Senate Bill No. 72
(By Senators Anderson, Dittmar and Ross)
[Introduced January 14, 1998; referred to the Committee
on the Judiciary.]
A BILL to amend the code of West Virginia, one thousand nine
hundred thirty-one, as amended, by adding thereto a new
chapter, designated chapter twenty-two-d; and to amend and
reenact section two, article five, chapter twenty-nine-a of
said code, all relating to creating a privilege from
admissibility of evidence in administrative, civil and
criminal actions for self evaluations of facility compliance
with environmental laws; providing definitions; creating a
privilege for performing environmental audits and preparing
environmental audit reports; providing waivers and
exceptions to the privilege; establishing procedures to
overcome the privilege; limiting the disclosure of audit
reports; requiring certain actions to maintain the
privilege; establishing wavier of civil penalties in certain
circumstances; maintaining existing privileges; establishing burden of proof necessary to overcome the privilege;
establishing appeal procedures; limiting waiver of the
privilege; and providing protection of audit documents
submitted to a governmental agency.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended by adding thereto a new
chapter, designated chapter twenty-two-d; and that section two,
article five, chapter twenty-nine-a of said code be amended and
reenacted, all to read as follows:
CHAPTER 22D. ENVIRONMENTAL SELF AUDITS.
ARTICLE 1. ENVIRONMENTAL AUDITS PRIVILEGE
§22D-1-1. Legislative intent.
The Legislature hereby finds and declares that protection of
the environment and human health is enhanced by encouraging
voluntary compliance with environmental laws and that the public
and the environment will benefit from incentives to encourage
businesses to identify and remedy environmental law
noncompliance; that self evaluation and voluntary compliance by
businesses independent of governmental enforcement actions
promote cleanup of existing pollution and prevent future
pollution; that providing protection from forced disclosure of
environmental self-evaluations for businesses who undertake timely remediations of discovered violations, combined with a
waiver of certain civil penalties for timely self-reporting, will
create incentives for businesses to aggressively evaluate
activities which impact the environment to undertake any
necessary remediation activities, thereby improving the quality
of the state's environment.
Unless the context in which used clearly requires a
different meaning, as used in the article:
(a) "Division" means the West Virginia division of
environmental protection as established in chapter twenty-two of
(b) "Environmental audit" means a voluntary, good faith and
comprehensive evaluation of a facility or facilities or any part
thereof, including specific activities, processes or management
systems, or local counterparts or extensions thereof, or
management systems related to a facility or activity, that is
designed to identify and prevent incidents of noncompliance and
to promote future compliance with environmental laws. An
environmental audit may be conducted by the owner or operator of
a facility, by the employees of the owner or operator, or by
outside consultants or agents retained by the owner or operator
for purposes of performing such an audit.
(c) "Environmental audit report" means a set of documents prepared as a result of an environmental audit, including, but
not limited to, sampling results, test results, field notes and
records of observations, findings, suggestions, conclusions,
drafts, memoranda, drawings, photographs, computer-generated or
electronically recorded information, maps, charts, graphs,
surveys, provided that the information is collected or developed
in the course of conducting an environmental audit. An
environmental audit report may include, but is not limited to,
the following: (1) Scope and date of the audit and the
information gained in the audit together with exhibits and
appendices, and may include conclusions and recommendations; (2)
memoranda and documents analyzing a portion or all of the audit
report and discussing implementation issues; and (3) an audit
implementation plan that addresses correcting past noncompliance,
improving current compliance and preventing future noncompliance.
The environmental audit report includes any memorandum,
information, communications or documents discussing all or part
of other environmental audit or implementation of compliance
plans. Each document contained in the report must be labeled
"Environmental Audit Report: Privileged Document" to be
designated as part of the environmental audit report.
(d) "Environmental law" means any federal, state or local
statute, law, ordinance, rule or regulation or permit standard
applicable to a facility or the operations of a facility designed to protect or enhance the land, air or water for the protection
of human health, natural resources or the environment.
(e) "Facility" means any site, operation or activity that is
subject to regulation under any environmental law.
