Fiscal Note - SB 0048 - Confidentiality and Immunity for Voluntary Self-Audits
L.R. NO. 0412-01
BILL NO. SB 48
SUBJECT: Environmental Audit Privilege
TYPE: Original
DATE: February 7, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
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.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government
FISCAL ANALYSIS
ASSUMPTION
The Office of the Attorney General (AGO) assumes they would incur additional
costs to hire expert witnesses to replace the information currently available
in environmental audit reports. The AGO estimated their costs would be
$23,100 per case for a projected 50 cases annually.
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 1997 FY 1998 FY 1999
(10 Mo.)
$0 $0 $0
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
$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 act, with penalty provisions, establishes an environmental audit
privilege and confidentiality of communications relating to voluntary
internal environmental audits. The act 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 act 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 act 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 which divulges 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 the Attorney General
This Fiscal Note is not an official copy and should not be quoted or cited.