[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1332 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1332

 To amend title 28, United States Code, to recognize and protect State 
efforts to improve environmental mitigation and compliance through the 
    promotion of voluntary environmental audits, including limited 
 protection from discovery and limited protection from penalties, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 29, 1997

   Mr. Enzi introduced the following bill; which was read twice and 
       referred to the Committee on Environment and Public Works

_______________________________________________________________________

                                 A BILL


 
 To amend title 28, United States Code, to recognize and protect State 
efforts to improve environmental mitigation and compliance through the 
    promotion of voluntary environmental audits, including limited 
 protection from discovery and limited protection from penalties, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Environmental Audit Protection 
Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) consistent with the purpose of voluntary environmental 
        audits of enhancing United States environmental mitigation 
        efforts, it is in the interest of the United States to allow 
        and encourage States to enact and implement such incentive 
        programs as are consistent with the specific and respective 
        needs and situations of the States;
            (2) State environmental incentive laws should be allowed 
        and encouraged by the Federal government as a means of enabling 
        regulated entities to set minimum requirements in environmental 
        mitigation efforts by the entities;
            (3) a strong regulatory enforcement effort is necessary to 
        ensure compliance with Federal, State, and local laws that 
        protect the environment and public health;
            (4) the use of voluntary environmental audits, in 
        accordance with respective State laws, is intended to 
        supplement, not supplant, regulatory enforcement efforts to 
        improve the environmental compliance of regulated entities;
            (5) the protections offered by the amendments made by this 
        Act do not relieve regulated entities from the need to comply 
        with otherwise applicable requirements to disclose information 
        under Federal, State, or local environmental laws; and
            (6)(A) law and regulatory policies provide ample precedent 
        for the constructive use of voluntary audits;
            (B) the final policy on the use of environmental audits (60 
        Fed. Reg. 66706) issued by the Administrator of the 
        Environmental Protection Agency--
                    (i) provides incentives for conducting audits; and
                    (ii) includes limited protection from discovery and 
                disclosure of audit information and discretionary 
                relief from an enforcement action for voluntary 
                disclosure of violations;
            (C) Advisory Circular 120-56, issued by the Administrator 
        of the Federal Aviation Administration, commits to a policy of 
        cooperative problem-solving and use of self-evaluation 
        incentives as a means of enhancing aviation safety in the 
        commercial airline industry; and
            (D) the Equal Credit Opportunity Act (15 U.S.C. 1691 et 
        seq.) provides discovery protection for information developed 
        by creditors as a result of self-tests that are voluntarily 
        conducted to determine the level of compliance with that Act.

SEC. 3. VOLUNTARY AUDIT PROTECTION.

    (a) In General.--Part VI of title 28, United States Code, is 
amended by inserting after chapter 176 the following:

               ``CHAPTER 177--VOLUNTARY AUDIT PROTECTION

``Sec.
``3601. Recognition of State efforts to provide voluntary environmental 
                            audit incentives.
``3602. Performance Report.
``3603. Definitions.
``Sec. 3601. Recognition of State efforts to provide voluntary 
              environmental audit incentives
    ``(a) Voluntary Environmental Audit Incentive Laws.--
            ``(1) Limited protection from discovery.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), a State law may provide that a 
                voluntary environmental audit report, or a finding, 
                opinion, or other communication related to and 
                constituting part of a voluntary environmental audit 
                report, shall not be--
                            ``(i) subject to discovery or any other 
                        investigatory procedure governed by Federal, 
                        State, or local law; or
                            ``(ii) admissible as evidence in any 
                        Federal, State, or local judicial action or 
                        administrative proceeding.
                    ``(B) Testimony.--Except as provided in 
                subparagraph (C), a State law may provide that an 
                entity, or an individual who performs a voluntary 
                environmental audit on behalf of the entity, shall not 
                be required to give testimony in any Federal, State, or 
                local judicial action or administrative proceeding 
                concerning the voluntary environmental audit.
                    ``(C) Information not subject to protection.--The 
                protections described in subparagraphs (A) and (B) 
                shall not apply to any information that is otherwise 
                required to be disclosed under a Federal, State, or 
                local law.
            ``(2) Limited protection for disclosure.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a State law may provide that an 
                entity that promptly discloses information about 
                noncompliance with a covered Federal law, that is 
                discovered as a result of a voluntary environmental 
                audit or through a compliance management system, to an 
                appropriate Federal, State, or local official may be 
                protected, in whole or in part, from an enforcement 
                action in a Federal, State, or local judicial or 
                administrative proceeding.
                    ``(B) Disclosure not subject to protection.--A 
                State law described in subparagraph (A) shall not apply 
                to noncompliance with a covered Federal law that is--
                            ``(i) not discovered voluntarily; or
                            ``(ii) the result of a willful and knowing 
                        violation or gross negligence by the entity 
                        disclosing the information.
    ``(b) Prohibited Federal Activities.--A Federal agency shall not--
            ``(1) refuse to delegate enforcement authority under a 
        covered Federal law to a State or local agency or refuse to 
        approve or authorize a State or local program under a covered 
        Federal law because the State has in effect a voluntary 
        environmental audit incentive law;
            ``(2) make a permit, license, or other authorization, a 
        contract, or a consent decree or other settlement agreement 
        contingent on a person waiving any protection under a State 
        voluntary environmental audit incentive law; or
            ``(3) take any other action that has the effect of 
        requiring a State to rescind or limit any protection of a State 
        voluntary environmental audit incentive law.
``Sec. 3602. Performance report
    ``(a) In General.--Section 3601 shall not apply to a State 
voluntary environmental audit incentive law unless the appropriate 
State agency compiles and submits to appropriate Federal agencies an 
annual report in accordance with this section on the performance of the 
State voluntary environmental audit incentive law during the previous 
calendar year.
    ``(b) Provisions of Report.--The performance report shall include--
            ``(1) the number of noncompliance disclosures that were 
        received by the State pursuant to the State voluntary 
        environmental audit incentive law, with an indication of the 
        noncompliance disclosures that were made by--
                    ``(A) regulated entities that are normally 
                inspected; and
                    ``(B) regulated entities that are not on inspection 
                schedules;
            ``(2) the categories and sizes of regulated entities that 
        disclosed noncompliance problems pursuant to the State 
        voluntary environmental audit incentive law and a description 
        of the noncompliance problems that were disclosed;
            ``(3) the status of remediation undertaken by regulated 
        entities in the State to correct noncompliance problems that 
        were disclosed pursuant to the State voluntary environmental 
        audit incentive law; and
            ``(4) a certification from the State attorney general that 
        the State maintains the necessary regulatory authority to carry 
        out administration and enforcement of delegated programs in 
        light of the State voluntary environmental audit incentive law.
    ``(c) Additional Information.--In addition to the information 
required under subsection (b), the State agency may include additional 
information in the annual performance report that the State agency 
considers important to demonstrate the performance of a State voluntary 
environmental audit law.
``Sec. 3603. Definitions
    ``In this chapter:
