[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 866 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 866

    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

                             June 10, 1997

Mrs. Hutchison 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.

    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 ``Environmental Protection Partnership 
Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) it is in the interest of the United States to promote 
        voluntary efforts to maximize compliance with environmental 
        laws and to increase protection of the environment and public 
        health;
            (2) voluntary environmental audit and compliance management 
        systems have greatly enhanced compliance with environmental 
        laws and should be encouraged by the Federal Government;
            (3) 2 means of directly encouraging voluntary environmental 
        audit and compliance management systems are--
                    (A) granting limited protection from disclosure of 
                voluntary environmental audits; and
                    (B) granting limited protection for parties that 
                promptly disclose information from voluntary 
                environmental audits or compliance management systems 
                and correct any noncompliance discovered as a result of 
                the information;
            (4) Federal law does not encourage voluntary environmental 
        audit and compliance management systems and may actually create 
        disincentives to conducting voluntary environmental audits or 
        implementing compliance management systems;
            (5) in the interest of increasing environmental protection, 
        the Federal Government should not impede the efforts of States 
        to encourage voluntary environmental audit through adoption of 
        State laws granting limited protection for voluntary efforts to 
        maximize compliance with environmental laws;
            (6) State laws granting those protections should apply in 
        all proceedings in which the State is exercising authority 
        under State or Federal law; and
            (7) the protections offered under this Act do not relieve 
        parties from the need to comply with otherwise applicable 
        requirements to disclose information under Federal, State, or 
        local environmental laws.

