Texas 2013 - 83rd Regular

Texas Senate Bill SB1300 Compare Versions

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1	1	By: Eltife, et al. S.B. No. 1300
2	2	(Lewis, Marquez, Darby, Villalba, Turner of Tarrant)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to environmental or health and safety audits under the
8	8	Texas Environmental, Health, and Safety Audit Privilege Act.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subsection (a), Section 3, Texas Environmental,
11	11	Health, and Safety Audit Privilege Act (Article 4447cc, Vernon's
12	12	Texas Civil Statutes), is amended to read as follows:
13	13	(a) In this Act:
14	14	(1) "Acquisition closing date" means the date on which
15	15	ownership of, or a direct or indirect majority interest in the
16	16	ownership of, a regulated facility or operation is acquired in an
17	17	asset purchase, equity purchase, merger, or similar transaction.
18	18	(2) "Audit report" means an audit report described by
19	19	Section 4 of this Act.
20	20	(3) [(2)] "Environmental or health and safety law"
21	21	means:
22	22	(A) a federal or state environmental or
23	23	occupational health and safety law; or
24	24	(B) a rule, regulation, or regional or local law
25	25	adopted in conjunction with a law described by Paragraph (A) of this
26	26	subdivision.
27	27	(4) [(3)] "Environmental or health and safety audit"
28	28	or "audit" means a systematic voluntary evaluation, review, or
29	29	assessment of compliance with environmental or health and safety
30	30	laws or with any permit issued under an environmental or health and
31	31	safety law [those laws] conducted by an owner or operator, an
32	32	employee of an [the] owner or operator, a person, including an
33	33	employee or independent contractor of the person, that is
34	34	considering the acquisition of a regulated facility or operation,
35	35	or an independent contractor of:
36	36	(A) a regulated facility or operation; or
37	37	(B) an activity at a regulated facility or
38	38	operation.
39	39	(5) [(4)] "Owner or operator" means a person who owns
40	40	or operates a regulated facility or operation.
41	41	(6) [(5)] "Penalty" means an administrative, civil,
42	42	or criminal sanction imposed by the state to punish a person for a
43	43	violation of a statute or rule. The term does not include a
44	44	technical or remedial provision ordered by a regulatory authority.
45	45	(7) [(6)] "Person" means an individual, corporation,
46	46	business trust, partnership, association, and any other legal
47	47	entity.
48	48	(8) [(7)] "Regulated facility or operation" means a
49	49	facility or operation that is regulated under an environmental or
50	50	health and safety law.
51	51	SECTION 2. Section 4, Texas Environmental, Health, and
52	52	Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
53	53	Statutes), is amended by adding Subsections (d-1) and (f) and
54	54	amending Subsection (e) to read as follows:
55	55	(d-1) A person that begins an audit before becoming the
56	56	owner of a regulated facility or operation may continue the audit
57	57	after the acquisition closing date if the person gives notice under
58	58	Section 10(g-1).
59	59	(e) Unless [Once initiated, an audit shall be completed
60	60	within a reasonable time not to exceed six months unless] an
61	61	extension is approved by the governmental entity with regulatory
62	62	authority over the regulated facility or operation based on
63	63	reasonable grounds, an audit must be completed within a reasonable
64	64	time not to exceed six months after:
65	65	(1) the date the audit is initiated; or
66	66	(2) the acquisition closing date, if the person
67	67	continues the audit under Subsection (d-1).
68	68	(f) Subsection (e)(1) does not apply to an audit conducted
69	69	before the acquisition closing date by a person that is considering
70	70	the acquisition of the regulated facility or operation.
71	71	SECTION 3. Subsection (b), Section 6, Texas Environmental,
72	72	Health, and Safety Audit Privilege Act (Article 4447cc, Vernon's
73	73	Texas Civil Statutes), is amended to read as follows:
74	74	(b) Disclosure of an audit report or any information
75	75	generated by an environmental or health and safety audit does not
76	76	waive the privilege established by Section 5 of this Act if the
77	77	disclosure:
78	78	(1) is made to address or correct a matter raised by
79	79	the environmental or health and safety audit and is made only to:
80	80	(A) a person employed by the owner or operator,
81	81	including temporary and contract employees;
82	82	(B) a legal representative of the owner or
83	83	operator;
84	84	(C) an officer or director of the regulated
85	85	facility or operation or a partner of the owner or operator; [or]
86	86	(D) an independent contractor of [retained by]
87	87	the owner or operator;
88	88	(E) a person considering the acquisition of the
89	89	regulated facility or operation that is the subject of the audit; or
90	90	(F) an employee, temporary employee, contract
91	91	employee, legal representative, officer, director, partner, or
92	92	independent contractor of a person described by Paragraph (E) of
93	93	this subdivision;
94	94	(2) is made under the terms of a confidentiality
95	95	agreement between the person for whom the audit report was prepared
96	96	or the owner or operator of the audited facility or operation and:
97	97	(A) a partner or potential partner of the owner
98	98	or operator of the facility or operation;
99	99	(B) a transferee or potential transferee of the
100	100	facility or operation;
101	101	(C) a lender or potential lender for the facility
102	102	or operation;
103	103	(D) a governmental official of a state; or
104	104	(E) a person or entity engaged in the business of
105	105	insuring, underwriting, or indemnifying the facility or operation;
106	106	or
107	107	(3) is made under a claim of confidentiality to a
108	108	governmental official or agency by the person for whom the audit
109	109	report was prepared or by the owner or operator.
