[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 200 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 200

 To amend the Comprehensive Environmental Response, Compensation, and 
             Liability Act of 1980, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 4, 1995

 Mr. Upton (for himself and Mr. Tauzin) introduced the following bill; 
 which was referred to the Committee on Commerce and, in addition, to 
the Committee on Transportation and Infrastructure, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Comprehensive Environmental Response, Compensation, and 
             Liability Act of 1980, 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 ``Lender and Fiduciary Fairness in 
Liability Act of 1995''.

SEC. 2. LENDER AND FIDUCIARY LIABILITY.

    (a) Definitions.--Section 101(20) of the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980 (42 
U.S.C. 9601(20)) is amended by adding at the end the following new 
subparagraphs:
                    ``(E) Definition of participation in management.--
                            ``(i) The term `participation in 
                        management' does not include--
                                    ``(I) the mere capacity to 
                                influence, or ability to influence, or 
                                the unexercised right to control vessel 
                                or facility operations; or
                                    ``(II) any act of the security 
                                interest holder to require another 
                                person or itself, to comply with 
                                applicable laws or to respond lawfully 
                                to disposal of any hazardous substance.
                            ``(ii) A security interest holder will not 
                        be deemed to be participating in management of 
                        a facility unless the security interest 
                        holder--
                                    ``(I) has undertaken responsibility 
                                for the facility's hazardous substance 
                                handling or disposal practices; or
                                    ``(II) has undertaken overall 
                                management of the facility encompassing 
                                day-to-day decisionmaking over either 
                                environmental compliance or over the 
                                operational, as opposed to financial 
                                and administrative, aspects of the 
                                facility. The term `operational 
                                aspects' include functions such as that 
                                of facility or plant manager, 
                                operations manager, chief operating 
                                officer, or chief executive officer.
                            ``(iii) The term `participate in 
                        management' does not include conducting an act 
                        or failing to act prior to the time that a 
                        security interest is created in a vessel or 
                        facility; and
                                    ``(I) the term `participate in 
                                management' does not include--
                                            ``(aa) holding such a 
                                        security interest or abandoning 
                                        or releasing such a security 
                                        interest;
                                            ``(bb) including in the 
                                        terms of an extension of 
                                        credit, or in a contract or 
                                        security agreement relating to 
                                        such an extension, covenants, 
                                        warranties, or other terms and 
                                        conditions that related to 
                                        environmental compliance;
                                            ``(cc) monitoring or 
                                        enforcing the terms and 
                                        conditions of the extension of 
                                        credit or security interest;
                                            ``(dd) monitoring or 
                                        undertaking 1 or more 
                                        inspections of the vessel or 
                                        facility;
                                            ``(ee) requiring or 
                                        conducting response action or 
                                        other lawful means of 
                                        addressing the release or 
                                        threatened release of a 
                                        hazardous substance in 
                                        connection with the vessel or 
                                        facility prior to, during, or 
                                        upon the expiration of the term 
                                        of the extension of credit;
                                            ``(ff) providing financial 
                                        or other advice or counseling 
                                        in an effort to mitigate, 
                                        prevent, or cure default or 
                                        diminution in the value of the 
                                        vessel or facility;
                                            ``(gg) restructuring, 
                                        renegotiating, or otherwise 
                                        agreeing to alter the terms and 
                                        conditions of the extension of 
                                        credit or security interest, 
                                        exercising forbearance; or
                                            ``(hh) exercising other 
                                        remedies that may be available 
                                        under applicable law for the 
                                        breach of any term or condition 
                                        of the extension of credit or 
                                        security agreement;
                                if such actions do not rise to the 
                                level of participating in management, 
                                as defined in above.
                            ``(iv) Legal or equitable title acquired by 
                        a security interest holder through foreclosure 
                        or its equivalents will be deemed to be held 
                        primarily to protect a security interest 
                        provided that the holder undertakes to sell, 
                        re-lease, or otherwise divest the property in a 
                        reasonably expeditious manner on commercially 
