S. B. No. 372 As Introduced

As Introduced

127th General Assembly

Regular Session

2007-2008

S. B. No. 372

Senator Niehaus

A BILL

To amend sections 3745.71 and 3745.72 of the Revised

Code to extend from January 1, 2009, to January 1,

2014, the time by which environmental audits must

be completed in order to be within the scope of

certain privileges and immunities that apply to

such audits, and to declare an emergency.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 3745.71 and 3745.72 of the Revised	7
Code be amended to read as follows:	8

Sec. 3745.71. (A) Except as otherwise provided in division	9
(C) of this section, the owner or operator of a facility or	10
property who conducts an environmental audit of one or more	11
activities at the facility or property has a privilege with	12
respect to both of the following:	13

(1) The contents of an environmental audit report that is	14
based on the audit;	15

(2) The contents of communications between the owner or	16
operator and employees or contractors of the owner or operator, or	17
among employees or contractors of the owner or operator, that are	18
necessary to the audit and are made in good faith as part of the	19
audit after the employee or contractor is notified that the	20
communication is part of the audit.	21

(B) Except as otherwise provided in or ordered pursuant to	22
this section, information that is privileged under this section is	23
not admissible as evidence or subject to discovery in any civil or	24
administrative proceeding and a person who possesses such	25
information as a result of conducting or participating in an	26
environmental audit shall not be compelled to testify in any civil	27
or administrative proceeding concerning the privileged portions of	28
the environmental audit.	29

(C) The privilege provided in this section does not apply to	30
criminal investigations or proceedings. Where an audit report is	31
obtained, reviewed, or used in a criminal proceeding, the	32
privilege provided in this section applicable to civil or	33
administrative proceedings is not waived or eliminated.	34
Furthermore, the privilege provided in this section does not apply	35
to particular information under any of the following	36
circumstances:	37

(1) The privilege is not asserted with respect to that	38
information by the owner or operator to whom the privilege	39
belongs.	40

(2) The owner or operator to whom the privilege belongs	41
voluntarily testifies, or has provided written authorization to an	42
employee, contractor, or agent to testify on behalf of the owner	43
or operator, as to that information.	44

(3) A court of record in a civil proceeding or the tribunal	45
or presiding officer in an administrative proceeding finds,	46
pursuant to this section, that the privilege does not apply to	47
that information.	48

(4) The information is required by law to be collected,	49
developed, maintained, reported, disclosed publicly, or otherwise	50
made available to a government agency.	51

(5) The information is obtained from a source other than an	52
environmental audit report, including, without limitation,	53
observation, sampling, monitoring, a communication, a record, or a	54
report that is not part of the audit on which the audit report is	55
based.	56

(6) The information is collected, developed, made, or	57
maintained in bad faith or for a fraudulent purpose.	58

(7) The owner or operator to whom the privilege belongs	59
waives the privilege, in whole or in part, explicitly or by	60
engaging in conduct that manifests a clear intent that the	61
information not be privileged. If an owner or operator introduces	62
part of an environmental audit report into evidence in a civil or	63
administrative proceeding to prove that the owner or operator did	64
not violate, or is no longer violating, any environmental laws,	65
the privilege provided by this section is waived with respect to	66
all information in the audit report that is relevant to that	67
issue.	68

(8)(a) The information shows evidence of noncompliance with	69
environmental laws and the owner or operator fails to do any of	70
the following:	71

(i) Promptly initiate reasonable efforts to achieve	72
compliance upon discovery of the noncompliance through an	73
environmental audit;	74

(ii) Pursue compliance with reasonable diligence;

(iii) Achieve compliance within a reasonable time.

