[Congressional Record Volume 141, Number 154 (Friday, September 29, 1995)]
[Senate]
[Pages S14711-S14751]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. SMITH (for himself, Mr. Chaffee, Mr. Inhofe, Mr. 
        Kempthorne, Mr. Faircloth, Mr. Bond, Mr. Thomas, Mr. McConnell, 
        Mr. Warner, Mr. Lott, and Mr. Gregg):
  S. 1285. A bill to reauthorize and amend the Comprehensive 
Environmental Recovery, Compensation, and Liability Act of 1980, and 
for other purposes; to the Committee on Environment and Public Works.


   the accelerated cleanup and environmental restoration act of 1995

  Mr. SMITH. Mr. President, when the Superfund Program was enacted in 
1980, it was expected that only a few hundred sites would need to be 
cleaned up, at a relatively modest cost. Today, we know those 
expectations were misguided. There are more than 1,300 sites on the 
national priorities list, and the EPA has been adding an average of 30-
40 new sites per year. To date, the construction of long-term cleanup 
remedies have been completed at fewer than 300 contaminated sites.
  The Superfund saga has been running now for 15 years. The cast 
includes a bewildering mix of lawyers, bureaucrats, insurers, small 
business owners, polluters and others trapped in a tangled web of 
retroactive, joint, strict and several liability. The Superfund story 
is one of good intentions gone bad while a Government program ran amok.
  I am here today to announce that this sorry show will be coming to an 
end, soon. My goal this year has been nothing short of a comprehensive, 
common sense reform of the Superfund Program.
  The Subcommittee on Superfund, Waste Control, and Risk Assessment, 
which I chair, held 7 hearings and received testimony from more than 60 
witnesses in an effort to formally incorporate a wide variety of views 
on the issue of Superfund reform. On June 28, I released a detailed 
outline of a Superfund reform plan and asked for comments from 
interested parties. I received more than 150 constructive comments and 
suggestions.
  The bill I am introducing today with Senators Chafee, Bond, Inhofe, 
Thomas, Kempthorne, Faircloth, Lott, McConnell, Warner and Gregg 
respond to the broad-based concerns and problems with the Superfund 
Program. The Accelerated Cleanup and Environmental Restoration Act will 
do just what the title says. The legislation will accelerate the pace 
of cleanups by reducing cleanup costs, reducing litigation costs, and 
providing economic incentives for PRPs to stay on site and get the job 
done.
  The legislation will establish a fair, cost-effective and balanced 
approach to cleaning up hazardous waste sites and returning them to 
productive use.
  Mr. President, I ask unanimous consent that a title-by-title summary 
of legislation be printed in the Record.
  Mr. President, I ask unanimous consent that a copy legislation be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1285

       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 
     ``Accelerated Cleanup and Environmental Restoration Act of 
     1995''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                    TITLE I--COMMUNITY PARTICIPATION

Sec. 101. Community response organizations; technical assistance 
              grants; improvement of public participation in the 
              Superfund decisionmaking process.

                          TITLE II--STATE ROLE

Sec. 201. Delegation to the States of authorities with respect to 
              national priorities list facilities.

                      TITLE III--VOLUNTARY CLEANUP

Sec. 301. Assistance for qualifying State voluntary response programs.
Sec. 302. Brownfield cleanup assistance.
Sec. 303. Treatment of security interest holders and fiduciaries as 
              owners or operators.
Sec. 304. Federal Deposit Insurance Act amendment.
Sec. 305. Contiguous properties.
Sec. 306. Prospective purchasers and windfall liens.
Sec. 307. Safe harbor innocent landholders.

                TITLE IV--SELECTION OF REMEDIAL ACTIONS

Sec. 401. Definitions.
Sec. 402. Selection and implementation of remedial actions.
Sec. 403. Remedy selection methodology.
Sec. 404. Remedy selection procedures.
Sec. 405. Completion of remedial action and delisting.
Sec. 406. Transition rules for facilities currently involved in remedy 
              selection.
Sec. 407. Judicial review.
Sec. 408. National priorities list.

                     TITLE V--LIABILITY ALLOCATIONS

Sec. 501. Allocation of liability for multiparty facilities.
Sec. 502. Liability of response action contractors.
Sec. 503. Release of evidence.
Sec. 504. Contribution protection.
Sec. 505. Treatment of religious, charitable, scientific, and 
              educational organizations as owners or operators.
Sec. 506. Common carriers.
Sec. 507. Limitation on liability for response costs.

                      TITLE VI--FEDERAL FACILITIES

Sec. 601. Transfer of authorities.
Sec. 602. Department of Energy environmental cleanup requirements.
Sec. 603. Innovative technologies for remedial action at Federal 
              facilities.
Sec. 604. Federal facility listing.
Sec. 605. Federal facility listing deferral.
Sec. 606. Transfers of uncontaminated property.

                  TITLE VII--NATURAL RESOURCE DAMAGES

Sec. 701. Restoration of natural resources.
Sec. 702. Assessment of damages.
Sec. 703. Consistency between response actions and resource restoration 
              standards and alternatives.
Sec. 704. Miscellaneous amendments.

                       TITLE VIII--MISCELLANEOUS

Sec. 801. Result-oriented cleanups.
Sec. 802. National priorities list.
Sec. 803. Obligations from the fund for response actions.
Sec. 804. Remediation waste.

                           TITLE IX--FUNDING

                     Subtitle A--General Provisions

Sec. 901. Authorization of appropriations from the fund.
Sec. 902. Orphan share funding.
Sec. 903. Department of Health and Human Services.
Sec. 904. Limitations on research, development, and demonstration 
              programs.
Sec. 905. Authorization of appropriations from general revenues.
Sec. 906. Additional limitations.
Sec. 907. Reimbursement of potentially responsible parties.
                    TITLE I--COMMUNITY PARTICIPATION

     SEC. 101. COMMUNITY RESPONSE ORGANIZATIONS; TECHNICAL 
                   ASSISTANCE GRANTS; IMPROVEMENT OF PUBLIC 
                   PARTICIPATION IN THE SUPERFUND DECISIONMAKING 
                   PROCESS.

       (a) Amendment.--Section 117 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9617) is amended by striking subsection (e) 
     and inserting the following:
       ``(e) Community Response Organizations.--
       ``(1) Establishment.--The Administrator shall create a 
     community response organization for a facility--
       ``(A) if the Administrator determines that a representative 
     public forum will be helpful in promoting direct, regular, 
     and meaningful consultation among persons interested in 
     remedial action at a facility; or
       ``(B) at the request of--
       ``(i) 50 individuals residing in, or at least 20 percent of 
     the population of, the area in which the facility is located;
       ``(ii) a representative group of the potentially 
     responsible parties; or
       ``(iii) any local governmental entity with jurisdiction 
     over the facility.
       ``(2) Responsibilities.--A community response organization 
     shall--
       ``(A) solicit the views of the local community on various 
     issues affecting the development and implementation of 
     remedial actions at the facility;

[[Page S 14712]]

       ``(B) serve as a conduit of information to and from the 
     community to appropriate Federal, State, and local agencies 
     and potentially responsible parties; and
       ``(C) serve as a representative of the local community 
     during the remedial action planning and implementation 
     process.
       ``(3) Consultation.--The Administrator shall consult with a 
     community response organization in the preparation of a 
     remedial action plan for a facility.
       ``(4) Access to documents.--The Administrator shall provide 
     a community response organization access to documents in 
     possession of the Federal Government regarding response 
     actions at the facility that do not relate to liability and 
     are not protected from disclosure as confidential business 
     information.
       ``(5) Participation by epa, the state, and potentially 
     responsible parties.--Representatives of the Administrator, 
     the State, and the potentially responsible parties shall be 
     given reasonable notice and opportunity to participate in the 
     community response organization activities and meetings and 
     shall periodically report to the community response 
     organization on preparation of the remedial action plan.
       ``(6) Community response organization input.--
       ``(A) Communication of information; solicitation of 
     views.--The Administrator, (and if the remedial action plan 
     is being prepared or implemented by a party other than the 
     Administrator, the other party) shall keep the community 
     response organization informed of progress and solicit the 
     views of the community response organization during 
     development and implementation of the remedial action plan.
       ``(B) Timely submission of comments.--The community 
     response organization shall provide its comments, 
     information, and recommendations in a timely manner to the 
     Administrator (and other party).
       ``(C) Consensus.--The community response organization shall 
     attempt to achieve consensus among its members before 
     providing comments and recommendations to the Administrator 
     (and other party), but if consensus cannot be reached, the 
     community response organization shall report or allow 
     presentation of divergent views.
       ``(7) Technical assistance grants.--
       ``(A) Preferred recipient.--If a community response 
     organization exists for a facility, the community response 
     organization shall be the preferred recipient of a technical 
     assistance grant under subsection (f).
       ``(B) Prior award.--A technical assistance grant concerning 
     a facility has been awarded prior to establishment of a 
     community response organization--
       ``(i) the recipient of the grant shall coordinate its 
     activities and share information and technical expertise with 
     the community response organization; and
       ``(ii) 1 person representing the grant recipient shall 
     serve on the community response organization.
       ``(8) Membership.--
       ``(A) Number.--The Administrator shall select not less than 
     15 nor more than 20 persons to serve on a community response 
     organization.
       ``(B) Notice.--Before selecting members of the community 
     response organization, the Administrator shall provide a 
     notice of intent to establish a community response 
     organization to persons who reside in the local community.
       ``(C) Represented groups.--The Administrator shall select 
     members of the community response organization from each of 
     the following groups of persons:
       ``(i) Persons who reside or own residential property near 
     the facility;
       ``(ii) Persons who, although they may not reside or own 
     property near the facility, may be adversely affected by a 
     release from the facility.
       ``(iii) Persons who are members of the local public health 
     or medical community and actively practicing in the 
     community.
       ``(iv) Representatives of local Indian tribes or Indian 
     communities, if such tribes or communities may be adversely 
     affected.
       ``(v) Local representatives of citizen, environmental, or 
     public interest groups with members residing in the 
     community.
       ``(vi) Representatives of local governments, such as city 
     or county governments, or both, and any other governmental 
     unit that regulates land use or land use planning in the 
     vicinity of the facility.
       ``(vii) Workers employed at the facility during facility 
     operation, if readily available.
       ``(viii) The owner or operator of the facility and other 
     potentially responsible parties who represent, if 
     practicable, a balance of such parties' interests.
       ``(ix) Members of the local business community.
       ``(D) Proportion.--Local residents shall comprise not less 
     than 60 percent of the membership of a community response 
     organization.
       ``(E) Pay.--Members of a community response organization 
     shall serve without pay.
       ``(9) Participation by government representatives.--
     Representatives of the Administrator, the Administrator of 
     the Agency for Toxic Substances and Disease Registry, and the 
     State, as appropriate, shall participate in community 
     response organization meetings to provide information and 
     technical expertise, but shall not be members of the 
     community response organization.
       ``(10) Administrative support.--The Administrator shall 
     provide administrative services and meeting facilities for 
     community response organizations.
       ``(11) Faca.--The Federal Advisory Committee Act (5 U.S.C. 
     App.) shall not apply to a community response organization.
       ``(f) Technical Assistance Grants.--
       ``(1) Definitions.--In this subsection:
       ``(A) Affected citizen group.--The term `affected citizen 
     group' means a group of 2 or more individuals who may be 
     affected by the release or threatened release of a hazardous 
     substance, pollutant, or contaminant at any facility on the 
     State Registry or the National Priorities List.
       ``(B) Technical assistance grant.--The term `technical 
     assistance grant' means a grant made under paragraph (2).
       ``(2) Authority.--
       ``(A) In general.--In accordance with a regulation issued 
     by the Administrator, the Administrator may make grants 
     available to affected citizen groups.
       ``(B) Availability of application process.--To ensure that 
     the application process for a technical assistance grant is 
     available to all affected citizen groups, the Administrator 
     shall periodically review the process and, based on the 
     review, implement appropriate changes to improve 
     availability.
       ``(3) Special rules.--
       ``(A) No matching contribution.--No matching contribution 
     shall be required for a technical assistance grant.
       ``(B) Availability in advance.--The Administrator shall 
     make all or a portion (but not less than $5,000 or 10 percent 
     of the grant amount, whichever is greater) of the grant 
     amount available to a grant recipient in advance of the total 
     expenditures to be covered by the grant.
       ``(4) Limit per facility.--
       ``(A) 1 grant per facility.--Not more than 1 technical 
     assistance grant may be made with respect to a single 
     facility, but the grant may be renewed to facilitate public 
     participation at all stages of response action.
       ``(B) Duration.--The Administrator shall set a limit by 
     regulation on the number of years for which a technical 
     assistance grant may be made available based on the duration, 
     type, and extent of response action at a facility.
       ``(5) Availability for facilities not yet listed.--Subject 
     to paragraph (6), 1 or more technical assistance grants shall 
     be made available to affected citizen groups in communities 
     containing facilities on the State Registry that have been 
     proposed for listing but are not yet listed on the National 
     Priorities List as of the date on which the grant is awarded.
       ``(6) Funding limit.--
       ``(A) Percentage of total appropriations.--Not more than 2 
     percent of the funds made available to carry out this Act for 
     a fiscal year may be used to make technical assistance 
     grants.
       ``(B) Allocation between listed and unlisted facilities.--
     Not more than the portion of funds equal to \1/8\ of the 
     total amount of funds used to make technical assistance 
     grants for a fiscal year may be used for technical assistance 
     grants with respect to facilities not listed on the National 
     Priorities List.
       ``(7) Funding amount.--
       ``(A) In general.--The amount of a technical assistance 
     grant may not exceed $50,000 for a single grant recipient.
       ``(B) Increase.--The Administrator may increase the amount 
     of a technical assistance grant, or renew a previous 
     technical assistance grant, up to an amount not exceeding 
     $100,000 to reflect the complexity of the response action, 
     the nature and extent of contamination at the facility, the 
     level of facility activity, projected total needs as 
     requested by the grant recipient, the size and diversity of 
     the affected citizen group, and the ability of the grant 
     recipient to identify and raise funds from other non-Federal 
     sources.
       ``(8) Use of technical assistance grants.--
       ``(A) Permitted use.--A technical assistance grant may be 
     used to obtain technical assistance in interpreting 
     information with regard to--
       ``(i) the nature of the hazardous substances located at a 
     facility;
       ``(ii) facility evaluation;
       ``(iii) a proposed remedial action plan and final remedial 
     design for a facility;
       ``(iv) response actions carried out at the facility; and
       ``(v) operation and maintenance activities at the facility.
       ``(B) Prohibited use.--A technical assistance grant may not 
     be used for the purpose of collecting field sampling data.
       ``(9) Grant guidelines.--
       ``(A) In general.--Not later than 90 days after the date of 
     enactment of this paragraph, the Administrator shall develop 
     and publish guidelines concerning the management of technical 
     assistance grants by grant recipients.
       ``(B) Hiring of experts.--A recipient of a technical 
     assistance grant shall hire technical experts and other 
     experts in accordance with the guidelines under subparagraph 
     (A).
       ``(g) Improvement of Public Participation in the Superfund 
     Decisionmaking Process.--
       ``(1) In general.--
       ``(A) Meetings and notice.--In order to provide an 
     opportunity for meaningful public participation in every 
     significant phase of response activities under this Act, the 
     Administrator shall provide the opportunity 

[[Page S 14713]]
     for, and publish notice of, public meetings before or during 
     performance of--
       ``(i) a facility evaluation, as appropriate;
       ``(ii) announcement of a proposed remedial action plan; and
       ``(iii) completion of a final remedial design.
       ``(B) Information.--A public meeting under subparagraph (A) 
     shall be designed to obtain information from the community, 
     and disseminate information to the community, with respect to 
     a facility concerning the Administrator's facility activities 
     and pending decisions.
       ``(2) Participants and subject.--The Administrator shall 
     provide reasonable notice of an opportunity for public 
     participation in meetings in which--
       ``(A) the participants include Federal officials (or State 
     officials, if the State is conducting response actions under 
     a delegated or authorized program or through facility 
     referral) with authority to make significant decisions 
     affecting a response action, and any other person (unless all 
     of such other persons are coregulators that are not 
     potentially responsible parties or are government 
     contractors); and
       ``(B) the subject of the meeting involves discussions 
     directly affecting--
       ``(i) a legally enforceable work plan document, or any 
     amendment to the document, for a removal, facility 
     evaluation, proposed remedial action plan, final remedial 
     design, or remedial action for a facility on the National 
     Priorities List; or
       ``(ii) the final record of information on which the 
     Administrator will base a hazard ranking system score for a 
     facility.
       ``(3) Limitation.--Nothing in this subsection shall be 
     construed--
       ``(A) to provide for public participation in or otherwise 
     affect any negotiation, meeting, or other discussion that 
     concerns only the potential liability or settlement of 
     potential liability of any person, whether prior to or 
     following the commencement of litigation or administrative 
     enforcement action;
       ``(B) to provide for public participation in or otherwise 
     affect any negotiation, meeting, or other discussion that is 
     attended only by representatives of the United States (or of 
     a department, agency, or instrumentality of the United 
     States) with attorneys representing the United States (or of 
     a department, agency, or instrumentality of the United 
     States); or
       ``(C) to waive, compromise, or affect any privilege that 
     may be applicable to a communication related to an activity 
     described in subparagraph (A) or (B).
       ``(4) Evaluation.--
       ``(A) In general.--To the extent practicable, before and 
     during the facility evaluation, the Administrator shall 
     solicit and evaluate concerns, interests, and information 
     from the community.
       ``(B) Procedure.--An evaluation under subparagraph (A) 
     shall include, as appropriate--
       ``(i) face-to-face community surveys to identify the 
     location of private drinking water wells, historic and 
     current or potential use of water, and other environmental 
     resources in the community;
       ``(ii) a public meeting;
       ``(iii) written responses to significant concerns; and
       ``(iv) other appropriate participatory activities.
       ``(5) Views and preferences.--
       ``(A) Solicitation.--During the facility evaluation study, 
     the Administrator shall solicit the views and preferences of 
     the community on the remediation and disposition of hazardous 
     substances or pollutants or contaminants at the facility.
       ``(B) Consideration.--The views and preferences of the 
     community shall be described in the facility evaluation study 
     and considered in the screening of remedial alternatives for 
     the facility.
       ``(6) Alternatives.--Members of the community may propose 
     remedial action alternatives, and the Administrator shall 
     consider such alternatives in the same manner as the 
     Administrator considers alternatives proposed by potentially 
     responsible parties.
       ``(7) Information.--
       ``(A) The community.--The Administrator, with the 
     assistance of the community response organization under 
     subsection (g) if there is one, shall provide information to 
     the community and seek comment from the community throughout 
     all significant phases of the response action at the 
     facility.
       ``(B) Technical staff.--The Administrator shall ensure that 
     information gathered from the community during community 
     outreach efforts reaches appropriate technical staff in a 
     timely and effective manner.
       ``(C) Responses.--The Administrator shall ensure that 
     reasonable written or other appropriate responses will be 
     made to such information.
       ``(8) Nonprivileged information.--Throughout all phases of 
     response action at a facility, the Administrator shall make 
     all nonprivileged information relating to a facility 
     available to the public for inspection and copying without 
     the need to file a formal request, subject to reasonable 
     service charges as appropriate.
       ``(9) Presentation.--
       ``(A) Documents.--
       ``(i) In general.--The Administrator, in carrying out 
     responsibilities under this Act, shall ensure that the 
     presentation of information on risk is complete and 
     informative.
       ``(ii) Risk.--To the extent feasible, documents prepared by 
     the Administrator and made available to the public that 
     purport to describe the degree of risk to human health shall, 
     at a minimum, state--

       ``(I) the upperbound and lowerbound estimates of the 
     incremental risk;
       ``(II) the population or populations addressed by any 
     estimates of the risk;
       ``(III) the expected risk or central estimate of the risk 
     for the specific population;
       ``(IV) the reasonable range or other description of 
     uncertainties in the assessment process; and
       ``(V) the assumptions that form the basis for any estimates 
     of such risk posed by the facility and a brief explanation of 
     the assumptions.

       ``(B) Comparisons.--The Administrator, in carrying out 
     responsibilities under this Act, shall provide comparisons of 
     the level of risk from hazardous substances found at the 
     facility to comparable levels of risk from those hazardous 
     substances ordinarily encountered by the general public 
     through other sources of exposure.
       ``(10) Requirements.--
       ``(A) Lengthy removal actions.--Notwithstanding any other 
     provision of this subsection, in the case of a removal action 
     taken in accordance with section 104 that is expected to 
     require more than 180 days to complete, and in any case in 
     which implementation of a removal action is expected to 
     obviate or that in fact obviates the need to conduct a long-
     term remedial action, the Administrator shall, to the maximum 
     extent practicable, allow for public participation consistent 
     with paragraph (1).
       ``(B) Other removal actions.--In the case of all other 
     removal actions, the Administrator may provide the community 
     with notice of the anticipated removal action and a public 
     comment period, as appropriate.''.
       (b) Issuance of Guidelines.--The Administrator of the 
     Environmental Protection Agency shall issue guidelines under 
     section 117(e)(9) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980, as added 
     by subsection (a), not later than 90 days after the date of 
     enactment of this Act.
                          TITLE II--STATE ROLE

     SEC. 201. DELEGATION TO THE STATES OF AUTHORITIES WITH 
                   RESPECT TO NATIONAL PRIORITIES LIST FACILITIES.

       (a) In General.--Title I of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9601 et seq.), as amended by section 302, is amended by 
     adding at the end the following:

     ``SEC. 135. DELEGATION TO THE STATES OF AUTHORITIES WITH 
                   RESPECT TO NATIONAL PRIORITIES LIST FACILITIES.

       ``(a) Definitions.--In this section:
       ``(1) Comprehensive delegation state.--The term 
     `comprehensive delegation State', with respect to a facility, 
     means a State to which the Administrator has delegated 
     authority to perform all of the categories of delegable 
     authority.
       ``(2) Delegable authority.--The term `delegable authority' 
     means authority to perform (or ensure performance of) all of 
     the authorities included in any 1 or more of the categories 
     of authority:
       ``(A) Category a.--All authorities necessary to perform 
     technical investigations, evaluations, and risk analyses, 
     including--
       ``(i) a preliminary assessment or facility inspection under 
     section 104;
       ``(ii) facility characterization under section 104;
       ``(iii) a remedial investigation under section 104;
       ``(iv) A facility-specific risk evaluation under section 
     129(b)(4); and
       ``(v) any other authority identified by the Administrator 
     under subsection (b).
       ``(B) Category b.--All authorities necessary to perform 
     alternatives development and remedy selection, including--
       ``(i) a feasibility study under section 104; and
       ``(ii)(I) remedial action selection under section 121 
     (including issuance of a record of decision); or
       ``(II) remedial action planning under section 129(b)(5); 
     and
       ``(iii) any other authority identified by the Administrator 
     under subsection (b).
       ``(C) Category c.--All authorities necessary to perform 
     remedial design, including--
       ``(i) remedial design under section 121; and
       ``(ii) any other authority identified by the Administrator 
     under subsection (b).
       ``(D) Category d.--All authorities necessary to perform 
     remedial action and operation and maintenance, including--
       ``(i) a removal under section 104;
       ``(ii) a remedial action under section 104 or section 10 
     (a) or (b);
       ``(iii) operation and maintenance under section 104(c); and
       ``(iv) any other authority identified by the Administrator 
     under subsection (b).
       ``(E) Category e.--All authorities necessary to perform 
     information collection and allocation of liability, 
     including--
       ``(i) information collection activity under section 104(e);
       ``(ii) allocation of liability under section 132;
       ``(iii) a search for potentially responsible parties under 
     section 104 or 107;
       ``(iv) settlement under section 122; and
       ``(v) any other authority identified by the Administrator 
     under subsection (b).
       ``(F) Category f.--All authorities necessary to perform 
     enforcement, including--
       ``(i) issuance of an order under section 106(a);

[[Page S 14714]]

       ``(ii) a response action cost recovery under section 107;
       ``(iii) imposition of a civil penalty or award under 
     section 109 (a)(1)(D) or (b)(4);
       ``(iv) settlement under section 122; and
       ``(v) any other authority identified by the Administrator 
     under subsection (b).
       ``(3) Delegated state.--The term `delegated State' means a 
     State to which delegable authority has been delegated under 
     subsection (c), except as may be provided in a delegation 
     agreement in the case of a limited delegation of authority 
     under subsection (c)(5).
       ``(4) Delegated authority.--The term `delegated authority' 
     means a delegable authority that has been delegated to a 
     delegated State under this section.
       ``(5) Delegated facility.--The term `delegated facility' 
     means a non-federal listed facility with respect to which a 
     delegable authority has been delegated to a State under this 
     section.
       ``(6) Noncomprehensive delegation state.--The term 
     `noncomprehensive delegation State', with respect to a 
     facility, means a State to which the Administrator has 
     delegated authority to perform fewer than all of the 
     categories of delegable authority.
       ``(7) Nondelegable authority.--The term `nondelegable 
     authority' means authority to--
       ``(A) make grants to community response organizations under 
     section 117; and
       ``(B) conduct research and development activities under any 
     provision of this Act.
       ``(8) Non-federal listed facility.--The term `non-federal 
     listed facility' means a facility that--
       ``(A) is not owned or operated by and is not under the 
     jurisdiction, custody, or control of a department, agency, or 
     instrumentality of the United States in any branch of the 
     Government; and
       ``(B) is listed on the National Priorities List.
       ``(b) Identification of Delegable Authorities.--
       ``(1) In general.--The Secretary shall by regulation 
     identify all of the authorities of the Administrator that 
     shall be included in a delegation of any category of 
     delegable authority described in subsection (a)(2).
       ``(2) Limitation.--The Administrator shall not identify a 
     nondelegable authority for inclusion in a delegation of any 
     category of delegable authority.
       ``(c) Delegation of Authority.--
       ``(1) In general.--On application by a State, the 
     Administrator shall delegate authority to perform 1 or more 
     delegable authorities with respect to 1 or more non-Federal 
     listed facilities in the State.
       ``(2) Application.--An application under paragraph (1) 
     shall--
       ``(A) identify each non-Federal listed facility for which 
     delegation is requested;
       ``(B) identify each delegable authority that is requested 
     to be delegated for each non-Federal listed facility for 
     which delegation is requested; and
       ``(C) certify that the State has adequate legal authority, 
     financial and personnel resources, organization, and 
     expertise to perform the requested delegable authority.
       ``(3) Approval of application.--
       ``(A) In general.--Not later than 60 days after receiving 
     an application under paragraph (2) by a State that is 
     authorized to administer and enforce the corrective action 
     requirements of a hazardous waste program under section 3006 
     of the Solid Waste Disposal Act (42 U.S.C. 6926), and not 
     later than 120 days after receiving an application from any 
     other State, the Administrator shall--
       ``(i) issue a notice of approval of the application 
     (including approval or disapproval regarding any or all of 
     the facilities with respect to which a delegation of 
     authority is requested or with respect to any or all of the 
     authorities that are requested to be delegated); or
       ``(ii) if the Administrator determines that the State does 
     not have adequate legal authority, financial and personnel 
     resources, organization, or expertise to administer and 
     enforce any of the requested delegable authority, issue a 
     notice of disapproval, including an explanation of the basis 
     for the determination.
       ``(B) Failure to act.--If the Administrator does not issue 
     a notice of approval or notice of disapproval of all or any 
     portion of an application within the applicable time period 
     under subparagraph (A), the application shall be deemed to 
     have been granted.
       ``(C) Resubmission of application.--
       ``(i) In general.--If the Administrator disapproves an 
     application under paragraph (1), the State may resubmit the 
     application at any time after receiving the notice of 
     disapproval.
       ``(ii) Failure to act.--If the Administrator does not issue 
     a notice of approval or notice of disapproval of a 
     resubmitted application within the applicable time period 
     under subparagraph (A), the resubmitted application shall be 
     deemed to have been granted.
       ``(D) No additional terms or conditions.--The Administrator 
     shall not impose any term or condition on the approval of an 
     application that meets the requirements stated in paragraph 
     (2) (except that any technical deficiencies in the 
     application be corrected).
       ``(E) Judicial review.--
       ``(i) In general.--A disapproval of a resubmitted 
     application shall be subject to judicial review under section 
     113(b).
       ``(ii) Standard of review.--In a proceeding on review of a 
     disapproval of a resubmitted application, the court shall, 
     notwithstanding section 706(2)(E) of title 5, United States 
     Code, hold unlawful and set aside actions, findings, and 
     conclusions found to be unsupported by substantial evidence.
       ``(4) Delegation agreement.--On approval of a delegation of 
     authority under this section, the Administrator and the 
     delegated State shall enter into a delegation agreement that 
     identifies each category of delegable authority that is 
     delegated with respect to each delegated facility.
       ``(5) Limited delegation.--
       ``(A) In general.--In the case of a State that does not 
     meet the requirements of paragraph (2)(C) the Administrator 
     may delegate to the State limited authority to perform, 
     ensure the performance of, or supervise or otherwise 
     participate in the performance of 1 or more delegable 
     authorities, as appropriate in view of the extent to which 
     the State has the required legal authority, financial and 
     personnel resources, organization, and expertise.
       ``(B) Special provisions.--In the case of a limited 
     delegation of authority to a State under subparagraph (A), 
     the Administrator shall specify the extent to which the State 
     shall be considered to be a delegated State for the purposes 
     of this Act.
       ``(d) Performance of Delegated Authorities.--
       ``(1) In general.--A delegated State shall have sole 
     authority (except as provided in paragraph (6)(B), subsection 
     (e)(4), and subsection (g)) to perform a delegated authority 
     with respect to a delegated facility.
       ``(2) Agreements.--A delegated State may enter into an 
     agreement with a political subdivision of the State, an 
     interstate body comprised of that State and another delegated 
     State or States, or a combination of such subdivisions or 
     interstate bodies, providing for the performance of any 
     category of delegated authority with respect to a delegated 
     facility in the State if the parties to the agreement agree 
     in the agreement to undertake response actions that are 
     consistent with this Act.
       ``(3) Compliance with act.--
       ``(A) Noncomprehensive delegation states.--A 
     noncomprehensive delegation State shall implement each 
     applicable provision of this Act (including regulations and 
     guidance issued by the Administrator) so as to perform each 
     delegated authority with respect to a delegated facility in 
     the same manner as would the Administrator with respect to a 
     facility that is not a delegated facility.
       ``(B) Comprehensive delegation states.--
       ``(i) In general.--A comprehensive delegation State shall 
     implement applicable provisions of this Act or of similar 
     provisions of State law in a manner comporting with State 
     policy, so long as the remedial action that is selected 
     protects human health and the environment to the same extent 
     as would a remedial action selected by the Administrator 
     under section 121.
       ``(ii) Costlier remedial action.--

       ``(I) In general.--A delegated State may select a remedial 
     action for a delegated facility that has a greater response 
     cost (including operation and maintenance costs) than the 
     response cost for a remedial action that would be selected by 
     the Administrator under section 121, if the State pays for 
     the difference in cost.
       ``(II) No cost recovery.--If a delegated State selects a 
     more costly remedial action under subclause (I), the State 
     shall not be entitled to seek cost recovery under this Act or 
     any other Federal or State law from any other person for the 
     difference in cost.

