II

106TH CONGRESS

1ST SESSION S. 1661

To amend title 28, United States Code, to provide that certain voluntary

disclosures of violations of Federal law made as a result of a voluntary

environmental audit shall not be subject to discovery or admitted into

evidence during a judicial or administrative proceeding, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 29, 1999

Mrs. HUTCHISON (for herself and Mr. LOTT) introduced the following bill;

which was read twice and referred to the Committee on the Judiciary

A BILL

To amend title 28, United States Code, to provide that

certain voluntary disclosures of violations of Federal law

made as a result of a voluntary environmental audit

shall not be subject to discovery or admitted into evidence during a judicial or administrative proceeding, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Environmental Protec5 tion Partnership Act’’.
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1 SEC. 2. FINDINGS.

2 Congress finds that—

3 (1) it is in the interest of the United States to

4 promote voluntary efforts to maximize compliance

5 with environmental laws and to increase protection

6 of the environment and public health;

7 (2) voluntary environmental audit and compli8 ance management systems have greatly enhanced

9 compliance with environmental laws and should be

10 encouraged by the Federal Government;

11 (3) 2 means of directly encouraging voluntary

12 environmental audit and compliance management

13 systems are—

14 (A) granting limited protection from disclo15 sure of voluntary environmental audits; and

16 (B) granting limited protection for parties

17 that promptly disclose information from vol18 untary environmental audits or compliance

19 management systems and correct any non20 compliance discovered as a result of the vol21 untary environmental audits or compliance

22 management systems;

23 (4) Federal law does not encourage voluntary

24 environmental audits and compliance management

25 systems and may actually create disincentives to
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1 conducting voluntary environmental audits or imple2 menting compliance management systems;

3 (5) in the interest of increasing environmental

4 protection, the Federal Government should not im5 pede the efforts of States to encourage voluntary en6 vironmental audits through adoption of State laws

7 granting limited protection for voluntary efforts to

8 maximize compliance with environmental laws;

9 (6) State laws granting those protections should

10 apply in all proceedings in which the State is exer11 cising authority under State or Federal law; and

12 (7) the protections offered under this Act do

13 not relieve parties from the need to comply with oth14 erwise applicable requirements to disclose informa15 tion under Federal, State, or local environmental

16 laws.

17 SEC. 3. VOLUNTARY AUDIT PROTECTION.

18 (a) IN GENERAL.—Part VI of title 28, United States

19 Code, is amended by inserting after chapter 176 the fol20 lowing:

21 ‘‘CHAPTER 177—VOLUNTARY AUDIT

22 PROTECTION

‘‘Sec.

‘‘3601. Admissibility of environmental audit reports.

‘‘3602. Testimony.

‘‘3603. Disclosures.

‘‘3604. Recognition of State efforts to encourage compliance.

‘‘3605. Definitions.
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1 ‘‘§ 3601. Admissibility of environmental audit reports

2 ‘‘(a) GENERAL RULE.—

3 ‘‘(1) IN GENERAL.—Except as provided in para4 graphs (2) and (3), an environmental audit report

5 that is prepared in good faith, or a finding, opinion,

6 or other communication that is made in good faith

7 by a person or government entity and that relates

8 to, and essentially constitutes a part of, an environ9 mental audit report, shall not be—

10 ‘‘(A) subject to discovery or any other in11 vestigatory procedure; or

12 ‘‘(B) admissible as evidence in any judicial

13 action or administrative proceeding.

14 ‘‘(2) EXCLUDED ITEMS.—Paragraph (1) shall

15 not apply to—

16 ‘‘(A) a document, a communication, data,

17 a report, or any other item of information that

18 is required to be collected, developed, main19 tained, or reported to a regulatory agency

20 under a covered Federal law;

21 ‘‘(B) information obtained by observation,

22 sampling, or monitoring by a regulatory agency;

23 or

24 ‘‘(C) information obtained from a source

25 independent of the environmental audit.
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1 ‘‘(3) INAPPLICABILITY.—Paragraph (1) shall

