TZ is passed to the env.:

local function time_of_day (TZ)
    os.setenv('TZ', TZ)
    local time = os.gettimeofday();
    print(os.date('%c %p', math.floor(time)))
    print(TZ); os.execute("date +%c") ;
    print()
    os.setenv('TZ', nil)
  end

under linux os.date calls localtime_r  (if the string format doesn't start with '!')

and localtime_r 

 "need not set tzname, timezone, and daylight"