       ``(4) Judicial review.--
       ``(A) In general.--An order that is issued under section 
     106 by a delegated State with respect to a delegated facility 
     shall be subject to judicial review under section 113(b).
       ``(B) Standard of review.--In a proceeding on review of an 
     order under subparagraph (A), the court shall, 
     notwithstanding section 706(2)(E) of title 5, United States 
     Code, hold unlawful and set aside actions, findings, and 
     conclusions found to be unsupported by substantial evidence.
       ``(5) Delisting of national priorities list facilities.--
       ``(A) Delisting.--After notice and an opportunity for 
     public comment, a delegated State may remove from the 
     National Priorities List all or part of a delegated 
     facility--
       ``(i) if the State makes a finding that no further action 
     is needed to be taken at the facility (or part of the 
     facility) under any applicable law to protect human health 
     and the environment consistent with section 121(a) (1) and 
     (2);
       ``(ii) with the concurrence of the potentially responsible 
     parties, if the State has an enforceable agreement to perform 
     all required remedial action and operation and maintenance 
     for the facility or if the cleanup will proceed at the 
     facility under the Solid Waste Disposal Act (42 U.S.C 6901 et 
     seq.); or
       ``(iii) if the State is a comprehensive delegation State 
     with respect to the facility.
       ``(B) Effect of delisting.--A delisting under subparagraph 
     (A)(iii) shall not affect--
       ``(i) the authority or responsibility of the State to 
     complete remedial action and operation and maintenance; or
       ``(ii) the eligibility of the State for funding under this 
     Act.
       ``(C) No relisting.--The Administrator shall not relist on 
     the National Priorities List a facility or part of a facility 
     that has been removed from the National Priorities List under 
     subparagraph (A).
       ``(6) Cost recovery.--

[[Page S 14715]]

       ``(A) Deposit in fund.--Any response costs recovered from a 
     responsible party by a delegated State for a delegated 
     facility under section 107 shall be deposited in the 
     Hazardous Substances Superfund established under subchapter A 
     of chapter 98 of the Internal Revenue Code of 1986.
       ``(B) Recovery by the administrator.--
       ``(i) In general.--The Administrator may take action under 
     section 107 to recover response costs from a responsible 
     party for a delegated facility if the delegated State 
     notifies the Administrator in writing that the delegated 
     State does not intend to pursue action for recovery of 
     response costs under section 107 against the responsible 
     party.
       ``(ii) No further action.--If the Administrator takes 
     action against a potentially responsible party under section 
     107, the delegated State may not take any other action for 
     recovery of response costs under this Act or any other 
     Federal or State law.
       ``(e) Federal Responsibilities and Authorities.--
       ``(1) Review use of funds.--
       ``(A) In general.--The Administrator shall review the 
     certification submitted by the Governor under subsection 
     (f)(8) not later than 120 days after the date of its 
     submission.
       ``(B) Finding of use of funds inconsistent with this act.--
     If the Administrator finds that funds were used in a manner 
     that is inconsistent with this Act, the Administrator shall 
     notify the Governor in writing not later than 120 days after 
     receiving the Governor's certification.
       ``(C) Explanation.--not later than 30 days after receiving 
     a notice under subparagraph (B), the Governor shall--
       ``(i) explain why the Administrator's finding is in error; 
     or
       ``(ii) explain to the Administrator's satisfaction how any 
     misapplication or misuse of funds will be corrected.
       ``(D) Failure to explain.--If the Governor fails to make an 
     explanation under subparagraph (C) to the Administrator's 
     satisfaction, the Administrator may request reimbursement of 
     such amount of funds as the Administrator finds was 
     misapplied or misused.
       ``(E) Withholding of further funds; civil action.--If the 
     Administrator fails to obtain reimbursement from the State 
     within a reasonable period of time, the Administrator may, 
     after 30 days' notice to the State, bring a civil action in 
     United States district court to recover from the delegated 
     State any funds from that were advanced for a purpose or were 
     used for a purpose or in a manner that is inconsistent with 
     this Act.
       ``(2) Withdrawal of delegation of authority.--
       ``(A) Delegated states.--If at any time the Administrator 
     finds that contrary to a certification made under subsection 
     (c)(2), a delegated State--
       ``(i) lacks the required financial and personnel resources, 
     organization, or expertise to administer and enforce the 
     requested delegated authorities;
       ``(ii) does not have adequate legal authority to request 
     and accept delegation; or
       ``(iii) is failing to materially carry out the State's 
     delegated authorities,

     the Administrator may withdraw a delegation of authority with 
     respect to a delegated facility after providing notice and 
     opportunity to correct deficiencies under subparagraph (D).
       ``(B) States with limited delegations of authority.--If the 
     Administrator finds that a State to which a limited 
     delegation of authority was made under subsection (c)(5) has 
     materially breached the delegation agreement, the 
     Administrator may withdraw the delegation after providing 
     notice and opportunity to correct deficiencies under 
     subparagraph (D).
       ``(C) No withdrawal with 1 year of approval.--The 
     Administrator shall not withdraw a delegation of authority 
     within 1 year after the date on which the application for 
     delegation is approved (including approval under subsection 
     (b)(3) (B) or (C)(ii)).
       ``(D) Notice and opportunity to correct.--If the 
     Administrator proposes to withdraw a delegation of authority 
     for any or all delegated facilities, the Administrator shall 
     give the State written notice and allow the State at least 90 
     days after the date of receipt of the notice to correct the 
     deficiencies cited in the notice.
       ``(E) Failure to correct.--If the Administrator finds that 
     the deficiencies have not been corrected within the time 
     specified in a notice under subparagraph (D), the 
     Administrator may withdraw delegation of authority after 
     providing public notice and opportunity for comment.
       ``(F) Judicial review.--
       ``(i) In general.--A decision of the Administrator to 
     withdraw a delegation of authority shall be subject to 
     judicial review under section 113(b).
       ``(ii) Standard of review.--In a proceeding on review of a 
     decision by the Administrator to withdraw a delegation of 
     authority, the court shall, notwithstanding section 706(2)(E) 
     of title 5, United States Code, hold unlawful and set aside 
     actions, findings, and conclusions found to be unsupported by 
     substantial evidence.
       ``(3) Rule of construction.--Nothing in this section shall 
     be construed to affect the authority of the Administrator 
     under this Act to--
       ``(A) take a response action at a facility listed on the 
     National Priorities List in a State to which a delegation of 
     authority has not been made under this section or at a 
     facility not included in a delegation of authority; or
       ``(B) perform a delegable authority with respect to a 
     facility that is not included among the authorities delegated 
     to a State with respect to the facility.
       ``(4) Emergency removal.--
       ``(A) Notice.--Before performing an emergency removal 
     action under section 104 at a delegated facility, the 
     Administrator shall notify the delegated States of the 
     Administrator's intention to perform the removal.
       ``(B) State action.--If, after receiving a notice under 
     subparagraph (A), the delegated State notifies the 
     Administrator within 48 hours that the State intends to take 
     action to perform an emergency removal at the delegated 
     facility, the Administrator shall not perform the emergency 
     removal action unless the Administrator determines that the 
     delegated State has failed to act within a reasonable period 
     of time to perform the emergency removal.
       ``(C) Immediate and significant danger.--If the 
     Administrator finds that an emergency at a delegated facility 
     poses an immediate and significant danger to human health or 
     the environment, the Administrator shall not be required to 
     provide notice under subparagraph (A).
       ``(5) Prohibited actions.--Except as provided in 
     subsections (d)(6)(B), (e)(4), and (g), the President, the 
     Administrator, and the Attorney General shall not take any 
     action under section 104, 106, 107, 109, 121, or 122 with 
     respect to a delegated facility.
       ``(f) Funding.--
       ``(1) In general.--The Administrator shall provide grants 
     to delegated States to carry out this section.
       ``(2) No claim against fund.--Notwithstanding any other 
     law, funds to be granted under this subsection shall not 
     constitute a claim against the Fund.
       ``(3) Determination of costs on a facility-specific 
     basis.--The Administrator shall--
       ``(A) determine--
       ``(i) the delegable authorities the costs of performing 
     which it is practicable to determine on a facility-specific 
     basis; and
       ``(ii) the delegable authorities the costs of performing 
     which it is not practicable to determine on a facility-
     specific basis; and
       ``(B) publish a list describing the delegable authorities 
     in each category.
       ``(4) Facility-specific grants.--The costs described in 
     paragraph (3)(A)(i) shall be funded as such costs arise with 
     respect to each delegated facility.
       ``(5) Non-facility-specific grants.--
       ``(A) In general.--The costs described in paragraph 
     (1)(A)(ii) shall be funded through non-facility-specific 
     grants under this paragraph.
       ``(B) Formula.--The Administrator shall establish a formula 
     under which funds available for non-facility-specific grants 
     shall be allocated among the delegated States, taking into 
     consideration--
       ``(i) the cost of administering the delegated authority;
       ``(ii) the number of sites for which the State has been 
     delegated authority;
       ``(iii) the types of activities for which the State has 
     been delegated authority;
       ``(iv) the number of facilities within the State that are 
     listed on the National Priorities List or are delegated 
     facilities under section 127(d)(5);
       ``(v) the number of other high priority facilities within 
     the State;
       ``(vi) the need for the development of the State program;
       ``(vii) the need for additional personnel;
       ``(viii) the amount of resources available through State 
     programs for the cleanup of contaminated sites; and
       ``(ix) the benefit to human health and the environment of 
     providing the funding.
       ``(6) Permitted use of grant funds.--A delegated State may 
     use grant funds to take any action or perform any duty 
     necessary to implement the authority delegated to the State 
     under this section.
       ``(7) Cost share.--
       ``(A) Assurance.--A delegated State to which a grant is 
     made under this subsection shall provide an assurance that 
     the State will pay any amount required under section 
     104(c)(3).
       ``(B) Prohibited use of grant funds.--A delegated State to 
     which a grant is made under this subsection may not use grant 
     funds to pay any amount required under section 104(c)(3).
       ``(8) Certification of use of funds.--Not later than 1 year 
     after the date on which a delegated State receives funds 
     under this subsection, and annually thereafter, the Governor 
     of the State shall submit to the Administrator--
       ``(A) a certification that the State has used the funds in 
     accordance with the requirements of this Act; and
       ``(B) information describing the manner in which the State 
     used the funds.
       ``(g) Cooperative Agreements.--Nothing in this section 
     shall affect the authority of the Administrator under section 
     104(d)(1) to enter into a cooperative agreement with a State, 
     a political subdivision of a State, or an Indian tribe to 
     carry out actions under section 104.
       ``(h) Non-National Priorities List Facilities.--
       ``(1) Definitions.--In this subsection, the term `non-
     National Priorities List facility' means a facility that is 
     not, and never has been, listed on the National Priorities 
     List 

[[Page S 14716]]
     and that is not owned or operated by a department, agency, or 
     instrumentality of the United States.
       ``(2) Finality.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a determination that a response action at a non-National 
     Priorities List facility or portion of a non-National 
     Priorities List facility is complete under State law is 
     final, and the facility shall not be subject to further 
     response action notwithstanding any provision of this Act or 
     any other Federal law.
       ``(B) Exception for emergency removals.--The Administrator 
     may conduct an emergency removal action under the authority 
     of section 104 subject to the notice requirement of section 
     135(e)(4) at a non-National Priorities List facility.
       ``(3) Prohibition.--The President shall not take any action 
     under section 106 at a non-National Priorities List 
     facility.''.
       (b) Uses of Fund.--Section 111(a) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9611(a)) is amended by inserting after 
     paragraph (6) the following:
       ``(7) Grants to delegated states.--Making a grant to a 
     delegated State under section 135(f).''.
       (c) Relationship to Other Laws.--
       (1) In general.--Section 114 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9614) is amended--
       (A) by striking subsection (a); and
       (B) by redesignating subsections (b), (c), and (d) as 
     subsections (a), (b), and (c), respectively.
       (2) Conforming amendment.--Section 101(37)(B) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601(37)(B)) is amended by 
     striking ``section 114(c)'' and inserting ``section 114(b)''.
                      TITLE III--VOLUNTARY CLEANUP

     SEC. 301. ASSISTANCE FOR QUALIFYING STATE VOLUNTARY RESPONSE 
                   PROGRAMS.

       (a) Section 101 of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9601) is amended by adding at the end the following:
       ``(39) Qualifying state voluntary response program.--The 
     term `qualifying State voluntary response program' means a 
     State program that includes the elements described in section 
     133(b).''.
       (b) Qualifying State Voluntary Response Programs.--Title I 
     of the Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (42 U.S.C. 9601 et seq.), as 
     amended by section 501, is amended by adding at the end the 
     following:

     ``SEC. 133. QUALIFYING STATE VOLUNTARY RESPONSE PROGRAMS.

       ``(a) Assistance to States.--The Administrator shall 
     provide technical and other assistance to States to establish 
     and expand qualifying State voluntary response programs that 
     include the elements listed in subsection (b).
       ``(b) Elements.--The elements of a qualifying State 
     voluntary response program are the following:
       ``(1) Opportunities for technical assistance for voluntary 
     response actions.
       ``(2) Adequate opportunities for public participation, 
     including prior notice and opportunity for comment, in 
     appropriate circumstances, in selecting response actions.
       ``(3) Streamlined procedures to ensure expeditious 
     voluntary response actions.
       ``(4) Oversight and enforcement authorities that are 
     adequate to ensure that--
       ``(A) voluntary response actions are protective of human 
     health and the environment and are conducted in accordance 
     with an appropriate response action plan; and
       ``(B) if the person conducting the voluntary response 
     action fails to complete the necessary response activities, 
     including operation and maintenance or long-term monitoring 
     activities, the necessary response activities are completed.
       ``(5) Mechanisms for approval of a voluntary response 
     action plan.
       ``(6) A requirement for certification or similar 
     documentation from the State to the person conducting the 
     voluntary response action indicating that the response is 
     complete.''.
       (c) Funding.--Section 111(a) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9611), as amended by section 201(b), is 
     amended by inserting after paragraph (7) the following:
       ``(8) Qualifying state voluntary response programs.--For 
     assistance to States to establish and administer qualifying 
     State voluntary response programs, during the first 5 full 
     fiscal years following the date of enactment of this 
     subparagraph, in a total amount to all States that is not 
     less than 2 percent and not more than 5 percent of the amount 
     available in the Fund for each such fiscal year, distributed 
     among each of the States that notifies the Administrator of 
     the State's intent to establish a qualifying State voluntary 
     response program and each of the States with a qualifying 
     State voluntary response program in the amount that is equal 
     to the total amount multiplied by a fraction--
       ``(A) the numerator of which is the number of facilities in 
     the State that, as of September 29, 1995, were listed on the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Information System (not including facilities that 
     are listed on the National Priorities List); and
       ``(B) the denominator of which is the total number of such 
     facilities in the United States.''.

     SEC. 302. BROWNFIELD CLEANUP ASSISTANCE.

       Title I of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.), as amended by section 301(b), is amended by adding at 
     the end the following:

     ``SEC. 134. BROWNFIELD CLEANUP ASSISTANCE

       ``(a) Definitions.--In this section:
       ``(1) Administrative cost.--The term `administrative cost' 
     does not include the cost of--
       ``(A) investigation and identification of the extent of 
     contamination;
       ``(B) design and performance of a response action; or
       ``(C) monitoring of natural resources.
       ``(2) Brownfield facility.--The term `brownfield facility' 
     means--
       ``(A) a parcel of land that contains or at any time 
     contained abandoned or underused commercial or industrial 
     property, the expansion or redevelopment of which is 
     complicated by the presence or potential presence of a 
     hazardous substance; but
       ``(B) does not include--
       ``(i) a facility that is the subject of a removal or 
     planned removal under title I;
       ``(ii) a facility that is listed or has been proposed for 
     listing on the National Priorities List or that has been 
     delisted under section 135(d)(5);
       ``(iii) a facility that is subject to corrective action 
     under section 3004(u) or 3008(h) of the Solid Waste Disposal 
     Act (42 U.S.C. 6924(u) or 6928(h)) at the time at which an 
     application for a grant or loan concerning the facility is 
     submitted under this section;
       ``(iv) a land disposal unit with respect to which--

       ``(I) a closure notification under subtitle C of the Solid 
     Waste Disposal Act (42 U.S.C. 6921 et seq.) has been 
     submitted; and
       ``(II) closure requirements have been specified in a 
     closure plan or permit;

       ``(v) a facility with respect to which an administrative 
     order on consent or judicial consent decree requiring cleanup 
     has been entered into by the United States under the Solid 
     Waste Disposal Act (42 U.S.C. 6901 et seq.), the Federal 
     Water Pollution Control Act (33 U.S.C. 1251 et seq.), the 
     Toxic Substances Control Act (15 U.S.C. 2601 et seq.), or 
     title XIV of the Public Health Service Act (commonly known as 
     the `Safe Drinking Water Act') (42 U.S.C. 300f et seq.);
       ``(vi) a facility that is owned or operated by a 
     department, agency, or instrumentality of the United States; 
     or
       ``(vii) a portion of a facility, for which portion, 
     assistance for response activity has been obtained under 
     subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et 
     seq.) from the Leaking Underground Storage Tank Trust Fund 
     established under section 9508 of the Internal Revenue Code 
     of 1986.
       ``(3) Eligible entity.--The term `eligible entity' means--
       ``(A) a general purpose unit of local government;
       ``(B) a land clearance authority or other quasi-
     governmental entity that operates under the supervision and 
     control of or as an agent of a general purpose unit of local 
     government;
       ``(C) a regional council or group of general purpose units 
     of local government; and
       ``(D) an Indian tribe.
       ``(b) Brownfield Cleanup Assistance Program.--
       ``(1) Establishment of program.--The Administrator shall 
     establish a program to provide interest-free loans for the 
     site characterization and assessment of brownfield 
     facilities.
       ``(2) Assistance for site characterization and 
     assessment.--
       ``(A) In general.--On approval of an application made by an 
     eligible entity, the Administrator may make interest-free 
     loans out of the Fund to the eligible entity to be used for 
     the site characterization and assessment of 1 or more 
     brownfield facilities.
       ``(B) Appropriate inquiry.--A site characterization and 
     assessment carried out with the use of a loan under 
     subparagraph (A) shall be performed in accordance with 
     section 101(35)(B).
       ``(C) Repayment.--
       ``(i) In general.--An eligible entity that receives a loan 
     under subparagraph (A) shall agree to repay the full amount 
     of the loan within 10 years after the date on which the loan 
     is made.
       ``(ii) Deposit in fund.--Repayments on a loan under 
     subparagraph (A) shall be deposited in the Fund.
       ``(3) Hazardous substance superfund.--Notwithstanding 
     section 111 of this Act or any provision of the Superfund 
     Amendments and Reauthorization Act of 1986 (100 Stat. 1613), 
     there is authorized to be appropriated out of the Fund 
     $15,000,000 for each of the first 5 fiscal years beginning 
     after the date of enactment of this section, to be used for 
     making interest-free loans under paragraph (2).
       ``(4) Maximum loan amount.--A loan under subparagraph (A) 
     shall not exceed, with respect to each brownfield facility 
     covered by the loan, $100,000 for any fiscal year or $200,000 
     in total.
       ``(5) Sunset.--No amount shall be available from the Fund 
     for purposes of this section after the fifth fiscal year 
     after the date of enactment of this section.

[[Page S 14717]]

       ``(6) Prohibition.--No part of a loan under this section 
     may be used for payment of penalties, fines, or 
     administrative costs.
       ``(7) Audits.--The Inspector General of the Environmental 
     Protection Agency shall audit all loans made under paragraph 
     (2) to ensure that all funds are used for the purposes 
     described in this section and that all loans are repaid in 
     accordance with paragraph (2).
       ``(8) Agreements.--Each loan made under this section shall 
     be subject to an agreement that--
       ``(A) requires the eligible entity to comply with all 
     applicable State laws (including regulations);
       ``(B) requires that the eligible entity shall use the loan 
     exclusively for purposes specified in paragraph (2); and
       ``(C) contains such other terms and conditions as the 
     Administrator determines to be necessary to protect the 
     financial interests of the United States and to carry out the 
     purposes of this section.
       ``(9) Leveraging.--An eligible entity that receives a loan 
     under paragraph (1) may use the loaned funds for part of a 
     project at a brownfield facility for which funding is 
     received from other sources, but the loan funds shall be used 
     only for the purposes described in paragraph (2).
       ``(c) Loan Applications.--
       ``(1) In general.--Any eligible entity may submit an 
     application to the Administrator, through a regional office 
     of the Environmental Protection Agency and in such form as 
     the Administrator may require, for a loan under this section 
     for 1 or more brownfield facilities.
       ``(2) Application requirements.--An application for a loan 
     under this section shall include--
       ``(A) an identification of each brownfield facility for 
     which the loan is sought and a description of the 
     redevelopment plan for the area or areas in which each 
     facility is located, including a description of the nature 
     and extent of any known or suspected environmental 
     contamination within the area; and
       ``(B) an analysis that demonstrates the potential of the 
     grant to stimulate economic development on completion of the 
     planned response action, including a projection of the number 
     of jobs expected to be created at the facility after 
     remediation and redevelopment and, to the extent feasible, a 
     description of the type and skill level of the jobs and a 
     projection of the increases in revenues accruing to Federal, 
     State, and local governments from the jobs.
       ``(3) Approval.--
       ``(A) Initial loans.--On or about March 30 and September 30 
     of the first fiscal year following the date of enactment of 
     this section, the Administrator shall make loans under this 
     section to eligible entities that submit applications before 
     those dates that the Administrator determines have the 
     highest rankings under ranking criteria established under 
     paragraph (4).
       ``(B) Subsequent loans.--Beginning with the second fiscal 
     year following the date of enactment of this section, the 
     Administrator shall make an annual evaluation of each 
     application received during the prior fiscal year and make 
     loans under this section to eligible entities that submit 
     applications during the prior year that the Administrator 
     determines have the highest rankings under the ranking 
     criteria established under paragraph (4).
       ``(4) Ranking criteria.--The Administrator shall establish 
     a system for ranking loan applications that includes the 
     following criteria:
       ``(A) The extent to which a loan will stimulate the 
     availability of other funds for environmental remediation and 
     subsequent redevelopment of the area in which the brownfield 
     facilities are located.
       ``(B) The potential of the development plan for the area in 
     which the brownfield facilities are located to stimulate 
     economic development of the area on completion of the 
     cleanup, such as the following:
       ``(i) The relative increase in the estimated fair market 
     value of the area as a result of any necessary response 
     action.
       ``(ii) The potential of a loan to create new or expand 
     existing business and employment opportunities (particularly 
     full-time employment opportunities) on completion of any 
     necessary response action.
       ``(iii) The estimated additional tax revenues expected to 
     be generated by economic redevelopment in the area in which a 
     brownfield facility is located.
       ``(iv) The estimated extent to which a loan would 
     facilitate the identification of or facilitate a reduction of 
     health and environmental risks.
       ``(v) The financial involvement of the State and local 
     government in any response action planned for a brownfield 
     facility and the extent to which the response action and the 
     proposed redevelopment is consistent with any applicable 
     State or local community economic development plan.
       ``(vi) The extent to which the site characterization and 
     assessment or response action and subsequent development of a 
     brownfield facility involves the active participation and 
     support of the local community.
       ``(vii) Such other factors as the Administrator considers 
     appropriate to carry out the purposes of this section.''.

     SEC. 303. TREATMENT OF SECURITY INTEREST HOLDERS AND 
                   FIDUCIARIES AS OWNERS OR OPERATORS.

       (a) Definition of Owner or Operator.--Section 101 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601), as amended by section 
     301(a), is amended--
       (1) in paragraph (20)--
       (A) in subparagraph (A) by striking the second sentence; 
     and
       (B) by adding at the end the following:
       ``(E) Security interest holders.--
       ``(i) In general.--The term `owner or operator' does not 
     include a person that, without participating in the 
     management of a vessel or facility, holds an indicium of 
     ownership primarily to protect the person's security interest 
     in a vessel or facility.
       ``(ii) Participating in management.--A security interest 
     holder--

       ``(I) shall be considered to be participating in management 
     of a vessel or facility only if the security interest holder 
     has undertaken--

       ``(aa) responsibility for the hazardous substance handling 
     or disposal practices of the vessel or facility; or
       ``(bb) overall management of the vessel or facility 
     encompassing day-to-day decisionmaking over environmental 
     compliance or over an operational function (including 
     functions such as those of a plant manager, operations 
     manager, chief operating officer, or chief executive 
     officer), as opposed to financial and administrative aspects, 
     of a vessel or facility; and

       ``(II) shall not be considered to be participating in 
     management solely on the ground that the security interest 
     holder--

       ``(aa) serves in a capacity or has the ability to influence 
     or the right to control the operation of a vessel or facility 
     if that capacity, ability, or right is not exercised;
       ``(bb) acts, or causes or requires another person to act, 
     to comply with an applicable law or to respond lawfully to 
     disposal of a hazardous substance;
       ``(cc) performs an act or omits to act in any way with 
     respect to a vessel or facility prior to the time at which a 
     security interest is created in a vessel or facility;
       ``(dd) holds, abandons, or releases a security interest;
       ``(ee) includes in the terms of an extension of credit, or 
     in a contract or security agreement relating to an extension 
     of credit, a covenant, warranty, or other term or condition 
     that relates to environmental compliance;
       ``(ff) monitors or enforces a term or condition of an 
     extension of credit or a security interest;
       ``(gg) monitors or undertakes 1 or more inspections of a 
     vessel or facility;
       ``(hh) requires or conducts a response action or other 
     lawful means of addressing a release or threatened release of 
     a hazardous substance in connection with a vessel or facility 
     prior to, during, or on the expiration of the term of an 
     extension of credit;
       ``(ii) provides financial or other advice or counseling in 
     an effort to mitigate, prevent, or cure a default or 
     diminution in the value of a vessel or facility;
       ``(jj) exercises forbearance by restructuring, 
     renegotiating, or otherwise agreeing to alter a term or 
     condition of an extension of credit or a security interest; 
     or
       ``(kk) exercises any remedy that may be available under law 
     for the breach of a term or condition of an extension of 
     credit or a security agreement.
       ``(iii) Foreclosure.--Legal or equitable title acquired by 
     a security interest holder through foreclosure (or the 
     equivalent of foreclosure) shall be considered to be held 
     primarily to protect a security interest if the holder 
     undertakes to sell, re-lease, or otherwise divest the vessel 
     or facility in a reasonably expeditious manner on 
     commercially reasonable terms.
       ``(iv) Definition of security interest.--In this 
     subparagraph, the term `security interest' includes a right 
     under a mortgage, deed of trust, assignment, judgment lien, 
     pledge, security agreement, factoring agreement, or lease, or 
     any other right accruing to a person to secure the repayment 
     of money, the performance of a duty, or any other obligation.
       ``(F) Fiduciaries.--
       ``(i) In general.--The term `owner or operator' does not 
     include a fiduciary that holds legal or equitable title to, 
     is the mortgagee or secured party with respect to, controls, 
     or manages, directly or indirectly, a vessel or facility for 
     the purpose of administering an estate or trust of which the 
     vessel or facility is a part.''; and
       (2) by adding at the end the following:
       ``(40) Fiduciary.--The term `fiduciary' means a person that 
     is acting in the capacity of--
       ``(A) an executor or administrator of an estate, including 
     a voluntary executor or a voluntary administrator;
       ``(B) a guardian;
       ``(C) a conservator;
       ``(D) a trustee under a will or a trust agreement under 
     which the trustee takes legal or equitable title to, or 
     otherwise controls or manages, a vessel or facility for the 
     purpose of protecting or conserving the vessel or facility 
     under the rules applied in State court;
       ``(E) a court-appointed receiver;
       ``(F) a trustee appointed in proceedings under title 11, 
     United States Code;
       ``(G) an assignee or a trustee acting under an assignment 
     made for the benefit of creditors; or
       ``(H) a trustee, or a successor to a trustee, under an 
     indenture agreement, trust agreement, lease, or similar 
     financing agreement, for debt securities, certificates of 
     interest of participation in debt securities, or other forms 
     of indebtedness as to which the trustee 

[[Page S 14718]]
     is not, in the capacity of trustee, the lender.''.
       (b) Liability of Fiduciaries and Lenders.--Section 107 of 
     the Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9607) is amended by adding 
     at the end the following:
       ``(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 from a vessel 
     or facility held by a fiduciary may not exceed the assets 
     held by the fiduciary that are available to indemnify the 
     fiduciary.
       ``(2) No individual liability.--Subject to the other 
     provisions of this subsection, a fiduciary shall not be 
     liable in an individual capacity under this Act.
       ``(3) Exceptions.--This subsection does not preclude a 
     claim under this Act against--
       ``(A) the assets of the estate or trust administered by a 
     fiduciary;
       ``(B) a nonemployee agent or independent contractor 
     retained by a fiduciary; or
       ``(C) a fiduciary that causes or contributes to a release 
     or threatened release of a hazardous substance.
       ``(4) Safe harbor.--Subject to paragraph (5), a fiduciary 
     shall not be liable in an individual capacity under this Act 
     for--
       ``(A) undertaking or directing another to undertake a 
     response action under section 107(d)(1) or under the 
     direction of an on-scene coordinator;
       ``(B) undertaking or directing another to undertake any 
     other lawful means of addressing a hazardous substance in 
     connection with a vessel or facility;
       ``(C) terminating the fiduciary relationship;
       ``(D) including, modifying, or enforcing a covenant, 
     warranty, or other term or condition in the terms of a 
     fiduciary agreement that relates to compliance with 
     environmental laws;
       ``(E) monitoring or undertaking 1 or more inspections of a 
     vessel or facility;
       ``(F) providing financial or other advice or counseling to 
     any party to the fiduciary relationship, including the 
     settlor or beneficiary;
       ``(G) restructuring, renegotiating, or otherwise altering a 
     term or condition of the fiduciary relationship;
       ``(H) administering a vessel or facility that was 
     contaminated before the period of service of the fiduciary 
     began; or
       ``(I) declining to take any of the actions described in 
     subparagraphs (B) through (H).
       ``(5) Due care.--This subsection does not limit the 
     liability of a fiduciary if the fiduciary fails to exercise 
     due care and the failure causes or contributes to the release 
     of a hazardous substance.
       ``(6) Rule of construction.--Nothing in this subsection 
     shall be construed to--
       ``(A) affect the rights or immunities or other defenses 
     that are available under this Act or other applicable law to 
     any person;
       ``(B) create any liability for any person; or
       ``(C) create a private right of action against a fiduciary 
     or against a Federal agency that regulates lenders.
       ``(o) Liability of Lenders.--
       ``(1) Definitions.--In this subsection:
       ``(A) Actual benefit.--The term `actual benefit' means the 
     net gain, if any, realized by a lender due to an action.
       ``(B) Extension of credit.--The term `extension of credit' 
     includes a lease finance transaction--
       ``(i) in which the lessor does not initially select the 
     leased vessel or facility and does not during the lease term 
     control the daily operations or maintenance of the vessel or 
     facility; or
       ``(ii) that conforms to all regulations issued by any 
     appropriate Federal banking agency (as defined in section 
     3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
     1813(q))) and any appropriate State banking regulatory 
     authority.
       ``(C) Foreclosure.--The term `foreclosure' means the 
     acquisition of 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 the vessel or facility was security 
     for an extension of credit previously contracted;
       ``(ii) conveyance under an extension of credit previously 
     contracted, including the termination of a lease agreement; 
     or
       ``(iii) any other formal or informal manner by which a 
     person acquires, for subsequent disposition, possession of 
     collateral in order to protect the security interest of the 
     person.
       ``(D) 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 any other entity that 
     in a bona fide manner is engaged in the business of buying or 
     selling loans or interests in loans;
       ``(iii) a 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) a person regularly engaged in the business of 
     providing title insurance that acquires a vessel or facility 
     as a result of an assignment or conveyance in the course of 
     underwriting a claim or claim settlement.
       ``(E) Net gain.--The term `net gain' means an amount not in 
     excess of the amount realized by a lender on the sale of a 
     vessel or facility less acquisition, holding, and disposition 
     costs.
       ``(F) Vessel or facility acquired through foreclosure.--The 
     term `vessel or facility acquired through foreclosure'--
       ``(i) means a vessel or facility that is acquired by a 
     lender through foreclosure from a person that is not 
     affiliated with the lender; but
       ``(ii) does not include such a vessel or facility if the 
     lender does not seek to sell or otherwise divest the vessel 
     or facility at the earliest practicable, commercially 
     reasonable time, on commercially reasonable terms, taking 
     into account market conditions and legal and regulatory 
     requirements.
       ``(2) Liability limitation.--
       ``(A) In general.--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 a vessel or facility shall be limited to the 
     amount described in subparagraph (B) if the vessel or 
     facility is--
       ``(i) a vessel or facility acquired through foreclosure;
       ``(ii) a vessel or facility subject to a security interest 
     held by the lender;
       ``(iii) a vessel or facility held by a lessor under the 
     terms of an extension of credit; or
       ``(iv) a vessel or facility subject to financial control or 
     financial oversight under the terms of an extension of 
     credit.
       ``(B) Amount.--The amount described in this subparagraph is 
     the excess of the fair market value of a vessel or facility 
     on the date on which the liability of a lender is determined 
     over the fair market value of the vessel or facility on the 
     date that is 180 days before the date on which the response 
     action is initiated, not to exceed the amount that the lender 
     realizes on the sale of the vessel or facility after 
     subtracting acquisition, holding, and disposition costs.
       ``(3) Exclusion.--This subsection does not limit the 
     liability of a lender that causes or contributes to the 
     release or threatened release of a hazardous substance.
       ``(4) Rule of construction.--Nothing in this subsection 
     shall be construed to--
       ``(A) affect the rights or immunities or other defenses 
     that are available under this Act or other applicable law to 
     any person;
       ``(B) create any liability for any person; or
       ``(C) create a private right of action against a lender or 
     against a Federal agency that regulates lenders.''.

     SEC. 304. FEDERAL DEPOSIT INSURANCE ACT AMENDMENT.

       The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) 
     is amended by adding at the end the following:

     ``SEC. 45. FEDERAL BANKING AND LENDING AGENCY LIABILITY.

       ``(a) Definitions.--In this section:
       ``(1) Federal banking or lending agency.--The term `Federal 
     banking or lending agency'--
       ``(A) means the Corporation, the Resolution Trust 
     Corporation, the Board of Governors of the Federal Reserve 
     System, the Comptroller of the Currency, the Office of Thrift 
     Supervision, a Federal Reserve Bank, a Federal Home Loan 
     Bank, the Department of Housing and Urban Development, the 
     National Credit Union Administration Board, the Farm Credit 
     Administration, the Farm Credit System Insurance Corporation, 
     the Farm Credit System Assistance Board, the Farmers Home 
     Administration, the Rural Electrification Administration, the 
     Small Business Administration, and any other Federal agency 
     acting in a similar capacity, in any of their capacities, and 
     their agents or appointees; and
       ``(B) includes a first subsequent purchaser of the vessel 
     or facility from a Federal banking or lending agency, unless 
     the purchaser--
       ``(i) would otherwise be liable or potentially liable for 
     all or part of the costs of the removal, remedial, 
     corrective, or other response action due to a prior 
     relationship with the vessel or facility;
       ``(ii) is or was affiliated with or related to a party 
     described in clause (i);
       ``(iii) fails to agree to take reasonable steps necessary 
     to remedy the release or threatened release or to protect 
     public health and safety in a manner consistent with the 
     purposes of applicable environmental laws; or
       ``(iv) causes or contributes to any additional release or 
     threatened release on the vessel or facility.
       ``(2) Facility.--The term `facility' has the meaning stated 
     in section 101 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601).
       ``(3) Hazardous substance.--The term `hazardous substance' 
     means a hazardous substance (as defined in section 101 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601)).
       ``(4) Release.--The term `release' has the meaning stated 
     in section 101 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601).
       ``(5) Response action.--The term `response action' has the 
     meaning stated in section 101 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601).

[[Page S 14719]]

       ``(6) Vessel.--The term `vessel' has the meaning stated in 
     section 101 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601).
       ``(b) Federal Banking and Lending Agencies Not Strictly 
     Liable.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     Federal banking or lending agency shall not be liable under 
     any law imposing strict liability for the release or 
     threatened release of a hazardous substance at or from a 
     vessel or facility (including a right or interest in a vessel 
     or facility) acquired--
       ``(A) in connection with the exercise of receivership or 
     conservatorship authority, or the liquidation or winding up 
     of the affairs of an insured depository institution, 
     including a subsidiary of an insured depository institution;
       ``(B) in connection with the provision of a loan, a 
     discount, an advance, a guarantee, insurance, or other 
     financial assistance; or
       ``(C) in connection with a vessel or facility received in a 
     civil or criminal proceeding, or administrative enforcement 
     action, whether by settlement or by order.
       ``(2) Active causation.--Subject to section 107(d) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9607(d)), a Federal banking 
     or lending agency that causes or contributes to a release or 
     threatened release of a hazardous substance may be liable for 
     a response action pertaining to the release or threatened 
     release.
       ``(3) Federal or state action.--If a Federal agency or 
     State environmental agency is required to take response due 
     to the failure of a subsequent purchaser to carry out in good 
     faith an agreement described in paragraph (a)(1)(C)(iii), the 
     subsequent purchaser shall reimburse the Federal or State 
     environmental agency for the costs of the response action. 
     Any such reimbursement shall not exceed the increase in the 
     fair market value of the vessel or facility attributable to 
     the response action.
       ``(c) Lien Exemption.--Notwithstanding any other law, a 
     vessel or facility held by a subsequent purchaser described 
     in subsection (a)(1)(B) or held by a Federal banking or 
     lending agency shall not be subject to a lien for costs or 
     damages associated with the release or threatened release of 
     a hazardous substance existing at the time of the transfer.
       ``(d) Exemption From Covenants To Remediate.--A Federal 
     banking or lending agency shall be exempt from any law 
     requiring the agency to grant a covenant warranting that a 
     response action has been, or will in the future be, taken 
     with respect to a vessel or facility acquired in a manner 
     described in subsection (b)(1).
       ``(e) Rules of Construction.--Nothing in this section shall 
     be construed to--
       ``(1) affect the rights or immunities or other defenses 
     that are available to any party under this Act, the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601 et seq.) or any other 
     law;
       ``(2) create any liability for any party;
       ``(3) create a private right of action against an insured 
     depository institution or lender, a Federal banking or 
     lending agency, or any other party;
       ``(4) preempt, affect, apply to, or modify a State law or a 
     right, cause of action, or obligation under State law, except 
     that the liability of a Federal banking or lending agency for 
     a response action under a State law shall not exceed the 
     value of the interest of the agency in the asset giving rise 
     to the liability; or
       ``(5) preclude a Federal banking or lending agency from 
     agreeing with a State to transfer a vessel or facility to the 
     State in lieu of any liability that might otherwise be 
     imposed under State law.''.