2 not apply to an environmental audit report if, after

3 an in camera hearing under subsection (c), a judge

4 determines that—

5 ‘‘(A) the person or government entity that

6 initiated the environmental audit expressly

7 waives, in accordance with subsection (b), the

8 protection provided by paragraph (1);

9 ‘‘(B) the environmental audit provides evi10 dence of noncompliance with a covered Federal

11 law and appropriate efforts to achieve compli12 ance were not promptly initiated and pursued

13 with reasonable diligence;

14 ‘‘(C) the person or government entity that

15 is asserting the applicability of paragraph (1) is

16 doing so for a fraudulent purpose; or

17 ‘‘(D) the environmental audit report, find18 ing, opinion, or other communication was pre19 pared for the purpose of avoiding disclosure of

20 information required for a governmental inves21 tigative, administrative, or judicial proceeding

22 that, at the time of preparation, was imminent

23 or in progress.

24 ‘‘(b) WAIVER.—
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1 ‘‘(1) IN GENERAL.—The protection provided by

2 subsection (a)(1) may be waived by the person or

3 government entity for which an environmental audit

4 is prepared.

5 ‘‘(2) PORTIONS WAIVED.—A waiver under para6 graph (1) shall apply only to the portion or portions

7 of the environmental audit report, finding, opinion,

8 or other communication that the person or govern9 ment entity expressly waives.

10 ‘‘(3) CONFIDENTIAL DISCLOSURES.—Disclosure

11 of an environmental audit report shall not constitute

12 a waiver of the protection provided by subsection

13 (a)(1) if—

14 ‘‘(A) the person or government entity for

15 which the environmental audit is prepared or

16 the owner or operator of a facility or activity

17 evaluated in the environmental audit discloses

18 the environmental audit to any person employed

19 by (including a temporary or contract em20 ployee), any officer or director of, any partner

21 or joint venturer in, any legal representative of,

22 or any independent contractor retained by the

23 person, government entity, owner, or operator

24 to address an issue raised by the environmental

25 audit; or
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1 ‘‘(B) the disclosure is pursuant to a con2 fidentiality agreement between the person or

3 government entity for which the evaluation was

4 prepared or the owner or operator of a facility

5 or activity evaluated in the environmental audit

6 and—

7 ‘‘(i) a business associate or potential

8 business associate;

9 ‘‘(ii) a lender or potential lender;

10 ‘‘(iii) an insurer or potential insurer;

11 ‘‘(iv) a transferee or potential trans12 feree; or

13 ‘‘(v) any other person or government

14 entity having environmental or commercial

15 interests in, similar to, or substantially

16 aligned with the facility or activity evalu17 ated in the environmental audit.

18 ‘‘(c) REVIEW.—

19 ‘‘(1) DISCLOSURE AND TESTIMONY.—A judge

20 may, after an in camera hearing, require disclosure

21 of or testimony concerning an audit report, finding,

22 opinion, or other communication for which protec23 tion under subsection (a)(1) is asserted if the judge

24 determines that the information subject to the dis-
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1 closure or testimony is not subject to protection

2 under subsection (a)(1).

3 ‘‘(2) CRIMINAL EVIDENCE.—

4 ‘‘(A) SEIZURE.—Based on information ob5 tained from a source independent of an environ6 mental audit report, a law enforcement official

7 may seize an environmental audit report for

8 which protection is asserted under subsection

9 (a)(1) if—

10 ‘‘(i) the seizure is pursuant to a law11 ful search and seizure; and

12 ‘‘(ii) the law enforcement official has

13 probable cause to believe that—

14 ‘‘(I) a criminal offense has been

15 committed under a covered Federal

16 law; and

17 ‘‘(II) the report constitutes, or

18 may lead to discovery of, evidence of

19 the criminal offense.

20 ‘‘(B) HANDLING OF REPORT.—On taking

21 possession of a report under subparagraph (A),

22 a law enforcement official shall immediately

23 place the report under seal and shall not review,

24 disclose, or otherwise use the contents of the re25 port in any way, unless the person or govern-
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1 ment entity for which the report was

2 prepared—

3 ‘‘(i) expressly waives protection for

4 the report in accordance with subsection

5 (b); or

6 ‘‘(ii) after actual notice of the seizure,

7 does not file a timely petition under sub8 paragraph (C).

