1.1                          A bill for an act 
  1.2             relating to the environment; creating an environmental 
  1.3             audit privilege; proposing coding for new law in 
  1.4             Minnesota Statutes, chapter 115. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [115.074] [ENVIRONMENTAL AUDIT PRIVILEGE.] 
  1.7      Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
  1.8   section, the following terms have the meanings given. 
  1.9      (b) "Applicable environmental law" means sections 144.35 to 
  1.10  144.387 and chapters 18B, 18C, 18D, 18F, 115, 115A, 115B, 115C, 
  1.11  115D, 115E, and 116. 
  1.12     (c) "Environmental audit" means a voluntary, internal, and 
  1.13  comprehensive evaluation of a facility or an activity at a 
  1.14  facility regulated under an applicable environmental law, or of 
  1.15  a management system related to the facility or activity, that: 
  1.16     (1) is designed to identify and prevent noncompliance and 
  1.17  to improve compliance with an applicable environmental law; and 
  1.18     (2) is conducted by the owner or operator of the facility, 
  1.19  by an employee of the owner or operator, by another person 
  1.20  conducting an activity regulated under an applicable 
  1.21  environmental law, or by an independent contractor. 
  1.22     (d) "Environmental audit report" means a report comprised 
  1.23  of one or more components, each labeled "Environmental Audit 
  1.24  Report:  Privileged Document," that is prepared as a result of 
  1.25  an environmental audit, and any supporting information that is 
  2.1   collected or developed for the primary purpose and in the course 
  2.2   of the environmental audit, including field notes or records of 
  2.3   observations, findings, opinions, suggestions, conclusions, 
  2.4   drafts, memoranda, drawings, photographs, computer-generated or 
  2.5   electronically recorded information, maps, charts, graphs, and 
  2.6   surveys.  As used in this paragraph, "component" means: 
  2.7      (1) an audit report prepared by the auditor, which may 
  2.8   include information on the scope of the audit, information 
  2.9   gained from the audit, and conclusions and recommendations 
  2.10  relating to the audit, together with exhibits and appendices; 
  2.11     (2) a memorandum or other document that analyzes a portion 
  2.12  or all of the audit report and that may include information 
  2.13  concerning the implementation of the report; or 
  2.14     (3) an implementation plan that addresses the correction of 
  2.15  past noncompliance, the improvement of current compliance, and 
  2.16  the prevention of future noncompliance. 
  2.17     Subd. 2.  [PRIVILEGE.] Except as provided in subdivisions 3 
  2.18  to 6, an environmental audit report is not subject to discovery 
  2.19  and is not admissible as evidence in a civil or criminal action 
  2.20  or administrative proceeding. 
  2.21     Subd. 3.  [EXCEPTIONS.] (a) The privilege described in 
  2.22  subdivision 2 does not apply to the extent that it is waived 
  2.23  expressly or by implication by the owner or operator of a 
  2.24  facility or persons conducting an activity that prepared or 
  2.25  caused to be prepared the environmental audit report. 
  2.26     (b) In a civil or administrative proceeding, the court of 
  2.27  record or the administrative law judge shall require disclosure 
  2.28  of material for which the privilege described in subdivision 2 
  2.29  is asserted if the court or administrative law judge determines 
  2.30  that: 
  2.31     (1) the privilege is asserted for a fraudulent purpose; 
  2.32     (2) the material is not subject to the privilege; or 
  2.33     (3) even if subject to the privilege, the material shows 
  2.34  evidence of noncompliance with an applicable environmental law, 
  2.35  appropriate efforts to achieve compliance with which were not 
  2.36  promptly initiated and pursued with reasonable diligence. 
  3.1      (c) In a criminal proceeding, the court of record shall 
  3.2   require disclosure of material for which the privilege described 
  3.3   in subdivision 2 is asserted if the court determines that: 
  3.4      (1) the privilege is asserted for a fraudulent purpose; 
  3.5      (2) the material is not subject to the privilege; 
  3.6      (3) even if subject to the privilege, the material shows 
  3.7   evidence of noncompliance with an applicable environmental law, 
  3.8   appropriate efforts to achieve compliance with which were not 
  3.9   promptly initiated and pursued with reasonable diligence; or 
  3.10     (4) the material contains evidence relevant to commission 
  3.11  of an offense under section 609.671, the county attorney or 
  3.12  attorney general has a compelling need for the information, the 
  3.13  information is not otherwise available, and the county attorney 
  3.14  or attorney general is unable to obtain the substantial 
  3.15  equivalent of the information by any means without incurring 
  3.16  unreasonable cost and delay. 
