[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3515 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3515

 To amend title 11, United States Code, to ensure that liable entities 
    meet environmental cleanup obligations, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 14, 2006

Ms. Cantwell (for herself, Mrs. Boxer, and Mr. Jeffords) introduced the 
 following bill; which was read twice and referred to the Committee on 
                      Environment and Public Works

_______________________________________________________________________

                                 A BILL


 
 To amend title 11, United States Code, to ensure that liable entities 
    meet environmental cleanup obligations, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Cleanup Assurance 
and Polluter Accountability Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definition of Administrator.
             TITLE I--REQUIREMENTS FOR FINANCIAL ASSURANCE

Sec. 101. Financial assurance directives.
Sec. 102. No effect on other law.
               TITLE II--RECOVERY OF COSTS IN BANKRUPTCY

Sec. 201. Extended period for review of transactions.
Sec. 202. Study and report by the National Bankruptcy Review 
                            Commission.
Sec. 203. No effect on other law.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the Environmental Protection Agency faces considerable 
        challenges when seeking to hold businesses responsible for 
        their environmental cleanup obligations because--
                    (A) the Comprehensive Environmental Response, 
                Compensation, and Liability Act of 1980 (42 U.S.C. 9601 
                et seq.) seeks to hold parties responsible for 
                environmental damage based on the principle of 
                ``polluter pays''; but
                    (B) in some cases, parties responsible for 
                environmental damage may file for bankruptcy protection 
                under title 11, United States Code, under which the 
                parties are often permitted to limit or avoid their 
                cleanup responsibilities;
            (2) the extent to which businesses with environmental 
        liabilities terminate operations and reorganize under title 11, 
        United States Code, directly affects the extent of cleanup 
        costs borne by taxpayers, as well as the timeliness of 
        remediation of contaminated sites;
            (3) according to an August 2005 Government Accountability 
        Office report, while more than 231,000 businesses operating in 
        the United States filed for bankruptcy protection between 1998 
        and 2003, it is not known how many of those businesses had 
        environmental liabilities because that information is not 
        adequately tracked;
            (4) the Environmental Protection Agency continues to lack 
        timely and complete information on the thousands of businesses 
        filing for bankruptcy protection each year;
            (5) contrary to the ``polluter pays'' principle, taxpayers 
        are more frequently covering the costs of environmental cleanup 
        because--
                    (A) potentially responsible businesses are no 
                longer taxed for that specific purpose; and
                    (B) the backlog of sites requiring costly cleanup 
                is growing;
            (6) as of the date on which this Act is introduced in the 
        Senate, there are 1,244 cleanup sites listed on the National 
        Priorities List developed by the President in accordance with 
        section 105(a)(8)(B) of the Comprehensive Environmental 
        Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
        9605(a)(8)(B));
            (7) pursuant to a congressionally requested study, the 
        organization entitled ``Resources for the Future'' determined 
        that, in 1999, the average cost to taxpayers of cleaning up a 
        site under the Comprehensive Environmental Response, 
        Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
        seq.) was $12,000,000;
            (8) consistent with the principle of ``polluter pays'', 
        polluters that are responsible for cleaning up contamination, 
        not ordinary taxpayers, should bear the costs of cleaning up a 
        site under that Act;
            (9) businesses commonly attempt to protect their assets 
        using a corporate structure that limits the liability of parent 
        corporations;
            (10) in some cases, assets are transferred between 
        corporate affiliates (such as parent and subsidiary 
        corporations) specifically for the purpose of shirking 
        environmental liabilities;
            (11) the Environmental Protection Agency should develop and 
        maintain the expertise--
                    (A) to prevent the asset transfers described in 
                paragraph (10); and
                    (B) to recover assets so transferred, to the 
                maximum extent feasible;
            (12) the Environmental Protection Agency has failed to 
        implement a statutory mandate enacted in 1980 to require proof 
        of ability to pay and financial assurances for potential 
        environmental cleanups from businesses handling hazardous 
        substances; and
            (13) by failing to comply with that mandate, the 
        Environmental Protection Agency continues to subject the 
        Superfund program under the Comprehensive Environmental 
        Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
        9601 et seq.) and taxpayers in the United States to the 
        obligation to pay enormous cleanup costs that should be borne 
        by the responsible parties.