(f) "Pattern of negligent acts" means: (i) Two or more
negligent acts occurring within a two year time period, each of
which causes harm to human health; or (ii) when negligence acts
causes harm to the environment, a pattern is shown when three or
more negligent acts occur within a two year time period. For
purposes of establishing a pattern of negligent acts, negligent
acts occurring prior to the effective date of this Act, and acts
that are not related by similar cause or similar type of harm
shall not be considered. For the purposes of establishing a
pattern of negligent acts, a violation of a environmental law
does not constitute a per se negligent act. For any act to be
considered in a pattern of negligent acts, the person asserting
the allegation of a pattern of negligent acts must demonstrate in
an in camera or confidential review, as provided in section four
of this article, that the acts violated the standard of
reasonable care of the person asserting the privilege, and the
pattern of negligent acts directly caused actual harm to human
health or the environment.
§22D-1-3. Privilege created, inadmissibility as evidence in any
(a) In order to encourage owners and operators of facilities
to conduct voluntary environmental self-evaluations of their
operations to assess and improve compliance with statutory and
regulatory requirements under environmental law, an environmental
audit privilege is hereby created to protect the confidentiality
of communications relating to any such environmental audit. An
environmental audit report and any materials created in its
development shall be privileged and shall not be admissible as
evidence in any civil, criminal or administrative proceeding, and
shall be exempt from disclosure or discovery in connection with
or in anticipation of any civil, criminal or administrative
proceeding, except as provided in section four of this article.
(b) If the privilege described in this section is applicable
to an environmental audit, the owner or operator, the employees
of the owner or operator, or outside consultants or agents who
engage in the performance of an environmental audit may not be
examined in any civil, criminal or administrative proceeding as
to the content of the audit or any environmental audit report
without the consent of the owner or operator of the affected
§22D-1-4. Privilege requirements and applicability.
(a) The privilege is applicable if the owner or operator has
met all the following requirements:
(1) If the owner or operator has failed to apply for any permit required by an environmental law, an application for the
permit must be filed no later than sixty days after the date on
which the owner or operator becomes aware of the need for the
(2) For other violations of environmental laws identified in
an environmental audit that do not require application for a
permit, the following requirements must be met:
(A) A preliminary plan for achievement of compliance must be
prepared within sixty days of completion of the environmental
audit. This plan shall include identification of the elements
and course of action necessary to be taken to bring the facility
into compliance with environmental laws, and identification of
any action that needs to be taken immediately to minimize any
adverse effect of noncompliance.
(B) Within six months, a final plan must be completed which
establishes a reasonable time-frame for remediation, along with
a specific engineering plan for all necessary acts required to
bring the owner or operator into compliance with all state and
federal laws. The final plan must include an assessment of each
environmental law violation and goals and plans to prevent future
(b) The environmental audit privilege established in section
three of this article does not apply or may be revoked under any
of the following conditions:
(1) The privilege is expressly waived by the owner or
operator of the facility that is the subject of the environmental
(2) The owner or operator of the facility that is the
subject of the environmental audit seeks to introduce the
environmental audit report as evidence in any civil, criminal or
(3) After an in camera or confidential review consistent
with all applicable rules of a court or administrative body, and
upon a finding by a court or administrative body that:
(A) The privilege is asserted for a fraudulent purpose;
(B) The material is not subject to the privilege; or
(C) Even if subject to the privilege, the material or other
evidence demonstrates that prior to the audit, the owner or
operator has through either a pattern of negligent acts, or by
any act of gross negligence, or any intentional act, violated an
environmental law, resulting in actual harm to human health or
the environment. Actual harm must be demonstrated by bona fide
medical, environmental, or financial evidence.
(4) In a criminal proceeding, a court of record after an in
camera review, may require disclosure of material for which the
privilege is asserted, upon the finding of the court that the
material contains evidence relevant to commission of an offense,
and the government has substantial and compelling need for the information, and the information cannot be obtained from other
(5) If the person claiming the privilege fails to prepare a
preliminary plan or a final plan and complete remediation as
required by subsection (a) of section four of this article.
(c) The privilege described in section three of this article
also does not apply to any of the following types of information:
(1) Information that is subject to reporting or availability
requirements under existing permits or environmental laws;
(2) Information obtained by a regulatory agency through its
own observation, sampling or monitoring, or from any source
independent of the environmental audit report; or
(3) Information obtained from a source independent of the
§22D-1-5. Limitation on civil penalties.