  3.17     (d) Upon making a determination under subdivision 3, 
  3.18  paragraph (b) or (c), the court may compel the disclosure only 
  3.19  of those portions of an environmental audit report relevant to 
  3.20  issues in dispute in the proceeding. 
  3.21     Subd. 4.  [BURDEN OF PROOF.] (a) Except as provided in 
  3.22  paragraphs (b) and (c), a person asserting the environmental 
  3.23  audit privilege described in subdivision 2 has the burden of 
  3.24  proving the privilege, including, if there is evidence of 
  3.25  noncompliance with an applicable environmental law, proof that 
  3.26  appropriate efforts to achieve compliance were promptly 
  3.27  initiated and pursued with reasonable diligence. 
  3.28     (b) A party seeking disclosure under subdivision 3, 
  3.29  paragraph (b), clause (1), has the burden of proving that the 
  3.30  privilege is asserted for a fraudulent purpose. 
  3.31     (c) A county attorney or the attorney general seeking 
  3.32  disclosure under subdivision 3, paragraph (c), clause (4), has 
  3.33  the burden of proving the conditions for disclosure set forth in 
  3.34  that provision.  
  3.35     Subd. 5.  [CRIMINAL ACTIONS.] (a) A county attorney or the 
  3.36  attorney general, having probable cause to believe an offense 
  4.1   has been committed under section 609.671 based upon information 
  4.2   obtained from a source independent of an environmental audit 
  4.3   report, may obtain an environmental audit report for which a 
  4.4   privilege is asserted under subdivision 2 pursuant to search 
  4.5   warrant, criminal subpoena, or discovery.  The county attorney 
  4.6   or attorney general shall immediately place the report under 
  4.7   seal and shall not review or disclose its contents. 
  4.8      (b) Within 30 days of the county attorney's or attorney 
  4.9   general's obtaining an environmental audit report, the owner or 
  4.10  operator who prepared or caused to be prepared the report may 
  4.11  file with the appropriate court a petition requesting an 
  4.12  in-camera hearing on whether the environmental audit report or 
  4.13  portions thereof are privileged under this section or subject to 
  4.14  disclosure.  Failure by the owner or operator to file a petition 
  4.15  waives the privilege. 
  4.16     (c) Upon filing of a petition, the court shall issue an 
  4.17  order scheduling an in-camera hearing within 45 days of the 
  4.18  filing of the petition to determine whether the environmental 
  4.19  audit report or portions thereof are privileged under this 
  4.20  section or subject to disclosure.  The order further must allow 
  4.21  the county attorney or attorney general to remove the seal from 
  4.22  the report to review the report and shall place appropriate 
  4.23  limitations on distribution and review of the report to protect 
  4.24  against unnecessary disclosure.  The county attorney or attorney 
  4.25  general may consult with the appropriate state agencies 
  4.26  regarding the contents of the report as necessary to prepare for 
  4.27  the in-camera hearing.  However, the information used in 
  4.28  preparation for the in-camera hearing may not be used in any 
  4.29  investigation or in any proceeding against the defendant and 
  4.30  must otherwise be kept confidential, unless and until the 
  4.31  information is found by the court to be subject to disclosure. 
  4.32     (d) The parties may at any time stipulate to entry of an 
  4.33  order directing that specific information contained in an 
  4.34  environmental audit report is or is not subject to the privilege 
  4.35  provided under this section. 
  4.36     Subd. 6.  [EXCLUDED INFORMATION.] The privilege described 
  5.1   in subdivision 2 does not extend to: 
  5.2      (1) documents, communications, data, reports, or other 
  5.3   information required to be collected, developed, maintained, 
  5.4   reported, or otherwise made available to a regulatory agency 
  5.5   under an applicable environmental law, rule, permit, or order; 
  5.6      (2) information obtained by observation, sampling, or 
  5.7   monitoring by a regulatory agency; or 
  5.8      (3) information obtained from a source independent of the 
  5.9   environmental audit. 
  5.10     Sec. 2.  [EFFECTIVE DATE.] 
  5.11     This act applies to civil and criminal actions and 
  5.12  administrative proceedings commenced on or after August 1, 1995.