     SEC. 305. CONTIGUOUS PROPERTIES.

       Section 107 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9607(a)), 
     as amended by section 303(b), is amended by adding at the end 
     the following:
       ``(p) Contiguous Properties.--
       ``(1) In general.--A person that owns or operates real 
     property that is contiguous to or otherwise similarly 
     situated with respect to real property on which there has 
     been a release or threatened release of a hazardous substance 
     and that is or may be contaminated by the release shall not 
     be considered to be an owner or operator of a vessel or 
     facility under subsection (a) (1) or (2) solely by reason of 
     the contamination if the person did not cause, contribute, or 
     consent to the release or threatened release.
       ``(2) Assurances.--The Administrator may--
       ``(A) issue an assurance that no enforcement action under 
     this Act will be initiated against a person described in 
     paragraph (1); and
       ``(B) grant a person described in paragraph (1) protection 
     against a cost recovery or contribution action under section 
     113(f).''.

     SEC. 306. PROSPECTIVE PURCHASERS AND WINDFALL LIENS.

       (a) Definition.--Section 101 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601), as amended by section 303(a)(2), is 
     amended by adding at the end the following:
       ``(41) Bona fide prospective purchaser.--The term `bona 
     fide prospective purchaser' means a person that acquires 
     ownership of a facility after the date of enactment of this 
     paragraph, or a tenant of such a person, that establishes 
     each of the following by a preponderance of the evidence:
       ``(A) Disposal prior to acquisition.--All active disposal 
     of hazardous substances at the facility occurred before the 
     person acquired the facility.
       ``(B) Inquiries.--
       ``(i) In general.--The person made all appropriate 
     inquiries into the previous ownership and uses of the 
     facility and the facility's real property in accordance with 
     generally accepted good commercial and customary standards 
     and practices.
       ``(ii) Standards and practices.--The standards and 
     practices referred to in paragraph (35)(B)(ii) or those 
     issued or adopted by the Administrator under that paragraph 
     shall be considered to satisfy the requirements of this 
     subparagraph.
       ``(iii) Residential use.--In the case of property for 
     residential or other similar use purchased by a 
     nongovernmental or noncommercial entity, a facility 
     inspection and title search that reveal no basis for further 
     investigation shall be considered to satisfy the requirements 
     of this subparagraph.
       ``(C) Notices.--The person provided all legally required 
     notices with respect to the discovery or release of any 
     hazardous substances at the facility.
       ``(D) Care.--The person exercised appropriate care with 
     respect to each hazardous substance found at the facility by 
     taking reasonable steps to stop any continuing release, 
     prevent any threatened future release and prevent or limit 
     human or natural resource exposure to any previously released 
     hazardous substance.
       ``(E) Cooperation, assistance, and access.--The person 
     provides full cooperation, assistance, and facility access to 
     the persons that are responsible for response actions at the 
     facility, including the cooperation and access necessary for 
     the installation, integrity, operation, and maintenance of 
     any complete or partial response action at the facility.
       ``(F) Relationship.--The person is not liable, and is not 
     affiliated with any other person that is liable, for any 
     response costs at the facility, through any direct or 
     indirect familial relationship, or any contractual, 
     corporate, or financial relationship other than that created 
     by the instruments by which title to the facility is conveyed 
     or financed.''.
       (b) Amendment.--Section 107 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9607), as amended by section 305(b), is 
     amended by adding at the end the following:
       ``(q) Prospective Purchaser and Windfall Lien.--
       ``(1) Limitation on liability.--Notwithstanding subsection 
     (a), a bona fide prospective purchaser whose potential 
     liability for a release or threatened release is based solely 
     on the purchaser's being considered to be an owner or 
     operator of a facility shall not be liable as long as the 
     bona fide prospective purchaser does not impede the 
     performance of a response action or natural resource 
     restoration.
       ``(2) Lien.--If there are unrecovered response costs at a 
     facility for which an owner of the facility is not liable by 
     reason of subsection (n)(1)(C) and each of the conditions 
     described in paragraph (3) is met, the United States shall 
     have a lien on the facility, or may obtain from appropriate 
     responsible party a lien on any other property or other 
     assurances of payment satisfactory to the Administrator, for 
     such unrecovered costs.
       ``(3) Conditions.--The conditions referred to in paragraph 
     (1) are the following:
       ``(A) Response action.--A response action for which there 
     are unrecovered costs is carried out at the facility.
       ``(B) Fair market value.--The response action increases the 
     fair market value of the facility above the fair market value 
     of the facility that existed 180 days before the response 
     action was initiated.
       ``(C) Sale.--A sale or other disposition of all or a 
     portion of the facility has occurred.
       ``(4) Amount.--A lien under paragraph (2)--
       ``(A) shall not exceed the increase in fair market value of 
     the property attributable to the response action at the time 
     of a subsequent sale or other disposition of the property;
       ``(B) shall arise at the time at which costs are first 
     incurred by the United States with respect to a response 
     action at the facility;
       ``(C) shall be subject to the requirements of subsection 
     (l)(3); and
       ``(D) shall continue until the earlier of satisfaction of 
     the lien or recovery of all response costs incurred at the 
     facility.''.

     SEC. 307. SAFE HARBOR INNOCENT LANDHOLDERS.

       (a) Amendment.--Section 101(35) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(35)) is amended by striking subparagraph 
     (B) and inserting the following:
       ``(B) Knowledge of inquiry requirement.--
       ``(i) All appropriate inquiries.--To establish that the 
     defendant had no reason to know of the matter described in 
     subparagraph (A)(i), the defendant must show that, at or 
     prior to the date on which the defendant acquired the 
     facility, the defendant undertook all appropriate inquiries 
     into the previous ownership and uses of the facility in 
     accordance with generally accepted good commercial and 
     customary standards and practices.

[[Page S 14720]]

       ``(ii) Standards and practices.--The Secretary shall by 
     regulation establish as standards and practices for the 
     purpose of clause (i)--

       ``(I) the American Society for Testing and Materials (ASTM) 
     Standard E1527-94, entitled `Standard Practice for 
     Environmental Site Assessments: Phase I Environmental Site 
     Assessment Process'; or
       ``(II) alternative standards and practices under clause 
     (iii).

       ``(iii) Alternative standards and practices.--

       ``(I) In general.--The Administrator may by regulation 
     issue alternative standards and practices or designate 
     standards developed by other organizations than the American 
     Society for Testing and Materials after conducting a study of 
     commercial and industrial practices concerning the transfer 
     of real property in the United States.
       ``(II) Considerations.--In issuing or designating 
     alternative standards and practices under subclause (I), the 
     Administrator shall include each of the following:

       ``(aa) The results of an inquiry by an environmental 
     professional.
       ``(bb) Interviews with past and present owners, operators, 
     and occupants of the facility and the facility's real 
     property for the purpose of gathering information regarding 
     the potential for contamination at the facility and the 
     facility's real property.
       ``(cc) Reviews of historical sources, such as chain of 
     title documents, aerial photographs, building department 
     records, and land use records to determine previous uses and 
     occupancies of the real property since the property was first 
     developed.
       ``(dd) Searches for recorded environmental cleanup liens, 
     filed under Federal, State, or local law, against the 
     facility or the facility's real property.
       ``(ee) Reviews of Federal, State, and local government 
     records (such as waste disposal records), underground storage 
     tank records, and hazardous waste handling, generation, 
     treatment, disposal, and spill records, concerning 
     contamination at or near the facility or the facility's real 
     property.
       ``(ff) Visual inspections of the facility and facility's 
     real property and of adjoining properties.
       ``(gg) Specialized knowledge or experience on the part of 
     the defendant.
       ``(hh) Consideration of the relationship of the purchase 
     price to the value of the property if the property was 
     uncontaminated.
       ``(ii) Commonly known or reasonably ascertainable 
     information about the property.
       ``(jj) Consideration of the degree of obviousness of the 
     presence or likely presence of contamination at the property, 
     and the ability to detect such contamination by appropriate 
     investigation.
       ``(iv) Site inspection and title search.--In the case of 
     property for residential use or other similar use purchased 
     by a nongovernmental or noncommercial entity, a facility 
     inspection and title search that reveal no basis for further 
     investigation shall be considered to satisfy the requirements 
     of this subparagraph.''.
       (b) Standards and Practices.--
       (1) Establishment by regulation.--The Administrator of the 
     Environmental Protection Agency shall issue the regulation 
     required by section 101(35)(B)(ii) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980, as added by subsection (a), not later than 1 year after 
     the date of enactment of this Act.
       (2) Interim standards and practices.--Until the 
     Administrator issues the regulation described in paragraph 
     (1), in making a determination under section 101(35)(B)(i) of 
     the Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980, as added by subsection (a), there 
     shall be taken into account--
       (A) any specialized knowledge or experience on the part of 
     the defendant;
       (B) the relationship of the purchase price to the value of 
     the property if the property was uncontaminated;
       (C) commonly known or reasonably ascertainable information 
     about the property;
       (D) the degree of obviousness of the presence or likely 
     presence of contamination at the property; and
       (E) the ability to detect the contamination by appropriate 
     investigation.
                TITLE IV--SELECTION OF REMEDIAL ACTIONS

     SEC. 401. DEFINITIONS.

       Section 101 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601), as 
     amended by section 306(a), is amended by adding at the end 
     the following:
       ``(42) Actual or planned or reasonably anticipated future 
     use of the land and water resources.--The term `actual or 
     planned or reasonably anticipated future use of the land and 
     water resources' means--
       ``(A) the actual use of the land, surface water, and ground 
     water at a facility at the time of the initiation of the 
     facility evaluation; and
       ``(B)(i) with respect to land--
       ``(I) the use of land that is authorized by the zoning or 
     land use decisions formally adopted, at or prior to the time 
     of the initiation of the facility evaluation, by the local 
     land use planning authority for a facility and the land 
     immediately adjacent to the facility; and
       ``(II) any other reasonably anticipated use that has a 
     substantial probability of occurring based on recent (as of 
     the time of the determination) development patterns in the 
     area in which the facility is located and on population 
     projections for the area; and
       ``(ii) with respect to water resources, the future use of 
     the surface water and ground water that is potentially 
     affected by releases from a facility that is reasonably 
     anticipated, by a local government or other governmental unit 
     that regulates ground water use or ground water use planning 
     in the vicinity of the facility, on the earlier of--
       ``(I) the date of issuance of the first record of decision; 
     or
       ``(II) the initiation of the facility evaluation.
       ``(43) Significant ecosystem.--The term `significant 
     ecosystem', for the purpose of section 121(a)(1)(B), means an 
     ecosystem that exhibits a uniqueness, particular value, or 
     historical presence or that is widely recognized as a 
     significant resource at the national, State or local level.
       ``(44) Valuable ecosystem.--The term `valuable ecosystem' 
     means an ecosystem that is a known source of significant 
     human or ecological benefits for its function.
       ``(45) Sustainable ecosystem.--The term `sustainable 
     ecosystem' means an ecosystem that has redundancy and 
     resiliency sufficient to enable the ecosystem to continue to 
     function and provide benefits within the normal range of its 
     variability notwithstanding exposure to hazardous substances 
     resulting from releases.
       ``(46) Ecological resource.--The term `ecological resource' 
     means land, fish, wildlife, biota, air, surface water, and 
     ground water within an ecosystem.
       ``(47) Significant risk to ecological resources that are 
     necessary to the sustainability of a significant ecosystem or 
     valuable ecosystem.--The term `significant risk to ecological 
     resources that are necessary to the sustainability of a 
     significant ecosystem or valuable ecosystem' means the risk 
     associated with exposures and impacts resulting from the 
     release of hazardous substances which together reduce or 
     eliminate the sustainability (within the meaning of paragraph 
     (45)) of a significant ecosystem or valuable ecosystem.''.

     SEC. 402. SELECTION AND IMPLEMENTATION OF REMEDIAL ACTIONS.

       Section 121 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9621) is 
     amended--
       (1) by striking the section heading and subsections (a) and 
     (b) and inserting the following:

     ``SEC. 121. SELECTION AND IMPLEMENTATION OF REMEDIAL ACTIONS.

       ``(a) General Rules.--
       ``(1) Selection of most cost-effective remedial action that 
     protects human health and the environment.--
       ``(A) In general.--The Administrator shall select a 
     remedial action that is the most cost-effective means of 
     achieving the goals of protecting human health and the 
     environment as stated in subparagraph (B) using the criteria 
     stated in subparagraph (C).
       ``(B) Goals of protecting human health and the 
     environment.--
       ``(i) Protection of human health.--A remedial action shall 
     be considered to protect human health if, considering the 
     expected exposures associated with the actual or planned or 
     reasonably anticipated future use of the land and water 
     resources, the remedial action achieves a residual risk--

       ``(I) from exposure to carcinogenic hazardous substances, 
     pollutants, or contaminants such that cumulative lifetime 
     additional cancer from exposure to hazardous substances from 
     releases at the facility range from 10-4 to 10-6 
     for the affected population; and
       ``(II) from exposure to noncarcinogenic hazardous 
     substances, pollutants, or contaminants at the facility that 
     does not pose an appreciable risk of deleterious effects.

       ``(ii) Protection of the environment.--A remedial action 
     shall be considered to protect the environment if, based on 
     the actual or planned or reasonably anticipated future use of 
     the land and water resources, the remedial action will 
     protect against significant risks to ecological resources 
     that are necessary to the sustainability of a significant 
     ecosystem or valuable ecosystem and will not interfere with a 
     sustainable functional ecosystem.
       ``(C) Remedy selection criteria.--In selecting a remedial 
     action from among alternatives that achieve the goals stated 
     in subparagraph (B), the Administrator shall balance the 
     following factors, ensuring that no single factor 
     predominates over the others:
       ``(i) The effectiveness of the remedy in protecting human 
     health and the environment.
       ``(ii) The reliability of the remedial action in achieving 
     the protectiveness standards over the long term.
       ``(iii) Any short-term risk to the affected community, 
     those engaged in the remedial action effort, and to the 
     environment posed by the implementation of the remedial 
     action.
       ``(iv) The acceptability of the remedial action to the 
     affected community.
       ``(v) The implementability and technical practicability of 
     the remedial action from an engineering perspective.
       ``(2) Technical impracticability and unreasonable cost.--
       ``(A) Minimization of risk.--If the Administrator finds 
     that achieving the goals stated in paragraph (1)(B), is 
     technically impracticable or unreasonably costly, the 
     Administrator shall evaluate remedial measures that mitigate 
     the risks to human health and the environment and select a 
     technically practicable remedial action that minimizes the 

[[Page S 14721]]
     risk to human health and the environment by cost-effective means.
       ``(B) Basis for finding.--A finding of technical 
     impracticability may be made on the basis of a determination, 
     supported by appropriate documentation, that, at the time at 
     which the finding is made--
       ``(i) there is no known reliable means of achieving at a 
     reasonable cost the goals stated in paragraph (1)(B); and
       ``(ii) it has not been shown that such a means is likely to 
     be developed within a reasonable period of time.
       ``(3) Presumptive remedial actions.--A remedial action that 
     implements a presumptive remedial action issued under section 
     128 shall be considered to achieve the goals stated in 
     paragraph (1)(B) and balance adequately the factors stated in 
     paragraph (1)(C).
       ``(4) Ground water.--
       ``(A) In general.--A remedial action shall protect 
     uncontaminated ground water that is suitable for use as 
     drinking water by humans or livestock in the water's 
     condition at the time of initiation of the facility 
     evaluation.
       ``(B) Considerations.--A decision under subparagraph (A) 
     regarding remedial action for ground water shall take into 
     consideration--
       ``(i) the actual or planned or reasonably anticipated 
     future use of the ground water and the timing of that use;
       ``(ii) any attenuation or biodegradation that would occur 
     if no remedial action were taken; and
       ``(iii) the criteria stated in paragraph (1)(C).
       ``(C) Official classification.--For the purposes of 
     subparagraph (A), there shall be no presumption that ground 
     water that is suitable for use as drinking water by humans or 
     livestock is the actual or planned or reasonably anticipated 
     future use of the ground water.
       ``(D) Uncontaminated ground water.--A remedial action for 
     protecting uncontaminated ground water may be based on 
     natural attenuation or biodegradation so long as the remedial 
     action does not interfere with the actual or planned or 
     reasonably anticipated future use of the ground water.
       ``(E) Contaminated ground water.--A remedial action for 
     contaminated ground water may include point-of-use treatment.
       ``(5) Legally applicable requirements.--A remedial action 
     shall not be required to attain any standard that, without 
     regard to this paragraph, would be legally applicable under 
     any other Federal or State law, except that in the case of a 
     removal or remedial action involving the transfer of 
     hazardous waste off-site, that hazardous waste may be 
     transferred only to a facility that is permitted to treat, 
     store, or dispose such waste under section 3005 of the Solid 
     Waste Disposal Act (42 U.S.C. 6925) or, if applicable, the 
     Toxic Substances Control Act (15 U.S.C. 2601 et seq.).
       ``(6) Other considerations applicable to remedial 
     actions.--A remedial action that uses institutional and 
     engineering controls shall be considered to be on an equal 
     basis with all other remedial action alternatives.'';
       (2) by redesignating subsection (c) as subsection (b), and, 
     in the first sentence of that subsection, by striking ``5 
     years'' and inserting ``7 years'';
       (3) by redesignating subsection (e) as subsection (c); and
       (4) by redesignating subsection (f) as subsection (d).

     SEC. 403. REMEDY SELECTION METHODOLOGY.

       Title I of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 127. FACILITY-SPECIFIC RISK EVALUATIONS.

       ``(a) Uses.--
       ``(1) In general.--A facility-specific risk evaluation 
     shall be used to--
       ``(A) identify the significant components of potential risk 
     posed by a facility;
       ``(B) screen out potential contaminants, areas, or exposure 
     pathways from further study at a facility;
       ``(C) compare the relative protectiveness of alternative 
     potential remedies proposed for a facility; and
       ``(D) demonstrate that the remedial action selected for a 
     facility is capable of protecting human health and the 
     environment considering the actual or planned or reasonably 
     anticipated future use of the land and water resources.
       ``(2) Compliance with principles.--A facility-specific risk 
     evaluation shall comply with the principles stated in this 
     section to ensure that--
       ``(A) actual or planned or reasonably anticipated future 
     use of the land and water resources is given appropriate 
     consideration; and
       ``(B) all of the components of the evaluation are, to the 
     maximum extent practicable, scientifically objective and 
     inclusive of all relevant data.
       ``(b) Risk Evaluation Principles.--A facility-specific risk 
     evaluation shall--
       ``(1) be based on actual or plausible estimates of exposure 
     considering the actual or planned or reasonably anticipated 
     future use of the land and water resources;
       ``(2) be comprised of components each of which is, to the 
     maximum extent practicable, scientifically objective, and 
     inclusive of all relevant data;
       ``(3) use chemical and facility-specific data and analysis 
     (such as toxicity, exposure, and fate and transport 
     evaluations) in preference to default assumptions;
       ``(4) use a range and distribution of realistic and 
     plausible assumptions when chemical and facility-specific 
     data are not available;
       ``(5) use mathematical models that take into account the 
     fate and transport of hazardous substances, pollutants, or 
     contaminants, in the environment instead of relying on 
     default assumptions; and
       ``(6) use credible hazard identification and dose/response 
     assessments.
       ``(c) Risk Communication Principles.--The document 
     reporting the results of a facility-specific risk evaluation 
     shall--
       ``(1) contain an explanation that clearly communicates the 
     risks at the facility;
       ``(2) identify and explain all assumptions used in the 
     evaluation, all alternative assumptions, the policy or value 
     judgments used in choosing the assumptions, and whether 
     empirical data conflict with or validate the assumptions;
       ``(3) present--
       ``(A) a range and distribution of exposure and risk 
     estimates, including, if numerical estimates are provided, 
     central estimates of exposure and risk using--
       ``(i) the most plausible assumptions or a weighted 
     combination of multiple assumptions based on different 
     scenarios; or
       ``(ii) any other methodology designed to characterize the 
     most plausible estimate of risk given the scientific 
     information that is available at the time of the facility-
     specific risk evaluation; and
       ``(B) a statement of the nature and magnitude of the 
     scientific and other uncertainties associated with those 
     estimates;
       ``(4) state the size of the population potentially at risk 
     from releases from the facility and the likelihood that 
     potential exposures will occur based on the actual or planned 
     or reasonably anticipated future use of the land and water 
     resources; and
       ``(5) compare the risks from the facility to other risks 
     commonly experienced by members of the local community in 
     their daily lives and similar risks regulated by the Federal 
     Government.
       ``(d) Regulations.--Not later than 18 months after the date 
     of enactment of this section, the Administrator shall issue a 
     final regulation implementing this section that promotes a 
     realistic characterization of risk that neither minimizes nor 
     exaggerates the risks and potential risks posed by a facility 
     or a proposed remedial action.
       ``(e) Determination of Actual or Planned or Reasonably 
     Anticipated Future Use of the Land and Water Resources.--The 
     Administrator shall determine the actual or planned or 
     reasonably anticipated future use of the land and water 
     resources at a facility by consulting the community response 
     organization, facility owners and operators, potentially 
     responsible parties, elected municipal and county officials, 
     and other persons.

     ``SEC. 128. PRESUMPTIVE REMEDIAL ACTIONS.

       ``(a) In General.--Not later than 1 year after the date of 
     enactment of this section, the Administrator shall issue a 
     final regulation establishing presumptive remedial actions 
     for commonly encountered types of facilities with reasonably 
     well understood contamination problems and exposure 
     potential.
       ``(b) Practicability and Cost-Effectiveness.--Such 
     presumptive remedies must have been demonstrated to be 
     technically practicable and cost-effective methods of 
     achieving the goals of protecting human health and the 
     environment stated in section 121(a)(1)(B).
       ``(c) Variations.--The Administrator may issue various 
     presumptive remedial actions based on various uses of land 
     and water resources, various environmental media, and various 
     types of hazardous substances, pollutants, or contaminants.
       ``(d) Engineering Controls.--Presumptive remedial actions 
     are not limited to treatment remedies, but may be based on, 
     or include, institutional and standard engineering 
     controls.''.

     SEC. 404. REMEDY SELECTION PROCEDURES.

       Title I of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.), as amended by section 403, is amended by adding at the 
     end the following:

     ``SEC. 129. REMEDIAL ACTION PLANNING AND IMPLEMENTATION.

       ``(a) In General.--
       ``(1) Basic rules.--
       ``(A) Procedures.--A remedial action shall be developed and 
     selected in accordance with the procedures set forth in this 
     section.
       ``(B) No other procedures or requirements.--The procedures 
     stated in this section are in lieu of any procedures or 
     requirements under any other law to conduct remedial 
     investigations, feasibility studies, record of decisions, 
     remedial designs, or remedial actions.
       ``(C) Limited review.--In a case in which the potentially 
     responsible parties prepare a remedial action plan, only the 
     facility evaluation, proposed remedial action plan, and final 
     remedial design shall be subject to review, comment, and 
     approval by the Administrator.
       ``(D) National contingency plan.--The Administrator shall 
     conform the National Contingency Plan regulations to reflect 
     the procedures stated in this section.
       ``(2) Use of presumptive remedial actions.--
       ``(A) Proposal to use.--In a case in which a presumptive 
     remedial action applies, the 

[[Page S 14722]]
     Administrator (if the Administrator is conducting the remedial action) 
     or the preparer of the remedial action plan may, after 
     conducting a facility evaluation, propose a presumptive 
     remedial action for the facility, if the Administrator or 
     preparer shows with appropriate documentation that the 
     facility fits the generic classification for which a 
     presumptive remedial action has been issued and performs an 
     engineering evaluation to demonstrate that the presumptive 
     remedial action can be applied at the facility.
       ``(B) Limitation.--The Administrator may not require a 
     potentially responsible party to implement a presumptive 
     remedial action.
       ``(b) Remedial Action Planning Process.--
       ``(1) In general.--The Administrator or a potentially 
     responsible party shall prepare and implement a remedial 
     action plan for a facility.
       ``(2) Contents.--A remedial action plan shall consist of--
       ``(A) the results of a facility evaluation, including any 
     screening analysis performed at the facility;
       ``(B) a discussion of the potentially viable remedies that 
     are considered to be reasonable under section 121(a) and how 
     they balance the factors stated in section 121(a)(1)(C);
       ``(C) a description of the remedial action to be taken;
       ``(D) a description of the facility-specific risk-based 
     evaluation under section 127 and a demonstration that the 
     selected remedial action--
       ``(i) will achieve the goals stated in section 
     121(a)(1)(B); or
       ``(ii) satisfies the requirements of section 128; and
       ``(E) a realistic schedule for conducting the remedial 
     action, taking into consideration facility-specific factors.
       ``(3) Work plan.--
       ``(A) In general.--Prior to preparation of a remedial 
     action plan, the preparer shall develop a work plan, 
     including a community information and participation plan, 
     which generally describes how the remedial action plan will 
     be developed.
       ``(B) Submission.--A work plan shall be submitted to the 
     Administrator, the State, the community response 
     organization, the local library, and any other public 
     facility designated by the Administrator.
       ``(C) Publication.--The Administrator, or the preparer of 
     the plan, shall publish in a newspaper of general circulation 
     in the area where the facility is located, and post in 
     conspicuous places in the local community, a notice 
     announcing that the work plan is available for review at the 
     local library and that comments concerning the work plan can 
     be submitted to the preparer of the work plan, the 
     Administrator, the State, or the local community response 
     organization.
       ``(D) Forwarding of comments.--If comments are submitted to 
     the Administrator, the State, or the community response 
     organization, the Administrator, State, or community response 
     organization shall forward the comments to the preparer of 
     the work plan.
       ``(4) Facility evaluation.--
       ``(A) In general.--The Administrator shall conduct a 
     facility evaluation at each facility to characterize the risk 
     posed by the facility by gathering enough information 
     necessary to--
       ``(i) assess potential remedial alternatives, including 
     ascertaining, to the degree appropriate, the volume and 
     nature of the contaminants, their location, potential 
     exposure pathways and receptors;
       ``(ii) discern the actual or planned or reasonably 
     anticipated future use of the land and water resources; and
       ``(iii) screen out any uncontaminated areas, contaminants, 
     and potential pathways from further consideration.
       ``(B) Submission.--A draft facility evaluation shall be 
     submitted to the Administrator for approval.
       ``(C) Publication.--Not later than 30 days after 
     submission, or in a case in which the Administrator is 
     preparing the remedial action plan, after the completion of 
     the draft facility evaluation, the Administrator shall 
     publish in a newspaper of general circulation in the area 
     where the facility is located, and post in conspicuous places 
     in the local community, a notice announcing that the draft 
     facility evaluation is available for review and that comments 
     concerning the evaluation can be submitted to the 
     Administrator, the State, and the community response 
     organization.
       ``(D) Availability of comments.--If comments are submitted 
     to the Administrator, the State, or the community response 
     organization, the Administrator, State, or community response 
     organization shall make the comments available to the 
     preparer of the facility evaluation.
       ``(E) Notice of approval.--If the Administrator approves a 
     facility evaluation, the Administrator shall--
       ``(i) notify the community response organization; and
       ``(ii) publish in a newspaper of general circulation in the 
     area where the facility is located, and post in conspicuous 
     places in the local community, a notice of approval.
       ``(F) Notice of disapproval.--If the Administrator does not 
     approve a facility evaluation, the Administrator shall--
       ``(i) identify to the preparer of the facility evaluation, 
     with specificity, any deficiencies in the submission; and
       ``(ii) request that the preparer submit a revised facility 
     evaluation within a reasonable period of time.
       ``(5) Proposed remedial action plan.--
       ``(A) Submission.--In a case in which a potentially 
     responsible party prepares a remedial action plan, the 
     preparer shall submit the remedial action plan to the 
     Administrator for approval and provide a copy to the local 
     library.
       ``(B) Publication.--After receipt of the proposed remedial 
     action plan, or in a case in which the Administrator is 
     preparing the remedial action plan, after the completion of 
     the remedial action plan, the Administrator shall cause to be 
     published in a newspaper of general circulation in the area 
     where the facility is located and posted in other conspicuous 
     places in the local community a notice announcing that the 
     proposed remedial action plan is available for review at the 
     local library and that comments concerning the remedial 
     action plan can be submitted to the Administrator, the State, 
     and the community response organization, and that persons may 
     request that the Administrator hold a public hearing.
       ``(C) Availability of comments.--If comments are submitted 
     to a State or the community response organization, the State 
     or community response organization shall make the comments 
     available to the preparer of the proposed remedial action 
     plan.
       ``(D) Hearing.--The Administrator shall hold a public 
     hearing at which the proposed remedial action plan may be 
     presented and public comment received.
       ``(E) Approval.--
       ``(i) In general.--The Administrator shall approve a 
     proposed remedial action plan if the plan--

       ``(I) contains the information described in subsection (b); 
     and
       ``(II) achieves the goals stated in section 121(a)(1)(B).

       ``(ii) Default.--If the Administrator fails to issue a 
     notice of disapproval of a proposed remedial action plan in 
     accordance with subparagraph (G) within 90 days after the 
     proposed plan is submitted, the plan shall be considered to 
     be approved and its implementation fully authorized.
       ``(F) Notice of approval.--If the Administrator approves a 
     proposed remedial action plan, the Administrator shall--
       ``(i) notify the community response organization; and
       ``(ii) publish in a newspaper of general circulation in the 
     area where the facility is located, and post in conspicuous 
     places in the local community, a notice of approval.
       ``(G) Notice of disapproval.--If the Administrator does not 
     approve a proposed remedial action plan, the Administrator 
     shall--
       ``(i) inform the preparer of the proposed remedial action 
     plan, with specificity, of any deficiencies in the 
     submission; and
       ``(ii) request that the preparer submit a revised proposed 
     remedial action plan within a reasonable time.
       ``(6) Implementation of remedial action plan.--A remedial 
     action plan that has been approved or is considered to be 
     approved under paragraph (5) shall be implemented in 
     accordance with the schedule set forth in the remedial action 
     plan.
       ``(7) Remedial design.--
       ``(A) Submission.--A remedial design shall be submitted to, 
     or in a case in which the Administrator is preparing the 
     remedial action plan, completed by, the Administrator.
       ``(B) Publication.--After receipt (or completion) of the 
     remedial design, the Administrator shall--
       ``(i) notify the community response organization; and
       ``(ii) cause a notice of submission or completion of the 
     remedial design to be published in a newspaper of general 
     circulation and posted in conspicuous places in the area 
     where the facility is located.
       ``(C) Comment.--The Administrator shall provide an 
     opportunity to the public to submit written comments on the 
     remedial design.
       ``(D) Approval.--Not later than 90 days after the 
     submission (or completion) of the remedial design, the 
     Administrator shall approve or disapprove the remedial 
     design.
       ``(E) Notice of approval.--If the Administrator approves a 
     remedial design the Administrator shall--
       ``(i) notify the community response organization; and
       ``(ii) publish in a newspaper of general circulation in the 
     area where the facility is located, and post in conspicuous 
     places in the local community, a notice of approval.
       ``(F) Notice of disapproval.--If the Administrator 
     disapproves the remedial design, the Administrator shall 
     identify with specificity any deficiencies in the submission 
     and allow the preparer submitting a remedial design a 
     reasonable time to submit a revised remedial design.
       ``(c) Judicial Review.--Notwithstanding any other provision 
     of this Act or any other law, an approval or disapproval of a 
     remedial action plan the implementation of which is projected 
     to cost more than $15,000,000 shall be final action of the 
     Administrator subject to judicial review in United States 
     district court.
       ``(d) Enforcement of Remedial remedial Plan.--
       ``(1) Notice of significant deviation.--If the 
     Administrator determines that the implementation of the 
     remedial action plan has deviated significantly from the 
     plan, the Administrator shall so notify the implementing 
     party and require the implementing party to-- 

[[Page S 14723]]

       ``(A) comply with the terms of the remedial action plan; or
       ``(B) submit a notice for modifying the plan,

     at the option of the implementing party.
       ``(2) Failure to comply.--If the implementing party fails 
     to either comply with the plan or submit a proposed 
     modification, the Administrator may pursue all appropriate 
     enforcement pursuant to this Act.
       ``(e) Modifications to Remedial Action Plan.--
       ``(1) By the administrator.--
       ``(A) In general.--If the Administrator proposes a 
     modification to the plan, the Administrator shall demonstrate 
     that the modification constitutes the most cost-effective 
     remedial action that is technologically feasible, is not 
     unreasonably costly, and achieves the goals of protecting 
     human health and the environment stated in section 
     121(a)(1)(B).
       ``(B) Notice and comment.--The Administrator shall provide 
     the implementing party and the community response 
     organization at least 30 days' advance notice and opportunity 
     to comment on any such proposed modification.
       ``(2) By the implementing party.--An implementing party 
     that proposes a minor modification to or clarification of a 
     remedial action plan shall, at least 10 days prior to the 
     proposed implementation of the modification or clarification, 
     submit to the Administrator and to the community response 
     organization a description of the proposed modification or 
     clarification and documentation showing that the proposed 
     modification or clarification will not cause the remedial 
     action to fail to achieve the goals of section 
     121(a)(1)(B).''.

     SEC. 405. COMPLETION OF REMEDIAL ACTION AND DELISTING.

       Title I of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.), as amended by section 404, is amended by adding at the 
     end the following:

     ``SEC. 130. COMPLETION OF REMEDIAL ACTION AND DELISTING.