9 ‘‘(C) PETITION.—Not later than 30 days

10 after receiving actual notice of the seizure of an

11 environmental audit report, the person or gov12 ernment entity for which the report was pre13 pared or the owner or operator of the facility or

14 activity evaluated in the report may file with

15 the appropriate court a petition requiring an in

16 camera hearing under subparagraph (D).

17 ‘‘(D) IN CAMERA HEARING.—

18 ‘‘(i) IN GENERAL.—On the filing of a

19 petition under subparagraph (C), the court

20 shall issue an order—

21 ‘‘(I) scheduling an in camera

22 hearing not later than 45 days after

23 the date of the filing of the petition to

24 determine whether the environmental

25 audit report (or a portion of the re-
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1 port) is protected under subsection

2 (a)(1);

3 ‘‘(II) allowing the law enforce4 ment official to remove the seal from

5 the report to review the report;

6 ‘‘(III) allowing the law enforce7 ment official to consult with an en8 forcement agency concerning the con9 tents of the report to prepare for the

10 in camera hearing; and

11 ‘‘(IV) placing appropriate limita12 tions on distribution and review of the

13 report to protect against unnecessary

14 disclosure.

15 ‘‘(ii) PROTECTION OF INFORMA16 TION.—Unless a court finds the informa17 tion to be subject to disclosure, any infor18 mation used in preparation for an in cam19 era hearing—

20 ‘‘(I) shall not be used in any in21 vestigation or proceeding against the

22 person or government entity for which

23 the environmental audit report was

24 prepared or the owner or operator of
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1 the facility or activity evaluated in the

2 environmental audit report; and

3 ‘‘(II) shall be kept confidential.

4 ‘‘(3) BURDEN OF PROOF.—

5 ‘‘(A) BURDEN OF PRODUCING EVI6 DENCE.—In an in camera hearing under para7 graph (1) or (2), the person asserting the pro8 tection of subsection (a)(1) shall have the bur9 den of demonstrating a prima facie basis for

10 the application of subsection (a)(1). If there is

11 evidence of noncompliance with a covered Fed12 eral law, the prima facie basis shall include, to

13 the extent that the noncompliance was identi14 fied by the environmental audit report, evidence

15 that appropriate efforts to achieve compliance

16 were promptly initiated and pursued with rea17 sonable diligence.

18 ‘‘(B) BURDEN OF PERSUASION.—In an in

19 camera hearing under paragraph (1) or (2), the

20 person seeking the disclosure of information has

21 the burden of persuasion that the protection

22 provided by subsection (a)(1) does not apply.

23 ‘‘(4) SUPPRESSION OF EVIDENCE.—

24 ‘‘(A) IN GENERAL.—A judge may suppress

25 any evidence arising or derived from the failure
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1 of a government official to comply with this

2 subsection.

3 ‘‘(B) BURDEN OF PROOF.—A government

4 official who fails to comply with this subsection

5 shall have the burden of proving that any prof6 fered evidence did not arise and was not derived

7 from the failure.

8 ‘‘(d) EFFECT ON OTHER RULES.—Nothing in this

9 chapter limits, waives, or abrogates the scope or nature

10 of any statutory or common law protection against the dis11 covery or admissibility of evidence, including the attorney12 client privilege and the work product doctrine.

13 ‘‘§ 3602. Testimony

14 ‘‘A person or government entity (including a present

15 or former officer, employee, agent, or contractor of the

16 person or government entity) that performs an environ17 mental audit may not give testimony concerning the envi18 ronmental audit in any judicial or administrative pro19 ceeding that relates to a nondelegated covered Federal law

20 without the consent of the person or government entity

21 that initiated the audit, including testimony concerning an

22 environmental audit report, finding, opinion, or other com23 munication with respect to which section 3601(a)(1) ap24 plies.
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1 ‘‘§ 3603. Disclosures

2 ‘‘(a) IN GENERAL.—If a person or government entity

3 discloses information relating to a covered Federal law to

4 an appropriate official of a Federal or State agency re5 sponsible for administering the covered Federal law, the

