and prohibiting the imposition of penalties
3 when a person voluntarily discloses a violation under certain
4 circumstances.
5 TABLE OF CONTENTS
6 Chapter 1. General Provisions
7 Section 101. Short title.
8 Section 102. Declaration of policy.
9 Section 103. Definitions.
10 Section 104. Powers and duties.
11 Chapter 2. Environmental Audit Reports
12 Section 201. Environmental audit privilege.
13 Section 202. Waiver.
14 Section 203. Disclosure pursuant to order.
15 Section 204. Discovery and subpoenas.
16 Section 205. Burden of proof.
17 Chapter 3. Voluntary Disclosures
18 Section 301. Immunity for voluntary disclosures.
1 Section 302. Immunity inapplicable.
2 Section 303. Burden of proof.
3 Chapter 4. Miscellaneous Provisions
4 Section 401. Existing privilege.
5 Section 402. Applicability.
6 Section 403. Effective date.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 CHAPTER 1
10 GENERAL PROVISIONS
11 Section 101. Short title.
12 This act shall be known and may be cited as the Voluntary
13 Environmental Compliance Act.
14 Section 102. Declaration of Policy.
15 The General Assembly finds and declares as follows:
16 (1) It is the policy of this Commonwealth to encourage
17 voluntary compliance with State environmental statutes rather
18 than relying upon litigation and confrontational enforcement
19 techniques.
20 (2) Voluntary compliance with environmental requirements
21 is most effectively achieved through self-evaluations, such
22 as periodic audits of compliance status and implementation of
23 management systems to assure compliance.
24 (3) It is in the public interest to encourage voluntary
25 compliance activities by providing protection of audit
26 findings and fair treatment of those who voluntarily disclose
27 violations to regulatory agencies and act diligently to
28 remedy the violations.
29 (4) Encouraging voluntary environmental compliance is
30 appropriate and necessary to implement section 27 of Article
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1 1 of the Constitution of Pennsylvania.
2 Section 103. Definitions.
3 The following words and phrases when used in this act shall
4 have the meanings given to them in this section unless the
5 context clearly indicates otherwise:
6 "Board." The Environmental Hearing Board created by the act
7 of July 13, 1988 (P.L.530, No.94), known as the Environmental
8 Hearing Board Act.
9 "Compliance management system." A formal, written, voluntary
10 compliance assurance program having at least the following
11 elements:
12 (1) An environmental policy requiring conduct of
13 operations in compliance with environmental requirements.
14 (2) A clear definition of responsibility for compliance
15 for each facility or operation.
16 (3) Systematically implemented procedures for bringing
17 about compliance at each facility or operation.
18 (4) Regular facility or operation-specific reviews of
19 compliance.
20 (5) A mechanism to ensure prompt action to correct
21 noncompliance and address the underlying cause.
22 (6) A mechanism for disciplining employees who
23 intentionally or negligently contribute to the commission of
24 violations.
25 (7) Effective management oversight of compliance and
26 compliance correction.
27 "Department." The Department of Environmental Protection of
28 the Commonwealth.
29 "Environmental audit." A voluntary and internal evaluation,
30 review or assessment of one or more operations or facilities, or
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1 any activity at one or more operations or facilities, or of
2 management systems related to such operations, facilities or
3 activities, that is designed to identify and prevent violations
4 of environmental statutes or to improve compliance with those
5 statutes. An environmental audit may be conducted by the owner
6 or operator of such operation, facility or activity by the
7 owner's or operator's employees or by independent contractors.
8 The term includes, but is not limited to, a due diligence review
9 conducted by a prospective purchaser of real property.
10 "Environmental audit report." Documents and information
11 prepared as a result of or relating to an environmental audit.