                        reasonable terms.
                            ``(v) The term `security interest' includes 
                        rights under a mortgage, deed of trust, 
                        assignment, judgment lien, pledge, security 
                        agreement, factoring agreement, lease, or any 
                        other right accruing to person to secure the 
                        repayment of money, the performance of a duty, 
                        or some other obligation.
                    ``(F) Protection for fiduciaries from individual 
                liability--
                            ``(i) The term `owner or operator' does not 
                        include a fiduciary who holds legal title to, 
                        is the mortgagee or secured party with respect 
                        to, controls, or manages, directly or 
                        indirectly, any facility or vessel for purposes 
                        of administering an estate or trust of which 
                        such facility or vessel is a part.
                            ``(ii) For purposes of clause (i), the term 
                        `fiduciary' means a person who is acting in any 
                        of the following representative capacities, but 
                        only to the extent such person is acting in 
                        such representative capacity:
                                    ``(I) An executor or administrator 
                                of an estate, including a voluntary 
                                executor or a voluntary administrator.
                                    ``(II) A guardian.
                                    ``(III) A conservator.
                                    ``(IV) A trustee under a will under 
                                which the trustee takes title to, or 
                                otherwise controls or manages, property 
                                for the purpose of protecting or 
                                conserving such property under the 
                                ordinary rules applied in State courts.
                                    ``(V) A court-appointed receiver.
                                    ``(VI) A trustee appointed in 
                                proceedings under Federal bankruptcy 
                                laws.
                                    ``(VII) An assignee or a trustee 
                                acting under an assignment made for the 
                                benefit of creditors.
                                    ``(VIII) A trustee, or any 
                                successor thereto, pursuant to an 
                                indenture agreement, trust agreement, 
                                lease, or similar financing agreement, 
                                for debt securities, certificates of 
                                interest of participation in any such 
                                debt securities, or other forms of 
                                indebtedness as to which it is not, in 
                                its capacity as trustee, the lender.
                            ``(iii) Fiduciary capacity.--A person acts 
                        in a `fiduciary capacity' with respect to 
                        property if the person holds title to such 
                        property, or otherwise has control of or an 
                        interest in such property, pursuant to the 
                        exercise of such person's responsibilities as a 
                        fiduciary.''.
    (b) Liability.--Section 107 of the Comprehensive Environmental 
Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9607), is 
amended by adding the following new subsections at the end:
    ``(n) Liability of Fiduciaries.--
            ``(1) In general.--The liability of a fiduciary that is 
        liable under any other provision of this Act for the release or 
        threatened release of a hazardous substance at, from, or in 
        connection with property held in a fiduciary capacity, may not 
        exceed the assets held in such fiduciary capacity that are 
        available to indemnify the fiduciary.
            ``(2) Exemption.--Except as provided in paragraph (3), a 
        fiduciary (as defined in section 101(20)) shall not be liable 
        in its individual capacity under this section.
            ``(3) Exceptions.--Nothing in this paragraph may be 
        construed as preventing claims under this Act against--
                    ``(A) the assets of the estate or trust 
                administered by a fiduciary; or
                    ``(B) non-employee agents or independent 
                contractors retained by a fiduciary.
            ``(4) Negligence or intentional misconduct.--Nothing in 
        this paragraph may be construed as preventing claims under this 
        Act against a fiduciary in its individual capacity whose 
        negligent acts or intentional misconduct caused a release or 
        threatened release of hazardous substances at a facility or 
        vessel. A fiduciary shall not be attributed with negligence or 
        intentional misconduct of non-employee agents or independent 
        contractors if the fiduciary has conducted itself without 
        negligence or intentional misconduct with regard to its 
        relationship with such agents or contractors.
            ``(5) Safe harbor.--A fiduciary shall not be liable in its 
        individual capacity under this Act--
                    ``(A) for undertaking or directing another to 
                undertake a response action under section 107(d)(1) or 
                under the direction of an on-scene coordinator;
                    ``(B) for undertaking or directing another to 
                undertake any other lawful means of addressing 
                hazardous substances in connection with the property;
                    ``(C) for terminating the fiduciary relationship;
                    ``(D) for including in the terms of the fiduciary 
                agreement covenants, warranties, or other terms and 
                conditions that relate to compliance with environmental 
                laws, or monitoring or enforcing such terms;
                    ``(E) for monitoring or undertaking 1 or more 
                inspections of the property;
                    ``(F) for providing financial or other advice or 
                counseling to other parties to the fiduciary 
                relationship, including the settler or beneficiary;
                    ``(G) for restructuring, renegotiating, or 
                otherwise altering the terms and conditions of the 
                fiduciary relationship;
                    ``(H) if the property was contaminated before the 
                fiduciary's period of service began; or
                    ``(I) for declining to take any of the actions 
                described in paragraphs (2) through (7).
    ``(o) Liability Limitations.--
            ``(1) Actual benefit.--The liability of a lender that is 
        liable under any other provision of this Act for the release or 