6 disclosure shall be considered to be a voluntary disclosure

7 subject to protection under subsection (b), regardless of

8 whether the disclosure is required by law, if—

9 ‘‘(1) the disclosure arises out of a voluntary en10 vironmental audit or the implementation of a vol11 untary environmental compliance management sys12 tem by the person or government entity;

13 ‘‘(2) the disclosure is made promptly after the

14 person or government entity receives knowledge of

15 the information;

16 ‘‘(3) the person or government entity initiates

17 an action to address the issues identified in the

18 disclosure—

19 ‘‘(A) within a reasonable period of time

20 after receiving knowledge of the information;

21 and

22 ‘‘(B) within a period of time that is ade23 quate to achieve compliance with the require24 ments of the covered Federal law that is the

25 subject of the action; and
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1 ‘‘(4) the person or government entity reason2 ably provides any further relevant information re3 quested, as a result of the disclosure, by the appro4 priate official of the Federal or State agency respon5 sible for administering the covered Federal law, not

6 including information protected by this chapter, the

7 attorney-client privilege, the attorney work product

8 doctrine, or any other applicable privilege.

9 ‘‘(b) LIMITED IMMUNITY.—

10 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

11 if a person or government entity makes a voluntary

12 disclosure under subsection (a)—

13 ‘‘(A) the person or government entity shall

14 be immune from any enforcement action

15 brought as a result of the disclosure; and

16 ‘‘(B) the disclosed information shall not, in

17 any court or administrative proceeding, be sub18 ject to discovery or be admissible against the

19 person or government entity that made the dis20 closure.

21 ‘‘(2) PERMISSIBLE SANCTIONS AND ADMISSION

22 INTO EVIDENCE.—Paragraph (1) does not

23 preclude—

24 ‘‘(A) imposition of a civil sanction in an

25 administrative or civil action to the extent that
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1 a violation was committed intentionally and

2 willfully;

3 ‘‘(B) imposition of a criminal sanction—

4 ‘‘(i) against a natural person, if—

5 ‘‘(I) the person committed, or

6 aided or abetted the commission of, a

7 disclosed violation intentionally and

8 willfully; or

9 ‘‘(II) the disclosed violation is a

10 knowing endangerment offense de11 scribed in section 309(c)(3) of the

12 Federal Water Pollution Control Act

13 (33 U.S.C. 1319(c)(3)), section

14 3008(e) of the Solid Waste Disposal

15 Act (42 U.S.C. 6928(e)), or section

16 113(c)(5) of the Clean Air Act (42

17 U.S.C. 7413(c)(5)); or

18 ‘‘(ii) against an entity other than a

19 natural person, if—

20 ‘‘(I) the disclosed violation was

21 committed intentionally and willfully

22 by a member of the entity’s senior

23 management;

24 ‘‘(II) the disclosed violation is a

25 knowing endangerment offense de-
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1 scribed in section 309(c)(3) of the

2 Federal Water Pollution Control Act

3 (33 U.S.C. 1319(c)(3)), section

4 3008(e) of the Solid Waste Disposal

5 Act (42 U.S.C. 6928(e)), or section

6 113(c)(5) of the Clean Air Act (42

7 U.S.C. 7413(c)(5)); or

8 ‘‘(III) the entity’s policies or lack

9 of preventive actions or systems con10 tributed materially to the occurrence

11 of the violation; or

12 ‘‘(C) admission of information into evi13 dence for the purpose of seeking injunctive re14 lief against the person or government entity to

15 remedy a continuing adverse public health or

16 environmental effect of a violation.

17 ‘‘(3) MITIGATING CIRCUMSTANCES.—A sanction

18 under subparagraph (A) or (B) of paragraph (2)

19 shall, to the extent appropriate, be mitigated by—

20 ‘‘(A) factors relating to the nature of the

21 violation;

22 ‘‘(B) circumstances of the disclosure;

23 ‘‘(C) efforts of the disclosing person or

24 government entity to prevent or resolve the vio25 lation; and
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1 ‘‘(D) other relevant considerations.

