1.Short
title; table of contents
(a)This Act may be cited
as the Cleanup Assurance and Polluter
Accountability Act of 2007
or the
CAPA
.
(b)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.
2.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.
3.Definition of
AdministratorIn this Act, the
term Administrator means the Administrator of the Environmental
Protection Agency.
<enum>I</enum><header>Requirements for
Financial Assurance</header>
<section id="id372701F578064F65923DF2F8ED6369ED"><enum>101.</enum><header>Financial
assurance directives</header>
<subsection id="id7FE779AFF74440829D994F3D7D491887"><enum>(a)</enum><header>Completion of
requirements</header>
<paragraph id="id060BF2FE5BD44DDC9F69019A4D5DFD62"><enum>(1)</enum><header>Definitions</header><text>In
this subsection, the terms <term>damages</term>, <term>hazardous
substance</term>, and <term>response</term> 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).</text>
</paragraph><paragraph id="idF96EB5C7D13E4541BB0B3BFD99846EB4"><enum>(2)</enum><header>Regulations and
classes of facilities</header>
<subparagraph id="id2670BD787A9046848F936ED720BBFCBB"><enum>(A)</enum><header>Statement of
policy</header><text>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.</text>
</subparagraph><subparagraph id="id6D94909ECA094700802277146A0B576C"><enum>(B)</enum><header>Regulations and
classes</header><text>The Administrator shall—</text>
<clause id="id4BA59FE7CCEC4DAC97CC102509D595E6"><enum>(i)</enum><text>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));</text>
</clause><clause id="id87574390911A47C6A351FB85010504E7"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="id46424308BC494F8BB943BEF032BCA207"><enum>(I)</enum><text>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</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id74CF301610EA4DD5B0571A940131ACB8" indent="up1"><enum>(II)</enum><text>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;</text>
</subclause></clause><clause id="id210DC3075E154D64B54F6BFC2283EC86"><enum>(iii)</enum><text>not later than
1 year after the date of enactment of this Act, submit to Congress a report
that, at a minimum—</text>
<subclause id="idE1CD1870C89C4AFD8E7FA1F3CC7D27A2"><enum>(I)</enum><text>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</text>
</subclause><subclause id="id5A47FC38D9674C7E941E6BA8B08C6F9F"><enum>(II)</enum><text>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</text>
</subclause></clause><clause id="id77F82F8064DF4D88AEA128DF80DB1528"><enum>(iv)</enum><text>submit to
Congress an annual update of the report required under clause (iii) that
includes additional classes of facilities described in clause (iii)(I).</text>
</clause></subparagraph></paragraph><paragraph id="id2E6E728AEA2F49C2964CCED1427C32AB"><enum>(3)</enum><header>Notification of
bankruptcy</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="id767950ADED1E4BCDB0C6D80F6F732993"><enum>(A)</enum><text display-inline="yes-display-inline">an estimate of environmental impacts (and
the costs of remediating the impacts) resulting from activities at the
facility; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id34E0D35FFD434F6F94C6DC57FCC3CA13"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text>
</subparagraph></paragraph><paragraph id="idE0F6F4B4920442EEA4AEE58991F55907"><enum>(4)</enum><header>Risk of
default</header><text>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.</text>
</paragraph></subsection><subsection id="id3FF68758E47D4D68827523A8A207B407"><enum>(b)</enum><header>Requirement of
financial assurance</header>
<paragraph id="id1DCEE03F723C40FA94AD6CC9C65BDC0B"><enum>(1)</enum><header>Financial
assurance agreements</header>
<subparagraph id="idBCB2A726EF8641DFB9F82267C7C51F12"><enum>(A)</enum><header>Definition of
affected person or entity</header><text>In this paragraph, the term
<term>affected person or entity</term> means—</text>
<clause id="id1792D7314C6F420D894959588FED6442"><enum>(i)</enum><text>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</text>
</clause><clause id="id882D3D04F82A4212BDA8B2A2857DF4AE"><enum>(ii)</enum><text>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)).</text>
</clause></subparagraph><subparagraph id="id78471C48F2864C65941A61EE88B9C603"><enum>(B)</enum><header>Requirement</header><text>In
addition to any other applicable financial assurance requirements, the
Administrator shall require that each affected person or entity shall—</text>
<clause id="id6ED5E72C6D6F4D1FA275E49F58E2AA5D"><enum>(i)</enum><text>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</text>
</clause><clause id="idCDC4FFD31DE247D3B8B6293B4634D484"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="id449B7F55D29B4F179BF0EC52E49B3232"><enum>(2)</enum><header>Tracking of
settlements</header><text>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—</text>
<subparagraph id="id7778F6C0F75447FDA7D3EEC2384CD672"><enum>(A)</enum><text>the amount of any
financial assurance relating to such a settlement, consent decree, corrective
action permit, or order;</text>
</subparagraph><subparagraph id="id7122C08B087A4EF99DA834EDD3C3BC65"><enum>(B)</enum><text>the estimated
value of any environmental actions secured by the financial assurances;</text>
</subparagraph><subparagraph id="idBF7DAC076A79485DB2C06A29BB17C5FC"><enum>(C)</enum><text>the name of each
responsible party; and</text>
</subparagraph><subparagraph id="id8A934927685A41D79C7DB3C95EE85F1E"><enum>(D)</enum><text>the name of each
financial institution or other entity providing the financial assurance, as
appropriate.</text>
</subparagraph></paragraph><paragraph id="id272D9E513F2A4869B106931FA14C73B7"><enum>(3)</enum><header>Criteria for
acceptance of appropriate financial assurance</header><text>In determining
whether to accept financial assurances provided under paragraph (1), the