If an owner or operator of a facility regulated under this
article complies with all the requirements of this article, the
division shall not seek civil penalties for any self reported
violation reported in a permit application or otherwise reported,
which is discovered as a result of an environmental audit. This
waiver of civil penalties shall not apply if the division has
assumed primacy over a federally delegated environmental law and
this waiver of penalty authority would result in a state program
being less stringent than the federal program or the waiver would violate any federal regulation required to maintain state
primacy. If a federally delegated program requires the
imposition of a penalty for a violation, the voluntary disclosure
of the violation shall be, to the extent allowed under federal
law or regulation, considered a mitigating factor in determining
the penalty amount.
§22D-1-6. Burden of proof.
A party seeking forced disclosure or any information in an
environmental audit report has the burden of proving the
existence of conditions making the privilege under section three
of this article inapplicable. To release audit materials, the
court or administrative body must find clear and convincing
evidence that a violation of section four of this article has
§22D-1-7. Disclosure of audit materials.
If any of the information contained in an environmental
audit report or obtained during the course of an environmental
audit is subject to disclosure under this article, only those
portions of the environmental audit report relevant to the
applicable proceedings and subject to section four of this
article shall be disclosed: Provided, That when the privilege
has been asserted for any fraudulent purpose, all portions of the
audit shall be subject to disclosure.
§22D-1-8. Disclosure of audit materials subject to appeal.
No portion of the audit shall be released until the person
or persons asserting the audit privilege have been provided an
opportunity to appeal the disclosure. For administrative
hearings, the appeal shall be initiated pursuant to the state
administrative procedures act, as provided in section four,
article five of chapter twenty-nine-a of the code. Any circuit
court decision to release audit materials may be appealed
pursuant to the rules of the West Virginia Supreme Court of
Appeals for civil procedure for trial courts of record.
§22D-1-9. Existing privileges retained.
Nothing in this article shall limit, waive or abrogate the
scope or nature of any other statutory or common law privileges,
including, but not limited to, the work product doctrine and the
§22D-1-10. Confidential submission does not waive privilege.
An owner or operator may submit an environmental audit
report or a portion of an environmental audit to a governmental
agency as a confidential document without waiving a privilege to
which the owner or operator would otherwise be entitled under
this article, including protection from disclosure pursuant to
chapter twenty-nine-b of this code.
CHAPTER 29A. STATE ADMINISTRATIVE PROCEDURES ACT.
ARTICLE 5. CONTESTED CASES.
§29A-5-2. Rules of evidence; taking notice of facts; correction
(a) In contested cases irrelevant, immaterial, or unduly
repetitious evidence shall be excluded. The rules of evidence as
applied in civil cases in the circuit courts of this state shall
be followed. When necessary to ascertain facts not reasonably
susceptible of proof under those rules, evidence not admissible
thereunder may be admitted, except where precluded by statute, if
it is of a type commonly relied upon by reasonably prudent men in
the conduct of their affairs. Agencies shall be bound by the
rules of privilege recognized by law, including those set forth
in article one, chapter twenty-two-d of this code. Objections
to evidentiary offers shall be noted in the record. Any party to
any such hearing may vouch the record as to any excluded
testimony or other evidence.
(b) All evidence, including papers, records, agency staff
memoranda and documents in the possession of the agency, of which
it desires to avail itself, shall be offered and made a part of
the record in the case, and no other factual information or
evidence shall be considered in the determination of the case.
Documentary evidence may be received in the form of copies or
excerpts or by incorporation by reference.
(c) Every party shall have the right of cross-examination of
witnesses who testify, and shall have the right to submit
(d) Agencies may take notice of judicially cognizable facts.
All parties shall be notified either before or during the
hearing, or by reference in preliminary reports or otherwise, of
the material so noticed, and they shall be afforded an
opportunity to contest the facts noticed.
(e) Upon motion in writing served by any party as notice may
be served pursuant to section two, article seven of this chapter
and therein assigning error or omission in any part of any
transcript of the proceedings had and testimony taken at any such
hearing, the agency shall settle all differences arising as to
whether the transcript truly discloses what occurred at the
hearing and shall direct that the transcript be corrected and
revised in the respects designated by the agency, so as to make
it conform to the whole truth.
NOTE: The purpose of this bill is to establish an
environmental audit privilege for businesses which conduct self
audits to assess environmental law compliance. As long as the
privilege attaches to audit documents, the audit cannot be used
in a legal proceeding as evidence against the business.
Requirements to obtain and maintain the privilege are also
Chapter 22D is new; therefore, strike-throughs and
underscoring have been omitted.
Strike-throughs to current law indicate language that would
be stricken from the present law and underscoring indicates new
language that would be added.