SEC. 3. DEFINITION OF ADMINISTRATOR.

    In this Act, the term ``Administrator'' means the Administrator of 
the Environmental Protection Agency.

             TITLE I--REQUIREMENTS FOR FINANCIAL ASSURANCE

SEC. 101. FINANCIAL ASSURANCE DIRECTIVES.

    (a) Completion of Requirements.--
            (1) Definitions.--In this subsection, the terms 
        ``damages'', ``hazardous substance'', and ``response'' have the 
        meanings given those terms in section 101 of the Comprehensive 
        Environmental Response, Compensation, and Liability Act of 1980 
        (42 U.S.C. 9601).
            (2) Regulations and classes of facilities.--
                    (A) Statement of policy.--In 1980, Congress 
                directed the Administrator to promulgate financial 
                assurance requirements under section 108(b) of the 
                Comprehensive Environmental Response, Compensation, and 
                Liability Act (42 U.S.C. 9608(b)), but, as of the date 
                of enactment of this Act, the Administrator has failed 
                to promulgated those regulations.
                    (B) Regulations and classes.--The Administrator 
                shall--
                            (i) as soon as practicable after the date 
                        of enactment of this Act, but in no case later 
                        than 18 months after that date, finalize 
                        regulations under section 108(b) of the 
                        Comprehensive Environmental Response 
                        Compensation and Liability Act (42 U.S.C. 
                        9608(b));
                            (ii)(I) as soon as practicable after the 
                        date of enactment of this Act, but in no case 
                        later than 1 year after that date, publish in 
                        the Federal Register proposed financial 
                        assurance rules for the classes of facilities 
                        identified under clause (iii) that, as 
                        determined by the Administrator in accordance 
                        with the criteria under section 108(b)(1) of 
                        the Comprehensive Environmental Response, 
                        Compensation, and Liability Act of 1980 (42 
                        U.S.C. 9608(b)(1)), present the highest degree 
                        and duration of risk associated with the 
                        production, transportation, treatment, storage, 
                        or disposal of hazardous substances; and
                            (II) for each fiscal year thereafter, 
                        publish and promulgate additional proposed and 
                        final financial assurance rules for additional 
                        classes of facilities described in subclause 
                        (I), giving highest priority to classes of 
                        facilities that may contain sites at which 
                        unreimbursed response costs are greater than or 
                        equal to $12,000,000;
                            (iii) not later than 1 year after the date 
                        of enactment of this Act, submit to Congress a 
                        report that, at a minimum--
                                    (I) includes a list of not less 
                                than 5 classes of facilities that the 
                                Administrator determines have met the 
                                criteria identified in section 
                                108(b)(1) of the Comprehensive 
                                Environmental Response, Compensation, 
                                and Liability Act of 1980 (42 U.S.C. 
                                9608(b)(1)); and
                                    (II) includes a description 
                                (including the name, location, number, 
                                and costs) of response actions or 
                                potential response actions for which 
                                remaining unreimbursed response costs 
                                exist, or for which the Administrator 
                                reasonably anticipates there will be 
                                unreimbursed response actions carried 
                                out under the Comprehensive 
                                Environmental Response, Compensation, 
                                and Liability Act of 1980 (42 U.S.C. 
                                9601 et seq.) as of the date of the 
                                report; and
                            (iv) submit to Congress an annual update of 
                        the report required under clause (iii) that 
                        includes additional classes of facilities 
                        described in clause (iii)(I).
            (3) Notification of bankruptcy.--Each owner and operator of 
        a facility that is included in class of facilities regulated 
        under paragraph (2)(B) and that files for bankruptcy protection 
        under title 11, United States Code, shall submit to the 
        Administrator and the regional office of the Environmental 
        Protection Agency of the region in which the facility is 
        located a notification of the filing that includes--
                    (A) an estimate of environmental impacts (and the 
                costs of remediating the impacts) resulting from 
                activities at the facility; and
                    (B) a description of all current and former 
                corporate relationships of the facility (such as 
                parents, subsidiaries, partners, and affiliates), 