            ``(1) Covered federal law.--
                    ``(A) In general.--The term `covered Federal law' 
                means--
                            ``(i) the Federal Insecticide, Fungicide, 
                        and Rodenticide Act (7 U.S.C. 136 et seq.);
                            ``(ii) the Toxic Substances Control Act (15 
                        U.S.C. 2601 et seq.);
                            ``(iii) the Federal Water Pollution Control 
                        Act (commonly known as the `Clean Water Act') 
                        (33 U.S.C. 1251 et seq.);
                            ``(iv) the Oil Pollution Act of 1990 (33 
                        U.S.C. 2701 et seq.);
                            ``(v) the Safe Drinking Water Act (42 
                        U.S.C. 300f et seq.);
                            ``(vi) the Noise Control Act of 1972 (42 
                        U.S.C. 4901 et seq.);
                            ``(vii) the Solid Waste Disposal Act (42 
                        U.S.C. 6901 et seq.);
                            ``(viii) the Clean Air Act (42 U.S.C. 7401 
                        et seq.);
                            ``(ix) the Comprehensive Environmental 
                        Response, Compensation, and Liability Act of 
                        1980 (42 U.S.C. 9601 et seq.);
                            ``(x) the Emergency Planning and Community 
                        Right-To-Know Act of 1986 (42 U.S.C. 11001 et 
                        seq.);
                            ``(xi) the Pollution Prevention Act of 1990 
                        (42 U.S.C. 13101 et seq.);
                            ``(xii) the Endangered Species Act of 1973 
                        (16 U.S.C. 1531 et seq.);
                            ``(xiii) chapter 51 of title 49, United 
                        States Code;
                            ``(xiv) section 13 or 16 of the Act 
                        entitled `An Act making appropriations for the 
                        construction, repair, and preservation of 
                        certain public works on rivers and harbors, and 
                        for other purposes', approved March 3, 1899 
                        (commonly known as the `River and Harbor Act of 
                        1899') (33 U.S.C. 407, 411);
                            ``(xv) the Surface Mining Control and 
                        Reclamation Act of 1977 (30 U.S.C. 1201 et 
                        seq.); and
                            ``(xvi) any other law enacted after the 
                        date of enactment of this chapter that 
                        addresses subject matter similar to a law 
                        listed in clauses (i) through (xv).
                    ``(B) Inclusions.--The term `covered Federal law' 
                includes--
                            ``(i) a regulation or other binding agency 
                        action issued under a law referred to in 
                        subparagraph (A);
                            ``(ii) the terms and conditions of a permit 
                        issued or other administrative action taken 
                        under a law referred to in subparagraph (A); 
                        and
                            ``(iii) a State law that operates as a 
                        federally enforceable law under a law referred 
                        to in subparagraph (A) as a result of the 
                        delegation, approval, or authorization of a 
                        State activity or program.
            ``(2) Enforcement action.--
                    ``(A) In general.--The term `enforcement action' 
                means a civil or administrative action undertaken for 
                the purpose of imposing a penalty or any other punitive 
                sanction, including imposition of a restriction on 
                providing to or receiving from the United States or any 
                State or political subdivision a good, material, 
                service, grant, license, permit, or other approval or 
                benefit.
                    ``(B) Exclusion.--The term `enforcement action' 
                does not include an action solely for the purpose of 
                seeking injunctive relief to remedy a continuing 
                adverse public health or environmental effect of a 
                violation.
            ``(4) Environmental compliance management system.--The term 
        `environmental compliance management system' means the 
        systematic effort of a person or government entity, appropriate 
        to the size and nature of the person or government entity, to 
        prevent, detect, and correct a violation of a covered Federal 
        law through--
                    ``(A) a compliance policy, standard, or procedure 
                that identifies how an employee or agent shall meet the 
                requirements of the law;
                    ``(B) assignment of overall responsibility for 
                overseeing compliance with policies, standards, and 
                procedures, and assignment of specific responsibility 
                for ensuring compliance at each facility or operation;
                    ``(C) a mechanism for systematically ensuring that 
                compliance policies, standards, and procedures are 
                being carried out, including--
                            ``(i) a monitoring or auditing system that 
                        is reasonably designed to detect and correct a 
                        violation; and
                            ``(ii) a means for an employee or agent to 
                        report a violation of an environmental 
                        requirement without fear of retaliation;
                    ``(D) an effort to communicate effectively the 