       ``(a) In General.--
       ``(1) Proposed notice of completion and proposed 
     delisting.--Not later than 60 days after the completion of a 
     remedial action by the Administrator, or not later than 60 
     days after receipt of a notice of such completion from the 
     implementing party, the Administrator shall publish a notice 
     of completion and proposed delisting of the facility from the 
     National Priorities List in the Federal Register and in a 
     newspaper of general circulation in the area where the 
     facility is located.
       ``(2) Comments.--The public shall be provided 30 days in 
     which to submit comments on the notice of completion and 
     proposed delisting.
       ``(3) Final notice.--Not later than 60 days after the end 
     of the comment period, the Administrator shall--
       ``(A) issue a final notice of completion and delisting or a 
     notice of withdrawal of the proposed notice until the 
     implementation of the remedial action is determined to be 
     complete; and
       ``(B) publish the notice in the Federal Register and in a 
     newspaper of general circulation in the area where the 
     facility is located.
       ``(4) Failure to act.--If the Administrator fails to 
     publish a notice of withdrawal within the 60-day period 
     described in paragraph (3)--
       ``(A) the remedial action plan shall be deemed to have been 
     completed; and
       ``(B) the facility shall be delisted by operation of law.
       ``(5) Effect of delisting.--The delisting of a facility 
     shall have no effect on--
       ``(A) liability allocation requirements or cost-recovery 
     provisions otherwise provided in this Act; or
       ``(B) the obligation of any person to provide continued 
     operation and maintenance.
       ``(b) Certification.--A final notice of completion and 
     delisting shall include a certification by the Administrator 
     that the facility has met all of the requirements of the 
     remedial action plan (except requirements for continued 
     operation and maintenance).
       ``(c) Release From Liability.--
       ``(1) Facility available for unrestricted use.--If, after 
     completion of remedial action, a facility is available for 
     unrestricted use and there is no need for continued operation 
     and maintenance, the potentially responsible parties shall 
     have no further liability under any Federal, State, or local 
     law (including any regulation) for remediation at the 
     facility, unless the Administrator determines, based on new 
     and reliable factual information about the facility, that the 
     facility does not meet the goals stated in section 
     121(a)(1)(B) considering the actual or planned or reasonably 
     anticipated future use of the land and water resources.
       ``(2) Facility not available for unrestricted use.--If, 
     after completion of remedial action, a facility is not 
     available for unrestricted use or there are continued 
     operation and maintenance requirements that preclude use of 
     the facility, the Administrator shall--
       ``(A) review the status of the facility every 7 years; and
       ``(B) require additional remedial action at the facility if 
     the Administrator determines, after notice and opportunity 
     for hearing, that the facility does not meet the goals of 
     section 121(a)(1) (B), (C), and (D) considering the actual or 
     planned or reasonably anticipated future use of the land and 
     water resources contemplated in the remedial action plan.
       ``(3) Facilities available for restricted use.--The 
     Administrator may determine that a facility or portion of a 
     facility is available for restricted use while remediation 
     response actions are under way. The Administrator shall make 
     available for use any uncontaminated portions of the facility 
     where such uses would not interfere with ongoing operations 
     and maintenance activities or endanger human health or the 
     environment.
       ``(4) Failure to make timely disapproval.--The issuance of 
     a final notice of completion and delisting or of a notice of 
     withdrawal within the time required by subsection (a)(3) 
     constitutes a nondiscretionary duty within the meaning of 
     section 310(a)(2).
       ``(d) Operation and Maintenance.--The need to perform 
     continued operation and maintenance at a facility shall not 
     delay delisting of the facility or issuance of the 
     certification if performance of operation and maintenance is 
     subject to a legally enforceable agreement, order, or decree.
       ``(e) Change of Use of Facility.--
       ``(1) Petition.--Any person may petition the Administrator 
     to change the use of a facility from that which was the basis 
     of the remedial action plan.
       ``(2) Grant.--The Administrator may grant a petition under 
     paragraph (1) if the petitioner agrees to implement any 
     additional remedial actions that the Administrator determines 
     are necessary to continue to meet the goals stated in section 
     121(a)(1)(B), considering the different use of the facility.
       ``(3) Responsibility for risk.--When a petition has been 
     granted under paragraph (2), the person requesting the change 
     in use of the facility shall be responsible for all risk 
     associated with altering the facility and all costs of 
     implementing any necessary additional remedial actions.''.

     SEC. 406. TRANSITION RULES FOR FACILITIES CURRENTLY INVOLVED 
                   IN REMEDY SELECTION.

       Title I of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.), as amended by section 405, is amended by adding at the 
     end the following:

     ``SEC. 131. TRANSITION RULES FOR FACILITIES INVOLVED IN 
                   REMEDY SELECTION ON DATE OF ENACTMENT.

       ``(a) No Record of Decision.--
       ``(1) Option.--In the case of a facility or operable unit 
     that, as of the date of enactment of this section, is the 
     subject of a remedial investigation and feasibility study 
     (whether completed or incomplete), the potentially 
     responsible parties or the Administrator may elect to follow 
     the remedial action plan process stated in section 129 rather 
     than the remedial investigation and feasibility study and 
     record of decision process under regulations in effect on the 
     date of enactment of this section that would otherwise apply 
     if the requesting party notifies the Administrator and other 
     potentially responsible parties of the election not later 
     than 90 days after the date of enactment of this section.
       ``(2) Submission of facility evaluation.--In a case in 
     which the potentially responsible parties have or the 
     Administrator has made an election under subsection (a), the 
     potentially responsible parties shall submit the proposed 
     facility evaluation within 270 days after the date on which 
     notice of the election is given.
       ``(b) Construction Not Begun.--
       ``(1) Determination.--In the case of a facility or operable 
     unit with respect to which a record of decision has been 
     signed but construction has not yet begun prior to the date 
     of enactment of this section, the Administrator or the State 
     shall, at the request of the implementer of the record of 
     decision, conduct an expedited review to determine whether 
     the application of section 127 would be likely to result in 
     the selection of a less costly remedial action that achieves 
     the goals of protecting human health and the environment 
     stated in section 121(a)(1)(B).
       ``(2) Default.--Section 127 shall apply to a facility or 
     operable unit in accordance with a request under paragraph 
     (1) unless the Administrator or the State, prior to the date 
     that is 90 days after the date on which the request is made, 
     publishes a written finding that the application of section 
     127 would not be likely to result in the selection of a less 
     costly remedial action that achieves the goals of protecting 
     human health and the environment stated in section 
     121(a)(1)(B).
       ``(c) Additional Construction.--
       ``(1) In general.--In the case of a facility or operable 
     unit with respect to which a record of decision has been 
     signed and construction has begun prior to the date of 
     enactment of this section, but for which additional 
     construction or long-term operation and maintenance 
     activities are anticipated, the Administrator or the State 
     shall, at the request of the implementer of the record of 
     decision, conduct an expedited review to determine whether 
     the application of section 127 would be likely to result in 
     the selection of a remedial action that--
       ``(A) achieves a cost saving of at least 10 percent over 
     the life of the remedial action, including any long-term 
     operation and maintenance, compared to the remedial action 
     originally selected; and
       ``(B) achieves the goals of protecting human health and the 
     environment stated in section 121(a)(1)(B).
       ``(2) Default.--Section 127 shall apply to a facility or 
     operable unit in accordance with a request under paragraph 
     (1) unless the Administrator or the State, prior to the date 
     that is 90 days after the date on which the 

[[Page S 14724]]
     request is made, publishes a written finding that the application of 
     section 127 would not be likely to result in the selection of 
     a remedial action that achieves a cost saving of at least 10 
     percent over the life of the remedial and achieves the goals 
     of protecting human health and the environment stated in 
     section 121(a)(1)(B).
       ``(d) Mediation of Disputes.--A dispute over the 
     implementation of this section or over a written finding 
     under subsection (b)(2) or (c)(2) shall be referred to 
     mediation on an expedited basis without penalty to any 
     person.''.

     SEC. 407. JUDICIAL REVIEW.

       (a) Review of Certain Actions.--Section 113(h) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9613(h)) is amended by 
     adding at the end the following:
       ``(6) An action under section 129(c).''.
       (b) Stay.--Section 113(b) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9613(b)) is amended by adding at the end the 
     following: ``In the case of a challenge under section 
     113(h)(6), the court may stay the implementation or 
     initiation of the challenged actions pending judicial 
     resolution of the matter.''.

     SEC. 408. NATIONAL PRIORITIES LIST.

       (a) Revision of National Contingency Plan.--
       (1) Amendments.--Section 105 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9605) is amended--
       (A) in subsection (a)(8) by adding at the end the 
     following:
       ``(C) provision that in listing a site on the National 
     Priority List, the Administrator shall not include any parcel 
     of real property at which no release has actually occurred, 
     but to which a released hazardous substance, pollutant, or 
     contaminant has migrated in ground water that has moved 
     through subsurface strata from another parcel of real estate 
     at which the release actually occurred, unless the ground 
     water is in use as a public drinking water supply or was in 
     such use at the time of the release.''; and
       (B) by adding at the end the following:
       ``(h) Listing of Particular Parcels.--
       ``(1) Definition.--In subsection (a)(8)(C) and paragraph 
     (2) of this subsection, the term `parcel of real property' 
     means a parcel, lot, or tract of land that has a separate 
     legal description from that of any other parcel, lot, or 
     tract of land the legal description and ownership of which 
     has been recorded in accordance with the law of the State in 
     which it is located.
       ``(2) Statutory construction.--Nothing in subsection 
     (a)(8)(C) shall be construed to limit the Administrator's 
     authority under section 104 to obtain access to and undertake 
     response actions at any parcel of real property to which a 
     released hazardous substance, pollutant, or contaminant has 
     migrated in the ground water.''.
       (2) Revision of national priorities list.--The President 
     shall revise the National Priorities List to conform with the 
     amendment made by paragraph (1) not later that 180 days of 
     the date of enactment of this Act.
                     TITLE V--LIABILITY ALLOCATIONS

     SEC. 501. ALLOCATION OF LIABILITY FOR MULTIPARTY FACILITIES.

       Title I of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.), as amended by section 406, is amended by adding at the 
     end the following:

     ``SEC. 132. ALLOCATION OF LIABILITY FOR MULTIPARTY 
                   FACILITIES.

       ``(a) Definitions.--In this section:
       ``(1) Allocation party.--The term `allocation party' means 
     a party, named on a list of parties that will be subject to 
     the allocation process under this section, issued by an 
     allocator under subsection (g)(3)(A).
       ``(2) Allocator.--The term `allocator' means an allocator 
     retained to conduct an allocation for a facility under 
     subsection (f)(1).
       ``(3) Mandatory allocation facility.--The term `mandatory 
     allocation facility' means--
       ``(A) a non-federally owned vessel or facility listed on 
     the National Priorities List for which the Administrator has 
     approved a record of decision or a remedial action plan on or 
     after June 15, 1995;
       ``(B) a federally owned facility listed on the National 
     Priorities List for which the Administrator has approved a 
     record of decision or a remedial action plan on or after June 
     15, 1995, if 1 or more of the potentially responsible parties 
     with respect to the facility is not a department, agency, or 
     instrumentality of the United States;
       ``(C) a non-federally owned vessel or facility listed on 
     the National Priorities List for which the Administrator has 
     approved a record of decision prior to June 15, 1995, if the 
     construction or the operation and maintenance in accordance 
     with the record of decision has continued after June 15, 
     1995; or
       ``(D) a federally owned facility listed on the National 
     Priorities List for which the Administrator has approved a 
     record of decision prior to June 15, 1995, and 1 or more of 
     the potentially responsible parties is not a department, 
     agency, or instrumentality of the United States and the 
     construction or the operation and maintenance in accordance 
     with the record of decision has continued after June 15, 
     1995.
       ``(b) Allocations of Liability.--
       ``(1) Mandatory allocations.--For each mandatory allocation 
     facility involving 2 or more potentially responsible parties, 
     the Administrator shall conduct the allocation process under 
     this section.
       ``(2) Requested allocations.--For a facility (other than a 
     mandatory allocation facility) involving 2 or more 
     potentially responsible parties, the Administrator shall 
     conduct the allocation process under this section if the 
     allocation is requested in writing by a potentially 
     responsible party that has--
       ``(A) incurred response costs with respect to a response 
     action; or
       ``(B) resolved any liability to the United States with 
     respect to a response action in order to assist in allocating 
     shares among potentially responsible parties.
       ``(3) Permissive allocations.--For any facility (other than 
     a mandatory allocation facility or a facility with respect to 
     which a request is made under paragraph (2)) involving 2 or 
     more potentially responsible parties, the Administrator may 
     conduct the allocation process under this section if the 
     Administrator considers it to be appropriate to do so.
       ``(4) Orphan share.--An allocation performed at a facility 
     identified under subsection (a)(3) (C) or (D) or (b) (2) or 
     (3) shall not require payment of an orphan share under 
     subsection (l) or reimbursement under subsection (t).
       ``(5) Excluded facilities.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     for purposes of the allocation process only, this section 
     does not apply to--
       ``(i) a response action at a mandatory allocation facility 
     for which there was in effect as of June 15, 1995, a final 
     settlement, decree, or order that determines the liability 
     and allocated shares of all potentially responsible parties 
     with respect to the response action; or
       ``(ii) a facility with respect to which none of the 
     potentially responsible parties is liable or potentially 
     liable under section 107(a)(1) (C) or (D).
       ``(B) Conduct prior to december 11, 1980.--
       ``(i) In general.--For any mandatory allocation facility 
     that is otherwise excluded by subparagraph (A), an allocation 
     process shall be conducted for the sole purpose of 
     determining the percentage share of responsibility 
     attributable to activity of each potentially responsible 
     party prior to December 11, 1980.
       ``(ii) Purpose.--The determination made under clause (i) 
     shall be used only to determine the availability of the 
     environmental response expenditures credit under section 
     38(b)(12) of the Internal Revenue Code of 1986.
       ``(6) Scope of allocations.--Subject to paragraph (5), an 
     allocation under this section shall apply to--
       ``(A) the cost of any response action selected by the 
     Administrator after June 15, 1995, for a mandatory allocation 
     facility described in subsection (a)(3) (A) or (B);
       ``(B) the cost of construction and operation and 
     maintenance incurred at a mandatory allocation facility after 
     June 15, 1995, in accordance with a record of decision 
     approved by the Administrator before June 15, 1995; and
       ``(C) the cost of any response action incurred by a 
     potentially responsible party at a facility that is the 
     subject of a requested allocation or permissive allocation 
     process under subsection (b) (2) or (3).
       ``(7) Other matters.--This section shall not limit or 
     affect--
       ``(A) the obligation of the Administrator to conduct the 
     allocation process for a response action at a facility that 
     has been the subject of a partial or expedited settlement 
     with respect to a response action that is not within the 
     scope of the allocation;
       ``(B) the ability of any person to resolve any liability at 
     a facility to any other person at any time before initiation 
     or completion of the allocation process, subject to 
     subsection (l)(3);
       ``(C) the validity, enforceability, finality, or merits of 
     any judicial or administrative order, judgment, or decree 
     issued prior to the date of enactment of this section with 
     respect to liability under this Act; or
       ``(D) the validity, enforceability, finality, or merits of 
     any preexisting contract or agreement relating to any 
     allocation of responsibility or any indemnity for, or sharing 
     of, any response costs under this Act.
       ``(c) Moratorium on Litigation and Enforcement.--
       ``(1) In general.--No person may assert a claim for 
     recovery of a response cost or contribution toward a response 
     cost under this Act or any other Federal or State law in 
     connection with a response action--
       ``(A) for which an allocation is required to be performed 
     under subsection (b)(1); or
       ``(B) for which the Administrator has initiated the 
     allocation process under this section,

     until the date that is 120 days after the date of issuance of 
     a report by the allocator under subsection (j)(5) or, if a 
     second or subsequent report is issued under subsection (r), 
     the date of issuance of the second or subsequent report.
       ``(2) Pending actions or claims.--If a claim described in 
     paragraph (1) is pending on the date of enactment of this 
     section or on initiation of an allocation under this section, 
     the portion of the claim pertaining to response costs that 
     are the subject of the allocation shall be stayed until the 
     date that is 120 days after the date of issuance of a report 
     by the allocator under subsection (j)(5) or, if a second or 
     subsequent report is issued under subsection (r), the date of 
     issuance of the second or subsequent report, unless the 

[[Page S 14725]]
     court determines that a stay would result in manifest injustice.
       ``(3) Tolling of period of limitation.--
       ``(A) Beginning of tolling.--Any applicable period of 
     limitation with respect to a claim subject to paragraph (1) 
     shall be tolled beginning on the earlier of--
       ``(i) the date of listing of the facility on the National 
     Priorities List if the listing occurs after the date of 
     enactment of this section; or
       ``(ii) the date of initiation of the allocation process 
     under this section.
       ``(B) End of tolling.--A period of limitation shall be 
     tolled under subparagraph (A) until the date that is 180 days 
     after the date of issuance of a report by the allocator under 
     subsection (j)(5), or of a second or subsequent report under 
     subsection (r).
       ``(4) Later actions.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Administrator shall not issue any order under section 106 
     after the date of enactment of this section in connection 
     with a response action for which an allocation is required to 
     be performed under subsection (b)(1), or for which the 
     Administrator has initiated the allocation process under this 
     section, until the date that is 180 days after the date of 
     issuance of a report by the allocator under subsection (j)(5) 
     or of a second or subsequent report under subsection (r).
       ``(B) Emergencies.--Subparagraph (A) does not preclude an 
     order requiring the performance of a removal action that is 
     necessary to address an emergency situation at a facility.
       ``(5) Retained authority.--Except as specifically provided 
     in this section, this section does not affect the authority 
     of the Administrator to--
       ``(A) exercise the powers conferred by section 103, 104, 
     105, 106, or 122;
       ``(B) commence an action against a party if there is a 
     contemporaneous filing of a judicial consent decree resolving 
     the liability of the party; or
       ``(C) file a proof of claim or take other action in a 
     proceeding under title 11, United States Code.
       ``(d) Initiation of Allocation Process.--
       ``(1) Responsible party search.--For each facility 
     described in paragraph (2), the Administrator shall initiate 
     the allocation process as soon as practicable by commencing a 
     comprehensive search for all potentially responsible parties 
     with respect to the facility under authority of section 104.
       ``(2) Facilities.--The Administrator shall initiate the 
     allocation process for each--
       ``(A) mandatory allocation facility;
       ``(B) facility for which a request for allocation is made 
     under subsection (b)(2); and
       ``(C) facility that the Administrator considers to be 
     appropriate for allocation under subsection (b)(3).
       ``(3) Time limit.--The Administrator shall initiate the 
     allocation process for a facility not later than the earlier 
     of--
       ``(A) the date of completion of the facility evaluation or 
     remedial investigation for the facility; or
       ``(B) the date that is 60 days after the date of selection 
     of a removal action.
       ``(4) Submission of information.--Any person may submit 
     information to the Administrator concerning a potentially 
     responsible party for a facility that is subject to a search, 
     and the Administrator shall consider the information in 
     carrying out the search.
       ``(5) Initial list of parties.--
       ``(A) In general.--As soon as practicable after initiation 
     of an allocation process for a facility, the Administrator 
     shall publish, in accordance with section 117(d), a list of 
     all potentially responsible parties identified for a 
     facility.
       ``(B) Time limit.--The Administrator shall publish a list 
     under paragraph (1) not later than 120 days after the 
     commencement of a comprehensive search.
       ``(C) Copy of list.--The Administrator shall provide each 
     person named on a list of potentially responsible parties 
     with--
       ``(i) a copy of the list; and
       ``(ii) the names of not less than 25 neutral parties--

       ``(I) who are not employees of the United States;
       ``(II) who are qualified to perform an allocation at the 
     facility, as determined by the Administrator; and
       ``(III) at least some of whom maintain an office in the 
     vicinity of the facility.

       ``(D) Proposed allocator.--A person identified by the 
     Administrator as a potentially responsible party may propose 
     an allocator not on the list of neutral parties.
       ``(e) Selection of Allocator.--
       ``(1) In general.--As soon as practicable after the receipt 
     of a list under subsection (d)(5)(C), the potentially 
     responsible parties named on the list shall--
       ``(A) select an individual to serve as allocator by 
     plurality vote on a per capita basis; and
       ``(B) promptly notify the Administrator of the selection.
       ``(2) Vote by representative.--The representative of the 
     Fund shall be entitled to cast 1 vote in an election under 
     paragraph (1).
       ``(3) Eligible allocators.--The potentially responsible 
     parties shall select an allocator under paragraph (1) from 
     among individuals--
       ``(A) named on the list of neutral parties provided by the 
     Administrator;
       ``(B) named on a list that is current on the date of 
     selection of neutrals maintained by the American Arbitration 
     Association, the Center for Public Resources, the 
     Administrative Conference of the United States, or another 
     nonprofit or governmental organization of comparable 
     standing; or
       ``(C) proposed by a party under subsection (d)(5)(D).
       ``(4) Unqualified allocator.--
       ``(A) In general.--If the Administrator determines that a 
     person selected under paragraph (1) is unqualified to serve, 
     the Administrator shall promptly notify all potentially 
     responsible parties for the facility, and the potentially 
     responsible parties shall make an alternative selection under 
     paragraph (1).
       ``(B) Limit on determinations.--The Administrator may not 
     make more than 2 determinations that an allocator is 
     unqualified under this paragraph with respect to any 
     facility.
       ``(5) Determination by administrator.--If the Administrator 
     does not receive notice of selection of an allocator within 
     60 days after a copy of a list is provided under subsection 
     (d)(5)(C), or if the Administrator, having given a 
     notification under paragraph (4), does not receive notice of 
     an alternative selection of an allocator under that paragraph 
     within 60 days after the date of the notification, the 
     Administrator shall promptly select and designate a person to 
     serve as allocator.
       ``(6) Judicial review.--No action under this subsection 
     shall be subject to judicial review.
       ``(f) Retention of Allocator.--
       ``(1) In general.--On selection of an allocator, the 
     Administrator shall promptly--
       ``(A) contract with the allocator for the provision of 
     allocation services in accordance with this section; and
       ``(B) notify each person named as a potentially responsible 
     party at the facility that the allocator has been retained.
       ``(2) Discretion of allocator.--A contract with an 
     allocator under paragraph (1) shall give the allocator broad 
     discretion to conduct the allocation process in a fair, 
     efficient, and impartial manner.
       ``(3) Provision of information.--
       ``(A) In general.--Not later than 30 days after the 
     selection of an allocator, the Administrator shall make 
     available to the allocator and to each person named as a 
     potentially responsible party for the facility--
       ``(i) any information or documents furnished under section 
     104(e)(2); and
       ``(ii) any other potentially relevant information 
     concerning the facility and the potentially responsible 
     parties at the facility.
       ``(B) Privileged information.--The Administrator shall not 
     make available any privileged information, except as 
     otherwise authorized by law.
       ``(g) Additional Parties.--
       ``(1) In general.--Any person may propose to the allocator 
     the name of an additional potentially responsible party at a 
     facility, or otherwise provide the allocator with information 
     pertaining to a facility or to an allocation, until the date 
     that is 60 days after the later of--
       ``(A) the date of issuance of the initial list described in 
     subsection (d)(5)(A); or
       ``(B) the date of retention of the allocator under 
     subsection (f)(1)(A).
       ``(2) Nexus.--Any proposal under paragraph (1) to add a 
     potentially responsible party shall include all information 
     reasonably available to the person making the proposal 
     regarding the nexus between the additional potentially 
     responsible party and the facility.
       ``(3) Final list.--
       ``(A) In general.--The allocator shall issue a final list 
     of all parties that will be subject to the allocation process 
     (referred to in this section as the `allocation parties') not 
     later than 120 days after publication of the initial list 
     under subsection (d)(5)(A).
       ``(B) Standard.--The allocator shall include each party 
     proposed under paragraph (1) in the final list of allocation 
     parties unless the allocator determines that the party is not 
     potentially liable under section 107.
       ``(4) De micromis parties.--
       ``(A) Identification.--Not later than 120 days after the 
     filing of the initial list of parties under subsection 
     (d)(5)(A), the allocator shall issue a list identifying all 
     de micromis parties with respect to the facility based on an 
     evaluation of all evidence received at the time of the 
     issuance of the list with respect to the amount of hazardous 
     substances contributed by potentially responsible parties.
       ``(B) Notification.--The allocator shall notify each de 
     micromis party of its inclusion on the list under 
     subparagraph (A) not later than 20 days after the date of 
     issuance of the list.
       ``(C) Exemption from liability.--A person that is named on 
     the list under subparagraph (A) shall have no liability to 
     the United States or to any other person (including liability 
     for contribution), under Federal or State law, for a response 
     action or for any past, present, or future cost incurred at 
     the facility for a release identified in the facility 
     evaluation under section 129(b)(4) if the person takes no 
     other action after being included on the list that would give 
     rise to a separate basis for liability under this Act.
       ``(h) Federal, State, and Local Agencies.--
       ``(1) In general.--Notwithstanding any other law, any 
     Federal, State, or local governmental department, agency, or 
     instrumentality that is named as a potentially responsible 
     party or an allocation party shall be subject to, and be 
     entitled to the benefits 

[[Page S 14726]]
     of, the allocation process and allocation determination under this 
     section to the same extent as any other party.
       ``(2) Orphan share.--The Administrator or the Attorney 
     General shall participate in the allocation proceeding as the 
     representative of the Fund from which any orphan share shall 
     be paid.
       ``(i) Potentially Responsible Party Settlement.--
       ``(1) Submission.--At any time prior to the date of 
     issuance of an allocation report under subsection (j)(6) or 
     of a second or subsequent report under subsection (r), any 
     group of potentially responsible parties for a facility may 
     submit to the allocator a private allocation for any response 
     action that is within the scope of the allocation under 
     subsection (b)(6).
       ``(2) Adoption.--The allocator shall promptly adopt a 
     private allocation under paragraph (1) as the allocation 
     report if the private allocation--
       ``(A) is a binding allocation of 100 percent of the 
     recoverable costs of the response action that is the subject 
     of the allocation; and
       ``(B) does not allocate a share to--
       ``(i) any person who is not a signatory to the private 
     allocation; or
       ``(ii) any person whose share would be part of the orphan 
     share under subsection (l), unless the representative of the 
     Fund is a signatory to the private allocation.
       ``(3) Waiver of rights.--Any signatory to a private 
     allocation waives the right to seek from any other 
     potentially responsible party for a facility--
       ``(A) recovery of any response cost that is the subject of 
     the allocation; and
       ``(B) contribution under this Act with respect to any 
     response action that is within the scope of the allocation.
       ``(j) Allocation Determination.--
       ``(1) Allocation process.--An allocator retained under 
     subsection (f)(1) shall conduct an allocation process 
     culminating in the issuance of a written report with a 
     nonbinding equitable allocation of percentage shares of 
     responsibility for any response action that is within the 
     scope of the allocation under subsection (b)(6).
       ``(2) Copies of report.--An allocator shall provide the 
     report issued under paragraph (1) to the Administrator and to 
     the allocation parties.
       ``(3) Information-gathering authorities.--
       ``(A) In general.--An allocator may request information 
     from any person in order to assist in the efficient 
     completion of the allocation process.
       ``(B) Requests.--Any person may request that an allocator 
     request information under this paragraph.
       ``(C) Authority.--An allocator may exercise the 
     information-gathering authority of the Administrator under 
     section 104(e), including issuing an administrative subpoena 
     to compel the production of a document or the appearance of a 
     witness.
       ``(D) Disclosure.--Notwithstanding any other law, any 
     information submitted to the allocator in response to a 
     subpoena issued under paragraph (4) shall be exempt from 
     disclosure to any person under section 552 of title 5, United 
     States Code.
       ``(E) Orders.--In the event of contumacy or a failure of a 
     person to obey a subpoena issued under paragraph (4), an 
     allocator may request the Attorney General to--
       ``(i) bring a civil action to enforce the subpoena; or
       ``(ii) if the person moves to quash the subpoena, to defend 
     the motion.
       ``(F) Failure of attorney general to respond.--If the 
     Attorney General fails to provide any response to the 
     allocator within 30 days of a request for enforcement of a 
     subpoena or information request, the allocator may retain 
     counsel to commence a civil action to enforce the subpoena or 
     information request.
       ``(4) Additional authority.--An allocator may--
       ``(A) schedule a meeting or hearing and require the 
     attendance of allocation parties at the meeting or hearing;
       ``(B) sanction an allocation party for failing to cooperate 
     with the orderly conduct of the allocation process;
       ``(C) require that allocation parties wishing to present 
     similar legal or factual positions consolidate the 
     presentation of the positions;
       ``(D) obtain or employ support services, including 
     secretarial, clerical, computer support, legal, and 
     investigative services; and
       ``(E) take any other action necessary to conduct a fair, 
     efficient, and impartial allocation process.
       ``(5) Conduct of allocation process.--
       ``(A) In general.--The allocator shall conduct the 
     allocation process and render a decision based solely on the 
     provisions of this section, including the allocation factors 
     described in subsection (k).
       ``(B) Opportunity to be heard.--Each allocation party shall 
     be afforded an opportunity to be heard (orally or in writing, 
     at the option of an allocation party) and an opportunity to 
     comment on a draft allocation report.
       ``(C) Responses.--The allocator shall not be required to 
     respond to comments.
       ``(D) Streamlining.--In a case in which the expected 
     response costs are relatively low and the number of 
     potentially responsible parties is relatively small, the 
     allocator shall make every effort to streamline the 
     allocation process and minimize the cost of conducting the 
     allocation.
       ``(6) Allocation report.--
       ``(A) Deadline.--
       ``(i) In general.--The allocator shall provide a written 
     allocation report to the Administrator and the allocation 
     parties not later than 180 days after the date of issuance of 
     the final list of allocation parties under subsection 
     (g)(3)(A) that specifies the allocation share of each 
     potentially responsible party and any orphan shares, as 
     determined by the allocator.
       ``(ii) Extension.--On request by the allocator and for good 
     cause shown, the Administrator may extend the time to 
     complete the report by not more than 90 days.
       ``(B) Breakdown of allocation shares into time periods.--
     The allocation share for each potentially responsible party 
     with respect to a mandatory allocation facility shall be 
     comprised of percentage shares of responsibility stated 
     separately for activity prior to December 11, 1980, and 
     activity on or after December 11, 1980.
       ``(C) Tax-exempt parties.--Of the percentage share of a 
     potentially responsible party that is a State, political 
     subdivision of a State, an agency or instrumentality of a 
     State or political subdivision, or is an organization that is 
     exempt from tax imposed by chapter 1 of the Internal Revenue 
     Code of 1986 (unless the organization is subject to the tax 
     imposed by 511 of the Internal Revenue Code of 1986) for 
     activity prior to December 11, 1980, that would be allocated 
     to that party but for this subparagraph--
       ``(i) 50 percent shall be allocated to that party; and
       ``(ii) 50 percent shall be allocated to the orphan share 
     under subsection (l).
       ``(k) Equitable Factors for Allocation.--The allocator 
     shall prepare a nonbinding allocation of percentage shares of 
     responsibility to each allocation party and to the orphan 
     share, in accordance with this section and without regard to 
     any theory of joint and several liability, based on--
       ``(1) the amount of hazardous substances contributed by 
     each allocation party;
       ``(2) the degree of toxicity of hazardous substances 
     contributed by each allocation party;
       ``(3) the mobility of hazardous substances contributed by 
     each allocation party;
       ``(4) the degree of involvement of each allocation party in 
     the generation, transportation, treatment, storage, or 
     disposal of hazardous substances;
       ``(5) the degree of care exercised by each allocation party 
     with respect to hazardous substances, taking into account the 
     characteristics of the hazardous substances;
       ``(6) the cooperation of each allocation party in 
     contributing to any response action and in providing complete 
     and timely information to the allocator; and
       ``(7) such other equitable factors as the allocator 
     determines are appropriate.
       ``(l) Orphan Shares.--
       ``(1) In general.--The allocator shall determine whether 
     any percentage of responsibility for the response action 
     shall be allocable to the orphan share.
       ``(2) Makeup of orphan share.--The orphan share shall 
     consist of--
       ``(A) any share that the allocator determines is 
     attributable to an allocation party that is insolvent or 
     defunct and that is not affiliated with any financially 
     viable allocation party;
       ``(B) any share allocated under subsection (j)(6)(C)(ii); 
     and
       ``(C) the difference between the aggregate share that the 
     allocator determines is attributable to a person and the 
     aggregate share actually assumed by the person in a 
     settlement with the United States if--
       ``(i) the person is eligible for an expedited settlement 
     with the United States under section 122 based on limited 
     ability to pay response costs;
       ``(ii) the person is eligible for an expedited settlement 
     with the United States under section 122 based on de minimis 
     contributions of hazardous substances to a facility;
       ``(iii) the liability of the person for the response action 
     is limited or reduced by any provision of this Act; or
       ``(iv) the person settled with the United States before the 
     completion of the allocation.
       ``(3) Unattributable shares.--A share attributed to a 
     hazardous substance that the allocator cannot attribute to 
     any identified party shall be distributed among the 
     allocation parties and the orphan share.
       ``(m) De Minimis Settlements.--
       ``(1) Identification.--As part of the allocation report 
     under subsection (j)(6), or at any time before the issuance 
     of the allocation report, the allocator shall issue a list 
     identifying all potentially responsible parties with respect 
     to the facility whose allocated share of liability is 
     determined to be 1.0 percent or less.
       ``(2) Settlement offer.--
       ``(A) Offer by the administrator.--Not later than 90 days 
     after the date of issuance of the allocation report under 
     subsection (j)(6) or the date of issuance of the list of de 
     minimis parties under paragraph (1), whichever is earlier, 
     the Administrator shall make a firm written offer of 
     settlement to all de minimis parties.
       ``(B) Amount.--The amount of the settlement offer for a de 
     minimis party--
       ``(i) shall be stated in dollars, not a percentage share of 
     the cleanup costs; and
       ``(ii) shall be based on the Administrator's estimate of 
     the total cleanup cost at the facility multiplied by the de 
     minimis party's allocated share, as determined by the 
     allocator.

