{"data":{"id":"us-ky/krs-224.1-040","jurisdiction":"us-ky","citation":"KRS 224.1-040","heading":"Evidentiary privilege for environmental audit reports -- Exceptions --","body":"Restriction on civil penalties.\n(1) As used in this section:\n(a) \"Environmental audit\" means a voluntary, internal, and comprehensive\nevaluation of one (1) or more facil ities or an activity at one (1) or more\nfacilities regulated under KRS Chapter 77 or this chapter, or federal, regional,\nor local counterparts or extensions thereof, or of management systems related\nto that facility or activity, that is designed to identif y and prevent\nnoncompliance and to improve compliance with statutory or regulatory\nrequirements. An environmental audit may be conducted by the owner or\noperator, by the owner's or operator's employees, or by independent\ncontractors;\n(b) \"Environmental aud it report\" means a set of documents, each labeled\n\"environmental audit report: privileged document\" and prepared as a result of\nan environmental audit. An environmental audit report may include field\nnotes and records of observations, findings, suggestions , conclusions, drafts,\nmemoranda, drawings, photographs, computer -generated or electronically\nrecorded information, maps, charts, graphs, and surveys, provided the\nsupporting information is collected or developed for the primary purpose and\nin the course of an environmental audit. An environmental audit report, when\ncompleted, shall have three (3) components:\n1. An audit report prepared by an auditor, which shall include the scope\nand date of the audit and the information gained in the audit together\nwith e xhibits and appendices, and may include conclusions and\nrecommendations;\n2. Memoranda and documents analyzing part or all of the audit report and\ndiscussing implementation issues; and\n3. An audit implementation plan that addresses correcting past\nnoncompliance, improving current compliance, and preventing future\nnoncompliance;\n(c) \"Voluntary disclosure\" means the prompt reporting to the air pollution control\ndistrict established under KRS Chapter 77 by the owner or operator of a\nfacility of the voluntary di scovery of a violation of KRS Chapter 77 or any\nrules, orders, or administrative regulations promulgated pursuant thereto, or to\nthe cabinet by the owner or operator of a facility of the voluntary discovery of\na violation of this chapter or the administrat ive regulations promulgated\npursuant thereto prior to:\n1. The commencement of a federal, state, or local agency inspection or\ninvestigation, or the issuance by that agency of an information request to\nthe owner or operator of the facility;\n2. The filing of a notice of a citizen suit filed under federal or state law;\n3. The filing of a complaint by a third party;\n4. The reporting to a federal, state, or local agency of the violation by an\nemployee who is not authorized to speak on behalf of the facility; or\n5. The imminent discovery of the violation by a regulatory agency; and\n(d) \"Voluntary discovery\" means the discovery of a violation of KRS Chapter 77\nor this chapter or the administrative regulations promulgated pursuant thereto\nby the owner or operator of a facility if:\n1. The violation was discovered by an environmental audit; and\n2. The violation was not identified through a legally mandated monitoring\nor sampling requirement prescribed by statute, administrative regulation,\npermit, judicial or administrative order, agreed order, consent decree, or\nplea bargain.\n(2) In order to encourage owners and operators of facilities and persons conducting\nother activities regulated under KRS Chapter 77 or this chapter, or its federal,\nregional, or local  counterparts or extensions, both to conduct voluntary internal\nenvironmental audits of their compliance programs and management systems and to\nassess and improve compliance with statutory and regulatory requirements, an\nenvironmental audit privilege is cr eated to protect the confidentiality of\ncommunications relating to voluntary internal environmental audits.\n(3) An environmental audit report shall be privileged and shall not be admissible as\nevidence in any civil or administrative proceeding, except as p rovided in subsection\n(4) of this section.\n(4) The privilege described in subsection (3) of this section does not apply to the extent\nthat:\n(a) It is waived expressly or waived by implication by the owner or operator of a\nfacility or persons conducting an activity that prepared or caused to be\nprepared the environmental audit report;\n(b) The owner or operator of a facility or person conducting an activity seeks to\nintroduce an environmental audit report as evidence. Seeking to introduce any\npart of the repo rt shall constitute waiver of the privilege described in\nsubsection (3) of this section for the entire report;\n(c) In a civil or administrative proceeding, a court of record, after a private\nreview consistent with the Kentucky Rules of Civil Procedure, sha ll require\ndisclosure of material for which the privilege described in subsection (3) of\nthis section is asserted, if the court determines that:\n1. The privilege is asserted for a fraudulent purpose;\n2. The material is not subject to the privilege; or\n3. Even if subject to the privilege, the material shows evidence of\nnoncompliance with KRS Chapter 77 or this chapter, or with the federal,\nregional, or local counterparts or extensions thereof, and appropriate\nefforts to achieve compliance were not promptly i nitiated and pursued\nwith reasonable diligence.