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. Admissibility of environmental audit reports.
``3602. Testimony.
``3603. Disclosures.
``3604. Recognition of State efforts to encourage compliance.
``3605. Definitions.
``Sec. 3601. Admissibility of environmental audit reports
    ``(a) General Rule.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), an environmental audit report that is prepared in good 
        faith, or a finding, opinion, or other communication that is 
        made in good faith by a person or government entity and that is 
        related to, and essentially constitutes a part of, an 
        environmental audit report, shall not be--
                    ``(A) subject to discovery or any other 
                investigatory procedure; or
                    ``(B) admissible as evidence in any judicial action 
                or administrative proceeding.
            ``(2) Excluded items.--Paragraph (1) shall not apply to--
                    ``(A) a document, communication, data, report, or 
                other item of information that is required to be 
                collected, developed, maintained, or reported to a 
                regulatory agency under a covered Federal law;
                    ``(B) information obtained by observation, 
                sampling, or monitoring by a regulatory agency; or
                    ``(C) information obtained from a source 
                independent of the environmental audit.
            ``(3) Inapplicability.--Paragraph (1) shall not apply to an 
        environmental audit report if, after an in camera hearing under 
        subsection (c), a judge determines that--
                    ``(A) the person or government entity that 
                initiated the environmental audit expressly waives, 
                pursuant to subsection (b), the protection provided by 
                paragraph (1);
                    ``(B) the environmental audit provides evidence of 
                noncompliance with a covered Federal law and 
                appropriate efforts to achieve compliance were not 
                promptly initiated and pursued with reasonable 
                diligence;
                    ``(C) the person or government entity that is 
                asserting the applicability of paragraph (1) is doing 
                so for a fraudulent purpose; or
                    ``(D) the environmental audit report, finding, 
                opinion, or other communication was prepared for the 
                purpose of avoiding disclosure of information required 
                for a governmental investigative, administrative, or 
                judicial proceeding that, at the time of preparation, 
                was imminent or in progress.
    ``(b) Waiver.--
            ``(1) In general.--The protection provided by subsection 
        (a)(1) may be waived by the person or government entity for 
        whom an environmental audit is prepared.
            ``(2) Portions waived.--A waiver under paragraph (1) shall 
        apply only to the portion or portions of the environmental 
        audit report, finding, opinion, or other communication that the 
        person or government entity expressly waives.
            ``(3) Confidential disclosures.--Disclosure of an 
        environmental audit report shall not constitute a waiver of the 
        protection provided by subsection (a)(1) if--
                    ``(A) the person or government entity for whom the 
                environmental audit is prepared or the owner or 
                operator of a facility or activity evaluated in the 
                environmental audit discloses the environmental audit 
                to any person employed by (including temporary or 
                contract employees), officer or director of, partner or 
                joint venturer in, legal representative of, or 
                independent contractor retained by the person, 
                government entity, owner, or operator to address an 
                issue raised by the environmental audit; or
                    ``(B) the disclosure is pursuant to a 
                confidentiality agreement between the person or 
                government entity for which the evaluation was prepared 
                or the owner or operator of a facility or activity 
                evaluated in the environmental audit and--
                            ``(i) a business associate or potential 
                        business associate;
                            ``(ii) a lender or potential lender;
                            ``(iii) an insurer or potential insurer;
                            ``(iv) a transferee or potential 
                        transferee; or
                            ``(v) any other person or government entity 
                        having environmental or commercial interests 
                        in, similar to, or substantially aligned with 
                        the facility or activity evaluated in the 
                        environmental audit.
    ``(c) Review.--
            ``(1) Disclosure and testimony.--A judge may, after an in 
        camera hearing, require disclosure of or testimony regarding a 
        audit report, finding, opinion, or other communication for 
        which protection under subsection (a)(1) is asserted if the 
        judge determines that the information to be disclosed or 
        testified about is not subject to protection under subsection 
        (a)(1).
            ``(2) Criminal evidence.--
                    ``(A) Seizure.--Based on information obtained from 
                a source independent of an environmental audit report, 
                a law enforcement official may seize an environmental 
                audit report for which protection is asserted under 
                subsection (a)(1) if--
                            ``(i) the seizure is pursuant to a lawful 
                        search and seizure; and
                            ``(ii) the law enforcement official has 
                        probable cause to believe that--
                                    ``(I) a criminal offense has been 
                                committed under a covered Federal law; 
                                and
                                    ``(II) the report constitutes, or 
                                may lead to discovery of, evidence of 
                                the criminal offense.
                    ``(B) Handling of report.--On taking possession of 
                a report under subparagraph (A), a law enforcement 
official shall immediately place the report under seal and shall not 
review, disclose, or otherwise use the contents of the report in any 
way, unless the person or government entity for whom the report was 
prepared--
                            ``(i) expressly waives protection for the 
                        report pursuant to subsection (b); or
                            ``(ii) after actual notice of the seizure, 
                        does not file a timely petition under 
                        subparagraph (C).
                    ``(C) Petition.--Not later than 30 days after 
                receiving actual notice of the seizure of an 
                environmental audit report, the person or government 
                entity for whom the report was prepared or the owner or 
                operator of the facility or activity evaluated in the 
                report may file with the appropriate court a petition 
                requiring an in camera review under subparagraph (D).