2 ‘‘(c) INVOLUNTARY DISCLOSURES.—A disclosure of

3 information to an official of a Federal or State agency

4 shall not be considered to be a voluntary disclosure under

5 subsection (a)(1) if the person or government entity mak6 ing the disclosure is found under subsection (e) to have

7 committed a pattern of significant repeated violations of

8 Federal or State law, or orders on consent, relating to en9 vironmental quality, on the basis of the occurrence of sep10 arate and distinct events giving rise to the violations, dur11 ing the 3-year period preceding the date of the disclosure,

12 if the violations—

13 ‘‘(1) did not result from the same underlying

14 cause;

15 ‘‘(2) involved the same legal requirement as the

16 violation being disclosed;

17 ‘‘(3) are determined to have occurred through

18 final court or agency determinations or through ad19 missions by the person or government entity in con20 sent agreements, arrived at after opportunity for an

21 adjudicative hearing and not subject to further ap22 peal; and

23 ‘‘(4)(A) occurred at the same facility or oc24 curred at 2 or more facilities under common control;

25 and
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1 ‘‘(B) senior management of the disclosing per2 son or government entity had actual knowledge of

3 the violations and failed to take timely corrective

4 measures.

5 ‘‘(d) PRESUMPTION OF APPLICABILITY.—

6 ‘‘(1) IN GENERAL.—Subject to subsection (c),

7 there shall be a rebuttable presumption that a dis8 closure by a person or government entity of a viola9 tion of a covered Federal law to an appropriate offi10 cial of a Federal or State agency responsible for ad11 ministering the covered Federal law is a voluntary

12 disclosure described in subsection (a), if the person

13 or government entity provides information at the

14 time of the disclosure supporting a claim that the in15 formation is a voluntary disclosure.

16 ‘‘(2) CONCLUSIVE APPLICABILITY.—Unless the

17 appropriate official of the Federal or State agency to

18 whom a disclosure is made under paragraph (1)

19 issues a written response under paragraph (3), the

20 presumption under paragraph (1) shall be conclu21 sive.

22 ‘‘(3) DISPUTES.—If, not later than 60 days

23 after receiving the disclosure in writing, the appro24 priate official of the Federal or State agency to

25 whom a disclosure is made under paragraph (1)
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1 issues a written response disputing that the disclo2 sure is a voluntary disclosure, the issue shall be

3 resolved—

4 ‘‘(A) by settlement between the disclosing

5 person or government entity and the appro6 priate official; or

7 ‘‘(B) in an enforcement action against the

8 disclosing person or government entity in ac9 cordance with subsection (e).

10 ‘‘(e) RESOLUTION OF IMMUNITY DISPUTES.—

11 ‘‘(1) IN GENERAL.—In an enforcement action

12 brought against a person or government entity con13 cerning an alleged violation for which the person or

14 government entity claims to have made a disclosure

15 to which this section applies, the judge shall deter16 mine the application of this section.

17 ‘‘(2) BURDEN OF PROOF.—In an action de18 scribed in paragraph (1)—

19 ‘‘(A) the person or government entity mak20 ing the disclosure shall have the burden of es21 tablishing a prima facie case that the disclosure

22 was consistent with the requirements of sub23 section (a)(1); and

24 ‘‘(B) if a prima facie case is established,

25 the plaintiff shall have the burden of showing,
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1 by a preponderance of the evidence or, in a

2 criminal case, by proof beyond a reasonable

3 doubt, that this section does not apply.

4 ‘‘(f) STATUTORY CONSTRUCTION.—Except as ex5 pressly provided in this section, nothing in this section af6 fects the authority of a Federal or State agency respon7 sible for administering a covered Federal law to carry out

8 any requirement of the law associated with information

9 disclosed in a voluntary disclosure described in subsection

10 (a)(1).

11 ‘‘§ 3604. Recognition of State efforts to encourage

12 compliance

13 ‘‘(a) STATE LAWS ENCOURAGING VOLUNTARY ENVI14 RONMENTAL AUDITS.—

15 ‘‘(1) LIMITED PROTECTION FROM DISCLO16 SURE.—Except as provided in paragraph (3), a

17 State law may provide that, under appropriate con18 ditions, a voluntary environmental audit report, or a

19 finding, opinion, or other communication relating to

20 and constituting part of a voluntary environmental

21 audit report, shall not be—

22 ‘‘(A) subject to discovery or any other in23 vestigatory procedure governed by State or local

24 law; or
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1 ‘‘(B) admissible as evidence in any State

2 or local judicial action or administrative pro3 ceeding.