12 In order to facilitate identification, each document in the set
13 should be labeled "environmental audit report: privileged
14 document" or words to that effect; however, failure either to
15 label a document or to label it precisely as recommended does
16 not constitute a waiver of the audit privilege and shall not
17 create any presumption that such privilege does not apply. An
18 environmental audit report shall include any notes, drafts,
19 memoranda, drawings, photographs, computer-generated or
20 electronically recorded information, maps, charts, graphs or
21 surveys or any other information pertaining to observations,
22 findings, opinions, suggestions or conclusions, provided such
23 supporting information is collected or developed for the primary
24 purpose and in the course of an environmental audit. The term
25 includes, but is not limited to, reports resulting from the
26 operation of compliance management systems, and reports created
27 to evaluate pollution prevention and waste minimization
28 opportunities.
29 "Environmental statutes." Any State or local statutes now in
30 existence or as amended or adopted in the future governing the
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1 impact which operations, activities or facilities in this
2 Commonwealth may have on the environment and human health, and
3 the regulations, permits or orders promulgated or issued under
4 these statutes. The term includes the following existing State
5 statutes, as well as future State statutes of a similar nature:
6 Act of April 9, 1929 (P.L.177, No.175), known as The
7 Administrative Code of 1929.
8 Act of June 22, 1937 (P.L.1987, No.394), known as The
9 Clean Streams Law.
10 Act of May 31, 1945 (P.L.1198, No.418), known as the
11 Surface Mining Conservation and Reclamation Act.
12 Act of January 8, 1960 (1959 P.L.2119, No.787), known as
13 the Air Pollution Control Act.
14 Act of January 24, 1966 (1965 P.L.1535, No.537), known as
15 the Pennsylvania Sewage Facilities Act.
16 Act of April 27, 1966 (1st Sp.Sess., P.L.31, No.1), known
17 as The Bituminous Mine Subsidence and Land Conservation Act.
18 Act of September 24, 1968 (P.L.1040, No.318), known as
19 the Coal Refuse Disposal Control Act.
20 Act of March 1, 1974 (P.L.90, No.24), known as the
21 Pennsylvania Pesticide Control Act of 1973.
22 Act of November 26, 1978 (P.L.1375, No.325), known as the
23 Dam Safety and Encroachments Act.
24 Act of July 7, 1980 (P.L.380, No.97), known as the Solid
25 Waste Management Act.
26 Act of May 1, 1984 (P.L.206, No.43), known as the
27 Pennsylvania Safe Drinking Water Act.
28 Act of December 19, 1984 (P.L.1093, No.219), known as the
29 Noncoal Surface Mining Conservation and Reclamation Act.
30 Act of December 19, 1984 (P.L.1140, No.223), known as the
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1 Oil and Gas Act.
2 Act of July 13, 1988 (P.L.525, No.93), referred to as the
3 Infectious and Chemotherapeutic Waste Law.
4 Act of July 28, 1988 (P.L.556, No.101), known as the
5 Municipal Waste Planning, Recycling and Waste Reduction Act.
6 Act of October 18, 1988 (P.L.756, No.108), known as the
7 Hazardous Sites Cleanup Act.
8 Act of July 6, 1989 (P.L.169, No.32), known as the
9 Storage Tank and Spill Prevention Act.
10 Act of December 7, 1990 (P.L.639, No.165), known as the
11 Hazardous Material Emergency Planning and Response Act.
12 Act of May 20, 1993 (P.L.12, No.6), known as the Nutrient
13 Management Act.
14 Act of May 19, 1995 (P.L.4, No.2), known as the Land
15 Recycling and Environmental Remediation Standards Act.
16 30 Pa.C.S. (relating to fish).
17 75 Pa.C.S. (relating to vehicles).
18 "In-camera review." A review of a document before a court
19 or the Environmental Hearing Board to which the public is not
20 admitted.
21 "Person." An individual, firm, corporation, association,
22 partnership, consortium, joint venture, commercial entity,
23 authority, nonprofit corporation, interstate body or other legal
24 entity which is recognized by law as the subject of rights and
25 duties. The term includes the Federal Government, State
26 government, political subdivisions and Commonwealth
27 instrumentalities.