                including parents, subsidiaries, partners, and 
                affiliates located in other States or regions.
            (4) Risk of default.--In promulgating the regulations 
        described in paragraph (2)(B), the Administrator shall give 
        priority to the development of requirements relating to owners 
        and operators of facilities or industries whose prior actions 
        or practices indicate a high risk of default on environmental 
        liabilities.
    (b) Requirement of Financial Assurance.--
            (1) Financial assurance agreements.--
                    (A) Definition of affected person or entity.--In 
                this paragraph, the term ``affected person or entity'' 
                means--
                            (i) a person entering into a settlement 
                        agreement or consent decree under section 122 
                        of the Comprehensive Environmental Response, 
                        Compensation, and Liability Act of 1980 (42 
                        U.S.C. 9622) or the Solid Waste Disposal Act 
                        (42 U.S.C. 6901 et seq.); and
                            (ii) a treatment, storage, or disposal 
                        facility receiving a corrective action permit 
                        or order under section 3004(u) or 3008(h) of 
                        the Solid Waste Disposal Act (42 U.S.C. 
                        6924(u), 6928(h)).
                    (B) Requirement.--In addition to any other 
                applicable financial assurance requirements, the 
                Administrator shall require that each affected person 
                or entity shall--
                            (i) enter into a financial assurance 
                        agreement that reflects the degree and duration 
                        of risk associated with the production, 
                        transportation, treatment, storage, or disposal 
                        of hazardous substances with the Administrator 
                        as part of the final settlement agreement, 
                        consent decree, or other arrangement; and
                            (ii) provide at the time of issuance of a 
                        settlement agreement or consent decree 
                        described in subparagraph (A)(i), or a 
                        corrective action permit or order described in 
                        subparagraph (A)(ii), as applicable, such 
                        financial assurances as are required under 
                        applicable law and as may be needed to cover 
                        all potential response costs and damages.
            (2) Tracking of settlements.--For each fiscal year, the 
        Administrator shall track the number of settlements, consent 
        decrees, corrective action permits, and orders described in 
        paragraph (1)(A) (including those that are and are not 
        supported by financial assurances or otherwise in compliance 
        with paragraph (1)), including, with respect to those 
        settlements, consent decrees, corrective action permits, and 
        orders--
                    (A) the amount of any financial assurance relating 
                to such a settlement, consent decree, corrective action 
                permit, or order;
                    (B) the estimated value of any environmental 
                actions secured by the financial assurances;
                    (C) the name of each responsible party; and
                    (D) the name of each financial institution or other 
                entity providing the financial assurance, as 
                appropriate.
            (3) Criteria for acceptance of appropriate financial 
        assurance.--In determining whether to accept financial 
        assurances provided under paragraph (1), the Administrator 
        shall take into consideration--
                    (A) the level of financial risk to the Federal 
                Government if liable parties default on the obligations 
                of the parties;
                    (B) varying financial risks posed by financial 
                assurance mechanisms;
                    (C) any concerns about various forms of financial 
                assurance; and
                    (D) such other criteria as the Administrator 
                reasonably determines could affect the amount of 
                unreimbursed response costs of the Federal Government.
    (c) Full Use of Available Enforcement Tools.--In carrying out this 
section, the Administrator shall--
            (1) make full use of administrative offsets and liens on 
        assets for enforcement purposes, as appropriate; and
            (2) not later than 1 year after the date of enactment of 
        this Act, issue guidance for enforcement of the requirements of 
        this section relating to the use of administrative offsets and 
        asset liens.
    (d) Adjustment of Financial Test of Self-Insurance for Inflation.--
In using or authorizing the use of any financial test, the 
Administrator shall adjust upward, to account for changes since 1982 in 
the Consumer Price Index for all-urban consumers, United States city 
average, as published by the Bureau of Labor Statistics, the dollar 
amount of the tangible net worth requirement of the financial test of 
self-insurance accepted by the Administrator as a financial assurance 
mechanism from persons subject to regulation under this Act.

SEC. 102. NO EFFECT ON OTHER LAW.

    Nothing in this title limits any obligation of a person under the 
Comprehensive Environmental Response, Compensation, and Liability Act 
of 1980 (42 U.S.C. 9601 et seq.) or any other provision of law.