4 ‘‘(2) LIMITED PROTECTION FOR TESTIMONY.—

5 Except as provided in paragraph (3), a State law

6 may provide that, under appropriate conditions, no

7 individual that performs a voluntary environmental

8 audit shall be required to give testimony in any

9 State or local judicial action or administrative pro10 ceeding concerning the voluntary environmental

11 audit.

12 ‘‘(3) REQUIRED DISCLOSURES UNAFFECTED.—

13 The protections described in paragraphs (1) and (2)

14 shall not apply to the extent that any information is

15 otherwise required to be disclosed under Federal,

16 State, or local law.

17 ‘‘(4) LIMITED PROTECTION FOR DISCLOSURE

18 OF VOLUNTARY ENVIRONMENTAL AUDIT INFORMA19 TION.—A State law may provide that, under appro20 priate conditions, a person or entity that promptly

21 discloses information concerning noncompliance with

22 a covered Federal law or other environmental law

23 discovered as a result of a voluntary environmental

24 audit or implementation of an environmental compli25 ance management system to an appropriate Federal,
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1 State, or local official may be protected in whole or

2 in part from an enforcement action for the non3 compliance in a State or local judicial action or ad4 ministrative proceeding.

5 ‘‘(b) EXCLUSIVITY OF STATE PROTECTION.—In any

6 State or local judicial action or administrative proceeding

7 to enforce a State or local law or covered Federal law,

8 if a State law provides any of the protections referred to

9 in subsection (a), a person or entity qualifying for the pro10 tection shall receive the protection afforded by the applica11 ble State law in lieu of any protection provided by sections

12 3601 through 3603.

13 ‘‘(c) PROHIBITED IMPEDIMENTS TO STATE LAW.—

14 A Federal agency shall not—

15 ‘‘(1) refuse to delegate a covered Federal law to

16 a State or local agency or refuse to approve or au17 thorize a State or local program under a covered

18 Federal law because the State has in effect a law re19 ferred to in subsection (a);

20 ‘‘(2) make a permit, license, or other authoriza21 tion, a contract, or a consent decree or other settle22 ment agreement contingent on a person waiving any

23 protection of a State law referred to in subsection

24 (a); or
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1 ‘‘(3) take any other action that has the effect

2 of requiring a State to rescind or limit any protec3 tion of a State law referred to in subsection (a).

4 ‘‘§ 3605. Definitions

5 ‘‘In this chapter:

6 ‘‘(1) COVERED FEDERAL LAW.—The term ‘cov7 ered Federal law’—

8 ‘‘(A) means—

9 ‘‘(i) the Federal Insecticide, Fun10 gicide, and Rodenticide Act (7 U.S.C. 136

11 et seq.);

12 ‘‘(ii) the Toxic Substances Control Act

13 (15 U.S.C. 2601 et seq.);

14 ‘‘(iii) the Federal Water Pollution

15 Control Act (33 U.S.C. 1251 et seq.);

16 ‘‘(iv) the Oil Pollution Act of 1990

17 (33 U.S.C. 2701 et seq.);

18 ‘‘(v) the Safe Drinking Water Act (42

19 U.S.C. 300f et seq.);

20 ‘‘(vi) the Noise Control Act of 1972

21 (42 U.S.C. 4901 et seq.);

22 ‘‘(vii) the Solid Waste Disposal Act

23 (42 U.S.C. 6901 et seq.);

24 ‘‘(viii) the Clean Air Act (42 U.S.C.