        threatened release of a hazardous substance at, from, or in 
        connection with property--
                    ``(A) acquired through foreclosure;
                    ``(B) subject to a security interest held by such 
                institution or lender;
                    ``(C) held by a lessor pursuant to the terms of an 
                extension of credit; or
                    ``(D) subject to financial control or financial 
                oversight pursuant to the terms of an extension of 
                credit;
        shall be limited to the actual benefit conferred on such lender 
        by a removal, remedial, or other response action undertaken by 
        another party.
            ``(2) Computation of actual benefit.--For purposes of this 
        section, the actual benefit conferred on an institution or 
        lender by a removal, remedial, or other response action shall 
        be equal to the net gain, if any, realized by such institution 
        or lender due to such action. For purposes of this subsection, 
        the `net gain' shall not exceed the amount realized by the 
        institution or lender on the sale of property less acquisition, 
        holding, and disposition costs.
            ``(3) Exclusion.--Notwithstanding paragraph (1), but 
        subject to the provisions of section 107(d), a lender that 
        caused or contributed to the release of a hazardous substance 
        may be liable for a response action pertaining to that release.
            ``(4) Definitions.--For purposes of this Act the following 
        definitions shall apply:
                    ``(A) Property acquired through foreclosure.--
                            ``(i) In general.--The term `property 
                        acquired through foreclosure' means property 
                        acquired, or the act of acquiring property, 
                        from a nonaffiliated party by a lender--
                                    ``(I) through purchase at sales 
                                under judgment or decree, power of 
                                sales, nonjudicial foreclosure sales, 
                                or from a trustee, deed in lieu of 
                                foreclosure, or similar conveyance, or 
                                through repossession, if such property 
                                was security for an extension of credit 
                                previously contracted;
                                    ``(II) through conveyance pursuant 
                                to an extension of credit previously 
                                contracted, including the termination 
                                of a lease agreement; or
                                    ``(III) through any other formal or 
                                informal manner by which the lender 
                                temporarily acquires, for subsequent 
                                disposition, possession of collateral 
                                in order to protect its interest.
                            ``(ii) Exclusion.--Property is not acquired 
                        through foreclosure if the lender does not seek 
                        to sell or otherwise divest such property at 
                        the earliest practical, commercially reasonable 
                        time, on commercially reasonable terms, taking 
                        into account market conditions and legal and 
                        regulatory requirements.
                    ``(B) Lender.--The term `lender' means--
                            ``(i) a person that makes a bona fide 
                        extension of credit to, or takes a security 
                        interest from, another party;
                            ``(ii) the Federal National Mortgage 
                        Association, the Federal Home Loan Mortgage 
                        Corporation, the Federal Agricultural Mortgage 
                        Corporation, or other entity that in a bona 
                        fide manner is engaged in the business of 
                        buying or selling loans or interests therein.
                            ``(iii) any person engaged in the business 
                        of insuring or guaranteeing against a default 
                        in the repayment of an extension of credit, or 
                        acting as a surety with respect to an extension 
                        of credit, to another party; and
                            ``(iv) any person regularly engaged in the 
                        business of providing title insurance who 
                        acquires the property as a result of assignment 
                        or conveyance in the course of underwriting 
                        claims and claims settlement.
                    ``(C) Extensions of credit.--The term `extension of 
                credit' includes a lease finance transaction--
                            ``(i) in which the lessor does not 
                        initially select the leased property and does 
                        not during the lease term control the daily 
                        operations or maintenance of the property; or
                            ``(ii) that conforms any regulations issued 
                        by the appropriate Federal banking agency (as 
                        defined in section 3 of the Federal Deposit 
                        Insurance Act) or the appropriate State banking 
                        regulatory authority.
                    ``(D) Foreclosure; foreclose.--The terms 
                `foreclosure' and `foreclose' mean, respectively, 
                acquiring, and to acquire, a vessel or facility 
                through--
                            ``(i) purchase at sale under a judgment or 
                        decree, a power of sale, a nonjudicial 
                        foreclosure sale, or from a trustee, deed in 
                        lieu of foreclosure, or similar conveyance, or 
                        through repossession, if such vessel or 
                        facility was security for an extension of 
                        credit previously contracted;
                            ``(ii) conveyance pursuant to an extension 
                        of credit previously contracted, including the 
                        termination of a lease agreement; or
                            ``(iii) any other formal or informal manner 
                        by which the person acquires, for subsequent 
                        disposition, possession of collateral in order 
                        to protect the security interest of the 
                        person.-
    ``(p) Savings Clause.--Nothing in this section shall--
            ``(1) affect the rights or immunities or other defenses 
        that are available under this Act or other applicable law to 
        any party subject to the provisions of this section;
            ``(2) be construed to create any liability for any party; 
        or
            ``(3) create a private right of action against any lender 
        or against any Federal agency that regulates lenders.''.