Administrator shall take into consideration—</text>
<subparagraph id="id968AA1966A164608B3B87EE6436369B3"><enum>(A)</enum><text>the level of
financial risk to the Federal Government if liable parties default on the
obligations of the parties;</text>
</subparagraph><subparagraph id="idF301A1ED973A4D84A0F187B3B857876C"><enum>(B)</enum><text>varying financial
risks posed by financial assurance mechanisms;</text>
</subparagraph><subparagraph id="idFCF5A2A9B21546A59B4EB1B0D4F4F231"><enum>(C)</enum><text>any concerns
about various forms of financial assurance; and</text>
</subparagraph><subparagraph id="id6CDE0B613D44467AA88A71023ED0A45C"><enum>(D)</enum><text>such other
criteria as the Administrator reasonably determines could affect the amount of
unreimbursed response costs of the Federal Government.</text>
</subparagraph></paragraph></subsection><subsection id="idF91226E611674A31A9E34AA7DD0325B3"><enum>(c)</enum><header>Full use of
available enforcement tools</header><text>In carrying out this section, the
Administrator shall—</text>
<paragraph id="id2247662183AE404AA705D79E96C268CA"><enum>(1)</enum><text>make full use of
administrative offsets and liens on assets for enforcement purposes, as
appropriate; and</text>
</paragraph><paragraph id="id0705CD5E39B1497CA3614F8527B1DE4F"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="id7B9E787FF18B4E0BB5F476CF2BF88878"><enum>(d)</enum><header>Adjustment of
financial test of self-insurance for inflation</header><text>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.</text>
</subsection></section><section id="id9662CAF5C7A047FB873A5A4798634D61"><enum>102.</enum><header>No effect on
other law</header><text display-inline="no-display-inline">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.</text>
</section><enum>II</enum><header>Recovery of
Costs in Bankruptcy</header>
<section id="idFC2C99B7351C4C73A5AE0CD508C581E3"><enum>201.</enum><header>Extended
period for review of transactions</header><text display-inline="no-display-inline">Section 548 of title 11, United States Code,
is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="idB046F5F1B77B433F9D817B3227FD7840" style="USC">
<subsection id="idC778BF3F79244B7AA23BA7D9F5815994"><enum>(f)</enum><text>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—</text>
<paragraph id="IDaea55b4a4f9b4dbaa392bff6183c9a1c"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="IDcb31aeacd7c04db8844852ba0c65af8d"><enum>(2)</enum><text>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.).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="id2B992E952F0C4523BB795AC25A1DF094"><enum>202.</enum><header>Study and
report by the National Bankruptcy Review Commission</header>
<subsection id="idEEDA7C7DACD7412D8F468DA4627DE82C"><enum>(a)</enum><header>Study</header>
<paragraph id="idBFE44129BDBA4F08822A0EA737507F6A"><enum>(1)</enum><header>Inconsistencies
between bankruptcy and environmental laws</header>
<subparagraph id="id53570EEE3DE84BDDBB5CBD332A547444"><enum>(A)</enum><header>Action by
Administrator</header>
<clause id="idBE150DF5B6E94CAA91DEC85DFF4124F3"><enum>(i)</enum><header>In
general</header><text>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.</text>
</clause><clause id="id7CF0AEE52C88492CB8366E344BBB82D5"><enum>(ii)</enum><header>Public notice
and comment</header><text>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.</text>
</clause></subparagraph><subparagraph id="id652DFF44F84C4A818D9CDD7CDFB59512"><enum>(B)</enum><header>Action by
National Bankruptcy Review Commission</header><text>The National Bankruptcy
Review Commission (referred to in this section as the <term>Commission</term>)
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—</text>
<clause id="ID2d458f503c03460080c54a914fc37b6c"><enum>(i)</enum><text>the
challenges that the Environmental Protection Agency faces when attempting to
hold bankrupt and other financially distressed businesses responsible for their
cleanup obligations; and</text>
</clause><clause id="id13F2E36FA1C04910891DCF36A9691ED4"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="id232B479FBFD647179DDC995AA0F448B1"><enum>(2)</enum><header>Use of GAO
report</header><text>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.).</text>
</paragraph></subsection><subsection id="IDb4b2aaa90e374d089a2a823091ac8330"><enum>(b)</enum><header>Report</header>
<paragraph id="idC60C80B5A3C64B0099D2458DFBDE8AF4"><enum>(1)</enum><header>Timing</header><text>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.</text>
</paragraph><paragraph id="id40F3349DD6AA409DA2942B0AA2650926"><enum>(2)</enum><header>Content</header><text>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.</text>
</paragraph></subsection><subsection id="id0C304AC10DB44340805F6047854BF4C3"><enum>(c)</enum><header>Other
authority</header><text>In carrying out this section, the Commission
may—</text>
<paragraph id="idFAA0982080EB49E69137F3EEFC4F5088"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="IDd3b6b3b3f03246259e59e207ad1b2a1a"><enum>(2)</enum><text>obtain official
data from any Federal agency, department, or court necessary to the
implementation of its duties.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id7CB84E93A2E4409C8F062607BAA2A1A3"><enum>(d)</enum><header>Authorization
of appropriations</header><text>There is authorized to be made available to the
Commission to carry out this section, $1,500,000, to remain available until
expended.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idD310E8A9128A4D86B4C769376FE25C05" section-type="subsequent-section"><enum>203.</enum><header>No effect on other
law</header><text display-inline="no-display-inline">Nothing in this title or
any amendment made by this title limits any obligation of a person under any
other provision of law.</text>
</section>