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A BILL TO BE ENTITLED
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AN ACT
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relating to environmental or health and safety audits under the |
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Texas Environmental, Health, and Safety Audit Privilege Act. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 3(a), Texas Environmental, Health, and |
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Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil |
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Statutes), is amended to read as follows: |
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(a) In this Act: |
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(1) "Acquisition closing date" means the date on which |
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ownership of, or a direct or indirect majority interest in the |
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ownership of, a regulated facility is acquired in an asset |
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purchase, equity purchase, merger, or similar transaction. |
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(2) "Audit report" means an audit report described by |
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Section 4 of this Act. |
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(3) [(2)] "Environmental or health and safety law" |
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means: |
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(A) a federal or state environmental or |
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occupational health and safety law; or |
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(B) a rule, regulation, or regional or local law |
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adopted in conjunction with a law described by Paragraph (A) of this |
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subdivision. |
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(4) [(3)] "Environmental or health and safety audit" |
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means a systematic voluntary evaluation, review, or assessment of |
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compliance with environmental or health and safety laws or with any |
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permit issued under an environmental or health and safety law: |
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(A) [those laws] conducted by an owner or |
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operator, an employee of an [the] owner or operator, or an |
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independent contractor of: |
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(i) [(A)] a regulated facility or |
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operation; or |
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(ii) [(B)] an activity at a regulated |
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facility or operation; or |
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(B) conducted by a prospective purchaser of a |
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facility, activity, or operation described by Paragraph (A) of this |
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subdivision beginning before the acquisition closing date as part |
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of the prospective purchaser's investigation concerning whether to |
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complete the purchase of the facility, activity, or operation. |
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(5) [(4)] "Owner or operator" means a person who owns |
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or operates a regulated facility or operation. |
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(6) [(5)] "Penalty" means an administrative, civil, |
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or criminal sanction imposed by the state to punish a person for a |
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violation of a statute or rule. The term does not include a |
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technical or remedial provision ordered by a regulatory authority. |
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(7) [(6)] "Person" means an individual, corporation, |
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business trust, partnership, association, and any other legal |
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entity. |
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(8) [(7)] "Regulated facility or operation" means a |
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facility or operation that is regulated under an environmental or |
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health and safety law. |
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SECTION 2. Section 4, Texas Environmental, Health, and |
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Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil |
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Statutes), is amended by amending Subsection (e) and adding |
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Subsection (f) to read as follows: |
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(e) Once initiated, an audit, as defined by Section |
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3(a)(4)(A) of this Act, must [shall] be completed within a |
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reasonable time not to exceed six months unless an extension is |
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approved by the governmental entity with regulatory authority over |
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the regulated facility or operation based on reasonable grounds. |
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(f) If a prospective purchaser becomes an owner of a |
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regulated facility or operation or an activity at a regulated |
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facility or operation and continues an ongoing audit, as defined by |
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Section 3(a)(4)(B) of this Act, after the acquisition closing date, |
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the audit must be completed within a reasonable time not to exceed |
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six months after the acquisition closing date unless an extension |
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is approved by the governmental entity with regulatory authority |
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over the regulated facility or operation based on reasonable |
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grounds. |
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SECTION 3. Section 6(b), Texas Environmental, Health, and |
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Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil |
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Statutes), is amended to read as follows: |
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(b) Disclosure of an audit report or any information |
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generated by an environmental or health and safety audit does not |
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waive the privilege established by Section 5 of this Act if the |
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disclosure: |
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(1) is made to address or correct a matter raised by |
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the environmental or health and safety audit and is made only to: |
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(A) a person employed by the owner or operator, |
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including temporary and contract employees; |
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(B) a legal representative of the owner or |
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operator; |
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(C) an officer or director of the regulated |
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facility or operation or a partner of the owner or operator; [or] |
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(D) an independent contractor retained by the |
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owner or operator; |
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(E) a person who acquires the regulated facility |
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or operation or the activity at a regulated facility or operation |
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after beginning an audit as defined by Section 3(a)(4)(B) of this |
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Act; or |
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(F) an employee, temporary employee, contract |
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employee, legal representative, officer, director, partner, or |
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independent contractor or a person described by Paragraph (E) of |
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this subdivision; |
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(2) is made under the terms of a confidentiality |
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agreement between the person for whom the audit report was prepared |
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or the owner or operator of the audited facility or operation and: |
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(A) a partner or potential partner of the owner |
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or operator of the facility or operation; |
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(B) a transferee or potential transferee of the |
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facility or operation; |
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(C) a lender or potential lender for the facility |
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or operation; |
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(D) a governmental official of a state; [or] |
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(E) a person or entity engaged in the business of |
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insuring, underwriting, or indemnifying the facility or operation; |
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or |
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(F) a person described by Subdivision (1)(E) of |
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this subsection; or |
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(3) is made under a claim of confidentiality to a |
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governmental official or agency by the person for whom the audit |
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report was prepared or by the owner or operator. |
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SECTION 4. Section 10, Texas Environmental, Health, and |
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Safety Audit Privilege Act (Article 4447cc, Vernon's Texas Civil |
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Statutes), is amended by adding Subsection (b-1) and amending |
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Subsection (g) to read as follows: |
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(b-1) A person who has owned a regulated facility or |
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operation for a period of not more than six months after the |
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acquisition closing date is immune from an administrative or civil |
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penalty for a violation voluntarily disclosed as provided by |
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Subsections (a) and (b) of this section only if: |
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(1) for a violation the person discovered after the |
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acquisition closing date, the environmental or health and safety |
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audit out of which the disclosure arises was an audit as defined by |
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Section 3(a)(4)(B) of this Act and, not later than the 45th day |
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after the acquisition closing date, the person notifies the |
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governmental entity with regulatory authority over the regulated |
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facility or operation that the audit is being conducted; |
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(2) for a violation the person discovered before the |
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acquisition closing date, the disclosure is made not later than the |
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45th day after the acquisition closing date; and |
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(3) for a violation described by Subdivision (1) or |
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(2) of this subsection, before the acquisition closing date: |
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(A) the person was not responsible for compliance |
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at the regulated facility or operation with the environmental, |
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health, or safety law violated; |
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(B) the person was not the person with the |
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largest ownership share of the seller; |
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(C) the seller was not the person with the |
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largest ownership share of the person; and |
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(D) the person and the seller did not have a |
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common corporate parent or a common majority interest owner. |
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(g) In order to receive immunity under this section, a |
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facility conducting an environmental or health and safety audit |
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under this Act must give notice to an appropriate regulatory agency |
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of the fact that it is planning to commence the audit. The notice |
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shall specify the facility or portion of the facility to be audited, |
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the anticipated time the audit will begin, and the general scope of |
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the audit. The notice may provide notification of more than one |
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scheduled environmental or health and safety audit at a time. This |
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subsection does not apply to an audit defined by Section 3(a)(4)(B) |
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of this Act. |
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SECTION 5. The change in law made by this Act applies only |
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to an environmental or health and safety audit initiated on or after |
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the effective date of this Act. An audit initiated before the |
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effective date of this Act is governed by the law in effect on the |
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date the audit was initiated, and the former law is continued in |
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effect for that purpose. |
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SECTION 6. This Act takes effect September 1, 2013. |