                    ``(D) In camera hearing.--
                            ``(i) In general.--On the filing of a 
                        petition under subparagraph (C), the court 
                        shall issue an order--
                                    ``(I) scheduling an in camera 
                                review not later than 45 days after the 
                                date of the filing of the petition to 
                                determine whether the environmental 
                                audit report (or a portion of the 
                                report) is protected under subsection 
                                (a)(1);
                                    ``(II) allowing the law enforcement 
                                official to remove the seal from the 
                                report to review the report;
                                    ``(III) allowing the law 
                                enforcement official to consult with an 
                                enforcement agency regarding the 
                                contents of the report to prepare for 
                                the in camera hearing; and
                                    ``(IV) placing appropriate 
                                limitations on distribution and review 
                                of the report to protect against 
                                unnecessary disclosure.
                            ``(ii) Protection of information.--Unless a 
                        court finds the information subject to 
                        disclosure, any information used in preparation 
                        for an in camera hearing--
                                    ``(I) shall not be used in any 
                                investigation or proceeding against the 
                                person or government entity for whom 
                                the environmental audit report was 
                                prepared or the owner or operator of 
                                the facility or activity evaluated in 
                                the environmental audit report; and
                                    ``(II) shall be kept confidential.
            ``(3) Burden of proof.--
                    ``(A) Burden of producing evidence.--In an in 
                camera hearing under paragraph (1) or (2), the person 
                asserting the protection of subsection (a)(1) shall 
                have the burden of demonstrating a prima facie basis 
                for the application of subsection (a)(1). If there is 
                evidence of noncompliance with a covered law, the prima 
                facie basis shall include, to the extent that the 
                noncompliance was identified by the environmental audit 
                report, evidence that appropriate efforts to achieve 
                compliance were promptly initiated and pursued with 
                reasonable diligence.
                    ``(B) Burden of persuasion.--In an in camera 
                hearing under paragraph (1) or (2), the person seeking 
                the disclosure of information has the burden of 
                persuasion that the protection provided by subsection 
                (a)(1) does not apply.
            ``(4) Suppression of evidence.--
                    ``(A) In general.--A judge may suppress any 
                evidence arising or derived from the failure of a 
                government official to comply with this subsection.
                    ``(B) Burden of proof.--A government official who 
                fails to comply with this subsection shall have the 
                burden of proving that any proffered evidence did not 
                arise and was not derived from the failure.
    ``(d) Effect on Other Rules.--Nothing in this chapter limits, 
waives, or abrogates the scope or nature of any statutory or common law 
protection against the discovery or admissibility of evidence, 
including the attorney-client privilege and the work product doctrine.
``Sec. 3602. Testimony
    ``A person or government entity (including a present or former 
officer, employee, agent, or contractor of the person or government 
entity) that performs an environmental audit may not give testimony 
concerning the environmental audit in any judicial or administrative 
proceeding that relates to a nondelegated covered Federal law without 
the consent of the person or government entity that initiated the 
audit, including testimony concerning an environmental audit report, 
finding, opinion, or other communication with respect to which section 
3601(a)(1) applies.
``Sec. 3603. Disclosures
    ``(a) In General.--If a person or government entity discloses 
information relating to a covered Federal law to an appropriate 
official of a Federal or State agency responsible for administering the 
covered Federal law, the disclosure shall be considered to be a 
voluntary disclosure subject to protection under subsection (b), 
regardless of whether the disclosure is required by law, if--
            ``(1) the disclosure arises out of a voluntary 
        environmental audit or the operation of a voluntary 
        environmental compliance management system by the person or 
        government entity;
            ``(2) the disclosure is made promptly after the person or 
        government entity receives knowledge of the information;
            ``(3) the person or government entity initiates an action 
        to address the issues identified in the disclosure--
                    ``(A) within a reasonable period of time after 
                receiving knowledge of the information; and
                    ``(B) within a period of time that is adequate to 
                achieve compliance with the requirements of the covered 
                Federal law that is the subject of the action; and
            ``(4) the person or government entity reasonably provides 
        any further relevant information requested, as a result of the 
        disclosure, by the appropriate official of the Federal or State 
        agency responsible for administering the covered Federal law, 
        not including information protected by this chapter, the 
        attorney-client privilege, the attorney work product doctrine, 
        or any other applicable privilege.
    ``(b) Limited Immunity.--
            ``(1) In general.--Subject to paragraph (2), if a person or 
        government entity makes a voluntary disclosure under subsection 
        (a)--
                    ``(A) the person or government entity shall be 
                immune from any enforcement action brought as a result 
                of the disclosure; and
                    ``(B) the disclosed information shall not, in any 
                court or administrative proceeding, be subject to 
                discovery or be admissible against the person or 
                government entity that made the disclosure.
            ``(2) Permissible sanctions and admission into evidence.--
        Paragraph (1) does not preclude--
                    ``(A) imposition of a civil sanction in an 
                administrative or civil action to the extent that a 
                violation was committed intentionally and willfully;
                    ``(B) imposition of a criminal sanction--
                            ``(i) against a natural person, if--
                                    ``(I) the person committed, or 
