COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1372-01
Bill No.: SB 335
Subject: Environmental Audit Privilege
Type: Original
Date: March 26, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
$0 | $0 | $0 |
Based on the February 27, 1995 vote of the Oversight Subcommittee on a similar proposal, all fiscal impact to state and federal funds have been removed to reflect a $0 impact.
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the Office of State Courts Administrator assume the proposed legislation would have no fiscal impact on their agency.
Officials from the Office of Attorney General assume there may be additional litigation resulting from this proposal and therefore costs are unknown.
Officials from the Department of Natural Resources (DNR) assumes the introduction of this proposal is an indication there is a certain amount of known non-compliance with environmental laws. The DNR is not aware of these areas of non-compliance. The DNR assumes if it were aware of areas of non-compliance they would be working with the facilities to bring them into compliance, and non-compliance would not be an issue. However, since the DNR does not know the population of non-compliance they cannot estimate the increased resources that would result from this proposal.
The DNR assumes increased enforcement action will be necessary to obtain compliance information independently or through the courts. The DNR is unable to determine the additional costs of the anticipated increased enforcement.
DNR assumes disagreements over whether an audit is privileged will have to be resolved in court and will increase litigation costs. The DNR is unable to determine the additional costs of the increased litigation.
The DNR assumes they will be receiving the privileged audit reports for retention. They expect costs for development of procedures, staff, and storage facilities, however, the actual costs of the additional resources needed to receive and retain the audit reports are unknown.
The DNR assumes it would be subject to losing a delegation of authority from the Environmental Protection Agency, due to the weakening of penalties for environmental violations. That means Missouri would lose "primacy" in environmental programs causing citizens and local governments to deal directly with EPA. The DNR assumes it would also lose federal funding exceeding $100,000,000.
Based on the February 27, 1995 vote of the Oversight Subcommittee on a similar proposal, all fiscal impact to state and federal funds have been removed to reflect a $0 impact.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
There may be an impact to small businesses who have an environmental audit that discovers a violations, in that this proposal provides for immunity from penalties in certain circumstances.
DESCRIPTION
This proposal establishes an environmental audit privilege and confidentiality of communications relating to voluntary internal environmental audits. The proposal also provides penalty immunity for voluntarily-disclosed environmental violations.
The privilege shall not apply when the privilege has been waived. A judicial body may require disclosure of otherwise privileged information if it is determined that the privilege is being asserted fraudulently, the material is not subject to the privilege, or the material shows that party asserting privilege did not exercise ordinary care to pursue compliance upon discovery of
noncompliance with environmental laws. The privilege details the burden of proof on the party seeking disclosure as well as the party asserting the privilege.
The state may obtain an audit report if the state has determined from an independent source that a criminal offense has been committed, but may not review or disclose the content until ordered by a court or until the privilege is waived. A review may be requested by the provider of the report within thirty days of the date the state receives the audit report.
The proposal provides conditions for disclosure of a privileged report in civil and administrative cases, and provides for appeal of a civil or administrative disclosure decision by an aggrieved party. Any public entity, employee or official who divulges confidential audit information commits a Class A misdemeanor.
The proposal provides exceptions to the environmental audit privilege for information obtained by a regulatory agency pursuant to requirements of federal, state or local law or regulation, information obtained independently or information obtained directly by a regulatory agency.
DESCRIPTION (continued)
The proposal defines the voluntary disclosure of information regarding the violation of an environmental law, and prohibits the Department of Natural Resources from assessing administrative penalties or seeking civil or criminal penalties from any entity or
person who voluntarily discloses an environmental violation to a division or program within the Department. Penalty immunity shall not apply if the disclosure was not voluntary, or if a person or entity has been found by a court or administrative body to have committed serious violations that constitute a pattern of continuous or repeated violations of environmental laws. This pattern may be demonstrated by multiple, related settlement agreements.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Natural Resources
Office of Attorney General
Office of State Courts Administrator
Jeanne Jarrett, CPA
Director
March 26, 2001