S.Amdt. 3880

SA 3880. Mr. BYRD (for himself and Mr. Rockefeller) submitted an
amendment intended to be proposed to amendment SA 3739 proposed by Mr.
Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill S. 3217,
to promote the financial stability of the United States by improving
accountability and transparency in the financial system, to end ``too
big to fail'', to protect the American taxpayer by ending bailouts, to
protect consumers from abusive financial services practices, and for
other purposes; which was ordered to lie on the table; as follows:

At the end of subtitle A of title IX, add the following:

SEC. 919C. PENALTIES FOR FAILURE TO DISCLOSE HEALTH AND
SAFETY LITIGATION, VIOLATIONS, AND IMPACT
INFORMATION.

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)
is amended by inserting after section 21A the following new
section:

``SEC. 21B. HEALTH AND SAFETY DISCLOSURE VIOLATIONS.

``(a) Findings.--Congress finds the following:
``(1) This Act requires issuers of securities to disclose
material facts regarding--
``(A) pending litigation;
``(B) unsafe or unhealthy conditions in a high-risk
workplace that may reasonably be expected to cause the issuer
to face costly wrongful death actions from the heirs of the
deceased;
``(C) unsafe or unhealthy conditions in a high-risk
workplace, or significant violations of law in such a
workplace, that may reasonably be expected to cause reported
financial information not to be necessarily indicative of
future financial conditions or future operating results; and
``(D) events, trends, or uncertainties that may change the
relationship between costs and revenues.
``(2) In numerous industries, including high-risk
industries such as coal mining and oil exploration, health
and safety conditions have long been incompletely and
inconsistently disclosed, discussed, or analyzed by
corporations.
``(3) Investors and the public have a right to know, and a
reasonable expectation to remained informed, about
significant safety and health conditions that could imperil
the workforce of publicly-traded corporations, carrying
odious consequences for workers, families, and communities,
and that can lead to the abrogation of contracts,
environmental or other tort liabilities, and tarnished
corporate reputations.
``(b) Purpose.--The purpose of this section is to
strengthen the maintenance of fair and honest markets by
requiring disclosure of certain health and safety information
and by authorizing elevated penalties for failures to
disclose certain categories of information regarding health
and safety conditions or violations, given that such failures
have too often heretofore been unaddressed.
``(c) Judicial Actions Authorized.--
``(1) Relief and penalties.--Whenever it shall appear that
any issuer has violated subsection (d), the Commission or any
shareholder of the issuer may bring an action in a United
States district court to seek, and the court shall have
jurisdiction to impose--
``(A) equitable relief for the complainant, to be provided
by the issuer; and
``(B) a civil penalty to be paid by the senior executive
officers or the members of the board of directors of the
subject issuer--
``(i) who knew about such violation; or
``(ii) whose duties and decisions affected matters
regarding production or safety and who therefore had reason
to know about such violation, barring malfeasance by other
directors, officers, employees, or agents of the subject
issuer.
``(2) Costs.--Whenever a court issues an order sustaining a
shareholder's charges under paragraph (1), a sum equal to the
aggregate amount of all costs and expenses (including
attorney's fees) that have been reasonably incurred by the
shareholder for, or in connection with, the institution and
prosecution of such proceedings, as determined by the court,
shall be assessed against the issuer. These costs shall be
assessed regardless of the amount or means of relief or
penalties imposed on the issuer or its directors, officers,
employees, or agents.
``(d) Health and Safety-Related Disclosure.--
``(1) Duty to disclose.--At least annually, an issuer shall
disclose to the Commission and the shareholders the
information required under paragraph (2).
``(2) Required disclosures.--The disclosures required under
this paragraph are the following:
``(A) Any pending litigation concerning a health or safety
condition or violation under Federal or State law involving
the issuer, other than ordinary, routine litigation that is
incidental to the business of the issuer, as determined by
the Commission in consultation with the Secretary of Labor.
``(B) Any significant health or safety condition, or
significant health or safety violation, at any business unit
