[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 544 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 544

To protect financial institutions from liability for damages caused by 
failure to remove asbestos from a residential or commercial building in 
    which the financial institution holds a security interest if an 
    accredited asbestos management planner has recommended in-place 
          management of the asbestos, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 17, 1995

 Mr. Schumer introduced the following bill; which was referred to the 
 Committee on Banking and Financial Services and, in addition, to the 
 Committee on Commerce, 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 protect financial institutions from liability for damages caused by 
failure to remove asbestos from a residential or commercial building in 
    which the financial institution holds a security interest if an 
    accredited asbestos management planner has recommended in-place 
          management of the asbestos, 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 ``Asbestos Management Incentive Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Although asbestos is hazardous, the risk of asbestos-
        related disease depends upon exposure to airborne asbestos 
        fibers.
            (2) Data available to the Environmental Protection Agency 
        suggest that average airborne asbestos levels in buildings are 
        very low. Accordingly, the health risk to most building 
        occupants also appears to be very low.
            (3) The Environmental Protection Agency has estimated that 
        only 20 percent of all buildings (including public and 
        commercial buildings, residential apartment buildings of 10 
        units or more, and Federal buildings) contain friable asbestos-
        containing material.
            (4) The Environmental Protection Agency has found that 
        removal of asbestos is often not the best course of action to 
        reduce asbestos exposure. In fact, by releasing asbestos-
        containing material fibers into the air, an improper or 
        unnecessary removal can create a dangerous situation where none 
        previously existed and could result in a net increase in human 
        exposures and risks.
            (5) The Environmental Protection Agency requires asbestos 
        removal only to prevent significant public exposure to airborne 
        asbestos fibers during building demolition or renovation 
        activities.
            (6) Many lending institutions require the removal of 
        asbestos, regardless of its condition, from commercial 
        buildings before approving loans secured by those buildings 
        because of the potential liability for the health of the 
        occupants or property damages for failure to remove the 
        asbestos.
            (7) The Environmental Protection Agency recommends a pro-
        active, in-place management program whenever intact asbestos-
        containing material is discovered.
            (8) The American Medical Association's Council on 
        Scientific Affairs has stated that ``it is better that society 
        use its limited financial resources in learning how to live 
        safely with [asbestos] than in attempting to remove it totally 
        from the environment.''
            (9) The September 1991 report of the Health Effects 
        Institute's Asbestos Literature Review Panel stated that 
        ``there does not appear to be sufficient risk to the health of 
        general occupants to justify arbitrarily removing intact 
        asbestos-containing material from well-maintained buildings''. 
        The report also acknowledged that ``because custodial and 
        maintenance workers may be transiently exposed to higher levels 
        of asbestos, their added life-time risk of cancer may be 
        appreciably higher.''

SEC. 3. EFFECT OF ASBESTOS INSPECTION ON LENDING INSTITUTIONS.

    (a) Liability Immunity.--A lending institution that makes a loan or 
other extension of credit secured by a mortgage or other lien on a 
commercial building shall not be liable, from the time the loan or 
other extension of credit is made until it is renegotiated or a 
superseding loan or other extension of credit is made, under any 
Federal, State, or local law to any person for injuries, costs, 
damages, expenses, loss, or other obligation (including claims for 
indemnification or contribution and claims by third parties for death, 
personal injury, illness or loss of or damage to property or economic 
loss) which results from the presence of asbestos-containing material 
in the building in any case in which--
            (1) the building was constructed during the 5-year period 
        ending on the date that the loan or other extension of credit 
        is made, and the building's construction manager certifies that 
        the building contains no asbestos-containing material; or
            (2) the building--
                    (A) is one for which an asbestos inspection was 
                conducted in accordance with section 6 after January 1, 
                1989, and during the 5-year period ending on the date 
                that the loan or other extension of credit is made (as 
                demonstrated by appropriate documentation);
                    (B) has not been significantly rebuilt or renovated 
                in the area that contains asbestos-containing material 
                since that inspection was completed;
                    (C) is one in which that portion of asbestos-
                containing material which the management planner 
                recommended for removal has been removed in accordance 
                with the Occupational Safety and Health Act and the 
                regulations promulgated pursuant to section 7(a); and
                    (D) is one in which an operations and maintenance 
                program is currently being conducted in accordance with 
                section 8 and the regulations promulgated pursuant to 
                section 7(a) for remaining asbestos-containing 
                materials which the management planner recommended be 
                handled in place.
    (b) Limitation.--The immunity from liability provided in subsection 
(a) shall not apply if--
            (1) the lending institution requires removal of asbestos-
        containing material that the management planner has recommended 
        be handled in place; or
            (2) the lending institution requires an asbestos inspection 
        of the building despite the fact that--
                    (A) the loan applicant demonstrates, with 
                appropriate documentation, that the conditions in 
                subsection (a)(1) or (a)(2) have been satisfied; or
                    (B) the loan applicant demonstrates, with 
                appropriate documentation, that all asbestos-containing 
                material has been removed from the building.
    (c) Exclusion.--The immunity from liability provided in subsection 
(a) shall not apply to a subsidiary of a lending institution in any 
case in which the lending institution makes a loan or other extension 
of credit secured by a mortgage or other lien on a commercial building, 
and the subsidiary is the person to which the loan or other extension 
of credit is made. For purposes of this subsection, the term 
``subsidiary'' means any company that is owned or controlled, directly 
or indirectly, by a lending institution.
    (d) Effective Date.--This section shall take effect upon the 
promulgation of regulations by the Administrator of the Environmental 
Protection Agency pursuant to section 7(a).