\n(d) A party asserting the environmental audit privilege in subsection (3) of this\nsection has the burden of proving the privilege, including, if there is evidence\nof noncompliance with KRS Chapter 77 or this chapter, or the federal,\nregional, or local counterparts or extensions thereof, proof that appropriate\nefforts to achieve compliance were promptly initiated and pursued with\nreasonable diligence. A party seeking disclosure under subsection (4)(c)1. of\nthis section has the burden of proving that the privilege is asserted for a\nfraudulent purpose.\n(5) The privilege described in subsection (3) of this section shall not extend to:\n(a) Documents, communications, data, reports, or other information required to\nbe collected, developed, maintained, reported, or made available to the public\nor a regulatory agency pursuant to KRS Chapter 77 or this chapter, or\nadministrative regulations promulgated pursuant thereto, or other federal,\nstate, or local law, ordinance, re gulation, permit, or order, and any\ninformation developed relating to any release subject to KRS 224.1-400(19);\n(b) Information obtained by observation, sampling, or monitoring by any\nregulatory agency;\n(c) Information obtained from a source independent of  the environmental audit;\nor\n(d) Any criminal proceeding.\n(6) Nothing in this section shall limit, waive, or abrogate the scope or nature of any\nstatutory or common -law privilege, including the work -product doctrine and the\nattorney-client privilege.\n(7) Nothing in this section shall limit, waive, or abrogate any reporting requirement in\naccordance with KRS Chapter 77 or this chapter or permit conditions.\n(8) The cabinet shall not seek a civil penalty against a facility for a violation of this\nchapter or th e administrative regulations promulgated pursuant thereto and an air\npollution control district shall not seek a civil penalty against a facility for a\nviolation of KRS Chapter 77 or the rules, orders, or administrative regulations\npromulgated pursuant thereto if:\n(a) The owner or operator has made voluntary disclosure to the cabinet or the air\npollution control district of the voluntary discovery of the violation;\n(b) The owner or operator has corrected the violation within sixty (60) days of\nvoluntary dis covery, unless a shorter period of time is necessary to protect\nhuman health, safety, or the environment, or the cabinet or the air pollution\ncontrol district determines that a longer period of time is necessary to correct\nthe violation and approves a long er period of time and the owner or operator\nis taking the steps necessary to correct the violation as soon as possible;\n(c) The owner or operator has agreed in writing to take steps to prevent a\nrecurrence of the violation;\n(d) The specific violation, or closely related violation;\n1. Has not occurred within the past three (3) years at the facility;\n2. Is not part of a pattern o f violations of federal, state, or local law\noccurring within the past five (5) years at a facility or facilities owned or\noperated by the same entity, as identified in a judicial or administrative\norder, consent agreement, or agreed order, complaint, noti ce of\nviolation, conviction, or plea agreement; and\n3. Is not an act or omission for which the facility has received penalty\nmitigation from a federal, state, or local agency;\n(e) The violation is not one which resulted in serious actual harm, or presented  an\nimminent and substantial endangerment to human health or the environment,\nor violated the terms of a judicial or administrative order, consent decree or\nagreed order, or plea agreement;\n(f) The violation is not one which resulted in significant economi c benefit which\ngives to the violator a clear advantage over its business competitors; and\n(g) The owner or operator of the facility cooperates as requested by the cabinet or\nthe air pollution control district and provides information as necessary to\ndetermine the applicability of this section.\n(9) The condition contained in subsection (8)(f) of this section shall not apply to\nvoluntary disclosures made prior to June 21, 2001.\n(10) Nothing in this section shall be construed to abridge the right of any perso n to\nrecover actual damages resulting from any violation.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55506","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:52:38Z","sha256":"2965b0396b3dc07d910b5f9b8ce1e8689210e76cf5fcabb1ec18e61729deb647","source_id":"us-ky","stale":false,"prev":"us-ky/krs-224.1-030","next":"us-ky/krs-224.1-050"},"notice":"GroundRules: Original legal text. Not legal advice."}