(b) "Reasonable diligence" includes, without limitation,	77
compliance with section 3745.72 of the Revised Code.	78

(9) The information contains evidence that a government	79
agency federally authorized, approved, or delegated to enforce	80
environmental laws has reasonable cause to believe is necessary to	81
prevent imminent and substantial endangerment or harm to human	82
health or the environment.	83

(10) Any circumstance in which both of the following apply:

(a) The information contains evidence regarding an alleged	85
violation of environmental laws and a government agency charged	86
with enforcing any of those laws has a substantial need for the	87
information to protect public health or safety or to prevent	88
substantial harm to property or the environment;.	89

(b) The government agency is unable to obtain the substantial	90
equivalent of the information by other means without unreasonable	91
delay or expense.	92

(11) The information consists of personal knowledge of an	93
individual who did not obtain that information as part of an	94
environmental audit.	95

(12) The information is not clearly identified as part of an	96
environmental audit report. For purposes of this section, clear	97
identification of information as part of an environmental audit	98
report includes, without limitation, either of the following:	99

(a) The information is contained in a document and the front	100
cover, the first page, or a comparable part of the document is	101
prominently labeled with "environmental audit report: privileged	102
information" or substantially comparable language;.	103

(b) The information is contained in an electronic record and	104
the record is programmed to display or print prominently	105
"environmental audit report: privileged information" or	106
substantially comparable language before the privileged	107
information is displayed or printed.	108

(13) The information existed prior to the initiation of the	109
environmental audit under division (A) of section 3745.70 of the	110
Revised Code.	111

(D) If the privilege provided in this section belongs to an	112
owner or operator who is not an individual, the privilege may be	113
asserted or waived, in whole or in part, on behalf of the owner or	114
operator only by an officer, manager, partner, or other comparable	115
person who has a fiduciary relationship with the owner or operator	116
and is authorized generally to act on behalf of the owner or	117
operator or is a person who is authorized specifically to assert	118
or waive the privilege.	119

(E) A person asserting the privilege provided in this section	120
has the burden of proving the applicability of the privilege by a	121
preponderance of the evidence. If a person seeking disclosure of	122
information with respect to which a privilege is asserted under	123
this section shows evidence of noncompliance with environmental	124
laws pursuant to division (C)(8) of this section, the person	125
asserting the privilege also has the burden of proving by a	126
preponderance of the evidence that reasonable efforts to achieve	127
compliance with those laws were initiated promptly and that	128
compliance was pursued with reasonable diligence and achieved	129
within a reasonable time.	130

(F) When determining whether the privilege provided by this	131
section applies to particular information, a court of record that	132
is not acting pursuant to division (G) of this section, or the	133
tribunal or presiding officer in an administrative proceeding,	134
shall conduct an in camera review of the information in a manner	135
consistent with applicable rules of procedure.	136

(G)(1) The prosecuting attorney of a county or the attorney	137
general, having probable cause to believe, based on information	138
obtained from a source other than an environmental audit report,	139
that a violation has been committed under environmental laws for	140
which a civil or administrative action may be initiated, may	141
obtain information with respect to which a privilege is asserted	142
under this section pursuant to a search warrant, subpoena, or	143
discovery under the Rules of Civil Procedure. The prosecuting	144
attorney or the attorney general immediately shall place the	145
information under seal and shall not review or disclose its	146
contents.	147

(2) Not later than sixty days after receiving an	148
environmental audit report under division (G)(1) of this section,	149
the prosecuting attorney or the attorney general may file with the	150
court of common pleas of a county in which there is proper venue	151
to bring a civil or administrative action pertaining to the	152
alleged violation a petition requesting an in camera hearing to	153
determine if the information described in division (G)(1) of this	154
section is subject to disclosure under this section. Failure to	155
file such a petition shall cause the information to be released to	156
the owner or operator to whom it belongs.	157

(3) Upon the filing of a petition under division (G)(2) of	158
this section, the court shall issue an order scheduling an in	159
camera hearing, not later than forty-five days after the filing of	160
the petition, to determine if any or all of the information	161
described in division (G)(1) of this section is subject to	162
disclosure under this section. The order shall allow the	163
prosecuting attorney or the attorney general to remove the seal	164
from the report in order to review it and shall place appropriate	165
limitations on distribution and review of the report to protect	166
against unnecessary disclosure.	167