[[Page S 14727]]

       ``(C) Single estimate and premium.--All settlement offers 
     by the Administrator to de minimis parties at a facility 
     shall be based on the same estimate of cleanup costs and the 
     same premium.
       ``(D) No judicial review.--A settlement offer under this 
     paragraph is not subject to judicial review.
       ``(3) Acceptance.--
       ``(A) Deadline.--A de minimis party may accept or decline a 
     settlement offer, but any acceptance of the offer shall be 
     made within 60 days after receipt of the offer.
       ``(B) Resolution of liability.--A de minimis party that 
     accepts the offer may resolve the party's liability to the 
     United States by paying the amount of the offer to the 
     Hazardous Substance Superfund established under subparagraph 
     (A) of chapter 98 of the Internal Revenue Code of 1986.
       ``(C) No reopening.--Settlement under this subsection may 
     not be reopened after payment is made except on the ground of 
     fraud.
       ``(4) No further liability.--A de minimis party that 
     accepts a settlement offer and pays the amount of the offer 
     shall have no other liability, under Federal or State law, to 
     any person for a response action or for any past, present, or 
     future costs incurred at the facility for a release 
     identified in the facility evaluation under section 129(b)(4) 
     if the de minimis party takes no other actions after making 
     the payment that would give rise to a separate basis for 
     liability of the de minimis party under this Act.
       ``(5) Application of proceeds.--
       ``(A) Proceeds representing allocated shares.--All proceeds 
     from a de minimis settlement under this subsection that 
     represent the allocated share of a de minimis party for a 
     facility shall be held by the Administrator for timely 
     payment directly to the person performing the response action 
     at the facility.
       ``(B) Excess amounts.--Any amounts of a settlement 
     remaining in the Fund after completion of the response action 
     shall be available for other authorized uses.
       ``(n) Information Requests.--
       ``(1) Duty to answer.--Each person that receives an 
     information request or subpoena from the allocator shall 
     provide a full and timely response to the request.
       ``(2) Certification.--An answer to an information request 
     by an allocator shall include a certification by a 
     representative that meets the criteria established in section 
     270.11(a) of title 40, Code of Federal Regulations (or any 
     successor regulation), that--
       ``(A) the answer is correct to the best of the 
     representative's knowledge;
       ``(B) the answer is based on a diligent good faith search 
     of records in the possession or control of the person to whom 
     the request was directed;
       ``(C) the answer is based on a reasonable inquiry of the 
     current (as of the date of the answer) officers, directors, 
     employees, and agents of the person to whom the request was 
     directed;
       ``(D) the answer accurately reflects information obtained 
     in the course of conducting the search and the inquiry;
       ``(E) the person executing the certification understands 
     that there is a duty to supplement any answer if, during the 
     allocation process, any significant additional, new, or 
     different information becomes known or available to the 
     person; and
       ``(F) the person executing the certification understands 
     that there are significant penalties for submitting false 
     information, including the possibility of a fine or 
     imprisonment for a knowing violation.
       ``(o) Penalties.--
       ``(1) Civil.--
       ``(A) In general.--A person that fails to submit a complete 
     and timely answer to an information request, a request for 
     the production of a document, or a summons from an allocator, 
     submits a response that lacks the certification required 
     under subsection (n)(2), or knowingly makes a false or 
     misleading material statement or representation in any 
     statement, submission, or testimony during the allocation 
     process (including a statement or representation in 
     connection with the nomination of another potentially 
     responsible party) shall be subject to a civil penalty of not 
     more than $10,000 per day of violation.
       ``(B) Assessment of penalty.--A penalty may be assessed by 
     the Administrator in accordance with section 109 or by any 
     allocation party in a citizen suit brought under section 310.
       ``(2) Criminal.--A person that knowingly and willfully 
     makes a false material statement or representation in the 
     response to an information request or subpoena issued by the 
     allocator under subsection (n) shall be considered to have 
     made a false statement on a matter within the jurisdiction of 
     the United States within the meaning of section 1001 of title 
     18, United States Code.
       ``(p) Document Repository; Confidentiality.--
       ``(1) Document repository.--
       ``(A) In general.--The allocator shall establish and 
     maintain a document repository containing copies of all 
     documents and information provided by the Administrator or 
     any allocation party under this section or generated by the 
     allocator during the allocation process.
       ``(B) Availability.--Subject to paragraph (2), the 
     documents and information in the document repository shall be 
     available only to an allocation party for review and copying 
     at the expense of the allocation party.
       ``(2) Confidentiality.--
       ``(A) In general.--Each document or material submitted to 
     the allocator or placed in the document repository and the 
     record of any information generated or obtained during the 
     allocation process shall be confidential.
       ``(B) Maintenance.--The allocator, each allocation party, 
     the Administrator, and the Attorney General--
       ``(i) shall maintain the documents, materials, and records 
     of any depositions or testimony adduced during the allocation 
     as confidential; and
       ``(ii) shall not use any such document or material or the 
     record in any other matter or proceeding or for any purpose 
     other than the allocation process.
       ``(C) Disclosure.--Notwithstanding any other law, the 
     documents and materials and the record shall not be subject 
     to disclosure to any person under section 552 of title 5, 
     United States Code.
       ``(D) Discovery and admissibility.--
       ``(i) In general.--Subject to clause (ii), the documents 
     and materials and the record shall not be subject to 
     discovery or admissible in any other Federal, State, or local 
     judicial or administrative proceeding, except--

       ``(I) a new allocation under subsection (r) or (w) for the 
     same response action; or
       ``(II) an initial allocation under this section for a 
     different response action at the same facility.

       ``(ii) Otherwise discoverable or admissible.--

       ``(I) Document or material.--If the original of any 
     document or material submitted to the allocator or placed in 
     the document repository was otherwise discoverable or 
     admissible from a party, the original document, if 
     subsequently sought from the party, shall remain discoverable 
     or admissible.
       ``(II) Facts.--If a fact generated or obtained during the 
     allocation was otherwise discoverable or admissible from a 
     witness, testimony concerning the fact, if subsequently 
     sought from the witness, shall remain discoverable or 
     admissible.

       ``(3) No waiver of privilege.--The submission of testimony, 
     a document, or information under the allocation process shall 
     not constitute a waiver of any privilege applicable to the 
     testimony, document, or information under any Federal or 
     State law or rule of discovery or evidence.
       ``(4) Procedure if disclosure sought.--
       ``(A) Notice.--A person that receives a request for a 
     statement, document, or material submitted for the record of 
     an allocation proceeding, shall--
       ``(i) promptly notify the person that originally submitted 
     the item or testified in the allocation proceeding; and
       ``(ii) provide the person that originally submitted the 
     item or testified in the allocation proceeding an opportunity 
     to assert and defend the confidentiality of the item or 
     testimony.
       ``(B) Release.--No person may release or provide a copy of 
     a statement, document, or material submitted, or the record 
     of an allocation proceeding, to any person not a party to the 
     allocation except--
       ``(i) with the written consent of the person that 
     originally submitted the item or testified in the allocation 
     proceeding; or
       ``(ii) as may be required by court order.
       ``(5) Civil penalty.--
       ``(A) In general.--A person that fails to maintain the 
     confidentiality of any statement, document, or material or 
     the record generated or obtained during an allocation 
     proceeding, or that releases any information in violation of 
     this section, shall be subject to a civil penalty of not more 
     than $25,000 per violation.
       ``(B) Assessment of penalty.--A penalty may be assessed by 
     the Administrator in accordance with section 109 or by any 
     allocation party in a citizen suit brought under section 310.
       ``(C) Defenses.--In any administrative or judicial 
     proceeding, it shall be a complete defense that any 
     statement, document, or material or the record at issue under 
     subparagraph (A)--
       ``(i) was in, or subsequently became part of, the public 
     domain, and did not become part of the public domain as a 
     result of a violation of this subsection by the person 
     charged with the violation;
       ``(ii) was already known by lawful means to the person 
     receiving the information in connection with the allocation 
     process; or
       ``(iii) became known to the person receiving the 
     information after disclosure in connection with the 
     allocation process and did not become known as a result of 
     any violation of this subsection by the person charged with 
     the violation.
       ``(q) Rejection of Allocation Report.--
       ``(1) Rejection.--The Administrator and the Attorney 
     General may jointly reject a report issued by an allocator 
     only if the Administrator and the Attorney General jointly 
     publish, not later than 180 days after the Administrator 
     receives the report, a written determination that--
       ``(A) no rational interpretation of the facts before the 
     allocator, in light of the factors required to be considered, 
     would form a reasonable basis for the shares assigned to the 
     parties; or
       ``(B) the allocation process was directly and substantially 
     affected by bias, procedural error, fraud, or unlawful 
     conduct.
       ``(2) Finality.--A report issued by an allocator may not be 
     rejected after the date that is 180 days after the date on 
     which the United States accepts a settlement offer (excluding 
     a de minimis or other expedited settlement under section 122) 
     based on the allocation.

[[Page S 14728]]

       ``(3) Judicial review.--Any determination by the 
     Administrator or the Attorney General under this subsection 
     shall not be subject to judicial review unless 2 successive 
     allocation reports relating to the same response action are 
     rejected, in which case any allocation party may obtain 
     judicial review of the second rejection in a United States 
     district court under subchapter II of chapter 5 of part I of 
     title 5, United States Code.
       ``(4) Standard of review.--In a proceeding on review of a 
     rejection of an allocation report under subparagraph (3), the 
     court shall, notwithstanding section 706(2)(E) of title 5, 
     United States Code, hold unlawful and set aside actions, 
     findings, and conclusions found to be unsupported by 
     substantial evidence.
       ``(5) Delegation.--The authority to make a determination 
     under this subsection may not be delegated to any officer or 
     employee below the level of an Assistant Administrator or 
     Acting Assistant Administrator or an Assistant Attorney 
     General or Acting Assistant Attorney General with authority 
     for implementing this Act.
       ``(r) Second and Subsequent Allocations.--
       ``(1) In general.--If a report is rejected under subsection 
     (q), the allocation parties shall select an allocator under 
     subsection (e) to perform, on an expedited basis, a new 
     allocation based on the same record available to the previous 
     allocator.
       ``(2) Moratorium and tolling.--The moratorium and tolling 
     provisions of subsection (c) shall be extended until the date 
     that is 180 days after the date of the issuance of any second 
     or subsequent allocation report under paragraph (1).
       ``(3) Same allocator.--The allocation parties may select 
     the same allocator who performed 1 or more previous 
     allocations at the facility, except that the Administrator 
     may determine under subsection (e) that an allocator whose 
     previous report at the same facility has been rejected under 
     subsection (q) is unqualified to serve.
       ``(s) Settlements Based on Allocations.--
       ``(1) Definition.--In this subsection, the term `all 
     settlements' includes any orphan share allocated under 
     subsection (l).
       ``(2) In general.--Unless an allocation report is rejected 
     under subsection (q), any allocation party with respect to a 
     mandatory allocation facility shall be entitled to resolve 
     the liability of the party to the United States for response 
     actions subject to allocation if, not later than 90 days 
     after the date of issuance of a report by the allocator, the 
     party--
       ``(A) offers to settle with the United States based on the 
     percentage share specified by the allocator; and
       ``(B) agrees to the other terms and conditions stated in 
     this subsection.
       ``(3) Provisions of settlements.--
       ``(A) In general.--A settlement based on an allocation 
     under this section--
       ``(i) may consist of a cash-out settlement or an agreement 
     for the performance of a response action; and
       ``(ii) shall include--

       ``(I) a waiver of contribution rights against all persons 
     that are potentially responsible parties for any response 
     action addressed in the settlement;
       ``(II) a covenant not to sue that is consistent with 
     section 122(f) and, except in the case of a cash-out 
     settlement, provisions regarding performance or adequate 
     assurance of performance of the response action;
       ``(III) a premium, calculated on a facility-specific basis 
     and subject to the limitations on premiums stated in 
     paragraph (5), that reflects the actual risk to the United 
     States of not collecting unrecovered response costs for the 
     response action, despite the diligent prosecution of 
     litigation against any viable allocation party that has not 
     resolved the liability of the party to the United States, 
     except that no premium shall apply if all allocation parties 
     participate in the settlement or if the settlement covers 100 
     percent of the response costs subject to the allocation;
       ``(IV) complete protection from all claims for contribution 
     regarding the response action addressed in the settlement; 
     and
       ``(V) provisions through which a settling party shall 
     receive prompt reimbursement from the Fund under subsection 
     (t) of any response costs incurred by the party for any 
     response action that is the subject of the allocation in 
     excess of the allocated share of the party, including the 
     allocated portion of any orphan share.

       ``(B) Right to reimbursement.--A right to reimbursement 
     under subparagraph (A)(ii)(V) shall not be contingent on 
     recovery by the United States of any response costs from any 
     person other than the settling party.
       ``(4) Report.--The Administrator shall report annually to 
     Congress on the administration of the allocation process 
     under this section, providing in the report--
       ``(A) information comparing allocation results with actual 
     settlements at multiparty facilities;
       ``(B) a cumulative analysis of response action costs 
     recovered through post-allocation litigation or settlements 
     of post-allocation litigation;
       ``(C) a description of any impediments to achieving 
     complete recovery; and
       ``(D) a complete accounting of the costs incurred in 
     administering and participating in the allocation process.
       ``(5) Premium.--In each settlement under this subsection, 
     the premium authorized--
       ``(A) shall be determined on a case-by-case basis to 
     reflect the actual litigation risk faced by the United States 
     with respect to any response action addressed in the 
     settlement; but
       ``(B) shall not exceed--
       ``(i) 5 percent of the total costs assumed by a settling 
     party if all settlements (including any orphan share) account 
     for more than 80 percent and less than 100 percent of 
     responsibility for the response action;
       ``(ii) 10 percent of the total costs assumed by a settling 
     party if all settlements (including any orphan share) account 
     for more than 60 percent and not more than 80 percent of 
     responsibility for the response action;
       ``(iii) 15 percent of the total costs assumed by a settling 
     party if all settlements (including any orphan share) account 
     for more than 40 percent and not more than 60 percent of 
     responsibility for the response action; or
       ``(iv) 20 percent of the total costs assumed by a settling 
     party if all settlements (including any orphan share) account 
     for 40 percent or less of responsibility for the response 
     action.
       ``(t) Funding of Orphan Shares.--
       ``(1) Reimbursement.--For each settlement agreement entered 
     into under subsection (s), and for each administrative order 
     that satisfies the requirements of subsection (u), the 
     Administrator shall promptly reimburse the allocation parties 
     for any costs incurred that are attributable to the orphan 
     share, as determined by the allocator.
       ``(2) Entitlement.--Paragraph (1) constitutes an 
     entitlement to any allocation party eligible to receive a 
     reimbursement.
       ``(3) Amounts owed.--Any amount due and owing in excess of 
     available appropriations in any fiscal year shall be paid 
     from amounts made available in subsequent fiscal years, along 
     with interest on the unpaid balances at the rate equal to 
     that of the current average market yield on outstanding 
     marketable obligations of the United States with a maturity 
     of 1 year.
       ``(4) Documentation and auditing.--The Administrator--
       ``(A) shall require that any claim for reimbursement be 
     supported by documentation of actual costs incurred; and
       ``(B) may require an independent auditing of any claim for 
     reimbursement.
       ``(u) Administrative Order Reimbursement.--
       ``(1) In general.--An allocation party that is ordered to 
     perform, and does perform, a response action that is the 
     subject of an allocation under this section to an extent that 
     exceeds the percentage share of the allocation party, as 
     determined by the allocator, shall be entitled to prompt 
     reimbursement of the excess amount, including any orphan 
     share, from the Fund, unless the allocation report is 
     rejected under subsection (q).
       ``(2) Not contingent.--The right to reimbursement under 
     paragraph (1) shall not be contingent on recovery by the 
     United States of a response cost from any other person.
       ``(3) Terms and conditions.--
       ``(A) Risk premium.--A reimbursement shall be reduced by 
     the amount of the litigation risk premium under subsection 
     (s)(4) that would apply to a settlement by the allocation 
     party concerning the response action, based on the total 
     allocated shares of the parties that have not reached a 
     settlement with the United States.
       ``(B) Timing.--
       ``(i) In general.--A reimbursement shall be paid out during 
     the course of the response action that was the subject of the 
     allocation, using reasonable progress payments at significant 
     milestones.
       ``(ii) Construction.--Reimbursement for the construction 
     portion of the work shall be paid out not later than 120 days 
     after the date of completion of the construction.
       ``(C) Equitable offset.--A reimbursement is subject to 
     equitable offset or recoupment by the Administrator at any 
     time if the allocation party fails to perform the work in a 
     proper and timely manner.
       ``(D) Independent auditing.--The Administrator may require 
     independent auditing of any claim for reimbursement.
       ``(E) Waiver.--An allocation party seeking reimbursement 
     waives the right to seek recovery of response costs in 
     connection with the response action, or contribution toward 
     the response costs, from any other person.
       ``(F) Bar.--An administrative order shall be in lieu of any 
     action by the United States or any other person against the 
     allocation party for recovery of response costs in connection 
     with the response action, or for contribution toward the 
     costs of the response action.
       ``(v) Post-Settlement Litigation.--
       ``(1) In general.--Subject to subsections (r) and (s), and 
     on the expiration of the moratorium period under subsection 
     (c)(4), the Administrator may commence an action under 
     section 107 against an allocation party that has not resolved 
     the liability of the party to the United States following 
     allocation and may seek to recover response costs not 
     recovered through settlements with other persons.
       ``(2) Orphan share.--The recoverable costs shall include 
     any orphan share determined under subsection (l), but shall 
     not include any share allocated to a Federal, State, or local 
     governmental agency, department, or instrumentality.
       ``(3) Impleader.--A defendant in an action under paragraph 
     (1) may implead an allocation party only if the allocation 
     party did not resolve liability to the United States.
       ``(4) Certification.--In commencing or maintaining an 
     action under section 107 

[[Page S 14729]]
     against an allocation party after the expiration of the moratorium 
     period under subsection (c)(4), the Attorney General shall 
     certify in the complaint that the defendant failed to settle 
     the matter based on the share that the allocation report 
     assigned to the party.
       ``(5) Response costs.--
       ``(A) Allocation procedure.--The cost of implementing the 
     allocation procedure under this section, including reasonable 
     fees and expenses of the allocator, shall be considered as a 
     necessary response cost.
       ``(B) Funding orphan shares.--The cost attributable to 
     funding an orphan share under this section--
       ``(i) shall be considered as a necessary cost of response 
     cost; and
       ``(ii) shall be recoverable in accordance with section 107 
     only from an allocation party that does not reach a 
     settlement and does not receive an administrative order under 
     subsection (s) or (u).
       ``(w) New Information.--
       ``(1) In general.--An allocation under this section shall 
     be final, except that any settling party, including the 
     United States, may seek a new allocation with respect to the 
     response action that was the subject of the settlement by 
     presenting the Administrator with clear and convincing 
     evidence that--
       ``(A) the allocator did not have information concerning--
       ``(i) 35 percent or more of the materials containing 
     hazardous substances at the facility; or
       ``(ii) 1 or more persons not previously named as an 
     allocation party that contributed 15 percent or more of 
     materials containing hazardous substances at the facility; 
     and
       ``(B) the information was discovered subsequent to the 
     issuance of the report by the allocator.
       ``(2) New allocation.--Any new allocation of 
     responsibility--
       ``(A) shall proceed in accordance with this section;
       ``(B) shall be effective only after the date of the new 
     allocation report; and
       ``(C) shall not alter or affect the original allocation 
     with respect to any response costs previously incurred.
       ``(x) Allocator's Discretion.--The Administrator shall not 
     issue any rule or order that limits the discretion of the 
     allocator in the conduct of the allocation.''.

     SEC. 502. LIABILITY OF RESPONSE ACTION CONTRACTORS.

       (a) Liability of Contractors.--Section 101(20) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601(20)), as amended by 
     section 303(a), is amended by adding at the end the 
     following:
       ``(G) Liability of contractors.--
       ``(i) In general.--The term `owner or operator' does not 
     include a response action contractor (as defined in section 
     119(e)).
       ``(ii) Liability limitations.--A person described in clause 
     (i) shall not, in the absence of negligence by the person, be 
     considered to--

       ``(I) cause or contribute to any release or threatened 
     release of a hazardous substance, pollutant, or contaminant;
       ``(II) arrange for disposal or treatment of a hazardous 
     substance, pollutant, or contaminant;
       ``(III) arrange with a transporter for transport or 
     disposal or treatment of a hazardous substance, pollutant, or 
     contaminant; or
       ``(IV) transport a hazardous substance, pollutant, or 
     contaminant.

       ``(iii) Exception.--This subparagraph does not apply to a 
     person potentially responsible under section 106 or 107 other 
     than a person associated solely with the provision of a 
     response action or a service or equipment ancillary to a 
     response action.''.
       (b) National Uniform Negligence Standard.--Section 119(a) 
     of the Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (42 U.S.C. 9619(a)) is amended--
       (1) in paragraph (1) by striking ``title or under any other 
     Federal law'' and inserting ``title, under any other Federal 
     or State law''; and
       (2) in paragraph (2)--
       (A) by striking ``Paragraph (1)'' and inserting the 
     following:
       ``(A) In general.--Paragraph (1)''; and
       (B) by adding at the end the following:
       ``(B) Standard.--Conduct under subparagraph (A) shall be 
     evaluated based on the generally accepted standards and 
     practices in effect at the time and place at which the 
     conduct occurred.
       ``(C) Plan.--An activity performed in accordance with a 
     plan that was approved by the Administrator shall not be 
     considered to constitute negligence under subparagraph 
     (A).''.
       (c) Extension of Indemnification Authority.--Section 
     119(c)(1) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 
     9619(c)(1)) is amended by adding at the end the following: 
     ``The agreement may apply to a claim for negligence arising 
     under Federal or State law.''.
       (d) Indemnification Determinations.--Section 119(c) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9619(c)) is amended by 
     striking paragraph (4) and inserting the following:
       ``(4) Decision to indemnify.--
       ``(A) In general.--For each response action contract for a 
     vessel or facility, the Administrator shall make a decision 
     whether to enter into an indemnification agreement with a 
     response action contractor.
       ``(B) Standard.--The Administrator shall enter into an 
     indemnification agreement to the extent that the potential 
     liability (including the risk of harm to public health, 
     safety, environment, and property) involved in a response 
     action exceed or are not covered by insurance available to 
     the contractor at the time at which the response action 
     contract is entered into that is likely to provide adequate 
     long-term protection to the public for the potential 
     liability on fair and reasonable terms (including 
     consideration of premium, policy terms, and deductibles).
       ``(C) Diligent efforts.--The Administrator shall enter into 
     an indemnification agreement only if the Administrator 
     determines that the response action contractor has made 
     diligent efforts to obtain insurance coverage from non-
     Federal sources to cover potential liabilities.
       ``(D) Continued diligent efforts.--An indemnification 
     agreement shall require the response action contractor to 
     continue, not more frequently than annually, to make diligent 
     efforts to obtain insurance coverage from non-Federal sources 
     to cover potential liabilities.
       ``(E) Limitations on indemnification.--An indemnification 
     agreement provided under this subsection shall include 
     deductibles and shall place limits on the amount of 
     indemnification made available in amounts determined by the 
     contracting agency to be appropriate in light of the unique 
     risk factors associated with the cleanup activity.''.
       (e) Indemnification for Threatened Releases.--Section 
     119(c)(5)(A) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 
     9619(c)(5)(A)) is amended by inserting ``or threatened 
     release'' after ``release'' each place it appears.
       (f) Extension of Coverage to All Response Actions.--Section 
     119(e)(1) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 
     9619(e)(1)) is amended--
       (1) in subparagraph (D) by striking ``carrying out an 
     agreement under section 106 or 122''; and
       (2) in the matter following subparagraph (D)--
       (A) by striking ``any remedial action under this Act at a 
     facility listed on the National Priorities List, or any 
     removal under this Act,'' and inserting ``any response 
     action,''; and
       (B) by inserting before the period at the end the 
     following: ``or to undertake appropriate action necessary to 
     protect and restore any natural resource damaged by the 
     release or threatened release''.
       (g) Definition of Response Action Contractor.--Section 
     119(e)(2)(A)(i) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 
     9619(e)(2)(A)(i)) is amended by striking ``and is carrying 
     out such contract'' and inserting ``covered by this section 
     and any person (including any subcontractor) hired by a 
     response action contractor''.
       (h) Surety Bonds.--Section 119 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9619) is amended--
       (1) in subsection (e)(2)(C) by striking ``, and before 
     January 1, 1996,''; and
       (2) in subsection (g)(5) by striking ``, or after December 
     31, 1995''.
       (i) National Uniform Statute of Repose.--Section 119 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9619) is amended by adding 
     at the end the following:
       ``(h) Limitation on Actions Against Response Action 
     Contractors.--
       ``(1) In general.--No action may be brought as a result of 
     the performance of services under a response contract against 
     a response action contractor after the date that is 7 years 
     after the date of completion of work at any facility under 
     the contract to recover--
       ``(A) injury to property, real or personal;
       ``(B) personal injury or wrongful death;
       ``(C) other expenses or costs arising out of the 
     performance of services under the contract; or
       ``(D) contribution or indemnity for damages sustained as a 
     result of an injury described in subparagraphs (A) through 
     (C).
       ``(2) Exception.--Paragraph (1) does not bar recovery for a 
     claim caused by the conduct of the response action contractor 
     that is grossly negligent or that constitutes intentional 
     misconduct.
       ``(3) Indemnification.--This subsection does not affect any 
     right of indemnification that a response action contractor 
     may have under this section or may acquire by contract with 
     any person.
       ``(i) State Standards of Negligence.--Subsection (a)(1) and 
     subsection (h) shall not apply in determining the liability 
     of a response action contractor if the State has enacted, 
     after the date of enactment of this subsection, a statute of 
     repose determining the liability of a response action 
     contractor.''.

     SEC. 503. RELEASE OF EVIDENCE.

       (a) Timely Access to Information Furnished Under Section 
     104(e).--Section 104(e)(7)(A) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9604(e)(7)(A)) is amended by inserting after 
     ``shall be available to the public'' the following: ``not 
     later than 14 days after the records, reports, or information 
     is obtained''.

[[Page S 14730]]

       (b) Requirement To Provide Potentially Responsible Parties 
     Evidence of Liability.--
       (1) Abatement actions.--Section 106(a) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9606(a)) is amended--
       (A) by striking ``(a) In addition'' and inserting the 
     following: ``(a) Order.--''
       ``(1) In general.--In addition''; and
       (B) by adding at the end the following:
       ``(2) Contents of order.--An order under paragraph (1) 
     shall provide information concerning the evidence that 
     indicates that each element of liability described in section 
     107(a)(1) (A), (B), (C), and (D), as applicable, is 
     present.''.
       (2) Settlements.--Section 122(e)(1) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9622(e)(1)) is amended by inserting after 
     subparagraph (C) the following:
       ``(D) For each potentially responsible party, the evidence 
     that indicates that each element of liability contained in 
     section 107(a)(1) (A), (B), (C), and (D), as applicable, is 
     present.''.

     SEC. 504. CONTRIBUTION PROTECTION.

       (a) No Liability for Cost Recovery After Settlement.--
     Section 113(f)(2) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9613(f)(2)) is amended in the first sentence by inserting 
     ``or cost recovery'' after ``contribution''.
       (b) Definitions.--Section 101 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601), as amended by section 401, is amended 
     by adding at the end the following:
       ``(48) Allocated share.--The term `allocated share' means 
     the percentage of liability assigned to a potentially 
     responsible party by the allocator in an allocation report 
     under section 132(j)(6).
       ``(49) De micromis party.--The term `de micromis party' 
     means a potentially responsible party that is a generator or 
     transporter that contributed not more than 200 pounds or not 
     more than 110 gallons of material containing hazardous 
     substances at a facility, or such greater or lesser amount as 
     the Administrator may determine by regulation.
       ``(50) De minimis party.--The term `de minimis party' means 
     a liable party whose assigned share of liability is 
     determined to be 1.0 percent or less in an allocation report 
     under section 132.
       ``(51) Orphan share.--The term `orphan share' means the 
     total of the allocated shares determined by the allocator 
     under section 132(l).

     SEC. 505. TREATMENT OF RELIGIOUS, CHARITABLE, SCIENTIFIC, AND 
                   EDUCATIONAL ORGANIZATIONS AS OWNERS OR 
                   OPERATORS.

       (a) Definition.--Section 101(20) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601(20)), as amended by section 502(a), is 
     amended by adding at the end the following:
       ``(H) Religious, charitable, scientific, and educational 
     organizations.--The term `owner or operator' includes an 
     organization described in section 501(c)(3) of the Internal 
     Revenue Code of 1986 that is organized and operated 
     exclusively for religious, charitable, scientific, or 
     educational purposes and that holds legal or equitable title 
     to a vessel or facility.''.
       (b) Limitation on Liability.--Section 107 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9607), as amended by section 
     306(b), is amended by adding at the end the following:
       ``(r) Religious, Charitable, Scientific, and Educational 
     Organizations.--
       ``(1) Limitation on liability.--Subject to paragraph (2), 
     if an organization described in section 101(20)(I) holds 
     legal or equitable title to a vessel or facility as a result 
     of a charitable gift that is allowable as a deduction under 
     section 170, 2055, or 2522 of the Internal Revenue Code of 
     1986 (determined without regard to dollar limitations), the 
     liability of the organization shall be limited to the lesser 
     of the fair market value of the vessel or facility or the 
     actual proceeds of the sale of the vessel or facility 
     received by the organization.
       ``(2) Conditions.--In order for an organization described 
     in section 101(20)(I) to be eligible for the limited 
     liability described in paragraph (1), the organization 
     shall--
       ``(A) provide full cooperation, assistance, and vessel or 
     facility access to persons authorized to conduct response 
     actions at the vessel or facility, including the cooperation 
     and access necessary for the installation, preservation of 
     integrity, operation, and maintenance of any complete or 
     partial response action at the vessel or facility;
       ``(B) provide full cooperation and assistance to the United 
     States in identifying and locating persons who recently 
     owned, operated, or otherwise controlled activities at the 
     vessel or facility;
       ``(C) establish by a preponderance of the evidence that all 
     active disposal of hazardous substances at the vessel or 
     facility occurred before the organization acquired the vessel 
     or facility; and
       ``(D) establish by a preponderance of the evidence that the 
     organization did not cause or contribute to a release or 
     threatened release of hazardous substances at the vessel or 
     facility.
       ``(3) Limitation.--Nothing in this subsection affects the 
     liability of a person other than a person described in 
     section 101(20)(G) that meets the conditions specified in 
     paragraph (2).''.

     SEC. 506. COMMON CARRIERS.

       Section 107(b)(3) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9607(b)(3)) is amended by striking ``a published tariff and 
     acceptance'' and inserting ``a contract''.

     SEC. 507. LIMITATION ON LIABILITY FOR RESPONSE COSTS.

       Section 107 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9607), as 
     amended by section 505(b), is amended by adding at the end 
     the following:
       ``(s) Limitation on Liability of Railroad Owners.--
     Notwithstanding subsection (a)(1), a person that does not 
     impede the performance of a response action or natural 
     resource restoration shall not be liable under this Act to 
     the extent that liability is based solely on the status of 
     the person as a railroad owner or operator of a spur track, 
     including a spur track over land subject to an easement, to a 
     facility that is owned or operated by a person that is not 
     affiliated with the railroad owner or operator, if--
       ``(1) the spur track provides access to a main line or 
     branch line track that is owned or operated by the railroad;
       ``(2) the spur track is 10 miles long or less; and
       ``(3) the railroad owner or operator does not cause or 
     contribute to a release or threatened release at the spur 
     track.''.
                      TITLE VI--FEDERAL FACILITIES

     SEC. 601. TRANSFER OF AUTHORITIES.

       Section 120 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9620) is 
     amended by striking subsection (g) and inserting the 
     following:
       ``(g) Transfer of Authorities.--
       ``(1) Definitions.--In this section:
       ``(A) Interagency agreement.--The term `interagency 
     agreement' means an interagency agreement under section 120.
       ``(B) Transfer agreement.--The term `transfer agreement' 
     means a transfer agreement under paragraph (3).
       ``(C) Transferee state.--The term `transferee State' means 
     a State to which authorities have been transferred under a 
     transfer agreement.
       ``(2) State application for transfer of authorities.--A 
     State may apply to the Administrator to exercise the 
     authorities vested in the Administrator under this Act at any 
     facility owned or operated by any department, agency, or 
     instrumentality of the United States (including the 
     executive, legislative, and judicial branches of government) 
     located in the State.
       ``(3) Transfer of authorities.--
       ``(A) Determinations.--The Administrator shall enter into a 
     transfer agreement to transfer to a State the authorities 
     described in paragraph (2) if the Administrator determines 
     that--
       ``(i) the State has the ability to exercise such 
     authorities in accordance with this Act, including adequate 
     legal authority, financial and personnel resources, 
     organization, and expertise;
       ``(ii) the State has demonstrated experience in exercising 
     similar authorities;
       ``(iii) the State has agreed to be bound by all Federal 
     requirements and standards under section 129 governing the 
     design and implementation of the facility evaluation, 
     remedial action plan, and remedial design; and
       ``(iv) the State has agreed to abide by the terms of any 
     interagency agreement or agreements covering the Federal 
     facility or facilities with respect to which authorities are 
     being transferred in effect at the time of the transfer of 
     authorities.
       ``(B) Contents of transfer agreement.--A transfer 
     agreement--
       ``(i) shall incorporate the determinations of the 
     Administrator under subparagraph (A); and
       ``(ii) in the case of a transfer agreement covering a 
     facility with respect to which there is no interagency 
     agreement that specifies a dispute resolution process, shall 
     require that within 120 days after the effective date of the 
     transfer agreement, the State shall agree with the head of 
     the Federal department, agency, or instrumentality that owns 
     or operates the facility on a process for resolution of any 
     disputes between the State and the Federal department, 
     agency, or instrumentality regarding the selection of a 
     remedial action for the facility; and
       ``(iii) shall not impose on the transferee State any term 
     or condition other than that the State meet the requirements 
     of subparagraph (A).
       ``(4) Effect of transfer.--
       ``(A) State authorities.--A transferee State--
       ``(i) shall not be deemed to be an agent of the 
     Administrator but shall exercise the authorities transferred 
     under a transfer agreement in the name of the State; and
       ``(ii) shall have exclusive authority to determine the 
     manner in which those authorities are implemented.
       ``(B) Effect on interagency agreements.--Nothing in this 
     subsection shall require, authorize, or permit the 
     modification or revision of an interagency agreement covering 
     a facility with respect to which authorities have been 
     transferred to a State under a transfer agreement (except for 
     the substitution of the transferee State for the 
     Administrator in the terms of the interagency agreement, 
     including terms stating 

[[Page S 14731]]
     obligations intended to preserve the confidentiality of information) 
     without the written consent of the Governor of the State and 
     the head of the department, agency, or instrumentality.
       ``(5) Selected remedial action.--The remedial action 
     selected for a facility under section 129 by a transferee 
     State shall constitute the only remedial action required to 
     be conducted at the facility, and the transferee State shall 
     be precluded from enforcing any other remedial action 
     requirement under Federal or State law, except for--
       ``(A) any corrective action activity under the Solid Waste 
     Disposal Act (42 U.S.C. 6901 et seq.) that was initiated 
     prior to the date of enactment of this subsection; and
       ``(B) any remedial action in excess of remedial action 
     under section 129 that the State selects in accordance with 
     paragraph (8).
       ``(6) Deadline.--
       ``(A) In general.--The Administrator shall make a 
     determination on an application by a State under paragraph 
     (2) not later than 120 days after the date on which the 
     Administrator receives the application.
       ``(B) Failure to act.--If the Administrator does not issue 
     a notice of approval or notice of disapproval of an 
     application within the time period stated in subparagraph 
     (A), the application shall be deemed to have been granted.
       ``(7) Resubmission of application.--
       ``(A) In general.--If the Administrator disapproves an 
     application under paragraph (1), the State may resubmit the 
     application at any time after receiving the notice of 
     disapproval.
       ``(B) Failure to act.--If the Administrator does not issue 
     a notice of approval or notice of disapproval of a 
     resubmitted application within the time period stated in 
     paragraph (6)(A), the resubmitted application shall be deemed 
     to have been granted.
       ``(8) Judicial review.--
       ``(A) In general.--A disapproval of a resubmitted 
     application shall be subject to judicial review under section 
     113(b).
       ``(B) Standard of review.--In a proceeding on review of a 
     disapproval of a resubmitted application, the court shall, 
     notwithstanding section 706(2)(E) of title 5, United States 
     Code, hold unlawful and set aside actions, findings, and 
     conclusions found to be unsupported by substantial evidence.
       ``(9) Withdrawal of authorities.--The Administrator may 
     withdraw the authorities transferred under a transfer 
     agreement in whole or in part if the Administrator determines 
     that the State--
       ``(A) is exercising the authorities, in whole or in part, 
     in a manner that is inconsistent with the requirements of 
     this Act;
       ``(B) has violated the transfer agreement, in whole or in 
     part; or
       ``(C) no longer meets one of the requirements of paragraph 
     (3).
       ``(10) State cost responsibility.--The State may require a 
     remedial action that exceeds Federal standards (including the 
     remedial action selection requirements of section 121) if the 
     State pays the incremental cost of implementing that remedial 
     action over the most cost-effective remedial action that 
     would result from the application of section 129.
       ``(11) Dispute resolution and enforcement.--
       ``(A) Dispute resolution.--
       ``(i) Facilities covered by both a transfer agreement and 
     an interagency agreements.--In the case of a facility with 
     respect to which there is both a transfer agreement and an 
     interagency agreement, if the State does not concur in the 
     remedial action proposed for selection by the Federal 
     department, agency, or instrumentality, the Federal 
     department, agency, or instrumentality and the State shall 
     engage in the dispute resolution process provided for in the 
     interagency agreement, except that the final level for 
     resolution of the dispute shall be the head of the Federal 
     department, agency, or instrumentality and the Governor of 
     the State.
       ``(ii) Facilities covered by a transfer agreement but not 
     an interagency agreement.--In the case of a facility with 
     respect to which there is a transfer agreement but no 
     interagency agreement, if the State does not concur in the 
     remedial action proposed for selection by the Federal 
     department, agency, or instrumentality, the Federal 
     department, agency, or instrumentality and the State shall 
     engage in dispute resolution as provide in paragraph 
     (3)(B)(ii) under which the final level for resolution of the 
     dispute shall be the head of the Federal department, agency, 
     or instrumentality and the Governor of the State.
       ``(iii) Failure to resolve.--If no agreement is reached 
     between the head of the Federal department, agency, or 
     instrumentality and the Governor in a dispute resolution 
     process under clause (i) or (ii), the Governor of the State 
     shall make the final determination regarding selection of a 
     remedial action.
       ``(B) Enforcement.--
       ``(i) In general.--An interagency agreement with respect to 
     which there is a transfer agreement or an order issued by a 
     transferee State shall be enforceable by a transferee State 
     or by the Federal department, agency, or instrumentality that 
     is a party to the interagency agreement in the United States 
     district court for the district in which the facility is 
     located.
       ``(ii) Remedies.--The district court shall have the 
     jurisdiction to--

       ``(I) enforce compliance with any provision, standard, 
     regulation, condition, requirement, order, or final 
     determination that has become effective under the interagency 
     agreement;
       ``(II) impose any appropriate civil penalty provided for 
     any violation of an interagency agreement, not to exceed 
     $25,000 per day;
       ``(III) compel implementation of the selected remedial 
     action; and
       ``(IV) review a challenge by the Federal department, 
     agency, or instrumentality to the remedial action selected by 
     the State, in accordance with section 113(j).