                                aided or abetted the commission of, a 
                                disclosed violation intentionally and 
                                willfully; or
                                    ``(II) the disclosed violation is a 
                                knowing endangerment offense described 
                                in section 309(c)(3) of the Federal 
                                Water Pollution Control Act (33 U.S.C. 
                                1319(c)(3)), section 3008(e) of the 
                                Solid Waste Disposal Act (42 U.S.C. 
                                6928(e)), or section 113(c)(5) of the 
                                Clean Air Act (42 U.S.C. 7413(c)(5)); 
                                or
                            ``(ii) against an entity other than a 
                        natural person, if--
                                    ``(I) the disclosed violation was 
                                committed intentionally and willfully 
                                by a member of the entity's senior 
                                management;
                                    ``(II) the disclosed violation is a 
                                knowing endangerment offense described 
                                in section 309(c)(3) of the Federal 
                                Water Pollution Control Act (33 U.S.C. 
                                1319(c)(3)), section 3008(e) of the 
                                Solid Waste Disposal Act (42 U.S.C. 
                                6928(e)), or section 113(c)(5) of the 
                                Clean Air Act (42 U.S.C. 7413(c)(5)); 
                                or
                                    ``(III) the entity's policies or 
                                lack of preventive actions or systems 
                                contributed materially to the 
                                occurrence of the violation; or
                    ``(C) admission of information into evidence for 
                the purpose of seeking injunctive relief against the 
                person or government entity to remedy a continuing 
                adverse public health or environmental effect of a 
                violation.
            ``(3) Mitigating circumstances.--A sanction under 
        subparagraph (A) or (B) of paragraph (2) shall, to the extent 
        appropriate, be mitigated by factors relating to the nature of 
        the violation, circumstances of the disclosure, efforts of the 
        disclosing person or government entity to prevent or resolve 
        the violation, and other relevant considerations.
    ``(c) Involuntary Disclosures.--A disclosure of information to an 
official of a Federal or State agency shall not be considered to be a 
voluntary disclosure under subsection (a)(1) if the person or 
government entity making the disclosure is found under subsection (f) 
to have committed a pattern of significant repeated violations of 
Federal or State law, or orders on consent, related to environmental 
quality, on the basis of the occurrence of separate and distinct events 
giving rise to the violations, during the 3-year period preceding the 
date of the disclosure, if the violations--
            ``(1) did not result from the same underlying cause;
            ``(2) involved the same legal requirement as the violation 
        being disclosed;
            ``(3) are determined to have occurred in final court or 
        agency determinations or in admissions by the person or 
        government entity in consent agreements, arrived at after 
        opportunity for an adjudicative hearing and not subject to 
        further appeal; and
            ``(4)(A) occurred at the same facility; or
            ``(B) occurred at 2 or more facilities under common 
        control, and senior management of the disclosing person or 
        government entity had actual knowledge of the violations and 
        failed to take timely corrective measures.
    ``(d) Presumption of Applicability.--
            ``(1) In general.--Subject to subsection (c), there shall 
        be a rebuttable presumption that a disclosure by a person or 
        government entity of a violation of a covered Federal law to an 
        appropriate official of a Federal or State agency responsible 
        for administering the covered Federal law is a voluntary 
        disclosure described in subsection (a), if the person or 
        government entity provides information at the time of the 
        disclosure supporting a claim that the information is a 
        voluntary disclosure.
            ``(2) Conclusive applicability.--Unless the appropriate 
        official of the Federal or State agency to whom a disclosure is 
        made under paragraph (1) issues a written response under 
        paragraph (3), the presumption under paragraph (1) shall be 
        conclusive.
            ``(3) Disputes.--If, not later than 60 days after receiving 
        the disclosure in writing, the appropriate official of the 
        Federal or State agency to whom a disclosure is made under 
        paragraph (1) issues a written response disputing that the 
        disclosure is a voluntary disclosure, the issue shall be 
        resolved--
                    ``(A) by settlement between the disclosing person 
                or government entity and the appropriate official; or
                    ``(B) in an enforcement action against the 
                disclosing person or government entity in accordance 
                with subsection (f).
    ``(f) Resolution of Immunity Dispute.--
            ``(1) In general.--In an enforcement action brought against 
        a person or government entity regarding an alleged violation 
        for which the person or government entity claims to have made a 
        disclosure to which this section applies, the judge shall 
        determine the application of this section.
            ``(2) Burden of proof.--In an action described in paragraph 
        (1)--
                    ``(A) the person or government entity making the 
                disclosure shall have the burden of establishing a 
                prima facie case that the disclosure was consistent 
                with the requirements of subsection (a)(1); and
                    ``(B) if a prima facie case is established, the 
                plaintiff shall have the burden of showing, by a 
                preponderance of the evidence or, in a criminal case, 
by proof beyond a reasonable doubt, that this section does not apply.
    ``(g) Statutory Construction.--Except as expressly provided in this 
section, nothing in this section affects the authority of a Federal or 
State agency responsible for administering a covered Federal law to 
carry out any requirement of the law associated with information 
disclosed in a voluntary disclosure described in subsection (a)(1).
``Sec. 3604. Recognition of State efforts to encourage compliance
    ``(a) State Laws Encouraging Voluntary Environmental Assessments.--
            ``(1) Limited protection from disclosure.--Except as 
        provided in paragraph (3), a State law may provide that, under 
        appropriate conditions, 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--
                    ``(A) subject to discovery or any other 
                investigatory procedure governed by State or local law; 
                or
                    ``(B) admissible as evidence in any State or local 
                judicial action or administrative proceeding.