28 "State environmental agency." The term includes the
29 Department of Environmental Protection and any other State
30 agency which may have responsibility to enforce the
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1 environmental statutes that are within the scope of this act.
2 Section 104. Powers and duties.
3 The State environmental agencies administering the
4 environmental statutes shall have the authority to adopt
5 regulations that are necessary or appropriate for implementing
6 the provisions of this act.
7 CHAPTER 2
8 ENVIRONMENTAL AUDIT REPORTS
9 Section 201. Environmental audit privilege.
10 (a) General rule.--Information and documents contained in
11 and related to an environmental audit report shall be privileged
12 and shall not be admissible as evidence in any civil, criminal
13 or administrative proceeding, except as specifically provided
14 for in this act. The scope of this privilege shall extend to
15 testimony sought to be elicited from any person concerning an
16 environmental audit report, unless the circumstances under which
17 that person acquired knowledge of the environmental audit report
18 indicate that the privilege has been waived.
19 (b) Exceptions.--The privilege established in subsection (a)
20 shall not extend to:
21 (1) Documents, communications, data, reports or other
22 information required to be collected, developed, maintained
23 or reported to a regulatory agency under the environmental
24 statutes or other Federal, State or local law, ordinance,
25 regulation, permit or order.
26 (2) Information obtained by observation, sampling or
27 monitoring by any regulatory agency.
28 (3) Information obtained from a source independent of
29 the environmental audit.
30 (4) Any documents or information sought to be obtained
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1 or introduced as evidence in a civil action seeking damages
2 for an alleged tort.
3 Section 202. Waiver.
4 (a) General rule.--The privilege established in section
5 201(a) shall not apply to the extent that it is waived by the
6 owner or operator of a facility at which an environmental audit
7 was conducted and who prepared or caused to be prepared the
8 environmental audit report as a result of the audit.
9 (b) Exceptions.--The privilege shall not be deemed waived in
10 the following situations:
11 (1) Where the environmental audit report or information
12 generated by the environmental audit is disclosed to any
13 legal representative of the owner or operator or to any
14 independent contractor retained by the owner or operator to
15 address an issue or issues raised by the environmental audit.
16 (2) Where the audit report is disclosed under the terms
17 of a confidentiality agreement between the person for whom
18 the audit report was prepared or the owner or operator of the
19 facility audited and a partner or potential partner, a
20 transferee or potential transferee or a lender or potential
21 lender for the business or facility audited.
22 (3) Where the audit report is disclosed under the terms
23 of a confidentiality agreement between government officials
24 and the entity or person for whom the audit report was
25 prepared or the owner or operator of the operation or
26 facility audited.
27 Section 203. Disclosure pursuant to order.
28 Disclosure of an environmental audit report or of a document
29 that the holder of the document alleges is an environmental
30 report may be ordered by a court or the board when, following an
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1 in-camera review of the report or document, the court or board
2 determines that:
3 (1) The environmental audit report or document contains
4 evidence that the person for whom the report was prepared is
5 not or was not in compliance with an environmental statute,
6 and the person did not take reasonably prompt, diligent
7 action to correct such noncompliance and did not achieve
8 compliance within a reasonable time. In a situation where a
9 person's efforts to achieve compliance involve filing an
10 application for a permit, a person shall be deemed in
11 compliance for purposes of this act when the application is
12 filed and pursued diligently.
13 (2) The audit report or document is not subject to the
14 privilege.
15 (3) The owner or operator of the facility has waived the
16 privilege.
17 (4) The audit report was prepared to avoid disclosure of
18 information in a pending investigation or an administrative
19 or judicial proceeding that was under way at the time that
20 the audit or audit report was begun.