       ``(12) Community participation.--If, prior to June 15, 
     1995, a Federal department, agency, or instrumentality had 
     established for a facility covered by a transfer agreement a 
     facility-specific advisory board or other community-based 
     advisory group (designated as a `site-specific advisory 
     board', a `response action advisory board', or otherwise), 
     and the Administrator determines that the board or group is 
     willing and able to perform the responsibilities of a 
     community response organization under section 117(e)(2), the 
     board or group--
       ``(A) shall be considered to be a community response 
     organization for the purposes of section 117 (e) (2), (3), 
     (4), (5), and (6), and (g) and sections 127 and 129; but
       ``(B) shall not be required to comply with, and shall not 
     be considered to be a community response organization for the 
     purposes of, section 117 (e) (1), (7), (8), (9), (10), or 
     (11) or (f).''.

     SEC. 602. DEPARTMENT OF ENERGY ENVIRONMENTAL CLEANUP 
                   REQUIREMENTS.

       (a) Definitions.--In this section:
       (1) Civil or criminal sanction.--The term ``civil or 
     criminal sanction'' means a fine, penalty, imprisonment, a 
     requirement to pay damages or costs, the imposition of 
     equitable relief against a person, and the application of any 
     other remedy authorized by law.
       (2) Department of energy environmental cleanup 
     requirement.--The term ``Department of Energy environmental 
     cleanup requirement''--
       (A) means a requirement imposed on the Secretary of 
     Energy--
       (i) to carry out a response action under the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601 et seq.);
       (ii) to take corrective action under section 3004 (u) or 
     (v) or section 3008(h) of the Solid Waste Disposal Act (42 
     U.S.C. 6924 (u), (v));
       (iii) to conduct closure activity under section 3004 or 
     3005 of the Solid Waste Disposal Act (42 U.S.C. 6924, 6925);
       (iv) relating to storage of mixed waste under section 
     3004(j) of the Solid Waste Disposal Act (42 U.S.C. 6924(j));
       (v) for treatment of mixed waste under section 3021 of the 
     Solid Waste Disposal Act (42 U.S.C. 6939c);
       (vi) with respect to the storage of mixed waste in a 
     storage facility that does not meet other storage 
     requirements imposed under the Solid Waste Disposal Act (42 
     U.S.C. 6901 et seq.), if--

       (I) the facility commenced operation prior to October 6, 
     1992;
       (II) the storage does not result in any release of mixed 
     waste to the environment, or any direct, immediate, and 
     significant danger to human health or the environment.

       (vii) under comparable provisions of State and local laws; 
     or
       (viii) under a permit or order issued by, or an agreement 
     with a Federal, State, or local agency relating to a 
     requirement described in clause (i), (ii), (iii), (iv), (v), 
     (vi), (vii), or (viii); but
       (B) does not include--
       (i) a reporting requirement imposed by section 103 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9603); or
       (ii) except as provided in subparagraph (A)(iii), a 
     requirement with respect to the treatment, storage, disposal, 
     or transportation of hazardous waste generated by a response 
     action under the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.) or by a corrective action or closure under the Solid 
     Waste Disposal Act (42 U.S.C. 6901 et seq.).
       (b) Lists.--
       (1) Initial list.--Not later than 120 days after the date 
     of enactment of this Act, the Secretary of Energy, after 
     providing appropriate Federal, State, and local agencies 
     reasonable notice and an opportunity for comment, shall 
     submit to Congress a list identifying by State and facility 
     the specific Department of Energy environmental cleanup 
     requirements that cannot be carried out with the funds 
     appropriated specifically for the Department's environmental 
     management activities under the Energy and Water Development 
     Appropriations Act, 1996, or the Department of Defense 
     Appropriations Act, 1996.
       (2) Annual lists.--
       (A) Submission to the president.--For fiscal year 1997 and 
     each fiscal year thereafter, the Secretary of Energy, after 
     providing appropriate Federal, State, and local agencies 
     reasonable notice and an opportunity for comment, shall--
       (i) provide to the President--

       (I) information concerning the budget necessary to meet all 
     Department of Energy environmental management requirements, 
     including Department of Energy environmental cleanup 
     requirements; and
       (II) a list of the Department of Energy environmental 
     cleanup requirements that cannot be met (including 
     information about the nature and cost of each requirement and 
     the locations of each affected facility) within the 

[[Page S 14732]]
     Department's budget request for environmental management activities for 
     that fiscal year;

       (ii) advise the President of the factors taken into account 
     in formulating the list; and
       (iii) a summary of comments on the list received by the 
     Secretary of Energy from Federal, State, and local agencies.
       (B) Inclusion in budget request.--After considering 
     information provided by the Secretary of Energy, the 
     President shall submit to Congress with the President's 
     annual budget request under section 1105 of title 31, United 
     States Code--
       (i) information concerning the budget necessary to meet all 
     Department of Energy environmental management requirements, 
     including Department of Energy environmental cleanup 
     requirements;
       (ii) a list of the Department of Energy environmental 
     cleanup requirements that cannot be met (including 
     information about the nature and cost of each requirement and 
     the locations of each affected facility) within the 
     Department's budget request for environmental management 
     activities for that fiscal year; and
       (iii) a summary of comments on the list received by the 
     Secretary of Energy from Federal, State, and local agencies.
       (3) Comments on cost reduction.--During the comment period 
     on a list under paragraph (1) or (2), the Secretary of Energy 
     shall seek comments of appropriate Federal, State, and local 
     agencies concerning opportunities for cost reduction in 
     meeting cleanup requirements, risk reduction, community 
     concerns and other factors relevant to setting priorities for 
     cleanup activities.
       (4) Revision of lists.--
       (A) In general.--Beginning with fiscal year 1997, after 
     funds for the Department of Energy's environmental management 
     activities have been appropriated for a fiscal year, the 
     Secretary of Energy, after providing appropriate Federal, 
     State, and local agencies reasonable notice and an additional 
     opportunity for comment, shall revise the list of the 
     Department of Energy environmental cleanup requirements 
     submitted to Congress to reflect any differences between the 
     President's budget request and the funds appropriated 
     specifically to carry out such activities and shall submit 
     the revised list to Congress within 60 days.
       (B) No further revision.--After a revised list is submitted 
     to Congress, it shall not be subject to further revision.
       (c) Civil or Criminal Sanctions.--
       (1) In general.--Except as provided in paragraph (2), 
     notwithstanding any other law, no action seeking to impose 
     civil or criminal sanctions under any law may be commenced at 
     any time against--
       (A) the United States or any department, agency, or 
     instrumentality of the United States;
       (B) any employee or officer of the United States or of any 
     department, agency, or instrumentality of the United States; 
     or
       (C) any person who is a contractor, subcontractor, or agent 
     of the Department of Energy, or any employee, officer, 
     shareholder, partner, or director of such a person acting in 
     accordance with the person's authority,

     with respect to a failure to comply with a Department of 
     Energy environmental cleanup requirement by reason of a lack 
     of funds appropriated specifically for the Department of 
     Energy environmental management activities during a fiscal 
     year for which such cleanup requirement was on a list under 
     subsection (c).
       (2) Permitted actions.--This subsection does not prohibit 
     an action against the United States or any department, 
     agency, or instrumentality of the United States--
       (A) with respect to a violation of a Department of Energy 
     environmental cleanup requirement contained in a compliance 
     agreement with a Federal, State, or local agency or order 
     that the Department of Energy voluntarily accepted in writing 
     after January 1, 1995, if the action seeks only civil 
     penalties stipulated in the agreement or order, or injunctive 
     relief enforcing the agreement or order;
       (B) if injunctive relief is sought on the basis that such 
     relief is necessary to avoid a direct, immediate, and 
     significant danger to human health or the environment; or
       (C) if monetary damages are sought to compensate a person 
     for an actual injury or loss to the extent that such an 
     action is allowed by other law.
       (d) Judicial Review.--A decision made by the President or 
     the Secretary of Energy in preparing a list under subsection 
     (c) shall not be subject to judicial review.

     SEC. 603. INNOVATIVE TECHNOLOGIES FOR REMEDIAL ACTION AT 
                   FEDERAL FACILITIES.

       (a) In General.--Section 311 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9660) is amended by adding at the end the 
     following:
       ``(h) Federal Facilities.--
       ``(1) Designation.--The President may designate a facility 
     that is owned or operated by any department, agency, or 
     instrumentality of the United States, and that is listed or 
     proposed for listing on the National Priorities List, to 
     facilitate the research, development, and application of 
     innovative technologies for remedial action at the facility.
       ``(2) Use of facilities.--
       ``(A) In general.--A facility designated under paragraph 
     (1) shall be made available to Federal departments and 
     agencies, State departments and agencies, and public and 
     private instrumentalities, to carry out activities described 
     in paragraph (1).
       ``(B) Coordination.--The Administrator--
       ``(i) shall coordinate the use of the facilities with the 
     departments, agencies, and instrumentalities of the United 
     States; and
       ``(ii) may approve or deny the use of a particular 
     innovative technology for remedial action at any such 
     facility.
       ``(3) Considerations.--
       ``(A) Evaluation of schedules and penalties.--In 
     considering whether to permit the application of a particular 
     innovative technology for remedial action at a facility 
     designated under paragraph (1), the Administrator shall 
     evaluate the schedules and penalties applicable to the 
     facility under any agreement or order entered into under 
     section 120.
       ``(B) Amendment of agreement or order.--If, after an 
     evaluation under subparagraph (A), the Administrator 
     determines that there is a need to amend any agreement or 
     order entered into pursuant to section 120, the Administrator 
     shall comply with all provisions of the agreement or order, 
     respectively, relating to the amendment of the agreement or 
     order.''.
       (b) Report to Congress.--Section 311(e) of Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9660(e)) is amended--
       (1) by striking ``At the time'' and inserting the 
     following:
       ``(1) In general.--At the time''; and
       (2) by adding at the end the following:
       ``(2) Additional information.--A report under paragraph (1) 
     shall include information on the use of facilities described 
     in subsection (h)(1) for the research, development, and 
     application of innovative technologies for remedial activity, 
     as authorized under subsection (h).''.

     SEC. 604. FEDERAL FACILITY LISTING.

       Section 120(d) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9620(d)) 
     is amended--
       (1) by striking ``Not later'' and inserting the following:
       ``(1) Preliminary assessments.--Not later'';
       (2) by striking ``Following such'' and inserting the 
     following:
       ``(2) Evaluation and placement on national priorities 
     list.--Following such'';
       (3) by striking ``(1) evaluate'' and inserting the 
     following:
       ``(A) evaluate'';
       (4) by striking ``(2) include'' and inserting the 
     following:
       ``(B) include'';
       (5) by striking ``Such criteria'' and inserting the 
     following:
       ``(3) Application of criteria.--The criteria for 
     determining priorities'';
       (6) by striking ``Evaluation'' and inserting the following:
       ``(4) Completion.--Evaluation'';
       (7) by striking ``Upon'' and inserting the following:
       ``(5) Petitions by governors.--On''; and
       (8) by adding at the end the following:
       ``(6) Uncontaminated properties.--On identification of 
     parcels of uncontaminated property under subsection (h)(4), 
     the Administrator may provide notice that the listing does 
     not include the identified uncontaminated parcels.''.

     SEC. 605. FEDERAL FACILITY LISTING DEFERRAL.

       Paragraph (3) of section 120(d) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9620(d)), as designated by section 604, is 
     amended by inserting after ``persons'' the following: ``, but 
     an appropriate factor as referred to in section 105(a)(8)(A) 
     may include the extent to which the Federal land holding 
     agency has arranged with the Administrator or with a State to 
     respond to the release or threatened release under other 
     legal authority''.

     SEC. 606. TRANSFERS OF UNCONTAMINATED PROPERTY.

       Section 120(h)(4)(A) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9620(h)(4)(A)) is amended in the first sentence by striking 
     ``stored for one year or more,''.
                  TITLE VII--NATURAL RESOURCE DAMAGES

     SEC. 701. RESTORATION OF NATURAL RESOURCES.

       (a) Definitions.--Section 101 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9601), as amended by section 504(b), is 
     amended--
       (1) by striking paragraph (16) and inserting the following:
       ``(16) Natural resource.--
       ``(A) In general.--The term `natural resource' means land, 
     fish, wildlife, biota, air, water, ground water, a drinking 
     water supply, and any similar resource that is committed for 
     use by the general public and is owned or managed by, 
     appertains to, is held in trust by, or is otherwise 
     controlled by the United States (including a resource of the 
     fishery conservation zone established by the Magnuson Fishery 
     Conservation and Management Act (16 U.S.C. 1801 et seq.)), by 
     a State or local government, by a foreign government, by an 
     Indian tribe, or, if such a resource is subject to a trust 
     restriction on alienation, by a member of an Indian tribe.
       ``(B) Commitment for use.--A resource shall be considered 
     to be committed for use 

[[Page S 14733]]
     by the general public only if, at the time of the act of disposal 
     giving rise to liability (as limited by section 
     107(f)(1)(B)), the resource is subject to a public use or to 
     a planned public use, for which there is an authorized and 
     documented legal, administrative, budgetary, or financial 
     commitment.''; and
       (2) by adding at the end the following:
       ``(52) Baseline.--The term `baseline' means the condition 
     or conditions that would have existed at a natural resource 
     had a release of hazardous substances not occurred.
       ``(53) Compensatory restoration.--The term `compensatory 
     restoration' means the provision of ecological services lost 
     as a result of injury to or destruction or loss of a natural 
     resource from the initial release giving rise to liability 
     under section 107(a)(2)(C) until primary restoration has been 
     achieved with respect to those services.
       ``(54) Ecological service.--The term `ecological service' 
     means a physical or biological function performed by an 
     ecological resource, including the human uses of such a 
     function.
       ``(55) Primary restoration.--The term `primary restoration' 
     means rehabilitation, natural recovery, or replacement of an 
     injured, destroyed, or lost natural resource, or acquisition 
     of a substitute or alternative natural resource, to 
     reestablish the baseline ecological service that the natural 
     resource would have provided in the absence of a release 
     giving rise to liability under section 107(a)(2)(C).
       ``(56) Restoration.--The term `restoration' means primary 
     restoration and compensatory restoration.''.
       (b) Liability for Natural Resource Damages.--
       (1) Amendment.--Section 107(a) of the Comprehensive 
     Environmental Response Compensation, and Liability Act of 
     1980 (42 U.S.C. 9607(a)) is amended--
       (A) by inserting ``In General.--'' after ``(a)'';
       (B) by striking ``Notwithstanding'' and inserting the 
     following:
       ``(1) Persons liable.--Notwithstanding'';
       (C) by redesignating paragraphs (1), (2), (3), and (4) (as 
     designated prior to the date of enactment of this Act) as 
     subparagraphs (A), (B), (C), and (D), respectively, and 
     adjusting the margins accordingly;
       (D) by striking ``hazardous substance, shall be liable 
     for--'' and inserting the following: ``hazardous substance,
     shall be liable for the costs and damages described in 
     paragraph (2).
       ``(2) Costs and damages.--A person described in paragraph 
     (1) shall be liable for--'';
       (E) by striking subparagraph (C) of paragraph (2), as 
     designated by subparagraph (D), and inserting the following:
       ``(C) damages for injury to, destruction of, or loss of the 
     baseline ecological services of natural resources, including 
     the reasonable costs of assessing such injury, destruction, 
     or loss caused by a release; and'';
       (F) by striking ``The amounts'' and inserting the 
     following:
       ``(3) Interest.--The amounts''; and
       (G) in the first sentence of paragraph (3), as designated 
     by subparagraph (F), by striking ``subparagraphs (A) through 
     (D)'' and inserting ``paragraph (2)''.
       (2) Conforming amendments.--Section 107 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9607) is amended--
       (A) in subsection (d)(3) by striking ``the provisions of 
     paragraph (1), (2), (3), or (4) of subsection (a) of this 
     section'' and inserting ``subsection (a)'';
       (B) in subsection (f)(1) by striking ``subparagraph (C) of 
     subsection (a)'' each place it appears and inserting 
     ``subsection (a)(2)(C)''.
       (c) Natural Resource Damages.--Section 107(f) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9607(f)) is amended--
       (1) by inserting ``Natural Resource Damages.--'' after 
     ``(f)'';
       (2) by striking ``(1) Natural Resources Liability.--In the 
     case'' and inserting the following:
       ``(1) Liability.--
       ``(A) In general.--In the case'';
       (3) in paragraph (1)(A), as designated by paragraph (2)--
       (A) in the first sentence by inserting ``the baseline 
     ecological services of'' after ``loss of'';
       (B) in the third and fourth sentences, by striking ``to 
     restore, replace, or acquire the equivalent'' each place it 
     appears and inserting ``for restoration'';
       (C) by inserting after the fourth sentence the following: 
     ``Sums recovered by an Indian tribe as trustee under this 
     subsection shall be available for use only for restoration of 
     such natural resources by the Indian tribe. A restoration 
     conducted by the United States, a State, or an Indian tribe 
     shall proceed only if it is technologically practicable, 
     cost-effective, and consistent with all known or anticipated 
     response actions at or near the facility. Any sums recovered 
     by the United States, a State, or an Indian tribe shall be 
     placed in an escrow account. Such sums may be released from 
     the escrow account only for the purpose of contributing to 
     restoration activities carried out in accordance with 
     specific activities or accounts set forth in a restoration 
     plan approved by the United States, a State, or an Indian 
     tribe. The restoration plan may be revised as necessary to 
     account for new information or extenuating circumstances on 
     approval of the trustee and relevant responsible parties or 
     on approval by a United States district court. The trustee 
     shall issue a public notice and hold a public hearing every 2 
     years after approval of the restoration plan and issue a 
     report describing how the sums have been expended in 
     accordance with the restoration plan. Any sums expended by 
     the United States, a State, or an Indian tribe that are not 
     expended in accordance with the restoration plan may be 
     recovered by the persons from whom the sums were 
     collected.''; and
       (D) by striking ``The measure of damages in any action'' 
     and all that follows through the end of the paragraph and 
     inserting the following:
       ``(B) Limitations on liability.--
       ``(i) Measure of damages.--The measure of damages in any 
     action under subsection (a)(2)(C) shall be limited to the 
     reasonable costs of restoration and of assessing damages.
       ``(ii) Nonuse values.--There shall be no recovery under 
     this Act for any impairment of non-use values.
       ``(iii) No double recovery.--A person that obtains a 
     recovery of damages, response costs, assessment costs, or any 
     other costs under this Act for injury to, destruction of, or 
     loss of a natural resource caused by a release shall not be 
     entitled to recovery under or any other Federal or State law 
     for injury to or destruction or loss of the natural resource 
     caused by the release.
       ``(iv) No retroactive liability.--

       ``(I) Compensatory restoration.--There shall be no recovery 
     from any person under of this section of the costs of 
     compensatory restoration for a natural resource injury, 
     destruction, or loss that occurred prior to December 11, 
     1980.
       ``(II) Primary restoration.--There shall be no recovery 
     from any person under this section for the costs of primary 
     restoration if the natural resource injury, destruction, or 
     loss for which primary restoration is sought and the release 
     of the hazardous substance from which the injury resulted 
     occurred entirely prior to December 11, 1980.

       ``(v) Burden of proof on the issue of the date of 
     occurrence of a release.--The trustee for an injured, 
     destroyed, or lost natural resource bears the burden of 
     demonstrating that any amount of costs of compensatory 
     restoration that the trustee seeks under this section is to 
     compensate for an injury, destruction, or loss (or portion of 
     an injury, destruction, or loss) that occurred on or after 
     December 11, 1980.''; and
       (4) by adding at the end the following:
       ``(3) Selection of restoration method.--When selecting 
     appropriate restoration measures, including natural recovery, 
     a trustee shall select the most cost-effective method of 
     achieving restoration.''.
       (d) Amount of Damages.--Section 107(c) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9607(c)) is amended--
       (A) by striking ``paragraph (2) of this subsection,'' and 
     inserting ``paragraph (2), and subject to the limitation 
     stated in paragraph (4),''; and
       (B) in subparagraph (D) by inserting ``, as limited by 
     paragraph (4)'' before the period at the end; and
       (2) by adding at the end the following:
       ``(4) Limitation.--Except as provided in paragraph (2), the 
     aggregate liability of all responsible parties for costs of 
     compensatory restoration incurred as a result of a release or 
     releases of hazardous substances from an incineration vessel 
     or a facility or group of facilities (including those that 
     constitute part or all of 1 or more facilities listed on the 
     national priorities list under section 105(a)(8)(B)) shall 
     not exceed--
       ``(A) $25,000,000; or
       ``(B) if the costs of compensatory compensation exceed 
     $100,000,000, $50,000,000.''.

     SEC. 702. ASSESSMENT OF DAMAGES.

       (a) Damage Assessments.--Section 107(f)(2) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9607(f)(2)) is amended by 
     striking subparagraph (C) and inserting the following:
       ``(C) Damage assessment.--
       ``(i) Regulation.--A natural resource damage assessment 
     conducted for the purposes of this Act or section 311 of the 
     Federal Water Pollution Control Act (33 U.S.C. 1321) made by 
     a Federal, State, or tribal trustee shall be performed in 
     accordance with--

       ``(I) the regulation issued under section 301(c); and
       ``(II) generally accepted scientific and technical 
     standards and methodologies to ensure the validity and 
     reliability of assessment results.

       ``(ii) Facility-specific conditions and restoration 
     requirements.--Injury determination, restoration planning, 
     and quantification of restoration costs shall be based on an 
     assessment of facility-specific conditions and restoration 
     requirements.
       ``(iii) Use by trustee.--A natural resource damage 
     assessment under clause (i) may be used by a trustee as the 
     basis for a natural resource damage claim only if the 
     assessment demonstrates that the hazardous substance release 
     in question caused the alleged natural resource injury.
       ``(iv) Cost recovery.--As part of a trustee's claim, a 
     trustee may recover only the reasonable damage assessment 
     costs that were incurred directly in relation to the site-
     specific conditions and restoration measures that are the 
     subject of the natural resource damage action.
       ``(D) Judicial review.--

[[Page S 14734]]

       ``(i) Liability.--In reviewing a claim brought by a trustee 
     to recover natural resource damages costs of compensatory 
     restoration or primary restoration under this section, a 
     district court shall try de novo the issue whether a 
     defendant is liable and the issue of the amount of liability, 
     if any, to be imposed on the defendant.
       ``(ii) Trustee decisions.--In reviewing a claim brought to 
     challenge a decision of a trustee (such as a decision 
     concerning the extent of injury to or loss or destruction of 
     a natural resource or the selection of a restoration plan) 
     the district court, notwithstanding section 706(2)(E) of 
     title 5, United States Code, shall hold unlawful and set 
     aside actions, findings, and conclusions found to be 
     unsupported by substantial evidence.''.
       (b) Regulations.--Section 301 of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9651) is amended by striking subsection (c) 
     and inserting the following:
       ``(c) Regulations for Damage Assessments.--
       ``(1) In general.--The President, acting through Federal 
     officials designated by the National Contingency Plan under 
     section 107(f)(2), shall issue a regulation for the 
     assessment of restoration damages and assessment costs for 
     injury to, destruction of, or loss of natural resources 
     resulting from a release of oil or a hazardous substance for 
     the purposes of this Act and section 311(f) (4) and (5) of 
     the Federal Water Pollution Control Act (33 U.S.C. 1321(f) 
     (4), (5)).
       ``(2) Contents.--The regulation under paragraph (1) shall--
       ``(A) specify protocols for conducting assessments in 
     individual cases to determine the injury, destruction, or 
     loss of baseline ecological services of the environment;
       ``(B) identify the best available procedures to determine 
     damages for the reasonable cost of restoration and 
     assessment;
       ``(C) take into consideration the ability of a natural 
     resource to recover naturally and the availability of 
     replacement or alternative resources; and
       ``(D) specify an appropriate mechanism for the cooperative 
     designation of a single lead decisionmaking trustee at a site 
     where more than one Federal, State, or Indian tribe trustee 
     intends to conduct an assessment, which designation shall 
     occur not later than 180 days after the date of first notice 
     to the responsible parties that a natural resource damage 
     assessment will be made.
       ``(3) Biennial review.--The regulation under paragraph (1) 
     shall be reviewed and revised as appropriate every 2 
     years.''.

     SEC. 703. CONSISTENCY BETWEEN RESPONSE ACTIONS AND RESOURCE 
                   RESTORATION STANDARDS AND ALTERNATIVES.

       (a) Restoration Standards and Alternatives.--Section 107(f) 
     of the Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (42 U.S.C. 9607(f)), as amended by 
     section 701(b)(4), is amended by adding at the end the 
     following:
       ``(4) Consistency with response actions.--A restoration 
     standard or restoration alternative selected by a trustee 
     shall not be duplicative of or inconsistent with actions 
     undertaken pursuant to section 104, 106, 121, or 129.''.
       (b) Response Actions.--
       (1) Abatement action.--Section 106(a) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9606(a)) is amended by adding at the end the 
     following: ``The President shall not take action under this 
     subsection except such action as is necessary to protect the 
     public health and the baseline ecological services of the 
     environment.''.
       (2) Limitation on degree of cleanup.--Section 121(a) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9621(a)), as amended by 
     section 402(1), is amended by adding at the end the 
     following:
       ``(7) Limitation.--
       ``(A) In general.--The Administrator shall not select a 
     remedial action under this section that goes beyond the 
     measures necessary to protect human health and the baseline 
     ecological services of the environment.
       ``(B) Considerations.--In evaluating and selecting remedial 
     actions, the Administrator shall take into account the 
     potential for injury to, destruction of, or loss of a natural 
     resource resulting from such actions.
       ``(C) No liability.--No person shall be liable for injury 
     to, destruction of, or loss of a natural resource resulting 
     from a response action or remedial action selected by the 
     Administrator.''.

     SEC. 704. MISCELLANEOUS AMENDMENTS.

       (a) Contribution.--Section 113(f)(1) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9613(f)(1)) is amended in the third sentence 
     by inserting ``and natural resource damages'' after 
     ``costs''.
       (b) Statute of Limitations.--Section 113(g)(1) of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9613(g)(1)) is amended--
       (1) by striking the first sentence and inserting the 
     following:
       ``(A) In general.--Except as provided in paragraphs (3) and 
     (4), no action for damages under this Act may be commenced 
     unless the action is commenced within 3 years after the 
     earlier of--
       ``(i) the date on which the trustee agency knew or should 
     have known of the injury, destruction, or loss; or
       ``(ii) the date on which the vessel or facility is proposed 
     for listing on the National Priorities List.'';
       (2) by striking ``With respect to'' and inserting the 
     following:
       ``(B) Listed facilities.--With respect to'';
       (3) in subparagraph (B), as designated by paragraph (2), by 
     striking ``within'' and all that follows through the end of 
     the subparagraph and inserting ``by the earlier of--
       ``(i) the date referred to in subparagraph (A); or
       ``(ii) the date that is 3 years after the date of 
     completion of the remedial action (excluding operation and 
     maintenance activities).'';
       (4) in the third sentence--
       (A) by striking ``In no event'' and inserting the 
     following:
       ``(C) Limitation.--
       ``(i) In general.--In no event'';
       (B) by striking ``commenced (i) prior'' and inserting 
     ``commenced--

       ``(I) prior''; and

       (C) by striking ``suit, or (ii) before'' and inserting 
     ``suit; or

       ``(II) before''; and

       (5) by striking ``The limitation in the preceding sentence 
     and inserting the following:
       ``(ii) Application.--The limitation stated in clause (i)''.
                       TITLE VIII--MISCELLANEOUS

     SEC. 801. RESULT-ORIENTED CLEANUPS.

       (a) Amendment.--Section 105(a) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9605(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (9);
       (2) by striking the period at the end of paragraph (10) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (10) the following:
       ``(11) procedures for conducting response actions, 
     including facility evaluations, remedial investigations, 
     feasibility studies, remedial action plans, remedial designs, 
     and remedial actions, which procedures shall--
       ``(A) use a results-oriented approach to minimize the time 
     required to conduct response measures and reduce the 
     potential for exposure to the hazardous substances, 
     pollutants, and contaminants in an efficient, timely, and 
     cost-effective manner;
       ``(B) require, at a minimum, expedited facility evaluations 
     and risk assessments, timely negotiation of response action 
     goals, a single engineering study, streamlined oversight of 
     response actions, and consultation with interested parties 
     throughout the response action process;
       ``(C) be subject to the requirements of sections 117, 120, 
     121, and 129 in the same manner and to the same degree as 
     those sections apply to response actions; and
       ``(D) be required to be used for each remedial action 
     conducted under this Act unless the Administrator determines 
     that their use would not be cost-effective or result in the 
     selection of a response action that achieves the goals of 
     protecting human health and the environment stated in section 
     121(a)(1)(B).''.
       (b) Amendment of National Hazardous Substance Response 
     Plan.--Not later than 180 days after the date of enactment of 
     this Act, the Administrator, after notice and opportunity for 
     public comment, shall amend the National Hazardous Substance 
     Response Plan under section 105(a) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9605(a)) to include the procedures required 
     by the amendment made by subsection (a).

     SEC. 802. NATIONAL PRIORITIES LIST.

       Section 105 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9605), as 
     amended by section 408(a)(1)(B), is amended by adding at the 
     end the following:
       ``(i) National Priorities List.--
       ``(1) Additional vessels and facilities.--
       ``(A) Limitation.--During each of the 3 12-month periods 
     following the date of enactment of this subsection, the 
     Administrator may add not more than 30 new vessels and 
     facilities to the National Priorities List.
       ``(B) Prioritization.--The Administrator shall prioritize 
     the vessels and facilities added under subparagraph (A) on a 
     national basis in accordance with the threat to human health 
     and the environment presented by each of the vessels and 
     facilities, respectively.
       ``(C) State concurrence.--A vessel or facility may be added 
     to the National Priorities List under subparagraph (A) only 
     with the concurrence of the State in which the vessel or 
     facility is located.
       ``(2) Sunset.--
       ``(A) No additional vessels or facilities.--The authority 
     of the Administrator to add vessels and facilities to the 
     National Priorities List shall expire on the date that is 3 
     years after the date of enactment of this subsection.
       ``(B) Limitation on action by the administrator.--At the 
     completion of response actions for all vessels and facilities 
     on the National Priorities List, the authority of the 
     Administrator under this Act shall be limited to--
       ``(i) providing a national emergency response capability;
       ``(ii) conducting research and development;
       ``(iii) providing technical assistance; and
       ``(iv) conducting oversight of grants and loans to the 
     States.''.

     SEC. 803. OBLIGATIONS FROM THE FUND FOR RESPONSE ACTIONS.

       Section 104(c)(1) of the Comprehensive Environmental 
     Response, Compensation, and 

[[Page S 14735]]
     Liability Act of 1980 (42 U.S.C. 9604(c)(1)) is amended--
       (1) in subparagraph (C) by striking ``consistent with the 
     remedial action to be taken'' and inserting ``not 
     inconsistent with any remedial action that has been selected 
     or is anticipated at the time of any removal action at a 
     facility.'';
       (2) by striking ``$2,000,000'' and inserting 
     ``$4,000,000''; and
       (3) by striking ``12 months'' and inserting ``2 years''.

     SEC. 804. REMEDIATION WASTE.

