SB 1300 by Sen. Kevin Eltife (R-Tyler) and its companion, HB 3154 by Rep. Tryon Lewis (R-Odessa), amend the Texas Environmental, Health, and Safety Privilege Act (Art. 4447cc, VTCS) to protect a person that acquires a regulated facility or operation from liability for civil or administrative penalties for up to six months after the acquisition closing date under certain circumstances.
Under existing law, a regulated facility or operation may conduct a systematic voluntary self-evaluation, review, or assessment of compliance with environmental or health safety laws or of any permit issued under those laws. Audit findings may be reported under confidentiality to certain parties and the state for purposes of addressing or correcting a matter raised by the audit, provided that the regulated facility gives notice to the appropriate regulatory agency of the audit.
SB 1300/HB 3154 extend the privilege for up to six months after a purchaser acquires the facility, as long as the purchaser completes an ongoing audit within that time (unless the regulatory authority extends the time based on reasonable grounds). The bill further authorizes a prospective purchaser of a regulated facility to perform a privileged audit prior to acquiring the facility as part of the purchaser’s investigation of whether to complete the purchase. The purchaser is shielded from an administrative or civil penalty for a violation voluntarily disclosed to the regulatory agency if: (1) for a violation discovered after the acquisition date, the purchaser commenced the audit prior to the acquisition date and notified the regulatory agency of the fact that an audit was being conducted within 45 days after the acquisition date; and (2) for a violation discovered before the acquisition date, the disclosure is made within 45 days after the closing date.
If the violation is discovered in the course of an audit before the acquisition date by either the regulated facility or the acquiring person, the acquiring person may claim the immunity if: (1) the person discovering the violation was not responsible for compliance at the regulated facility with the applicable law violated; (2) the discovering person was not the person with the largest ownership share of the seller; (2) the seller was not the person with the largest ownership share of the person; and (4) the person and seller did not have a common corporate parent or common majority interest owner.
SB 1300 has been referred to Senate Natural Resources. HB 3154 has not yet been referred to committee.