110	110	SECTION 4. Section 10, Texas Environmental, Health, and
111	111	Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil
112	112	Statutes), is amended by amending Subsections (b), (e), and (g) and
113	113	adding Subsections (b-1) and (g-1) to read as follows:
114	114	(b) A disclosure is voluntary only if:
115	115	(1) the disclosure was made:
116	116	(A) promptly after knowledge of the information
117	117	disclosed is obtained by the person; or
118	118	(B) not more than the 45th day after the
119	119	acquisition closing date, if the violation was discovered during an
120	120	audit conducted before the acquisition closing date by a person
121	121	considering the acquisition of the regulated facility or operation;
122	122	(2) the disclosure was made in writing by certified
123	123	mail to an agency that has regulatory authority with regard to the
124	124	violation disclosed;
125	125	(3) an investigation of the violation was not
126	126	initiated or the violation was not independently detected by an
127	127	agency with enforcement jurisdiction before the disclosure was made
128	128	using certified mail;
129	129	(4) the disclosure arises out of a voluntary
130	130	environmental or health and safety audit;
131	131	(5) the person who makes the disclosure initiates an
132	132	appropriate effort to achieve compliance, pursues that effort with
133	133	due diligence, and corrects the noncompliance within a reasonable
134	134	time;
135	135	(6) the person making the disclosure cooperates with
136	136	the appropriate agency in connection with an investigation of the
137	137	issues identified in the disclosure; and
138	138	(7) the violation did not result in injury or imminent
139	139	and substantial risk of serious injury to one or more persons at the
140	140	site or off-site substantial actual harm or imminent and
141	141	substantial risk of harm to persons, property, or the environment.
142	142	(b-1) For a disclosure described by Subsection (b)(1)(B),
143	143	the person making the disclosure must certify in the disclosure
144	144	that before the acquisition closing date:
145	145	(1) the person was not responsible for the
146	146	environmental, health, or safety compliance at the regulated
147	147	facility or operation that is subject to the disclosure;
148	148	(2) the person did not have the largest ownership
149	149	share of the seller;
150	150	(3) the seller did not have the largest ownership
151	151	share of the person; and
152	152	(4) the person and the seller did not have a common
153	153	corporate parent or a common majority interest owner.
154	154	(e) A penalty that is imposed under Subsection (d) of this
155	155	section should, to the extent appropriate, be mitigated by factors
156	156	such as:
157	157	(1) the voluntariness of the disclosure;
158	158	(2) efforts by the disclosing party to conduct
159	159	environmental or health and safety audits;
160	160	(3) remediation;
161	161	(4) cooperation with government officials
162	162	investigating the disclosed violation; [or]
163	163	(5) the period of ownership of the regulated facility
164	164	or operation; or
165	165	(6) other relevant considerations.
166	166	(g) In order to receive immunity under this section, a
167	167	facility conducting an environmental or health and safety audit
168	168	under this Act must provide [give] notice to an appropriate
169	169	regulatory agency of the fact that it is planning to commence the
170	170	audit. The notice shall specify the facility or portion of the
171	171	facility to be audited, the anticipated time the audit will begin,
172	172	and the general scope of the audit. The notice may provide
173	173	notification of more than one scheduled environmental or health and
174	174	safety audit at a time. This subsection does not apply to an audit
175	175	conducted before the acquisition closing date by a person
176	176	considering the acquisition of the regulated facility or operation
177	177	that is the subject of the audit.
178	178	(g-1) A person that begins an audit before becoming the
179	179	owner of the regulated facility or operation may continue the audit
180	180	after the acquisition closing date if, not more than the 45th day
181	181	after the acquisition closing date, the person provides notice to
182	182	an appropriate regulatory agency of the fact that the person
183	183	intends to continue an ongoing audit. The notice shall specify the
184	184	facility or portion of the facility being audited, the date the
185	185	audit began, and the general scope of the audit. The person must
186	186	certify in the notice that before the acquisition closing date:
187	187	(1) the person was not responsible for the scope of the
188	188	environmental, health, or safety compliance being audited at the
189	189	regulated facility or operation;
190	190	(2) the person did not have the largest ownership
191	191	share of the seller;
192	192	(3) the seller did not have the largest ownership
193	193	share of the person; and
194	194	(4) the person and the seller did not have a common
195	195	corporate parent or a common majority interest owner.
196	196	SECTION 5. The change in law made by this Act applies only
197	197	to an environmental or health and safety audit initiated on or after
198	198	the effective date of this Act. An audit initiated before the
199	199	effective date of this Act is governed by the law in effect on the
200	200	date the audit was initiated, and the former law is continued in
201	201	effect for that purpose.
202	202	SECTION 6. This Act takes effect September 1, 2013.