In 1995, the Legislature enacted the "Environmental Protection Incentive" law, otherwise referred to as the environmental self-audit law.

The self-audit law allows a company to conduct an internal audit of its environmental operations and to legally classify all of the data, findings, analyses, field measurements, etc., of the audit as "privileged."

In legal terms, "privileged" information may be kept secret in the course of a lawsuit -- kept secret from anyone, including the public, the Wyoming Department of Environmental Quality (WDEQ), or a court. The law does not require a company conducting an environmental self-audit to report the audit's existence or findings to WDEQ, even to obtain privilege.

A second part of the self-audit law allows the company to report environmental violations discovered in the course of the audit to WDEQ within 60 days and, if the violation is promptly remedied, to receive immunity from fines and penalties for the violation. According to the WDEQ, in the three years since the self-audit law was passed, this provision for self-disclosure of violations and immunity has never been used.

The self-audit law engendered considerable and ongoing controversy, and in 1997, the federal Environmental Protection Agency (EPA) ruled that the law did not meet the minimum enforcement standards set by federal law and threatened to revoke Wyoming's "primacy" (authority to administer federal environmental programs).

HB 67 was offered to remedy the self-audit law's deficiencies as identified by EPA. The bill’s provisions:

• disallowed privilege (the right to keep the audit secret) in criminal proceedings;
• allowed all parties to attend a hearing and challenge the assertion of privilege for an audit;
• clarified the state’s ability to obtain an audit in support of issuing an emergency order or seeking injunctive relief;
• required cleanup of pollution within a reasonable time;
• mandated disclosure of an audit if ordered by a judge after an in camera (closed to the public) hearing.

Proponents of HB 67 argued that it is to Wyoming's advantage to retain primacy, so the Legislature should make the changes identified by EPA. This argument was not seriously disputed.

However, the extension of privilege for audits as a matter of policy was intensely debated in committee in both houses.

Proponents of privilege argued that it was needed to protect companies from public scrutiny when cleaning up pollution.

Opponents of privilege maintained that it makes a legal principle out of keeping pollution and sources of pollution secret. They also pointed out that although HB 67 removed privilege in criminal cases, it could still be asserted in civil and administrative proceedings, where almost all pollution cases are heard.

The debate over privilege and immunity culminated in "sunset" amendments, which would have made the law applicable only to environmental audits completed prior to January 1, 2001, and repealed the self-audit provisions entirely effective March 2, 2001.

Proponents of the sunset amendment argued that sunsetting the self-audit law would encourage companies that are keeping information about pollution privileged to begin cleanup. They also argued that the continuing ability to assert privilege in civil and administrative proceedings was fundamentally unfair.

Opponents of the sunset amendment maintained that there has not been adequate time for the law to be used. They cited a report from WDEQ noting three inquiries about the self-audit law during 1997 (none of which were applicable), and argued that not enough companies know how the law works.

(The above report on the self-audit law is required by the law itself, and is to be prepared by the Joint Minerals, Business & Economic Development Committee and WDEQ. Both entities had forgotten about it, and the report was hastily prepared as the Senate Minerals, Business & Economic Development Committee was hearing HB 67.)

Amendments to sunset the self-audit law in 2001 failed in the House, 24-35 (1 excused) and the Senate, 15-15.