               TITLE II--RECOVERY OF COSTS IN BANKRUPTCY

SEC. 201. EXTENDED PERIOD FOR REVIEW OF TRANSACTIONS.

    Section 548 of title 11, United States Code, is amended by adding 
at the end the following:
    ``(f) The trustee may avoid any transfer of an interest of the 
debtor in an asset that was made during the 10-year period preceding 
the date of the filing of the petition, if--
            ``(1) the debtor had, on or after the date on which such 
        transfer was made, environmental liabilities under section 
        107(a) of the Comprehensive Environmental Response, 
        Compensation, and Liability Act of 1980 (42 U.S.C. 9607(a)); 
        and
            ``(2) the debtor made such transfer with actual intent to 
        hinder, delay, or defraud any person with respect to any such 
        liability under that Act (42 U.S.C. 9601 et seq.).''.

SEC. 202. STUDY AND REPORT BY THE NATIONAL BANKRUPTCY REVIEW 
              COMMISSION.

    (a) Study.--
            (1) Inconsistencies between bankruptcy and environmental 
        laws.--
                    (A) Action by administrator.--
                            (i) In general.--Not later than 1 year 
                        after the date of enactment of this Act, the 
                        Administrator, in consultation with the 
                        Department of Justice, shall submit to Congress 
                        a report that recommends methods to 
                        substantially strengthen the ability of the 
                        United States to secure assets needed to pay 
                        for response costs at sites contaminated with 
                        hazardous substances.
                            (ii) Public notice and comment.--The 
                        Administrator shall provide public notice and 
                        an opportunity for comment relating to the 
                        report under clause (i) for a period of not 
                        less than 60 days.
                    (B) Action by national bankruptcy review 
                commission.--The National Bankruptcy Review Commission 
                (referred to in this section as the ``Commission'') 
                shall reconvene and evaluate the interaction between 
                title 11, United States Code, and the Comprehensive 
                Environmental Response, Compensation, and Liability Act 
                of 1980 (42 U.S.C. 9601 et seq.), and specifically 
                recommend what actions could be taken, consistent with 
                the report submitted under subparagraph (A), to 
                substantially strengthen the ability of the United 
                States to secure assets needed to pay for response 
                costs at sites contaminated with hazardous substances 
                by addressing--
                            (i) the challenges that the Environmental 
                        Protection Agency faces when attempting to hold 
                        bankrupt and other financially distressed 
                        businesses responsible for their cleanup 
                        obligations; and
                            (ii) the fact that the nature of 
                        environmental damage and cleanup gives 
                        companies significant time to reorganize their 
                        business structures to maximize corporate 
                        benefits and minimize potential environmental 
                        liabilities.
            (2) Use of gao report.--In conducting the study under 
        paragraph (1)(B), the Commission shall take into consideration 
        the work of the Government Accountability Office in its August 
        2005 report on the subject of inconsistencies between title 11, 
        United States Code, and the Comprehensive Environmental 
        Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
        9601 et seq.).
    (b) Report.--
            (1) Timing.--Not later than 18 months after the date of 
        enactment of this Act, the Commission shall submit to Congress 
        a report on the results of the study conducted under this 
        section.
            (2) Content.--The report submitted under paragraph (1) 
        shall contain a detailed statement of the findings and 
        conclusions of the Commission, together with any 
        recommendations for methods to substantially strengthen the 
        ability of the United States to secure assets needed to pay for 
        response costs at sites contaminated with hazardous substances.
    (c) Other Authority.--In carrying out this section, the Commission 
may--
            (1) conduct public meetings at which testimony and other 
        evidence may be taken, the minutes of which shall be made 
        available upon request and payment of photocopying and mailing 
        expenses; and
            (2) obtain official data from any Federal agency, 
        department, or court necessary to the implementation of its 
        duties.
    (d) Authorization of Appropriations.--There is authorized to be 
made available to the Commission to carry out this section, $1,500,000, 
to remain available until expended.

SEC. 203. NO EFFECT ON OTHER LAW.

    Nothing in this title or any amendment made by this title limits 
any obligation of a person under any other provision of law.
                                 <all>