(4) The prosecuting attorney or the attorney general may	168
consult with government agencies regarding the contents of the	169
report to prepare for the in camera hearing. Information	170
described in division (G)(1) of this section that is used by the	171
prosecuting attorney or the attorney general to prepare for the in	172
camera hearing shall not be used by the prosecuting attorney, the	173
attorney general, an employee or agent of either of them, or an	174
agency described in division (G)(4) of this section in any	175
investigation or proceeding against the respondent, and otherwise	176
shall be kept confidential, unless the information is subject to	177
disclosure under this section.	178

(5) The parties may stipulate that information contained in	179
an environmental audit report is or is not subject to disclosure	180
under this section.	181

(6) If the court determines that information described in	182
division (G)(1) of this section is subject to disclosure under	183
this section, the court shall compel disclosure under this section	184
of only the information that is relevant to the proceeding	185
described in division (G)(1) of this section.	186

(H) Nothing in this section affects the nature, scope, or	187
application of any privilege of confidentiality or nondisclosure	188
recognized under another section of the Revised Code or the common	189
law of this state, including, without limitation, the work product	190
doctrine and attorney-client privilege.	191

(I) The privilege provided by this section applies only to	192
information and communications that are part of environmental	193
audits initiated after March 13, 1997, and completed before	194
January 1, ~~2009~~2014, in accordance with the time frames specified	195
in division (A) of section 3745.70 of the Revised Code.	196

Sec. 3745.72. (A) The owner or operator of a facility or	197
property who conducts an environmental audit of the facility or	198
property and promptly and voluntarily discloses information	199
contained in or derived from an audit report that is based on the	200
audit and concerns an alleged violation of environmental laws to	201
the director of the state agency that has jurisdiction over the	202
alleged violation is immune from any administrative and civil	203
penalties for the specific violation disclosed, except that where	204
the disclosed violation has resulted in significant economic	205
benefit to the owner or operator of the facility or property,	206
there is no immunity for the economic benefit component of the	207
administrative and civil penalties for that violation. An owner	208
or operator asserting entitlement to such immunity has the burden	209
of proving that entitlement by a preponderance of the evidence.	210

(B) For the purposes of this section, a disclosure of	211
information is voluntary with respect to an alleged violation of	212
environmental laws only if all of the following apply:	213

(1) The disclosure is made promptly after the information is	214
obtained through the environmental audit by the owner or operator	215
who conducts the environmental audit;.	216

(2) A reasonable, good faith effort is made to achieve	217
compliance as quickly as practicable with environmental laws	218
applicable to the information disclosed;.	219

(3) Compliance with environmental laws applicable to the	220
information disclosed is achieved as quickly as practicable or	221
within such period as is reasonably ordered by the director of the	222
state agency that has jurisdiction over the alleged violation;.	223

(4) The owner or operator cooperates with the director of the	224
state agency that has jurisdiction over the alleged violation in	225
investigating the cause, nature, extent, and effects of the	226
noncompliance;.	227

(5) The disclosure is not required by law, prior litigation,	228
or an order by a court or a government agency;.	229

(6) The owner or operator who makes the disclosure does not	230
know or have reason to know that a government agency charged with	231
enforcing environmental laws has commenced an investigation or	232
enforcement action that concerns a violation of such laws	233
involving the activity.	234

(C) For the purposes of this section, a disclosure shall be	235
in writing, dated, and hand delivered or sent by certified mail to	236
the director of the state agency that has jurisdiction over the	237
alleged violation, and shall contain all of the following in a	238
printed letter attached to the front of the disclosure:	239

(1) The name, address, and telephone number of the owner or	240
operator making the disclosure;	241

(2) The name, title, address, and telephone number of one or	242
more persons associated with the owner or operator who may be	243
contacted regarding the disclosure;	244