25 7401 et seq.);
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1 ‘‘(ix) the Comprehensive Environ2 mental Response, Compensation, and Li3 ability Act of 1980 (42 U.S.C. 9601 et

4 seq.);

5 ‘‘(x) the Emergency Planning and

6 Community Right-To-Know Act of 1986

7 (42 U.S.C. 11001 et seq.);

8 ‘‘(xi) the Pollution Prevention Act of

9 1990 (42 U.S.C. 13101 et seq.);

10 ‘‘(xii) the Endangered Species Act of

11 1973 (16 U.S.C. 1531 et seq.);

12 ‘‘(xiii) chapter 51 of title 49, United

13 States Code;

14 ‘‘(xiv) section 13 or 16 of the Act en15 titled ‘An Act making appropriations for

16 the construction, repair, and preservation

17 of certain public works on rivers and har18 bors, and for other purposes’, approved

19 March 3, 1899 (commonly known as the

20 ‘River and Harbor Act of 1899’) (33

21 U.S.C. 407, 411);

22 ‘‘(xv) the Surface Mining Control and

23 Reclamation Act of 1977 (30 U.S.C. 1201

24 et seq.); and
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1 ‘‘(xvi) any other Federal law enacted

2 after the date of enactment of this chapter

3 that addresses subject matter similar to a

4 law listed in clauses (i) through (xv);

5 ‘‘(B) includes a regulation or other binding

6 agency action issued under a law listed in sub7 paragraph (A);

8 ‘‘(C) includes the terms and conditions of

9 a permit issued or other administrative action

10 taken under a law listed in subparagraph (A);

11 and

12 ‘‘(D) includes a State law that operates as

13 a federally enforceable law under a law listed in

14 subparagraph (A) as a result of the delegation,

15 approval, or authorization of a State activity or

16 program.

17 ‘‘(2) DELEGATED COVERED FEDERAL LAW.—

18 The term ‘delegated covered Federal law’ means a

19 covered Federal law with respect to which a State

20 has been delegated primary authority for enforce21 ment in accordance with the covered Federal law, to

22 the extent that the State has been delegated the au23 thority.

24 ‘‘(3) ENFORCEMENT ACTION.—
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1 ‘‘(A) IN GENERAL.—The term ‘enforce2 ment action’ means a criminal, civil, or admin3 istrative action for the purpose of imposing a

4 penalty or any other punitive sanction, includ5 ing imposition of a restriction on providing to

6 or receiving from the United States or any

7 State or political subdivision a good, material,

8 service, grant, license, permit, or other approval

9 or benefit.

10 ‘‘(B) EXCLUSION.—The term ‘enforcement

11 action’ does not include an action solely for the

12 purpose of seeking injunctive relief to remedy a

13 continuing adverse public health or environ14 mental effect of a violation.

15 ‘‘(4) ENVIRONMENTAL COMPLIANCE MANAGE16 MENT SYSTEM.—The term ‘environmental compli17 ance management system’ means the systematic ef18 fort of a person or government entity, appropriate to

19 the size and nature of the person or government en20 tity, to prevent, detect, and correct a violation of law

21 through—

22 ‘‘(A) a compliance policy, standard, or pro23 cedure that identifies how an employee or agent

24 shall meet the requirements of the law;
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1 ‘‘(B) assignment of overall responsibility

2 for overseeing compliance with policies, stand3 ards, and procedures, and assignment of spe4 cific responsibility for ensuring compliance at

5 each facility or operation;

6 ‘‘(C) a mechanism for systematically en7 suring that compliance policies, standards, and

8 procedures are being carried out, including—

9 ‘‘(i) a monitoring or auditing system

10 that is reasonably designed to detect and

11 correct a violation;

12 ‘‘(ii) a periodic evaluation of the over13 all performance of the compliance manage14 ment system; and

15 ‘‘(iii) a means for an employee or

16 agent to report a violation of an environ17 mental requirement without fear of retalia18 tion;

19 ‘‘(D) an effort to communicate effectively

20 the standards and procedures of the person or

21 government entity to employees and agents of

22 the person or government entity;

23 ‘‘(E) an appropriate incentive to managers

24 and employees of the person or government en25 tity to perform in accordance with any compli-
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1 ance policy or procedure of the person or gov2 ernment entity, including consistent enforce3 ment through an appropriate disciplinary mech4 anism; and

5 ‘‘(F) a procedure for—

6 ‘‘(i) the prompt and appropriate cor7 rection of any violation of law; and

8 ‘‘(ii) making any necessary modifica9 tions to the standards or procedures of the

10 person or government entity to prevent fu11 ture violations of law.