of the issuer in which routine activities pose risk of loss
of life.
``(C) Any significant health or safety condition, or
significant health or safety violation, at any business unit
of the issuer in which routine activities pose risk of
accidents or fatalities, injuries, or illnesses, the
occurrence of which could cause reported financial
information not to be necessarily indicative of future
financial conditions of the issuer, or which could cause a
negative effect on operating results of the issuer or any
subsidiaries thereof.
``(D) Any trend in health or safety conditions or
violations under Federal law, at any business unit of the
issuer, that may change the relationship between costs and
revenues of the issuer or any subsidiaries thereof.
``(e) Means and Amount of Equitable Relief, Damages, and
Penalties.--
``(1) Means and amount of equitable relief and damages.--
The court shall determine the means of equitable relief for a
violation of subsection (d), which may include the immediate
disclosure of significant health or safety conditions or
significant health or safety violations. If the court
determines that a shareholder has sustained damages, the
court may assess the damages against the issuer.
``(2) Amount of civil penalty.--
``(A) Judicial determination.--The court shall determine
the civil penalty for a violation of subsection (d) in light
of the facts and circumstances.
``(B) Amount of penalty.--Unless determined otherwise in
accordance with subparagraph (A), the civil penalty for a
violation of subsection (d) shall be equal to not less than 3
times the amount that may be imposed under other State or
Federal law in connection with the underlying safety or
health conditions or violations that are required to be
disclosed under this title.
``(3) Private actions.--If a person other than the United
States prevails on a claim alleging a violation of subsection
(d), the person shall be entitled to recover 3 times the
amount of damages sustained by the person, as determined by
the court, in light of the facts and circumstances.
``(f) Procedures for Collection.--
``(1) Payment of penalty to treasury.--A civil penalty
imposed under this section shall be payable into the Treasury
of the United States.
``(2) Collection of penalties.--If a person upon whom a
civil penalty under this section is imposed fails to pay such
penalty within the time prescribed in the order of the court,
the Commission may refer the matter to the Attorney General
of the United States, who shall recover such penalty by
action in the appropriate United States district court.
``(3) Remedy not exclusive.--An action authorized by this
section may be brought in addition to any other actions that
the Commission, the Attorney General, or any shareholder is
entitled to bring.
``(4) Jurisdiction and venue.--For purposes of section 27,
an action under this section shall be an action to enforce a
liability or a duty created by this title.
``(g) Definitions.--
``(1) In general.--The Commission, in consultation with the
Secretary of Labor, shall issue rules to define the terms
used in this section for which the Commission determines a
definition to be necessary.
``(2) Definitions.--In this section:
``(A) Pending litigation.--The term `pending litigation'
includes a civil action or administrative proceeding for a
penalty for

[[Page S3373]]

violating a Federal or State health and safety law that--
``(i) is being contested before an administrative law judge
under the Occupational Safety and Health Review Commission or
the Federal Mine Safety and Health Review Commission; or
``(ii) is being otherwise contested or appealed under a
State review board or other body.
``(B) Significant health or safety condition.--The term
`significant health or safety condition' means a condition
that a certified worker or manager could identify as
reasonably likely to be cited, were the condition to be
observed by a Federal inspector, as--
``(i) a significant and substantial health or safety
violation under the Federal Mine Safety and Health Act of
1977 (30 U.S.C. 801 et seq.);
``(ii) a serious or repeated violation under the
Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et
seq.); or
``(iii) another health- or safety-related violation
carrying a high degree of gravity under Federal law.
``(C) Significant health or safety violation.--The term
`significant health or safety violation' means--
``(i) a significant and substantial health or safety
violation under the Federal Mine Safety and Health Act of
1977;
``(ii) a serious or repeated violation under the
Occupational Safety and Health Act of 1970; or
``(iii) another health- or safety-related violation
carrying a high degree of gravity under State or Federal
law.''.
______