       (a) Definitions.--Section 1004 of the Solid Waste Disposal 
     Act (42 U.S.C. 6903) is amended by adding at the end the 
     following:
       ``(42) Debris.--The term `debris'--
       ``(A) means--
       ``(i) a solid manufactured object exceeding a 60 millimeter 
     particle size;
       ``(ii) plant or animal matter; and
       ``(iii) natural geologic material; but
       ``(B) does not include material that the Administrator may 
     exclude from the meaning of the term by regulation.
       ``(43) Identified characteristic waste.--The term 
     `identified characteristic waste' means a solid waste that 
     has been identified as having the characteristics of 
     hazardous waste under section 3001.
       ``(44) Listed waste.--The term `listed waste' means a solid 
     waste that has been listed as a hazardous waste under section 
     3001.
       ``(45) Media.--The term `media' means ground water, surface 
     water, soil, and sediment.
       ``(46) Remediation activity.--The term `remediation 
     activity' means the remediation, removal, containment, or 
     stabilization of--
       ``(A) solid waste that has been released to the 
     environment; or
       ``(B) media and debris that are contaminated as a result of 
     a release.
       ``(47) Remediation waste.--The term `remediation waste' 
     means--
       ``(A) solid and hazardous waste that is generated by a 
     remediation activity; and
       ``(B) debris and media that are generated by a remediation 
     activity and contain a listed waste or identified 
     characteristic waste.
       ``(48) State voluntary remediation program.--The term 
     `State voluntary remediation program' means a program 
     established by a State that permits a person to conduct 
     remediation activity at a facility under general guidance or 
     guidelines without being subject to a State order or consent 
     agreement specifically applicable to the person.''.
       (b) Identification and Listing.--Section 3001 of the Solid 
     Waste Disposal Act (42 U.S.C. 6921) is amended by adding at 
     the end the following:
       ``(j) Remediation Waste.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     person that manages remediation waste that is an identified 
     characteristic waste or listed waste or that contains an 
     identified characteristic waste or listed waste shall be 
     subject to the requirements of this subtitle (including 
     regulations issued under this subtitle, including the 
     regulation for corrective action management units published 
     in section 264.552, Code of Federal Regulations, and the 
     regulation for temporary units published in section 264.553, 
     Code of Federal Regulations, or any successor regulation).
       ``(2) Exceptions.--
       ``(A) Requirements under section 3004.--Media and debris 
     generated by a remediation activity that are identified 
     characteristic wastes or listed wastes or that contain an 
     identified characteristic waste or a listed waste shall not 
     be subject to the requirements of section 3004 (d), (e), (f), 
     (g), (j), (m), or (o).
       ``(B) Permit requirements.--No Federal, State, or local 
     permit shall be required for the treatment, storage, or 
     disposal of remediation waste that is conducted entirely at 
     the facility at which the remediation takes place.
       ``(3) Remediation waste subject to orders, consent 
     agreements, voluntary remediation programs, and other 
     mechanisms.--
       ``(A) Requirements not applicable.--Notwithstanding 
     paragraph (1), a person that manages remediation waste that--
       ``(i) is identified characteristic waste or listed waste or 
     that contains an identified characteristic waste or listed 
     waste; and
       ``(ii) is subject to a Federal or State order, Federal or 
     State consent agreement, a State voluntary remediation 
     program, or such other mechanism as the Administrator 
     considers appropriate,

     shall not be subject to the requirements of this subtitle 
     (including any regulation under this subsection) unless the 
     requirements are specified in the Federal or State order, 
     Federal or State consent agreement, State voluntary cleanup 
     program, or other mechanism, as determined by the 
     Administrator.
       ``(B) Enforcement.--Unless other enforcement procedures are 
     specified in the order, consent agreement, or other 
     mechanism, a person described in subparagraph (A) (except a 
     person that manages remediation waste under a State voluntary 
     remediation program) shall be subject to enforcement of the 
     requirements of the order, consent agreement, or other 
     mechanism by use of enforcement procedures under section 
     3008.''.
       (c) Regulation.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator shall issue a 
     regulation implementing section 3001(j) of the Solid Waste 
     Disposal Act, as added by subsection (b).
                           TITLE IX--FUNDING
                     Subtitle A--General Provisions

     SEC. 901. AUTHORIZATION OF APPROPRIATIONS FROM THE FUND.

       Section 111(a) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9611(a)) 
     is amended in the first sentence by striking ``not more than 
     $8,500,000,000 for the 5-year period beginning on the date of 
     enactment of the Superfund Amendments and Reauthorization Act 
     of 1986, and not more than $5,100,000,000 for the period 
     commencing October 1, 1991, and ending September 30, 1994'' 
     and inserting ``a total of $8,500,000 for fiscal years 1996, 
     1997, 1998, 1999, and 2000''.

     SEC. 902. ORPHAN SHARE FUNDING.

       Section 111(a) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9611(a)), 
     as amended by section 301(c), is amended by inserting after 
     paragraph (8) the following:
       ``(9) Orphan share funding.--Payment of orphan shares under 
     section 132.''.

     SEC. 903. DEPARTMENT OF HEALTH AND HUMAN SERVICES.

       Section 111 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9611) is 
     amended by striking subsection (m) and inserting the 
     following:
       ``(m) Health Authorities.--There are authorized to be 
     appropriated from the Fund to the Secretary of Health and 
     Human Services to be used for the purposes of carrying out 
     the activities described in subsection (c)(4) and the 
     activities described in section 104(i), $50,000,000 for each 
     of fiscal years 1996, 1997, 1998, 1999, and 2000. Funds 
     appropriated under this subsection for a fiscal year, but not 
     obligated by the end of the fiscal year, shall be returned to 
     the Fund.''.

     SEC. 904. LIMITATIONS ON RESEARCH, DEVELOPMENT, AND 
                   DEMONSTRATION PROGRAMS.

       Section 111 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9611) is 
     amended by striking subsection (n) and inserting the 
     following:
       ``(n) Limitations on Research, Development, and 
     Demonstration Programs.--
       ``(1) Alternative or innovative technologies research, 
     development, and demonstration programs.--
       ``(A) Limitation.--For each of fiscal years 1996, 1997, 
     1998, 1999, and 2000, not more than $20,000,000 of the 
     amounts available in the Fund may be used for the purposes of 
     carrying out the applied research, development, and 
     demonstration program for alternative or innovative 
     technologies and training program authorized under section 
     311(b) other than basic research.
       ``(B) Continuing availability.--Such amounts shall remain 
     available until expended.
       ``(2) Hazardous substance research, demonstration, and 
     training.--
       ``(A) Limitation.--For each of fiscal years 1996, 1997, 
     1998, 1999, and 2000 not more than $20,000,000 of the amounts 
     available in the Fund may be used for the purposes of section 
     311(a).
       ``(B) Further limitation.--No more than 10 percent of such 
     amounts shall be used for training under section 311(a) for 
     any fiscal year.
       ``(3) University hazardous substance research centers.--For 
     each of fiscal years 1996, 1997, 1998, 1999, and 2000, not 
     more than $5,000,000 of the amounts available in the Fund may 
     be used for the purposes of section 311(d).''.

     SEC. 905. AUTHORIZATION OF APPROPRIATIONS FROM GENERAL 
                   REVENUES.

       Section 111(p) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9611(p)) 
     is amended by striking paragraph (1) and inserting the 
     following:
       ``(1) Authorization of appropriations.--
       ``(A) In general.--There are authorized to be appropriated, 
     out of any money in the Treasury not otherwise appropriated, 
     to the Hazardous Substance Superfund--
       ``(i) for fiscal year 1996, $250,000,000;
       ``(ii) for fiscal year 1997, $250,000,000;
       ``(iii) for fiscal year 1998, $250,000,000;
       ``(iv) for fiscal year 1999, $250,000,000; and
       ``(v) for fiscal year 2000, $250,000,000.
       ``(B) Additional amounts.--There is authorized to be 
     appropriated to the Hazardous Substance Superfund for each 
     such fiscal year an amount, in addition to the amount 
     authorized by subparagraph (A), equal to so much of the 
     aggregate amount authorized to be appropriated under this 
     subsection and section 9507(b) of the Internal Revenue Code 
     of 1986 as has not been appropriated before the beginning of 
     the fiscal year.''.

     SEC. 906. ADDITIONAL LIMITATIONS.

       Section 111 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9611) is 
     amended by adding at the end the following:
       ``(q) Qualifying State Voluntary Response Program.--For 
     each of fiscal years 1996, 1997, 1998, 1999, and 2000, not 
     more than $25,000,000 of the amounts available in the Fund 
     may be used for the purposes of subsection (a)(7) (relating 
     to qualifying State voluntary response programs).
       ``(r) Brownfield Cleanup Assistance.--For each of fiscal 
     years 1996 through 2000, not more than $15,000,000 of the 
     amounts available in the Fund may be used to carry out 
     section 134(b) (relating to Citizen Information and Access 
     Offices).
       ``(s) Community Response Organization.--For the period 
     commencing October 1, 1995, 

[[Page S 14736]]
     and ending September 30, 2000, not more than $15,000,000 of the amounts 
     available in the Fund may be used to make grants under 
     section 117(f) (relating to Community Response 
     Organizations).
       ``(t) Recoveries.--Effective beginning October 1, 1995, any 
     recoveries collected pursuant to this Act shall be credited 
     as offsetting collections to the Superfund appropriations 
     account.''.

     SEC. 907. REIMBURSEMENT OF POTENTIALLY RESPONSIBLE PARTIES.

       Section 111(a) of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9611(a)), 
     as amended by section 902, is amended by inserting after 
     paragraph (9) the following:
       ``(10) Reimbursement of potentially responsible parties.--
     If--
       ``(A) a potentially responsible party and the Administrator 
     enter into a settlement under this Act under which the 
     Administrator is reimbursed for the response costs of the 
     Administrator; and
       ``(B) the Administrator determines, through a Federal audit 
     of response costs, that the costs for which the Administrator 
     is reimbursed--
       ``(i) are unallowable due to contractor fraud;
       ``(ii) are unallowable under the Federal Acquisition 
     Regulation; or
       ``(iii) should be adjusted due to routine contract and 
     Environmental Protection Agency response cost audit 
     procedures,
     reimbursement of a potentially responsible party for those 
     costs.''.
                                                                    ____



                         title-by-title summary

                    TITLE I: COMMUNITY PARTICIPATION

       Goal--To empower the citizens who are most adversely 
     impacted by the cleanup of hazardous waste sites with a 
     greater role in the decision making and remedy selection 
     processes to better protect human health and the environment, 
     foster rapid economic redevelopment, and promote expedited 
     restoration of natural resources.
       Establishes Community Response Organizations (CROs) 
     comprised of 15-20 local citizens to increase community 
     participation in site cleanups. CROs will: Solicit views and 
     concerns of the affected community; serve as a representative 
     of the local community on issues relating to facility cleanup 
     and land use designations; and serve as an information 
     conduit from the community to the EPA, state, PRPs.
       Creates Technical Assistance Grants (TAGs) that are 
     renewable up to $100,000 per facility, increasing the amount 
     currently available by $50,000 per facility. TAG grants would 
     be used by the community to interpret information regarding: 
     The nature of the hazardous substances located at the 
     facility; the facility evaluation; proposed remedial action 
     plans and remedial designs; response actions; and operation 
     and maintenance activities at the facility.
       Improves communication with the public through enhanced 
     meeting notification and by providing the public with 
     information regarding site cleanup activities and any 
     incremental risks.

                          TITLE II: STATE ROLE

       Goal--To move decisions regarding site cleanups closer to 
     the affected citizenry.
       Empowers states to veto listing of new NPL sites and to de-
     list existing NPL sites.
       Provides maximum flexibility to states to accept all or 
     portions of Federal CERCLA authorities. States may request 
     delegation of authority to perform one or more of the 
     following activities at non-Federal NPL sites: Site 
     investigations and risk analysis; alternatives development 
     and remedy selection (including feasibility studies and 
     issuance of records of decision); remedial design; remedial 
     action and operation and maintenance (including removal 
     actions); liability allocation (including identification of 
     PRPs and issuance of settlement agreements); and enforcement 
     (including compliance orders, cost recovery, and imposition 
     of civil penalties).
       Designates the state as the sole regulator and allows the 
     state to use its own remedy selection process at those sites 
     where the state accepts all EPA authority.
       Requires the Fund to continue to pay its share of cleanup 
     costs at delegated sites, as long as the selected remedy is 
     protective of human health and the environment and is no more 
     costly than the one that would have been selected under the 
     Federal program.
       Authorizes use of the Fund to make capacity building grants 
     to delegated states.

                      TITLE III: VOLUNTARY CLEANUP

       Goal--To provide greater flexibility to communities in 
     protecting human health and the environment and provide 
     incentives for the voluntary cleanup of industrial sites and 
     expedited reutilization and economic redevelopment of urban 
     areas.
       Authorizes grants of up to $25 million in yearly funding 
     for states to manage voluntary cleanup programs at non-NPL 
     sites.
       Authorizes interest free loans to local governments of up 
     to $200,000 per site to promote ``brownfields'' 
     redevelopment.
       Protects from liability purchasers of contaminated property 
     if they did not contribute to the contamination and conducted 
     appropriate inquiries prior to the purchase.
       Limits the liability of lenders or lessors that: Acquire 
     property through foreclosure; hold a security interest in the 
     property; hold property as a lessor pursuant to an extension 
     of credit; or exercise financial control pursuant to the 
     terms of an extension of credit.
       Excludes from liability landholders who's property was 
     contaminated by a contiguous NPL site, if they did not 
     contribute to the contamination and are not designated as an 
     owner or operator.

                TITLE IV: Selection of Remedial Actions

       Goal--To base cleanup decisions on a careful analysis of 
     the actual or plausible risks to human health and the 
     environment.
       Requires selection of the remedy that protects human health 
     and the environment in the most cost-effective manner.
       Requires remedial actions to be selected according to site 
     specific conditions and risks based on the reasonably 
     anticipated future use of the site. Remedial actions would be 
     selected according to: actual or plausible exposure pathways 
     based on actual or planned future use of the land and water 
     resources (industrial, commercial, residential, etc.); site-
     specific data, in preference to default assumptions; and 
     where site-specific data are unavailable, an acceptable range 
     of realistic and plausible default assumptions regarding 
     actual or likely human exposures and site-specific 
     conditions, instead of worst case default assumptions.
       Requires consideration of the following balancing factors 
     in selecting a remedy: effectiveness in protecting human 
     health; long-term reliability; short-term risks; acceptance 
     by the local community; and technical practicability.
       Cuts by half the number of steps required to implement 
     cleanup remedies by establishing the following accelerated 
     remedy selection procss: Facility Evaluation, Remedial Action 
     Planning, and Remedial Action.
       Eliminates the preferences for permanence, allowing 
     consideration of all cleanup options at a site that are 
     protective of human health and the environment, including, 
     containment, treatment, institutional controls, natural 
     attenuation, or a combination of these alternatives.
       Eliminates the requirement that remedial actions meet 
     applicable, relevant and appropriate requirements 
     (``ARARs'').
       Requires assessment of the actual or planned future use of 
     the contaminated land and water resources based on a mix of 
     several factors including: (1) current zoning requirements 
     and projected future land uses; (2) site analysis and 
     surrounding land use growth patterns; (3) previous use of the 
     landholdings; and (4) input from the CRO, elected municipal 
     and county officials, local planning and zoning authorities, 
     facility owners and potentially responsible parties.
       Establishes a higher level of protection for groundwater 
     that is currently uncontaminated.
       Allows certain past records of decision to be modified, if 
     applying the new remedy selection process can demonstrate 
     life-cycle savings of at least 10% over the existing remedy.
       Enhances emergency response capabilities by increasing the 
     duration of emergency response actions to 24 months, and 
     increasing the authorized spending cap to $4 million per 
     site.
       Allows de-listing and reuse of the uncontaminated portions 
     of NPL sites.
       Provides expedited de-listing of NPL sites where 
     construction of the remedy is complete and operation and 
     maintenance activities are continued.

                     TITLE V: Liability Allocations

       Goal--Accelerate cleanup by providing broad based fairness 
     in allocating liability.
       Establishes a mandatory, non-binding allocation process for 
     multi-party sites, whereby PRPs would be assessed only for 
     the costs of cleanup associated with their actions. This 
     allocation process would be mandatory at all sites where 
     response actions occurred after June 15, 1995, and would 
     divide unidentifiable shares equally among the parties to the 
     allocation. Shares that are attributable to bankrupt or 
     insolvent parties would be borne by an ``orphan share'' paid 
     out of the Trust Fund.
       Makes available to those PRPs that accept the allocator's 
     finding a 50% tax credit for the PRP's pre-1980 cleanup 
     costs, if the PRP stays on-site to conduct the cleanup. This 
     approach would: provide an incentive for PRPs to accelerate 
     cleanup; significantly decrease litigation by creating 
     incentives for PRPs to settle their liability; provide 
     significant, broad-based relief of pre-1980 liability for 
     most PRPs; avoid creating a ``public works'' program in 
     Superfund; and ensure greater efficiency by keeping PRPs on-
     site.
       Allows PRPs who conducted response actions before June 15, 
     1995, to request allocation of shares, but would not allow 
     them to qualify for tax credits or orphan share funding.
       Limits liability for religious, charitable, and other 
     ``501(c)(3)'' organizations.
       Assigns the cost of ``orphan shares,'' (which include the 
     shares attributed to bankrupt or dissolved parties) to the 
     Fund. Any PRP unwilling to pay its allocated share would be 
     held liable for any unrecovered costs at the site, including 
     unidentifiable shares. Settling parties would receive 
     complete contribution protection.
       Provides for an early dollar settlement for those ``de-
     minimus'' parties whose liability is 1% or less total site 
     liability.
       Releases from all liability those ``de-micromis'' parties 
     who contributed not more than 110 gallons of liquid material 
     containing hazardous waste or not more than 200 pounds of 
     solid material containing hazardous waste to a site.
       Provides increased protection from liability for response 
     action contractors by excluding them from being labeled 
     ``owners or 

[[Page S 14737]]
     operators'' and establishing a negligence standard for their activities 
     at NPL sites.

                      TITLE VI: Federal Facilities

       Goal--Enhance state participation in cleaning up and 
     reutilizing Federal facilities while ensuring the Federal 
     taxpayers get the maximum return for cleanup dollars spent.
       Allows delegation of Federal facilities to qualified 
     states, if that state takes the entire site and utilizes the 
     Federal remedy selection process and standards.
       Ensures that states: (1) apply cleanup standards that are 
     equivalent to non-Federal cleanup sites; (2) allow 
     uncontaminated or cleaned up parcels of property to be reused 
     as rapidly as possible; and (3) apply a definition of 
     uncontaminated property that includes property where 
     hazardous materials were once stored, but not released to the 
     environment.
       Facilitates use of Federal facilities to promote 
     development and demonstration of innovative cleanup 
     technologies.

                  TITLE VII: Natural Resource Damages

       Goal--Provide for the rapid restoration and replacement of 
     significant natural resources that have been damaged by the 
     release of hazardous materials.
       Favors actual restoration of resources over assessing 
     arbitrary, punitive damages.
       Eliminates non-use damages. Eliminates all lost use damages 
     for pre-1980 activities. Limits recovery to the restoration 
     of baseline ecological services.
       Allows for de novo court review of a trustee's assessment 
     of whether a party is liable and the extent of any such 
     liability.
       Requires trustees to give equal consideration to natural 
     attenuation and recovery as a viable restoration method.
       Requires selection of the most cost effective method of 
     restoring a resource to the condition that would have existed 
     if not for the release of hazardous material.
       Requires that the NRD provisions to receive ``double 
     recovery'' for damages if compensation has already been 
     provided pursuant to CERCLA or any other federal or state 
     law.

                       TITLE VIII: MISCELLANEOUS

       Requires the Administrator to establish a ``results 
     oriented'' engineering approach to accelerate response 
     actions, including site evaluations, response goals, and 
     oversight.
       Targets limited funds toward those sites currently on the 
     NPL by limiting new NPL listings to 30 sites per year for the 
     next three years and capping the list thereafter.

                           TITLE IX: Funding

       Introduces a new accelerated cleanup tax credit of 50% for 
     PRPs that conduct cleanups.
       Authorizes continuation of the Superfund program at $1.75 
     billion for fiscal years 1996-2000. $1.5 billion from the 
     Trust Fund; and $250 million from general revenue.
       Reauthorizes current Superfund taxes: (Corporate 
     Environmental Income Tax, Petroleum Feedstock Tax, and 
     Chemical Feedstock Tax). Assumes continuation of current 
     taxes will generate sufficient revenue to offset accelerated 
     cleanup tax credits.

  Mr. CHAFEE. Mr. President, Superfund is broken, and today the 
Environment and Public Works Committee is putting forward a plan that 
will fix it. Senator Bob Smith and his staff on the Superfund 
subcommittee have produced a remarkable reform package, one deserving 
of widespread support. I want to make it clear to everyone that 
Superfund reform will be a priority for the Environment and Public 
Works Committee for the rest of this year, and we will move to mark up 
this bill and bring it to the floor as quickly as possible.
  Superfund's troubled history and problems are news to no one, but 
fixing Superfund's plainly evident problems--too much litigation, not 
enough cleanup, inefficient use of scarce resources, blighted cities--
has eluded us now for more than 5 years, as one interest group after 
another sought their vision of a ``perfect'' reform. No plan is 
perfect, but his bill that Senator Smith and his staff prepared, with 
the help of my staff, is a tremendous improvement over the status quo. 
It is all the more remarkable for what it achieves in an era of tightly 
constrained budgets.
  This is real reform for Superfund that we can afford. This bill will:
  Streamline the cleanup process by eliminating overlapping studies of 
contaminated sites.
  Require EPA to consider the future use of resources when it decides 
how clean a site must be. Why clean up a site that will be a parking 
lot to the same level as a day care center?
  Let the States take as much of the Superfund Program as they want or 
can handle.
  Address the Brownfields problem by providing grants and loans to 
States for voluntary cleanup programs, and assessment of contamination 
levels at these sites. We also protect potential investors, innocent 
landowners and lenders so that entrepreneurs will step forward and be 
able to secure financing.
  Eliminate the unfairness of Joint & Several liability by having the 
fund, and not other parties, pay the share of those parties who cannot 
be found or are bankrupt.
  Provide significant relief to small waste contributors, usually small 
business, with an expanded de micromis exemption, and expedited, fair 
de minimis settlements.
  Make restoration the goal of natural resource damages recovery, not 
speculative punitive damages.
  Relieve as much of the pain as we can afford on retroactive 
liability, through the use of a tax credit for costs associated with 
liability for things people did, legally, before Superfund was enacted 
in 1980. On this point, I know Senator Smith wanted to do more, but the 
facts of the budget frustrated his attempts. I want to salute him. He 
took the best run at it he could, and then came forward, at some 
personal political risk, with this fiscally credible plan.
  Some will charge that the use of tax credits to relieve some of the 
unfairness of retroactive liability is corporate welfare. Any such 
charge about this tax credit proposal is merit-less, as the tax credits 
are tightly tied to the existing Superfund taxes. In this proposal, the 
tax credit is fully funded by the Superfund taxes that these 
corporations pay. It does not come out of general tax revenues. I would 
point out that, for the past several years, Superfund tax revenues have 
far outrun Superfund's annual appropriation, resulting in a Superfund 
trust fund balance of over $3 billion. I would also add that there is 
something fundamentally unfair about holding people liable for acts 
that were legal when they occurred. This credit helps to relieve some 
of that unfairness.
  I want to issue an invitation, and a warning, to all those out there 
who will say, ``This does not go far enough,'' or ``This is too much.'' 
First, the invitation. This bill is a work in progress. There will be a 
hearing on it before a markup, so make your views and suggestions 
known--but move with alacrity, because we will take this up in the 
committee as soon as we possibly can. Senator Smith's staff and my 
staff are ready to work with you on this.
  Second, the warning. If we fail, everyone loses. There is no longer a 
status quo for Superfund--just look at the cut the program took $1.33 
billion down to $1 billion in both the Senate and House versions of the 
EPA appropriations bill. Unless we pass a new Superfund law, we are 
looking at a $1 billion program, with even less in 1997 and beyond, 
probably with the existing taxes reauthorized. This will be the lose/
lose scenario:
  PRP's, and their insurers, lose. If you thought Enforcement First was 
bad, wait until Enforcement Only. The existing litigation machine rolls 
on. EPA, without many resources, runs the program by issuing section 
106 orders, or suing a handful of parties for cost recovery.
  EPA and all the agencies getting money from Superfund lose as the 
program slowly contacts, losing the expertise we want to keep on 
technical issues, until all that is left is a handful of lawyers to 
write those section 106 orders.
  Protection of human health and the environment loses, because the 
pace of Federally funded cleanup slows down in the face of declining 
budgets until the Federal Superfund becomes Enforcement Only.
  People paying Superfund taxes lose. Their taxes will probably get 
extended, but only two-thirds of those taxes will go to Superfund 
cleanup this year, and less in the future. And corporations paying 
Superfund taxes can still get sued by EPA or other PRP's. They will pay 
twice.
  So I end with a call for common sense and realistic expectations. 
When you make suggestions to improve this bill, please furnish us with 
an estimate of how much it will cost, where the money will come from, 
and how we can spend the money given the budget caps and firewalls.
  I want to assure all the members of the committee, and the Senate, 
that we will work to accommodate their concerns as we move forward on 
this bill. This is not a perfect bill, but neither Senator Smith nor I 
plan to repeat last year's so-called delicate balance 

[[Page S 14738]]
Superfund bill, a deal made off the Hill that was so fragile that could 
not be changed without the deal falling apart. Some members of the 
committee have expressed concerns with some provisions in the bill as 
introduced. Senator Kempthorne has expressed concern about the impact 
of Superfund on dry cleaners. Senator Warner is concerned about the 
potential impact on recycling operations, and in how the States and 
Federal Government will control the costs of federal facility cleanups. 
Senator Inhofe would like to see more protection for acts that occurred 
in the distant past. I will continue to work with Senator Smith on 
issues of concern to me, including groundwater and natural resource 
damage provisions. I know that other members of the Committee have 
other concerns as well. We will work to resolve these concerns as we 
move forward. This bill is no fragil compromise, and we will work 
within the budget constraints that we must all live with to get the 
best bill we can.
  Again, I want to commend Senator Smith and his staff for putting this 
complex bill together and bringing it quickly forward to this point. We 
have been working together on this since the start of the Congress, and 
today is an important milestone. It will not be easy to meet the goal 
we share--passage this year--but it will not be for lack of a continued 
team effort on this committee.
                                 ______

      By Mr. SMITH:
  S. 1286. A bill to amend the Solid Waste Disposal Act regarding 
management of remediation waste, certain recyclable industrial 
materials, and certain products, coproducts, and intermediate products, 
and for other purposes; to the Committee on Environment and Public 
Works.


               the resource conservation and recovery act

  Mr. SMITH. Mr. President, in addition to the Superfund Accelerated 
Cleanup bill, I would also like to introduce today a targeted Resource 
Conservation and Recovery Act--or ``rick-ra''--reform bill. I offer 
this bill in the hopes that it will supplement and enhance the reforms 
we are proposing to Superfund.
  It is my feeling that these changes are consistent with the goals of 
the RCRA ``Rifle Shot'' proposal being discussed within the 
Administration.
  My targeted bill is intended to: Provide greater consistency among 
environmental statutes; make RCRA more user friendly; eliminate costly 
and ineffective bureaucratic burdens; and maintain, or improve, current 
protections to human health and the environment.
  I feel the provisions of this bill will greatly enhance recycling and 
reuse of hazardous materials and will begin to provide cohesiveness 
between the two largest hazardous waste laws--Superfund and RCRA.
  We are trying to accomplish three things with this act:
  First, remove some recyclable hazardous materials from current RCRA 
provisions, and instead, subject them to a tailored set of standards 
which will facilitate the reuse of these materials in an 
environmentally friendly way.
  Under current law, the only option is to discard such materials.
  Second, specify a reasonable point at which a material is considered 
hazardous.
  Currently, EPA is required to apply very strict controls once a 
hazardous material is created, even if it is created very early in a 
manufacturing process.
  This greatly increases the costs of managing wastes, regardless of 
whether they ever come in contact with the environment.
  Third, allow EPA to determine when a hazardous material is no longer 
considered hazardous.
  Under the current law, EPA does not have the authority to tailor its 
standards to specific risks posed by some hazardous substances.
  This greatly increases the cost of treating materials that pose 
little or no risk.
  Mr. President, these changes will not only save money on waste 
management and cleanup, it will also greatly increase the effectiveness 
of our waste management laws in protecting human health and the 
environment. I urge its passage at the earliest possible date.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1286

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REMEDIATION WASTE.

       (a) Definitions.--Section 1004 of the Solid Waste Disposal 
     Act (42 U.S.C. 6903) is amended by adding at the end the 
     following:
       ``(42) Debris.--The term `debris'--
       ``(A) means--
       ``(i) a solid manufactured object exceeding a 60 millimeter 
     particle size;
       ``(ii) plant or animal matter; and
       ``(iii) natural geologic material; but
       ``(B) does not include material that the Administrator may 
     exclude from the meaning of the term by regulation.
       ``(43) Identified characteristic waste.--The term 
     `identified characteristic waste' means a solid waste that 
     has been identified as having the characteristics of 
     hazardous waste under section 3001.
       ``(44) Listed waste.--The term `listed waste' means a solid 
     waste that has been listed as a hazardous waste under section 
     3001.
       ``(45) Media.--The term `media' means ground water, surface 
     water, soil, and sediment.
       ``(46) Remediation activity.--The term `remediation 
     activity' means the remediation, removal, containment, or 
     stabilization of--
       ``(A) solid waste that has been released to the 
     environment; or
       ``(B) media and debris that are contaminated as a result of 
     a release.
       ``(47) Remediation waste.--The term `remediation waste' 
     means--
       ``(A) solid and hazardous waste that is generated by a 
     remediation activity; and
       ``(B) debris and media that are generated by a remediation 
     activity and contain a listed waste or identified 
     characteristic waste.
       ``(48) State voluntary remediation program.--The term 
     `State voluntary remediation program' means a program 
     established by a State that permits a person to conduct 
     remediation activity at a facility under general guidance or 
     guidelines without being subject to a State order or consent 
     agreement specifically applicable to the person.''.
       (b) Identification and Listing.--Section 3001 of the Solid 
     Waste Disposal Act (42 U.S.C. 6921) is amended by adding at 
     the end the following:
       ``(j) Remediation Waste.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     person that manages remediation waste that is an identified 
     characteristic waste or listed waste or that contains an 
     identified characteristic waste or listed waste shall be 
     subject to the requirements of this subtitle (including 
     regulations issued under this subtitle, including the 
     regulation for corrective action management units published 
     in section 264.552, Code of Federal Regulations, and the 
     regulation for temporary units published in section 264.553, 
     Code of Federal Regulations, or any successor regulation).
       ``(2) Exceptions.--
       ``(A) Requirements under section 3004.--Media and debris 
     generated by a remediation activity that are identified 
     characteristic wastes or listed wastes or that contain an 
     identified characteristic waste or a listed waste shall not 
     be subject to the requirements of section 3004 (d), (e), (f), 
     (g), (j), (m), or (o).
       ``(B) Permit requirements.--No Federal, State, or local 
     permit shall be required for the treatment, storage, or 
     disposal of remediation waste that is conducted entirely at 
     the facility at which the remediation takes place.
       ``(3) Remediation waste subject to orders, consent 
     agreements, voluntary remediation programs, and other 
     mechanisms.--
       ``(A) Requirements not applicable.--Notwithstanding 
     paragraph (1), a person that manages remediation waste that--
       ``(i) is identified characteristic waste or listed waste or 
     that contains an identified characteristic waste or listed 
     waste; and
       ``(ii) is subject to a Federal or State order, Federal or 
     State consent agreement, a State voluntary remediation 
     program, or such other mechanism as the Administrator 
     considers appropriate,

     shall not be subject to the requirements of this subtitle 
     (including any regulation under this subsection) unless the 
     requirements are specified in the Federal or State order, 
     Federal or State consent agreement, State voluntary cleanup 
     program, or other mechanism, as determined by the 
     Administrator.
       ``(B) Enforcement.--Unless other enforcement procedures are 
     specified in the order, consent agreement, or other 
     mechanism, a person described in subparagraph (A) (except a 
     person that manages remediation waste under a State voluntary 
     remediation program) shall be subject to enforcement of the 
     requirements of the order, consent agreement, or other 
     mechanism by use of enforcement procedures under section 
     3008.''.
       (c) Regulation.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator shall issue a 
     regulation implementing section 3001(j) of the Solid Waste 
     Disposal Act, as added by subsection (b).
     
[[Page S 14739]]


     SEC. 2. EXCLUSION OF CERTAIN RECYCLABLE INDUSTRIAL MATERIALS 
                   AND CERTAIN PRODUCTS, CO-PRODUCTS, AND 
                   INTERMEDIATE PRODUCTS.

       (a) Definitions.--Section 1004 of the Solid Waste Disposal 
     Act (42 U.S.C. 6903), as amended by section 1(a), is amended 
     by adding at the end the following:
       ``(49) Co-product.--The term `co-product' means a 
     combination of 2 or more materials intentionally produced 
     from a manufacturing or recycling operation for commercial 
     use.
       ``(50) Intermediate material.--The term `intermediate 
     material' means a material that results from a manufacturing 
     process the design of which contemplates further processing 
     of the material by the manufacturer or by a toll processor to 
     produce a product or an intermediate product.
       ``(51) Manufacturing.--The term `manufacturing' means the 
     use of a virgin material or other feedstock to produce a 
     product, co-product, or intermediate product (including all 
     associated ancillary operations) in which--
       ``(A) the process uses the appropriate equipment to produce 
     the intended product, co-product, or intermediate product;
       ``(B) the virgin material or other feedstock used in the 
     process meets commercial specifications;
       ``(C) the virgin material or other feedstock is handled in 
     a manner that is designed to minimize loss of the virgin 
     material or feedstock;
       ``(D) a contract or record is established by the 
     manufacturer to record or document the receipt and use of the 
     virgin material or other feedstock and the use or sale of the 
     product, co-product, or intermediate product that is 
     produced; and
       ``(E) the process produces a product, co-product, or 
     intermediate product that meets commercial specifications.
       ``(52) Product.--The term `product' means a material that 
     is produced from a manufacturing or recycling operation for 
     commercial use.
       ``(53) Recyclable industrial material.--The term 
     `recyclable industrial material' means a material that--
       ``(A) would constitute an identified characteristic waste 
     or listed waste except for the application of section 
     3024(a); and
       ``(B) is intended by a manufacturer, commercial enterprise, 
     or recycler for recycling by use, reuse, or reclamation.
       ``(54) Toll processor.--The term `toll processor' means a 
     person that performs any of a variety of manufacturing 
     processes on material owned by a manufacturer.''.
       (b) Exclusion from Regulation of Certain Recyclable 
     Industrial Materials and Certain Products, Co-Products, and 
     Intermediate Products.--Subtitle C of the Solid Waste 
     Disposal Act (42 U.S.C 6921 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 3024. EXCLUSION FROM REGULATION OF CERTAIN RECYCLABLE 
                   INDUSTRIAL MATERIALS AND CERTAIN PRODUCTS, CO-
                   PRODUCTS, AND INTERMEDIATE PRODUCTS.

       ``(a) Certain Recyclable Industrial Materials.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     person that manages recyclable industrial material shall not 
     be subject to the requirements of this subtitle (including 
     regulations).
       ``(2) Exceptions.--The following recyclable industrial 
     materials shall be subject to the requirements of this 
     subtitle (including regulations) unless the Administrator 
     determines that regulation under this subtitle is 
     unnecessary:
       ``(A) A recyclable industrial material that--
       ``(i) is burned for energy recovery or used to produce 
     fuel; or
       ``(ii) is otherwise contained in fuel,
     if burning for energy recovery or use to produce fuel is not 
     a normal use of the recyclable industrial material.
       ``(B) A recyclable industrial material that--
       ``(i) is applied to or placed on land in a manner that 
     constitutes disposal, if such use is not a normal use of the 
     recyclable industrial material; or
       ``(ii) is used to produce a product that is applied to or 
     placed on land or is contained in a product that is applied 
     to or placed on land, if such use of the recyclable 
     industrial material is not a normal use of the recyclable 
     industrial material.
       ``(C) A recyclable industrial material that is identified 
     by the Administrator by regulation as being inherently 
     wastelike.
       ``(b) Certain Products, Co-Products, and Intermediate 
     Products.--A product, co-product, or intermediate product 
     shall not be considered to be a solid waste for the purposes 
     of this Act unless the product, co-product, or intermediate 
     product--
       ``(1) is burned for energy recovery or used to produce fuel 
     or is contained in fuel, if such use is not a normal use of 
     the product, co-product, or intermediate product;
       ``(2) is used in a manner constituting disposal or used to 
     produce a product or is contained in a product that is used 
     in a manner constituting disposal, if such use is not a 
     normal use of the product, co-product, or intermediate 
     product; or
       ``(3) is identified by the Administrator by regulation as 
     being inherently wastelike.''.