(3) A brief summary of the alleged violation of environmental	245
laws, including, without limitation, the nature, date, and	246
location of the alleged violation to the extent that the	247
information is known by the owner or operator;	248

(4) A statement that the information is part of an	249
environmental audit report and is being disclosed under section	250
3745.72 of the Revised Code in order to obtain the immunity	251
provided by that section.	252

(D) This section does not provide immunity from the payment	253
of damages for harm to persons, property, or the environment; the	254
payment of reasonable costs incurred by a government agency in	255
responding to a disclosure; or responsibility for the remediation	256
or cleanup of environmental harm under environmental laws.	257

(E) The immunity provided by this section does not apply	258
under any of the following circumstances:	259

(1) Within the three-year period prior to disclosure, the	260
owner or operator of a facility or property has committed	261
significant violations that constitute a pattern of continuous or	262
repeated violations of environmental laws, environmental related	263
settlement agreements, or environmental related judicial orders	264
and that arose from separate and distinct events. For the purposes	265
of division (E)(1) of this section, a pattern of continuous or	266
repeated violations also may be demonstrated by multiple	267
settlement agreements related to substantially the same alleged	268
significant violations that occurred within the three-year period	269
immediately prior to the voluntary disclosure. Determination of	270
whether a person has a pattern of continuous or repeated	271
violations under division (E)(1) of this section shall be based on	272
the compliance history of the property or specific facility at	273
issue.	274

(2) With respect to a specific violation, the violation	275
resulted in serious harm or in imminent and substantial	276
endangerment to human health or the environment.	277

(3) With respect to a specific violation, the violation is of	278
a specific requirement of an administrative or judicial order.	279

(F) The immunity provided by this section applies only to	280
disclosures made concerning environmental audits initiated after	281
March 13, 1997, and completed before January 1, ~~2009~~2014, in	282
accordance with the time frames specified in division (A) of	283
section 3745.70 of the Revised Code.	284

(G) The immunity provided by this section applies to a person	285
who makes a good faith disclosure to a state agency under this	286
section even though another state agency is determined to have	287
jurisdiction over an alleged violation of environmental laws	288
indicated in the disclosure.	289

(H) Each state agency that receives a disclosure under this	290
section promptly shall record receipt of the disclosure, determine	291
whether it has jurisdiction over the alleged violation of	292
environmental laws indicated in the disclosure, and, if it does	293
not have such jurisdiction, deliver the disclosure documents to	294
the director of a state agency that has jurisdiction over the	295
alleged violation. If a disclosure indicates alleged violations of	296
environmental laws that are under the jurisdiction of more than	297
one state agency, the state agency that first receives the	298
disclosure and has jurisdiction over any of the alleged violations	299
promptly shall notify the director of each state agency that has	300
jurisdiction over any of such alleged violations. The director of	301
each state agency that receives a disclosure under this section,	302
or is notified by another state agency that the director's agency	303
has jurisdiction over an alleged violation of environmental laws	304
indicated in the disclosure, promptly shall deliver written notice	305
of that fact by certified mail to the owner or operator who made	306
the disclosure. The notice shall identify the state agency that	307
sends the notice; state the name, title, address, and telephone	308
number of a person in the agency whom the owner or operator may	309
contact regarding the disclosure; and state the name, address, and	310
telephone number of the director of any other state agency	311
notified about the disclosure because that agency has jurisdiction	312
over an alleged violation of environmental laws indicated in the	313
disclosure.	314

Section 2. That existing sections 3745.71 and 3745.72 of the	315
Revised Code are hereby repealed.	316

Section 3. This act is hereby declared to be an emergency	317
measure necessary for the immediate preservation of the public	318
peace, health, and safety. The reason for such necessity is that	319
the deadline by which environmental audits must be completed in	320
order to be within the scope of certain privileges and immunities	321
currently is January 1, 2009, thus necessitating the immediate	322
extension of that deadline in order to continue the environmental	323
audit program. Therefore, this act shall go into immediate effect.	324