12 ‘‘(5) ENVIRONMENTAL AUDIT REPORT.—

13 ‘‘(A) IN GENERAL.—The term ‘environ14 mental audit report’ means a document pre15 pared as a result of a voluntary environmental

16 audit.

17 ‘‘(B) INCLUSION.—The term ‘environ18 mental audit report’ includes—

19 ‘‘(i) a field note, draft, memorandum,

20 drawing, photograph, computer software or

21 stored information or electronically re22 corded information, map, chart, graph,

23 survey, analysis (including a laboratory re24 sult, instrument reading, and field anal25 ysis), and other information pertaining to
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1 an observation, finding, opinion, sugges2 tion, or conclusion, if such supporting in3 formation is collected or developed for the

4 primary purpose and in the course of cre5 ating an audit;

6 ‘‘(ii) a document prepared by the

7 auditor or evaluator, which may describe

8 the scope of the evaluation, the informa9 tion learned, any conclusions or rec10 ommendations, and any exhibits or appen11 dices;

12 ‘‘(iii) an analysis of a portion or all of

13 the audit or issues arising from the audit;

14 and

15 ‘‘(iv) an implementation plan or track16 ing system that addresses an action taken

17 or to be taken by the owner or operator of

18 the facility as a result of the audit.

19 ‘‘(6) INTENTIONAL AND WILLFUL.—The term

20 ‘intentional and willful’ refers to a specific intent to

21 violate or disregard the law.

22 ‘‘(7) JUDGE.—The term ‘judge’ includes an ad23 ministrative law judge.

24 ‘‘(8) NONDELEGATED COVERED FEDERAL

25 LAW.—The term ‘nondelegated covered Federal law’
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1 means a covered Federal law that is not a delegated

2 covered Federal law, to the extent that the covered

3 Federal law has not been delegated.

4 ‘‘(9) VOLUNTARY DISCLOSURE.—The term ‘vol5 untary disclosure’ means the disclosure of informa6 tion relating to a voluntary environmental audit or

7 voluntary implementation of an environmental com8 pliance management system with respect to which

9 the protections provided under section 3603 apply.

10 ‘‘(10) VOLUNTARY ENVIRONMENTAL AUDIT.—

11 The term ‘voluntary environmental audit’ means an

12 assessment, audit investigation, or review that is—

13 ‘‘(A) initiated by a person or government

14 entity;

15 ‘‘(B) carried out by an employee of the

16 person or government entity, or a consultant

17 employed by the person or government entity,

18 for the purpose of carrying out the assessment,

19 evaluation, investigation, or review; and

20 ‘‘(C) carried out for the purpose of deter21 mining or improving compliance with, or liabil22 ity under, a covered Federal law, or assessing

23 the effectiveness of an environmental compli24 ance management system.’’.
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1 (b) TECHNICAL AMENDMENT.—The part analysis for

2 part VI of title 28, United States Code, is amended by

3 inserting after the item relating to chapter 176 the fol4 lowing:

‘‘177. Voluntary Audit Protection ................................................ 3601’’.

5 SEC. 4. ASSISTANCE FROM SMALL BUSINESS DEVELOP6 MENT CENTERS.

7 Section 21(c)(3) of the Small Business Act (15

8 U.S.C. 648(c)(3)) is amended—

9 (1) in subparagraph (S), by striking ‘‘and’’ at

10 the end;

11 (2) in subparagraph (T), by striking the period

12 at the end and inserting ‘‘; and’’; and

13 (3) by adding at the end the following:

14 ‘‘(U) assisting small businesses in com15 plying with the requirements necessary to re16 ceive protections under chapter 177 of title 28,

17 United States Code.’’.

18 SEC. 5. APPLICABILITY.

19 This Act and the amendments made by this Act shall

20 apply to each civil or criminal action or administrative pro21 ceeding that has not been finally adjudicated as of the

22 date of enactment of this Act.
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1 SEC. 6. SUNSET PROVISION.

2 This Act and the amendments made by this Act shall

3 be effective during the 5-year period beginning on the date

4 of enactment of this Act.

Æ