SEC. 4. LIABILITY IN THE EVENT OF FORECLOSURE.

    In the case of a lending institution that is immune from liability 
with respect to a commercial building under section 3 and acquires 
title to such building through foreclosure or other exercise of rights 
under a security interest, the immunity from liability shall continue 
in effect so long as the lending institution maintains the operations 
and maintenance program for the building in accordance with the 
regulations promulgated pursuant to section 7(a), the Environmental 
Protection Agency asbestos guidance documents, and this Act.

SEC. 5. CONSTRUCTION OF ACT.

    The requirement by a lending institution that a loan applicant 
conduct an asbestos inspection in accordance with this Act of a 
building to be secured by a loan, and the conducting of an operations 
and maintenance program in the building after foreclosure or other 
exercise of rights under a security interest, shall not be construed as 
participation in the management of the building by the lending 
institution and shall be considered to be an activity carried out by 
the lending institution solely to protect the institution's security 
interest.

SEC. 6. ASBESTOS INSPECTION REQUIREMENTS.

    (a) In General.--For purposes of this Act, an asbestos inspection 
of a commercial building, if the loan applicant chooses to obtain one, 
shall be conducted by a qualified management planner for the purpose of 
determining whether asbestos-containing material is present in the 
building. If an inspection reveals the presence of asbestos-containing 
material, the management planner shall recommend specific response 
actions for each individual area of the building where such material is 
found. The recommendations shall be made in accordance with the 
regulations promulgated pursuant to section 7(a) and with the 
Environmental Protection Agency asbestos guidance documents.
    (b) Management Planner Qualifications.--For purposes of this Act, a 
qualified management planner is a person who meets all of the following 
requirements:
            (1) The person must be accredited, pursuant to title II of 
        the Toxic Substances Control Act, as an inspector and 
        management planner for asbestos-containing material in a public 
        or commercial building.
            (2) The person must not own or control or be under the 
        control of (A) any entity which carries out response actions 
        for asbestos-containing material from buildings, (B) any owner 
        or manager of the building being inspected, or (C) any lending 
        institution making a loan or other extension of credit secured 
        by a mortgage or other lien on the building being inspected. 
        For purposes of this paragraph, a person controls an entity if 
        the person, directly or indirectly, owns any amount of the 
        voting stock or other type of ownership interest in the entity.
    (c) Accreditation of Management Planners for Public and Commercial 
Buildings.--Section 206 of the Toxic Substances Control Act (15 U.S.C. 
2646) is amended as follows:
            (1) Paragraph (2) of subsection (a) is amended by inserting 
        before the comma the following: ``or for a public or commercial 
        building''.
            (2) Clause (ii) of subsection (a)(1)(A) is amended by 
        inserting before the period the following: ``or for public or 
        commercial buildings''.

SEC. 7. ENVIRONMENTAL PROTECTION AGENCY REQUIREMENTS.

    (a) Asbestos Inspection and Management Standards for Public and 
Commercial Buildings.--Not later than 1 year after the date of the 
enactment of this Act, the Administrator of the Environmental 
Protection Agency shall promulgate regulations governing the inspection 
and management of asbestos in public and commercial buildings for 
purposes of this Act only. The regulations shall include--
            (1) detailed guidelines for management planners to 
        determine whether asbestos-containing material should be 
        removed or managed in place in a public or commercial building;
            (2) appropriate practices for conducting operations and 
        maintenance programs in public or commercial buildings in which 
        asbestos-containing material is managed in place; and
            (3) standards, applicable to persons complying with section 
        8(1), for periodic surveillance of asbestos-containing material 
        that is managed in place in commercial buildings, including 
        standards for the training of maintenance and custodial staff 
        working in such buildings that are equivalent to the standards 
        for the training of maintenance and custodial staff of local 
        educational agencies under title II of the Toxic Substances 
        Control Act.
    (b) Revision of Environmental Protection Agency Asbestos Guidance 
Documents.--The Administrator of the Environmental Protection Agency 
shall periodically update, revise, and republish the Environmental 
Protection Agency asbestos guidance documents.

SEC. 8. OPERATION AND MAINTENANCE REQUIREMENTS.