21 Section 204. Discovery and subpoenas.
22 When information concerning, or production of, an
23 environmental audit report is sought in discovery or pursuant to
24 a subpoena, the person from whom the information or report is
25 sought shall be required to provide information concerning only
26 the existence of the audit report, the facility or facilities
27 subject to the audit, and the dates of the audit and audit
28 report. This section is not intended to limit the power of a
29 court or the board to order disclosure of an audit report under
30 section 203.
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1 Section 205. Burden of proof.
2 The burden of proving that a document qualifies as an
3 environmental audit report shall be upon the person making this
4 assertion. The burden of proving that a document is not
5 privileged under section 201(a) shall be upon the person
6 asserting that the document is not privileged.
7 CHAPTER 3
8 VOLUNTARY DISCLOSURES
9 Section 301. Immunity for voluntary disclosures.
10 (a) General rule.--If any person makes a voluntary
11 disclosure of a violation of the environmental laws, there shall
12 be a rebuttable presumption that the person is immune from any
13 administrative, civil or criminal penalties for the violations
14 disclosed.
15 (b) Requirements.--In order to qualify for the rebuttable
16 presumption of immunity under subsection (a), the voluntary
17 disclosure must meet the following requirements:
18 (1) It arose out of an environmental audit or the
19 operation of a compliance management system.
20 (2) It was made promptly after knowledge of the
21 information disclosed was obtained by the person.
22 (3) It was made to an agency or agencies that have
23 regulatory authority over the violations disclosed.
24 (4) The person who reported the violation takes
25 reasonably prompt, diligent action to correct the violation
26 and corrects the violation within a reasonable time. In a
27 situation where a person's efforts to achieve compliance
28 involve filing an application for a permit, a person shall be
29 deemed in compliance for purposes of this act when the
30 application is filed and pursued diligently.
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1 (5) The person who reported the violation cooperates
2 with the appropriate agency in investigating the incident.
3 Section 302. Immunity inapplicable.
4 (a) General rule.--The presumption of immunity established
5 in section 301 shall not apply if, and to the extent that, any
6 of the following factors are established:
7 (1) The person reporting the violation committed the
8 violation in reckless disregard of the environmental laws or
9 with intent to violate the environmental laws.
10 (2) The person making the disclosure realized
11 significant economic advantage from the violation, after
12 taking into account the cost of remedying the noncompliance.
13 In the event the department determines that immunity does not
14 apply solely because a person realized a significant economic
15 advantage from the violation, in determining the amount of a
16 penalty the department shall consider equitable factors,
17 including, but not limited to, the economic impact of the
18 penalty on the person, but in no event shall the amount of
19 such penalty exceed the amount of the economic advantage from
20 the violation.
21 (3) The violation caused a clear and substantial threat
22 to public health or the environment.
23 (4) The person asserting the immunity is determined by
24 the court or board to have shown a lack of ability or
25 intention to comply with the environmental laws, as indicated
26 by past or continuing violations.
27 (b) Mitigating factors.--When immunity is precluded under
28 section 301(b)(1), the nature of the disclosure and related
29 circumstances may, to the extent deemed appropriate, be
30 considered as mitigating factors in determining penalties for
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1 the violations.
2 Section 303. Burden of proof.
3 The burden of proving eligibility for immunity under section
4 301 shall be upon the person asserting immunity under that
5 section. The burden of proving that immunity does not apply
6 under section 302 shall be upon the person asserting that
7 immunity does not apply under that section.
8 CHAPTER 4
9 MISCELLANEOUS PROVISIONS
10 Section 401. Existing privilege.
11 Nothing in this act shall limit, waive or abrogate the scope
12 or nature of any existing privilege, including the attorney-work
13 product privilege or the attorney-client privilege.
14 Section 402. Applicability.
15 This act shall apply to all civil, criminal and
16 administrative proceedings initiated after the effective date of
17 this act.
18 Section 403. Effective date.
19 This act shall take effect in 30 days.
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