            ``(2) Limited protection for testimony.--Except as provided 
        in paragraph (3), a State law may provide that, under 
        appropriate conditions, no individual that performs a voluntary 
        environmental audit shall be required to give testimony in any 
        State or local judicial action or administrative proceeding 
        concerning the environmental audit.
            ``(3) Required disclosures unaffected.--The protections 
        described in paragraphs (1) and (2) shall not apply to the 
        extent that any information is otherwise required to be 
        disclosed under Federal, State, or local law.
            ``(4) Limited protection for disclosure of voluntary 
        environmental self-evaluation information.--A State law may 
        provide that, under appropriate conditions, a person or entity 
        that promptly discloses information about noncompliance with an 
        environmental law discovered as a result of a voluntary 
        environmental audit or performance of a compliance management 
        system to an appropriate Federal, State, or local official may 
        be protected in whole or in part from an enforcement action for 
        the noncompliance in a State or local judicial action or 
        administrative proceeding.
    ``(b) Exclusivity of State Protection.--In any State or local 
judicial action or administrative proceeding to enforce a State or 
local law (including a covered Federal law), if a State law provides 
any of the protections referred to in subsection (a), a person or 
entity qualifying for the protection shall receive the protection 
afforded by the applicable State law in lieu of any protection provided 
by sections 3601 through 3603.
    ``(c) Prohibited Impediments to State Law.--A Federal agency shall 
not--
            ``(1) refuse to delegate 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 law referred to in subsection (a);
            ``(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 of a State law 
        referred to in subsection (a); or
            ``(3) take any other action that has the effect of 
        requiring a State to rescind or limit any protection of a State 
        law referred to in subsection (a).
``Sec. 3605. Definitions
    ``In this chapter:
            ``(1) Covered federal law.--The term `covered Federal 
        law'--
                    ``(A) 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 or 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) includes a regulation or other binding agency 
                action issued under a law listed in subparagraph (A);
                    ``(C) includes the terms and conditions of a permit 
                issued or other administrative action taken under a law 
                listed in subparagraph (A); and
                    ``(D) includes a State law that operates as a 
                federally enforceable law under a law listed in 
                subparagraph (A) as a result of the delegation, 
                approval, or authorization of a State activity or 
                program.
            ``(2) Delegated covered federal law.--The term `delegated 
        covered Federal law' means a covered Federal law with respect 
        to which a State has been delegated primary authority for 
        enforcement in accordance with the covered Federal law, to the 
        extent the State has been delegated the authority.
            ``(3) Enforcement action.--
                    ``(A) In general.--The term `enforcement action' 
                means a criminal, civil, or administrative action 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 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;
                            ``(ii) a periodic evaluation of the overall 
                        performance of the compliance management 
                        system; and
                            ``(iii) 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) Environmental audit report.--
                    ``(A) In general.--The term `environmental audit 
                report' means a document prepared as a result of a 
                voluntary environmental audit.
                    ``(B) Inclusion.--The term `environmental audit 
                report' includes--
                            ``(i) a field note, draft, memorandum, 
                        drawing, photograph, computer software or 
                        stored information or electronically recorded 
                        information, map, chart, graph, survey, 
                        analysis (including a laboratory result, 
                        instrument reading, and field analysis), and 
                        other information pertaining to an observation, 
                        finding, opinion, suggestion, or conclusion, if 
                        such supporting information is collected or 
                        developed for the primary purpose and in the 
                        course of creating an audit;
                            ``(ii) a document prepared by the 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 a portion or all of 
                        the 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 the facility 
                        as a result of the audit.
            ``(6) Intentional and willful.--The term `intentional and 
        willful' refers to a specific intent to violate or disregard 
        the law.
            ``(7) Judge.--The term `judge' includes an administrative 
        law judge.
            ``(8) Nondelegated covered federal law.--The term 
        `nondelegated covered Federal law' means a covered Federal law 
        that is not a delegated covered Federal law, to the extent that 
        the covered Federal law has not been delegated.
            ``(9) Voluntary disclosure.--The term `voluntary 
        disclosure' means the disclosure of information related to a 
        voluntary environmental audit or voluntary implementation of an 
        environmental compliance management system with respect to 
        which the protections provided under section 3603 apply.
            ``(10) Voluntary environmental self-evaluation.--The term 
        `voluntary environmental audit' means an assessment, audit 
        investigation, or review that is--
                    ``(A) initiated by a person or government entity;
                    ``(B) carried out by an employee of the person or 
                government entity, or a consultant employed by the 
                person or government entity, for the purpose of 
                carrying out the assessment, evaluation, investigation, 
                or review; and
                    ``(C) carried out 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.''.
    (b) Technical Amendment.--The part analysis for 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 inserting after subparagraph (R) the following:
                    ``(S) assisting small businesses in complying with 
                the requirements necessary to receive protections under 
                chapter 177 of title 28, United States Code.''.

SEC. 5. APPLICABILITY.

    This Act and the amendments made by this Act shall apply to each 
civil or criminal action or administrative proceeding that has not been 
finally adjudicated as of the date of enactment of this Act.

SEC. 6. SUNSET PROVISION.

    This Act and the amendments made by this Act shall be effective 
during the 5-year period beginning on the date of enactment of this 
Act.
                                 <all>