                standards and procedures of the person or government 
                entity to employees and agents of the person or 
                government entity;
                    ``(E) an appropriate incentive to managers and 
                employees of the person or government entity to perform 
                in accordance with any compliance policy or procedure 
                of the person or government entity, including 
                consistent enforcement through an appropriate 
                disciplinary mechanism; and
                    ``(F) a procedure for--
                            ``(i) the prompt and appropriate correction 
                        of any violation of law; and
                            ``(ii) making any necessary modifications 
                        to the standards or procedures of the person or 
                        government entity to prevent future violations 
                        of law.
            ``(5) Federal agency.--
                    ``(A) In general.--The term `Federal agency' has 
                the meaning given the term `agency' in section 551 of 
                title 5, United States Code.
                    ``(B) Inclusions.--The term `Federal agency' 
                includes any agency or instrumentality of an Indian 
                Tribe with authority to administer or enforce a covered 
                Federal law.
            ``(6) Regulated entity.--
                    ``(A) In general.--The term `regulated entity' 
                means a person regulated under a covered Federal law, 
                including an officer, agent, or employee of the person.
                    ``(B) Exclusions.--The term `regulated entity' does 
                not include an entity owned or operated by a Federal or 
                State agency.
            ``(7) State agency.--The term `State agency' means an 
        agency or instrumentality of the executive branch of a State or 
        local government with the authority to administer or enforce 
        any covered Federal law, including an agency or instrumentality 
        of 2 or more States or local governments, whether or not the 
        localities are in different States.
            ``(8) Voluntary environmental audit.--The term `voluntary 
        environmental audit' means an assessment, audit, investigation, 
        or review that is--
                    ``(A) initiated voluntarily by a regulated entity, 
                including an officer, agent, or employee of a regulated 
                entity, but not including a regulated entity owned or 
                operated by a State or Federal agency;
                    ``(B) carried out by an employee of the person, or 
                a consultant employed by the person, for the purpose of 
                carrying out the assessment, evaluation, investigation, 
                or review; and
                    ``(C) carried out in good faith for the purpose of 
                determining or improving compliance with, or liability 
                under, a covered Federal law, or to assess the 
                effectiveness of an environmental compliance management 
                system.
            ``(9) Voluntary environmental audit report.--
                    ``(A) In general.--The term `voluntary 
                environmental audit report' means a document prepared 
                as a result of a voluntary environmental audit.
                    ``(B) Inclusions.--The term `voluntary 
                environmental audit report' includes--
                            ``(i) a field note, draft, memorandum, 
                        drawing, photograph, computer software, stored 
                        or electronically recorded information, map, 
                        chart, graph, survey, analysis (including a 
                        laboratory result, instrument reading, or field 
                        analysis), and other information pertaining to 
                        an observation, finding, opinion, suggestion, 
                        or conclusion, if the information is collected 
                        or developed for the primary purpose and in the 
                        course of creating a voluntary environmental 
                        audit;
                            ``(ii) a document prepared by an auditor or 
                        evaluator, which may describe the scope of the 
                        evaluation, the information learned, any 
                        conclusions or recommendations, and any 
                        exhibits or appendices;
                            ``(iii) an analysis of all or part of a 
                        voluntary environmental audit or issues arising 
                        from the audit; and
                            ``(iv) an implementation plan or tracking 
                        system that addresses an action taken or to be 
                        taken by the owner or operator of a facility as 
                        a result of a voluntary environmental audit.''.
    (b) Conforming Amendment.--The table of chapters of part VI of 
title 28, United States Code, is amended by inserting after the item 
relating to chapter 176 the following:

``177.  Voluntary Audit Protection                              3601''.

SEC. 4. ASSISTANCE FROM SMALL BUSINESS DEVELOPMENT CENTERS.

    Section 21(c)(3) of the Small Business Act (15 U.S.C. 648(c)(3)) is 
amended--
            (1) in subparagraph (Q), by striking ``and'' at the end;
            (2) in subparagraph (R), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(S) assisting small businesses in complying with 
                the requirements necessary to receive protections 
                provided by any applicable State voluntary 
                environmental audit incentive law.''.
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