There is new legislation in Texas allowing pipeline operators to avoid penalties for violations disclosed. Under the Texas Environmental, Health, and Safety Audit Privilege Act (“Audit Act”), TEX. CIV. STAT. art. 4447cc, persons that conduct voluntary environmental or health and safety audits of regulated facilities and operations can claim immunity from administrative penalties for violations discovered, disclosed, and corrected within a reasonable amount of time. The Audit Act also provides a limited privilege for audit reports developed in accordance with the Audit Act. An audit that qualifies for protection under the Audit Act is defined as “a systematic voluntary evaluation, review, or assessment of compliance with environmental or health and safety laws or with any permit issued under an environmental health and safety law conducted by an owner or operator.” An audit conducted for the purposes of a merger or acquisition of a regulated facility or operation qualifies for protection under the Audit Act, but special rules apply to those types of audits.
There are three types of submissions under the Audit Act: (1) a notice of audit letter; (2) a disclosure of violations letter; and (3) a request for an extension. The Railroad Commission of Texas (TRRC) requests that a courtesy copy of submissions be email to their General Counsel at audit.notice@rrc.texas.gov.
TRRC published a Guide to Submissions including information on immunity and privilege under the Audit Act, sample notices and a Q&A section. For a copy of the TRRC Guide to Submissions under the Audit Privilege Act (updated August 2016), contact Jessica Foley.