SEC. 3. INNOCENT LANDOWNER.

    Section 101(35) of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980 (42 U.S.C. 9601 (35)) is 
amended by redesignating subparagraphs (C) and (D) as subparagraphs (D) 
and (E), respectively, and inserting after subparagraph (B) the 
following:
                    ``(C)(i) A defendant who has acquired real property 
                shall have established a rebuttable presumption that he 
                has made all appropriate inquiry within the meaning of 
                subparagraph (B) if he establishes that, within 180 
                days prior to the time of acquisition, he conducted an 
                environmental site assessment of the real property 
                which meets the requirements of this subparagraph.
                    ``(ii) For purposes of this subparagraph, the term 
                `environmental site assessment' means an assessment of 
                the real property and surrounding areas to obtain 
                commonly known or reasonably ascertainable information 
                about the property and to assess the obviousness of 
the presence or likely presence of contamination at the real property, 
and which consists of each of the following elements:
                            ``(I) Interview of owners, operators, and 
                        occupants of the property to determine 
                        information regarding the potential for 
                        contamination there.
                            ``(II) Review of standard historical 
                        sources as necessary to determine previous uses 
                        and occupancies of the property since the 
                        property was first developed. For purposes of 
                        this subclause, the term `standard historical 
                        sources' means any of the following, providing 
                        they are reasonable ascertainable: recorded 
                        chain of title documents regarding the real 
                        property, including all deeds, easements, 
                        leases, restrictions, and covenants, aerial 
                        photographs, fire insurance maps, property tax 
                        files, USGS 7.5 minutes topographic maps, local 
                        street directories, building department 
                        records, zoning/land use records, and any other 
                        sources that are credible to a reasonable 
                        person and that identify past uses and 
                        occupancies of the property.
                            ``(III) Determination of the existence of 
                        recorded environmental cleanup liens against 
                        the real property which have arisen pursuant to 
                        Federal, State, or local statutes.
                            ``(IV) Review of reasonably ascertainable 
                        Federal, State, and local government records of 
                        sites or facilities that are likely to cause or 
                        contribute to contamination at the real 
                        property, including, as appropriate, 
                        investigation reports for such sites or 
                        facilities; records of activities likely to 
                        cause or contribute to contamination at the 
                        real property, including landfill and other 
                        disposal location records, underground storage 
                        tank records, hazardous waste handler and 
                        generator records and spill reporting records; 
                        and such other reasonable ascertainable 
                        Federal, State, and local government 
                        environmental records which reflect incidents 
                        or activities which are likely to cause or 
                        contribute to contamination at the real 
                        property.
                            ``(V) A visual site inspection of the real 
                        property and all facilities and improvements on 
                        the real property and a visual inspection of 
                        immediately adjacent properties, including an 
                        investigation of any hazardous substance use, 
                        storage, treatment, and disposal practices on 
                        the property.
                A record is considered to be `reasonably ascertainable' 
                for purposes of this clause if a copy or reasonable 
                facsimile of the record, or access to it, is obtainable 
                from the government agency by request (within 
                reasonable time and cost constraints) and the record is 
                practically reviewable.
                    ``(iii) No presumption shall arise under clause (i) 
                unless the defendant has maintained a complication of 
                the information reviewed in the course of the 
                environmental site assessment.
                    ``(iv) Notwithstanding any other provision of this 
                paragraph, if the environmental site assessment 
                discloses the presence of contamination at the real 
                property to be acquired, no presumption shall arise 
                under clause (i) with respect to such contamination 
                unless the defendant has taken reasonable steps, in 
                accordance with commonly available technology, existing 
                law, and generally acceptable engineering practices, as 
                may be necessary to confirm the absence of such 
                contamination.
                    ``(v) For the purposes of this paragraph, the term 
                `contamination' means an existing release, a past 
                release, or the material threat of a release of a 
                hazardous substance, other than de minimis conditions 
                that generally do not present a material risk of harm 
                to public health or welfare or the environment.''.

SEC. 4. LIMITATION OF LIABILITY UNDER SOLID WASTE DISPOSAL ACT.

    The Solid Waste Disposal Act (42 U.S.C. 6901 et seq.) is amended as 
follows:
            (1) By adding at the end of section 1004 the following 
        paragraph:
            ``(42) The terms `operator', `generator', and `transporter' 
        do not include a person who would not be an owner or operator 
        within the meaning of subparagraphs (E) and (F) of section 
        101(20) of the Comprehensive Environmental Response, 
        Compensation and Liability Act of 1980.''.
            (2) By adding at the end of section 9003(h)(9) the 
        following sentence: ``This definition shall be construed to be 
        parallel and comparable to that specified in section 101(20)(E) 
        of the Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980.''.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall become effective immediately 
upon enactment.
                                 <all>
HR 200 IH----2