    For purposes of section 3(a)(2)(D), the following requirements must 
be met after an asbestos inspection of the building concerned is 
conducted:
            (1) The owner or operator shall ensure that the remaining 
        asbestos-containing material is visually inspected, not less 
        frequently than every 6 months, by a member of the maintenance 
        or custodial staff, or another person, who has undergone 
        training in accordance with the standards contained in the 
        regulations promulgated pursuant to section 7(a)(4).
            (2) All remaining accessible asbestos-containing material 
        in public and maintenance areas of the building, including 
        asbestos in thermal system insulation and spray-on and 
        trowelled-on asbestos-containing material but excluding intact 
        vinyl floor tile and ceiling tile in public areas, shall be 
        prominently labeled. The owner or operator shall ensure that 
        access to any remaining asbestos-containing material located in 
        inaccessible areas, such as in spaces between floors or walls 
        of the building, is permitted only to persons who have been 
        notified of the presence of the asbestos-containing material.
            (3) After the inspection referred to in section 3(a)(2)(A), 
        a report on the inspection shall be kept on file in the 
        building. Such report shall include an accounting of remaining 
        asbestos-containing material, any such material recommended for 
        removal, and any removal that has taken place since the 
        previous inspection. Such report shall be available in the 
        building, in the administrative offices or other appropriate 
        place for inspection by tenants and employees in the building, 
        maintenance workers of the building, and building contractors. 
        The inspection report shall be updated after each subsequent 
        inspection pursuant to paragraph (1) and after any change in 
        condition of asbestos-containing material being managed in 
        place.
            (4) After each inspection pursuant to paragraph (1), the 
        owner of the building shall notify maintenance workers of the 
        building, either in writing or by posting notice, that an 
        inspection has occurred and that an inspection report is 
        available for inspection.

SEC. 9. RELATIONSHIP TO OTHER LAW.

    (a) Clean Air Act.--Nothing in this Act shall be construed or 
interpreted to preempt, supersede, or otherwise affect any requirement 
to remove asbestos from a building pursuant to section 112 of the Clean 
Air Act (42 U.S.C. 7412), as implemented through regulations known as 
the national emission standards for hazardous air pollutants (40 C.F.R. 
61).
    (b) Limited Requirements.--Nothing in this Act shall be construed 
or interpreted as a general requirement for inspections or operations 
and maintenance programs in public and commercial buildings. The 
requirements of sections 6, 7, and 8 are established solely to enable 
lending institutions to satisfy the conditions of this Act for purposes 
of obtaining immunity from liability under section 3.

SEC. 10. DEFINITIONS.

    For purposes of this Act, the following definitions apply:
            (1) The term ``asbestos-containing material'' has the 
        meaning given that term by section 202(4) of the Toxic 
        Substances Control Act (15 U.S.C. 2642(4)).
            (2) The term ``commercial building'' means any building 
        that is not a publicly owned building and that is not a school 
        building as defined in section 202(13) of the Toxic Substances 
        Control Act, except that such term does not include any 
        residential building of fewer than 10 units that is not part of 
        a complex of other residential buildings under common 
        ownership.
            (3) The term ``EPA asbestos guidance documents'' means--
                    (A) the most current version of the publication of 
                the Environmental Protection Agency titled ``Guidance 
                for Controlling Asbestos-Containing Materials in 
                Buildings'' (also known as the ``Purple Book'');
                    (B) the most current version of the publication of 
                the Environmental Protection Agency titled ``Managing 
                Asbestos in Place'' (also known as the ``Green Book''); 
                and
                    (C) any other publication of the Environmental 
                Protection Agency, including any guidance documents 
                published pursuant to section 7(a), published for the 
                purpose of enabling building owners to select and apply 
                appropriate asbestos control and abatement actions in 
                their buildings.
            (4) The term ``lending institution'' means (A) a bank, 
        savings and loan association, credit union, or similar 
        institution insured by, or subject to the supervision, 
        approval, or regulation of, the Board of Governors of the 
        Federal Reserve System, the Federal Deposit Insurance 
        Corporation, the Comptroller of the Currency, the Office of 
        Thrift Supervision, or the National Credit Union 
        Administration; (B) any other person, including an insurance 
        company, that makes direct loans or other extensions of credit 
        secured by mortgages or other liens on commercial buildings; 
        (C) any Federal agency to the extent the agency makes direct 
        loans or other extensions of credit secured by mortgages or 
        other liens on commercial buildings; and (D) the Federal 
        Deposit Insurance Corporation, the National Credit Union 
        Administrator Board, and the Resolution Trust Corporation, in 
        such corporation's or Board's capability as conservator, 
        receiver, or liquidating agency for any insured depository 
        institution (as that term is defined in section 3 of the 
        Federal Deposit Insurance Act). The term does not include any 
        institution or Federal agency engaged primarily in the purchase 
        of mortgage loans.
            (5) The term ``mortgage'' means a lien as is commonly given 
        to secure advances on, or the unpaid purchase price of, a 
        commercial building (and related real estate) under the laws of 
        the State in which the building is located, together with the 
        credit instrument, if any, secured thereby. The term includes 
        second mortgages and other subsequent liens on a commercial 
        building given to secure advances or loans.
            (6) The term ``response action'' has the meaning given that 
        term by section 202(11) of the Toxic Substances Control Act (15 
        U.S.C. 2642(11)).
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HR 544 IH----2