     SEC. 3. REGULATION OF CERTAIN RECYCLABLE INDUSTRIAL 
                   MATERIALS.

       The Solid Waste Disposal Act (42 U.S.C. 9601 et seq.) is 
     amended by adding at the end the following:
              ``Subtitle K--Recyclable Industrial Material

     ``SEC. 12001. RECYCLABLE INDUSTRIAL MATERIAL.

       ``(a) Requirements.--A person that manages recyclable 
     industrial material (other than recyclable industrial 
     material described in section 3024(a)(2)) shall be subject to 
     the following requirements:
       ``(1) In general.--Recyclable industrial material shall not 
     be stored on land but shall be managed in a building, tank, 
     or other containment structure that meets the following 
     requirements.
       ``(A) In a building.--Recyclable industrial material that 
     is managed in a building shall be completely enclosed with a 
     floor, walls, and a roof and shall otherwise be reasonably 
     constructed to prevent exposure to the elements and 
     incorporate appropriate controls and practices to ensure 
     containment of the recyclable industrial material.
       ``(B) In a tank or other containment structure.--A 
     recyclable industrial material that is managed in a tank or 
     other containment structure shall meet the technical 
     requirements of section 279.54 of title 40, Code of Federal 
     Regulations, or any successor regulation, not including the 
     requirements stated in--
       ``(i) the matter preceding paragraph (a); and
       ``(ii) paragraphs (a), (f)(2), and (h)(1)(i),

     as those paragraphs are designated on the date of enactment 
     of this Act, notwithstanding that the person managing the 
     recyclable industrial material may not be a used oil 
     processor or re-refiner under that section.
       ``(2) Recycling.--A recyclable industrial material shall be 
     recycled within 24 months after the date on which the 
     recyclable industrial material is generated unless the 
     Administrator by regulation establishes a shorter or longer 
     period.
       ``(3) Additional requirements.--
       ``(A) In general.--A recyclable industrial material shall 
     be subject to such requirements, in addition to those 
     described in this section, as the Administrator determines to 
     be necessary.
       ``(B) Considerations.--In determining whether any 
     additional requirement is necessary, the Administrator shall 
     ensure that the requirement does not discourage the recycling 
     of the recyclable industrial material, consistent with the 
     protection of human health and the environment.
       ``(b) Permit.--A person that manages a recyclable 
     industrial material in accordance with the requirements of 
     subsection (a) shall not be required to obtain a permit to 
     conduct recycling activity.
       ``(c) Documentation.--
       ``(1) In general.--A person that manages a recyclable 
     industrial material shall maintain documentation at the 
     recycling facility to demonstrate that the recyclable 
     industrial material is recycled in accordance with the 
     requirements of this subtitle.
       ``(2) Guidance.--Not later than 9 months after the date of 
     enactment of this subtitle, the Administrator shall, after 
     opportunity for public comment, publish guidance identifying 
     the criteria to be considered by a person that manages a 
     recyclable industrial material in making the demonstration 
     required by paragraph (1).
       ``(d) Inspection and Enforcement.--The Administrator may 
     use the authority under sections 3007 and 3008 to conduct 
     inspections and enforce this Act with respect to a person 
     that manages a recyclable industrial material.
       ``(e) References.--The Administrator shall amend 
     regulations, correspondence, orders, settlement agreements, 
     and other documents as appropriate to reflect the management 
     of recyclable industrial material under this subtitle.''.

     SEC. 4. POINT OF DETERMINATION.

       (a) Definitions.--Section 1004 of the Solid Waste Disposal 
     Act (42 U.S.C. 6903), as amended by section 4(a), is amended 
     by adding at the end the following:
       ``(55) Point of determination.--The term `point of 
     determination' means the point at which a decision is made 
     whether a solid waste is an identified characteristic waste 
     or listed waste.''.
       (b) Identification and Listing.--Section 3001(b)(1) of the 
     Solid Waste Disposal Act (42 U.S.C. 6921(b)(1)) is amended by 
     inserting after the second sentence the following: ``In 
     addition, the Administrator shall promulgate regulations 
     specifying the point at which a solid waste is an identified 
     characteristic waste or listed waste, which point of 
     determination shall not be before the point at which the 
     waste exits a closed system and is exposed to the environment 
     or is discharged to a waste management unit (as defined by 
     the Administrator), whichever point occurs first.''.

     SEC. 5. DISCONTINUATION OF REGULATION OF WASTE UNDER SUBTITLE 
                   C OF THE SOLID WASTE DISPOSAL ACT.

       (a) Identification and Listing.--
       (1) Amendments.--Section 3001(f) of the Solid Waste 
     Disposal Act (42 U.S.C. 6921(f)) is amended--
       (A) by striking ``(1) When'' and inserting the following:
       ``(1) Delisting of particular wastes.--
       ``(A) Consideration of factors.--When'';
       (B) by striking ``(2)(A) To the maximum extent practicable 
     the Administrator shall publish in the Federal Register a 
     proposal to grant or deny a petition referred to in paragraph 
     (1)'' and inserting the following:
       ``(B) Decision.--To the maximum extent practicable, the 
     Administrator shall publish 

[[Page S 14740]]
     in the Federal Register a proposal to grant or deny a petition under 
     subparagraph (A)'';
       (C) by striking subparagraph (B) of paragraph (2) as 
     designated on the day prior to the date of enactment of this 
     Act; and
       (D) by adding at the end the following:
       ``(2) Generic delisting.--
       ``(A) Regulation.--The Administrator shall issue a 
     regulation that defines constituent levels below which a 
     solid waste shall not be considered to be a hazardous waste 
     subject to the requirements of this subtitle (including 
     regulations).
       ``(B) Constituents of concern.--The regulation under 
     subparagraph (A) shall provide that only the constituents 
     that are reasonably expected to be present in solid waste 
     shall be considered in determining whether the solid waste is 
     not considered to be a hazardous waste.''.
       (2) Interim constituent levels.--Until the date on which 
     the Administrator issues the regulation under section 
     3001(f)(2) of the Solid Waste Disposal Act, as added by 
     paragraph (1)(D), the land disposal restriction treatment 
     levels under section 3004(m) of that Act, as in effect on 
     August 31, 1993, shall constitute the constituent levels 
     below which a solid waste shall not be considered to be a 
     hazardous waste.
       (b) Standards Applicable to Owners and Operators of 
     Hazardous Waste Treatment, Storage, and Disposal 
     Facilities.--Section 3004 of the Solid Waste Disposal Act (42 
     U.S.C. 6924) is amended by adding at the end the following:
       ``(z) Special Standards for Hazardous Waste.--
        ``(1) Modification of requirements.--Notwithstanding this 
     section and sections 3005(j) and 7004(b), the Administrator 
     may by regulation alter to any extent the requirements of 
     this section or section 3005(j) or 7004(b) for a solid waste 
     that is an identified characteristic waste or listed waste 
     and that contains hazardous constituents in an amount that is 
     not greater than 10 times the amount below which a solid 
     waste shall not be considered to be a hazardous waste.
       ``(2) Regulation.--The Administrator--
       ``(A) shall issue a regulation under paragraph (1) not 
     later than 18 months after the date of enactment of this 
     subsection; and
       ``(B) in formulating the regulation--
       ``(i) shall take into account the lower level of risk posed 
     by the wastes described in paragraph (1); and
       ``(ii) shall ensure that any modified requirements protect 
     human health and the environment.
       ``(3) 10-times level.--In issuing the regulation under 
     paragraph (2), the Administrator may alter to any extent the 
     10-times level for modifying the requirements of this section 
     and sections 3005(j) and 7004 so long as the changed 
     requirements protect human health and the environment.
       ``(4) Interim rule.--Until the Administrator modifies the 
     regulations under paragraph (1), a person may dispose of a 
     solid waste that is an identified characteristic waste or 
     listed waste and contains hazardous constituents not greater 
     than 10 times the land disposal restrictions treatment levels 
     issued by the Administrator under section 3004(m), as in 
     effect on August 31, 1993, in a hazardous waste management 
     facility that meets the requirements of this section, except 
     that--
       ``(A) the requirements of subsections (d), (e), (f), (g), 
     (j), and (m) shall not apply;
       ``(B) the air emission standards issued by the 
     Administrator under section 3004(n), as in effect on December 
     6, 1995, shall not apply to a tank or other container or to 
     surface impoundment if the average volatile organic 
     concentration of the hazardous waste at the point at which 
     the waste is discharged into the tank, container, or surface 
     impoundment is less than 500 parts per million by weight; and
       ``(C) the double-liner requirement stated in section 
     3004(o) may be waived by the Administrator for any monofill 
     if the monofill meets the same requirements as are applicable 
     under section 3005(j).
       ``(5) Permit.--No permit shall be required for storage and 
     treatment in a tank or other container or containment 
     building that meets the requirements of this section.''.

     SEC. 6. RELATIONSHIP OF THE SOLID WASTE DISPOSAL ACT TO OTHER 
                   STATUTES.

       Section 1006(b)(1) of the Solid Waste Disposal Act (42 
     U.S.C. 6905(b)(1)) is amended--
       (1) by striking ``(1) The Administrator'' and inserting the 
     following:
       ``(1) In general.--The Administrator'';
       (2) by striking the second sentence; and
       (3) by adding at the end the following:
       ``(2) Use of authorities.--If the Administrator determines 
     that a risk to health or the environment associated with the 
     management of solid waste can be eliminated or reduced to a 
     sufficient extent by actions taken under the authorities 
     contained in such other Federal laws, and the Administrator 
     has a statutory or court-ordered mandate to address that risk 
     to health or the environment within 5 years after the date of 
     enactment of this sentence, the Administrator shall use the 
     other authorities to protect against the risk.''.
                                 ______

      Mr. LEAHY:
  S. 1287. An act to amend chapters 83 and 84 of title 5, United States 
Code, to provide that Federal employees who are erroneously covered by 
the Civil Service Retirement System may elect to continue such coverage 
or transfer to coverage under the Federal Employees Retirement System, 
and for other purposes.


     Federal Employee Retirement system (FERS) Transfer Legislation

 Mr. LEAHY. Mr. President, today I am introducing a bill which 
offers a legislative solution for a number of Federal employees who 
have been the unwitting victims of paperwork errors. Over 10 years ago, 
Congress passed a Public Law 98-369, which eliminated the Social 
Security exclusion for Federal employees with prior military service. 
This law was made retroactive to January of that year, and it was up to 
each Federal agency to find the individual workers who were affected by 
this law and change them from the old Civil Service Retirement System 
[CSRS] into the Federal Employee Retirement System [FERS].
  Unfortunately, a small but important group of workers have remained 
in the CSRS retirement system, because of agency error. Over time, 
these agencies have belatedly discovered employees who are improperly 
enrolled in CSRS and are forcing them back to FERS. This has been 
disruptive and unfair to the affected employees, since they are losing 
many years of contributions to the Thrift Savings Plan, which my 
colleagues know is critical to any FERS retirement. In many cases, the 
agencies reluctantly made this switch, but they had no authority to 
give a waiver to these public servants.
  Today I am offering a bill which will allow Federal employees who 
were inadvertently enrolled in the wrong retirement system to remain in 
CSRS. It is nearly impossible to make an employee whole after many 
years of contributing to the wrong retirement system, despite agency 
efforts to do so. The number of employees affected by my legislation 
may be small, perhaps as few as several dozen, but we need to correct 
this oversight so that these workers may enjoy a full retirement.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1287

         Be it enacted by the Senate and House of Representatives 
     of the United States of America in Congress assembled,

     SECTION 1. ELECTION OF FEDERAL RETIREMENT COVERAGE BY 
                   EMPLOYEES ERRONEOUSLY COVERED BY THE CIVIL 
                   SERVICE RETIREMENT SYSTEM.

       (a) Civil Service Retirement System.--(1) Section 
     8331(1)(x) of title 5, United States Code, is amended by 
     inserting before the semicolon ``, except an employee who 
     elects to be covered under this chapter in accordance with 
     section 8347(r)''.
       (2) Section 8347 of title 5, United States Code, is amended 
     by adding at the end thereof the following new subsection:
       ``(r)(1) This subsection shall apply to any employee who--
       ``(A) is subject to coverage under chapter 84; and
       ``(B) notwithstanding subparagraph (A), is covered under 
     this chapter as a result of an administrative error of an 
     employing agency or the Office of Personnel Management, 
     through no fault of the employee.
       ``(2)(A) No later than 180 days after the date on which an 
     employee described under paragraph (1) receives notice of 
     such administrative error, such employee may elect to--
       ``(i) continue coverage under this chapter; or
       ``(ii) be subject to coverage under chapter 84, subject to 
     regulations prescribed under paragraph (3).
       ``(B) An election under subparagraph (A) shall be 
     irrevocable. An employee who fails to make an election under 
     subparagraph (A) shall be subject to coverage under chapter 
     84, subject to regulations prescribed under paragraph (3).
       ``(3) The Office of Personnel Management shall prescribe 
     regulations to carry out this subsection.''.
       (b) Federal Employees Retirement System; Exclusions.--
     Section 8402(b) of title 5, United States Code, is amended--
       (1) in paragraph (1) by striking out ``or'' after the 
     semicolon;
       (2) in paragraph (2) by striking out the period at the end 
     thereof and inserting in lieu thereof a semicolon and ``or''; 
     and
       (3) by adding after paragraph (2) the following new 
     paragraph:
       ``(3) any employee who elects to continue coverage under 
     chapter 83 in accordance with section 8347(r).''.
       (c) Open Enrollment Period.--(1) During the 180-day period 
     beginning on the date of the enactment of this Act, the 
     Office of Personnel Management shall conduct a period of open 
     enrollment under section 8347(r) of title 5, United States 
     Code (as added by subsection (a) of this section).
       (2) In addition to any employee to whom section 8347(r) of 
     title 5, United States Code, applies, an employee may make an 
     election during the period of open enrollment under paragraph 
     (1), if such employee--

[[Page S 14741]]

       (A) on the date of the enactment of this Act is 
     participating under the Federal Employees Retirement System 
     under subchapter II of chapter 84 of title 5, United States 
     Code; and
       (B) during any period before the date of the enactment of 
     this Act was covered under chapter 83 of title 5, United 
     States Code, as a result of an administrative error of an 
     employing agency or the Office of Personnel Management 
     through no fault of the employee.
       (d) Regulations.--The regulations prescribed under section 
     8347(r)(3) of title 5, United States Code (as added by 
     subsection (a) of this section) shall--
       (1) provide that an employee may not have periods of 
     simultaneous coverage under subchapter III of chapter 83 of 
     title 5, United States Code, and subchapter II of chapter 84 
     of such title; and
       (2) include requirements similar to the applicable 
     requirements under title III of the Federal Employees 
     Retirement System Act of 1986 (Public Law 99-335; 100 Stat. 
     599; 5 U.S.C. 8331 note) including requirements relating to--
       (A) the interest of a spouse or former spouse under section 
     301(d) of such Act;
       (B) withholdings, deposits, interest, and refunds under 
     section 302 of such Act; and
       (C) social security offsets under section 303 of such Act.
                                 ______

      By Mr. KERRY:
  S. 1290. A bill to reduce the deficit; to the Committee on the 
Budget.


                           budget legislation

 Mr. KERRY. Mr. President, I introduce a ``Budget Buster Bill'' 
that strips more than $90 billion from the budget and cuts 40 programs 
which I consider to be pointless, wasteful, antiquated, or just plain 
silly.
  Our priority is people not ``pork'' or special interests, and this 
proposal recognizes the need to cut while at the same time 
understanding the need to invest in those things that bring this Nation 
its greatest return.
  I know that the budget debate is philosophically driven, and that 
there are diametrically opposed positions on the legitimate role of 
government. But no matter where one falls on the political spectrum, it 
behooves us to point to specific savings that cross philosophical lines 
which can and should be made.
  We came to our senses last week, and in a display of commonsense 
bipartisanship, we overwhelmingly passed an amendment that cut the mink 
subsidy. There are other similar programs that we should cut, and this 
bill cuts them.
  It cuts $11 billion for the space station. It cuts $10 billion from 
defense spending. It saves $360 million by reducing the number of 
political appointees in the Federal Government; and it cuts 37 other 
programs.
  I know that this bill, in and of itself, won't balance the budget, 
but it is one Senator's commonsense effort to answer the question, ``if 
you really want to cut the budget, what would you cut and how would you 
do it?''
  Mr. President, there is no magic in this bill, but there is a healthy 
dose of common sense that seems to be sorely lacking in the 
ideologically driven budget debate that is speaking to the activist 
extremes and ignoring the silent middle.
  Despite the fact that a huge portion of the public has said they 
don't like the way we do business; despite the fact that we talk about 
change but rarely accomplish it; despite the fact that we claim to want 
bipartisanship and avoid politics as usual, Congress and the President 
together are willfully moving down a road that is guaranteed to leave 
most Americans questioning the degree to which people here are in 
touch.
  I find that a profoundly disturbing direction, and I find it contrary 
to all of the things that people are asking us to try to do. People 
want us to behave like adults down here. They want an assurance that 
critical services are not going to be made the poker chips of political 
gamesmanship.
  The point is that there are some basic needs that this country faces 
and, to the best of my knowledge, most Americans think about having a 
job and raising their paychecks sufficiently that they have quality of 
life to be able to enjoy the fruits of their labor.
  And most people think that the real concerns they express about 
making sure their kids have the best education in the world, and that 
they can walk through a neighborhood that is safe to get to a school 
that is safe when they get there.
  People are concerned about the quality of the education that they're 
going to get in that school. And yet, the debate in this country has 
been dominated by the return of a contribution to a campaign from a 
Republican gay person; the symbolic issue of English as our national 
language--which it is and ought to be; a constitutional amendment to 
protect the flag. These truly are not the paramount concerns of 
Americans but more of the traditional symbols of politics that are 
beginning to make people question the entire political process.
  Americans want to know if we're going to do the job. And the job we 
were sent here to do is to produce a budget by the end of this month.
  Rather than truly working on that budget, we are engaged in a charade 
where we're going to pass a continuing resolution and a series of 
appropriation bills without a true legislative effort but with one 
party ordained to march in lock step to refuse any legislative 
proposals that might improve it.
  I believe that is an unacceptable way to do business and an avoidance 
of our responsibility.
  Frankly, it is time we put the interests of the Nation first, get off 
the partisan track, and put America back on track.
  Mr. President, this is a debate about economic fairness. It is about 
what we believe in and what we stand for as a nation. It's about the 
creation and preservation of jobs. It's a debate not about class 
warfare--rich against poor--but about the working class and how we can 
legislate in their interests for their future.
  It's a debate about commitment to family, about realistic tax policy, 
about access to education, and investments in our future.
  It's about addressing the three deficits we face that I have 
mentioned many times on this floor: the fiscal deficit, the investment 
deficit, and the spiritual deficit.
  I believe that this debate is fundamentally about how we can grow as 
an economy, a nation, and a people, and about what the proper role and 
size of the Federal Government should be.
  For my part, any consensus on the budget must recognize four 
principles: First that we will not compromise our commitment to 
education, to jobs, to working families, and to senior citizens 
struggling to make ends meet; that we will not dis-invest in our 
economic, social, and cultural infrastructure; that we will not dis-
invest in necessary technologies and science; and that we will not cut 
taxes unless and until we say to working Americans that there will be 
an increase in the minimum wage.
  I believe the cuts I am proposing and the bipartisan, commonsense 
direction in which they take us is in our best interest.
                                 ______

      By Mr. BROWN:
  S. 1292. A bill to designate the U.S. Post Office building located at 
201 East Pikes Peak Avenue in Colorado Springs, CO, as the ``Winfield 
Scott Stratton Post Office,'' and for other purposes; to the Committee 
on Governmental Affairs.


              the winfield scott stratton post office act

 Mr. BROWN. Mr. President, today I would like to introduce 
legislation that would designate the U.S. Post Office building located 
at 201 East Pikes Peak Avenue in Colorado Springs, CO, the Winfield 
Scott Stratton Post Office.
  This designation will honor the memory of a man who contributed 
greatly to the community of Colorado Springs. Working as a carpenter 
and prospector for over 18 years, Winfield Scott Stratton was one of 
the many adventurers who came to Colorado looking for their fortune. In 
his case, the fortune was a rich deposit of gold in Cripple Creek, CO.
  Mr. Stratton's lifestyle changed little after his gold strike. He 
believed it was the duty of anyone who made a fortune to use his wealth 
in the development of his community. In keeping with that philosophy, 
Mr. Stratton dedicated the rest of his life to helping others less 
fortunate and to advancing the development of Colorado Springs and 
Colorado.
  He purchased and gave Colorado Springs the ground for its city hall; 
he helped finance a new courthouse; he purchased and upgraded the 
street railway system; he built the first privately funded building at 
the Colorado School of Mines; and he endowed the Myron 

[[Page S 14742]]
Stratton Home, a foster home for children and impoverished elderly 
which is still serving the Colorado Springs community today. Thousands 
of Coloradans today are the direct beneficiaries of Mr. Stratton's 
generosity.
  Regarding this bill, it is noteworthy that Winfield Scott Stratton 
also purchased the property at 201 East Pikes Peak Avenue and sold it 
to the Federal Government for half its value on the condition that the 
Federal Government build the post office which stands there today.
  In view of Mr. Stratton's contribution to the existing post office 
and to Colorado as a whole, it is an entirely fitting and appropriate 
gesture to name this U.S. Post Office the Winfield Scott Stratton Post 
Office. He was a man who shared his riches with an entire State, and he 
left a legacy of love and care which continues today.
                                 ______

      By Mr. MURKOWSKI (for himself, Mr. Helms, Mr. McCain, and Mr. 
        Nickles):
  S. 1293. A bill to provide for implementation of the Agreed Framework 
with North Korea regarding resolution of the nuclear issue on the 
Korean Peninsula, and for other purposes; to the Committee on Foreign 
Relations.


 agreed framework between the united states and north korea legislation

  Mr. MURKOWSKI. Mr. President, today I am introducing legislation, 
along with Senators Helms, McCain, and Nickles, which would provide a 
means for the Congress to monitor the implementation of the ``Agreed 
Framework between the United States and North Korea'' on nuclear 
issues. This will ensure that when and if we vote funds for that 
purpose, we know that that money is achieving the agreed objectives. 
The legislation conditions the availability of U.S. funds for 
fulfilling the accord on North Korea's abiding by the terms of the 
Agreed Framework and Confidential Minute in accordance with the 
schedule set forth in the agreement. Thus it adds necessary specificity 
to the timing and sequencing of all aspects of the Agreed Framework.
  The Agreed Framework is written in traditional diplomatic language, 
with insufficient detail on the timing and nature of actions which both 
North Korea and the United States must take to implement it. While I 
appreciate the Administration's desire to have flexibility in 
implementing the accord, it will be important that the North Koreans 
and the Administration understand that the Congress desires greater 
specificity if it is going to authorize and appropriate funds for this 
accord.
  I would add, Mr. President, that the legislation I am proposing is 
fully consistent with the Agreed Framework and with current U.S. 
policy. However, if this legislation causes difficulties for the 
Administration at some point, the President can waive the provisions of 
the legislation if he certifies to the Congress that it is vital to the 
national security interests of the United States to do so.
  In sum, the legislation provides the following:
  Full political and economic normalization of relations--specifically 
the exchange of Ambassadors and the total lifting of the economic 
embargo--with North Korea can occur only after:
  IAEA safeguards requirements are met, including inspections of 2 
suspected nuclear waste sites.
  Progress has been made in talks between North and South Korea.
  A more effective, regularized process has been created to return U.S. 
MIAs from the Korean War, including through joint field activities, as 
in Vietnam.
  North Korea no longer meets the criteria for inclusion on the list of 
countries the governments of which support international terrorism.
  North Korea takes positive steps to demonstrate greater respect for 
human rights.
  North Korea agrees to abide by Missile Technology Control Regime.
  All spent fuel has been removed from North Korea to a third country.
  North Korea's graphite reactors have been dismantled in a manner that 
bars reactivation of such reactors and related facilities.
  In short, until North Korea proves it is no longer a renegade state 
and wishes to behave as a normal, respected member of the international 
community, including through negotiating peacefully with the Republic 
of Korea concerning the future of the Korean peninsula, we should not 
establish full economic and political relations.
  Interim steps toward full economic and political relations, such as 
setting up diplomatic liaison offices and lifting certain economic 
regulatory sanctions, are not restricted under the legislation. In 
fact, I believe they can help provide incentives for the North Koreans 
to move ahead in these areas of concern while also giving the 
Administration useful leverage.
  The legislation also provides that the United States will suspend 
relevant activities described in the Agreed Framework if North Korea 
reloads its existing 5 megawatt reactor or resumes construction of 
nuclear facilities other than those permitted to be built under the 
Agreed Framework.
  The legislation also restricts United States direct or indirect 
support for exports of heavy fuel oil to North Korea if that state does 
not maintain the freeze on its nuclear program or takes steps regarding 
that oil which are not permitted under the Agreed Framework.
  Finally, the legislation has a reporting requirement to ensure that 
congressional monitoring of the implementation of the Agreed Framework 
and that the taxpayers' money is being spent effectively.
  I look forward to extensive debate on this legislation and its early 
passage.
  Mr. McCAIN. Mr. President, as I have often said, I have serious 
reservations about the October 1994 Nuclear Framework Agreement with 
North Korea. Therefore, I am pleased to be an original sponsor, with 
Senator Murkowski and others, of this legislation which would establish 
needed specificity to the vagaries of the agreement and provide clearly 
stated incentives for North Korean compliance with its terms.
  This legislation would prohibit the use of any U.S. taxpayer dollars 
to implement the Framework Agreement unless the Congress passes a law 
authorizing and appropriating the funds. The President would also be 
required to certify that North Korea is in full compliance with the 
terms of the Framework Agreement before any authorized funds can be 
spent.
  The legislation would prohibit normalization of diplomatic and 
economic relations between the United States and North Korea until 
several conditions are met--conditions which clearly serve our national 
interests, including the following:
  North Korea must fully comply with the IAEA safeguards agreement for 
its nuclear program.
  North Korea must forswear any support for international terrorism, 
and must demonstrate greater respect for human rights.
  North Korea must halt the export of ballistic missiles and related 
technology and agree to adhere to the Missile Technology Control 
Regime.
  The IAEA has inspected all suspected nuclear waste sites in North 
Korea.
  And most important, in my view, all spent nuclear fuel must be 
removed from North Korea, and their existing graphite-based nuclear 
reactors must be destroyed.
  Mr. President, let me take a moment to discuss some of the glaring 
flaws in the Framework Agreement, which are the principal reasons for 
my sponsorship of this legislation, and my predictions for the failure 
of the agreement.
  The most charitable appraisal I can give the agreement is that it 
represents a tendered bribe to North Korea in exchange for a limit on 
its nuclear weapons program. The underlying problem with the Nuclear 
Framework Agreement is that it is based not on trust, but on wishful 
thinking. North Korea has a well-established record of breaking its 
commitments to the U.S. and to the international community. At least 
nine times during the past two-and-a-half years, the North Koreans have 
reneged on their commitments. This agreement relies very heavily on 
North Korean good faith--indeed, it virtually tempts the North Koreans 
to break their word. That is its fundamental flaw.

  The foolish time lags between North Korea's receipt of the benefits 
of this agreement and the points at which they are required to prove 
their good faith will, I believe, prove an irresistible temptation to 
the North Koreans. This deal is front-end loaded in favor of North 
Korea. Under the deal, North 

[[Page S 14743]]
Korea gets free oil, the benefits of trade and diplomatic relations, 
two new nuclear reactors, and untold additional benefits, including 
tacit forgiveness of their blatant violation of the Nuclear Non-
Proliferation Treaty--most before incurring any real damage to their 
nuclear weapons program.
  Thus far, North Korea is only required to freeze its nuclear program 
at Yongbyon, and freeze construction of two larger reactors. Since none 
of these facilities fueled a single light bulb in North Korea (the 
Yongbyon reactor was never connected to a power grid), this is not much 
of a hardship.
  The first serious obligation imposed on North Korea under the terms 
of the agreement will not occur for 3 to 5 years from now. At that 
time, they must begin to transfer the spent fuel rods to an undisclosed 
third country. Regrettably, the Administration either doesn't know or 
refuses to disclose when this transfer will occur and which country is 
prepared to take the rods. We should insist on the transfer 
immediately.
  At that same time, as much as 5 years in the future, North Korea is 
supposed to accept its second major obligation--challenge inspections 
of undisclosed nuclear sites--especially the two suspected nuclear 
waste sites. These inspections are the only hope we have of determining 
what happened to the plutonium diverted during reprocessing in 1989. If 
North Korea reneges on the deal at this point--after receiving all the 
up-front benefits of the deal--we still won't know the truth about the 
1989 refueling of the Yongbyon reactor, and thus the truth about North 
Korea's nuclear weapons program.
  Finally, the dismantlement of any of the North Korean nuclear 
facilities will not begin until they have received one, fully 
operational, $2 billion light water reactor. This could be 7 or more 
years away. And they don't have to complete dismantlement of their 
nuclear facilities until the second reactor is completed, perhaps at 
much as 10 years from now.
  The harsh truth is that, by the time the North Koreans remove one 
brick from any of their nuclear facilities, they will have received 
from the U.S. and our Asian allies as much as 5 million tons of oil, 
inestimable millions in trade and investment opportunities, the 
propaganda value of improved relations with the United States--quite 
possibly at the expense of our relationship with South Korea, and a $2 
billion, fully operational, state of the art, light water reactor--the 
same kind we have pressured Russia and France not to sell to Iran.

  The practical effect of providing significant amounts of energy and 
economic aid to North Korea is to free up scarce hard currency for 
North Korea to use for almost any purpose--whether it is beefing up 
their military capability or rebuilding their failing infrastructure. 
Either way, their economy is almost certainly going to improve, and we 
may be facing a firmly entrenched Communist regime in North Korea for 
decades to come.
  Given North Korea's long history of broken promises and violated 
agreements, why wouldn't we expect them to break their word again, 
after collecting the many benefits of this agreement, and resume the 
operation of their current facilities after 5 or 8 or 10 years. This 
legislation would create clearly stated incentives for the North 
Koreans to honor their commitments under the agreement and dismantle 
their nuclear weapons program--incentives which were not included in 
the agreement itself.
  Mr. President, although I believe the framework agreement is 
seriously flawed, I strongly believe that Congress should not overturn 
the agreement. I do not want the U.S. Congress blamed for something 
that will really be the result of North Korean duplicity. When this 
agreement fails, I want it to be clear to all who is responsible for 
the failure--so that we can proceed immediately to organize 
international sanctions and other punitive measures which are designed 
to remove the threat of nuclear proliferation from the Korean Peninsula 
once and for all. That is what we should have done last year.
  At the same time, the American taxpayer should not be expected to 
underwrite this agreement--with one exception, which I will explain in 
a moment.
  Initially, the administration promised that the only financial 
commitment undertaken by the United States in the agreement was a one-
time shipment of oil worth roughly $5 million. Subsequent to that 
declaration, we learned that the President sent a letter to Kim Jong Il 
promising to ask Congress to pay for the new reactors if funding cannot 
be found elsewhere. To pay for the oil shipment, the administration 
avoided coming to Congress and took $4.7 million from Defense 
Department funds, using a little-known authority that is supposed to be 
used for ``emergencies and extraordinary expenses''--and they did it 
without giving Congress any prior notice.
  I should note that this little-known ``emergency and extraordinary 
expenses'' authority will not in the future be misused in such a 
fashion. I was successful in including a provision in the fiscal year 
1996 Defense authorization bill which establishes specific notification 
requirements when the authority is exercised for any expenditure 
exceeding $500,000. This provision will become law as part of the FY 
1996 Defense Authorization Act.

  Now, the Administration says that the U.S. financial commitment to 
this agreement may ultimately amount to $20-30 million per year, or 
$200-300 million over the ten-year period of the agreement.
  Since the Administration claims they did not guarantee North Korea 
that we will contribute anything more than the agreed upon oil 
shipment, and since the Administration has already demonstrated its 
intention to cut Congress out of the loop as much as possible, I think 
Congress should decline to appropriate any further funds to implement 
this accord--with one exception. That exception is with respect to the 
security, safe storage, and subsequent removal from North Korea of the 
8,000 spent nuclear fuel rods corroding in a cooling pond at Yongbyon.
  I believe we should test North Korea's intentions as early as 
possible. I believe we should identify a country willing to receive the 
fuel rods, and ask North Korea to ship them there. Should they comply, 
the U.S. should pay for the transfer. It's worth the cost, because we 
will remove from North Korea enough plutonium for 5 or 6 nuclear 
weapons, and we will have an early--though certainly not a definitive--
indicator of how seriously North Korea is taking its commitments under 
this agreement.
  Until the fuel is removed from North Korea, I believe it is 
imperative to ensure the security and safe storage of the spent fuel. I 
worked successfully in the Senate Armed Services Committee for a 
provision allowing up to $5 million of DOE funds to be used to complete 
work on the safe storage, or canning, of the spent nuclear fuel at the 
Yongbyon reactor site. Some of my colleagues wanted to refuse even this 
small amount of money, but I believe it would be counter-productive to 
allow the spent fuel to remain in an open and degrading storage pond, 
when we could at least ensure that it was less easily accessible to 
North Korea in the event the agreement fails. This provision will 
become law as part of the FY 1996 Defense Authorization Act.
  Mr. President, the legislation I am introducing today, with Senator 
Murkowski and others, is entirely consistent with the provisions of the 
Framework Agreement between the U.S. and North Korea. It merely adds 
specificity to the vagaries of the agreement, as well as incentives for 
North Korean compliance with the agreement. It also ensures that North 
Korea realizes a small part of the price it will pay for breaking its 
word to dismantle its nuclear weapons program. And it permits the 
President to waive any of its restrictive provisions if he certifies 
that it is vital to U.S. national security to do so.
  I urge my colleagues to support this legislation. It will ensure that 
the laudable goals of the Framework Agreement are realized by fixing 
its flaws.
                                 ______

      By Mr. JEFFORDS:
  S. 1294. A bill to amend title 10, United States Code, to repeal the 
requirement that amounts paid to a member of the Armed Forces under the 
Special Separation Benefits Program of the Department of Defense, or 
under the Voluntary Separation Incentive Program of that Department, be 
offset from amounts subsequently paid to that 

[[Page S 14744]]
member by the Department of Veterans Affairs as disability 
compensation; to the Committee on Armed Services.


                     title 10 amendment legislation

 Mr. JEFFORDS. Mr. President, I reintroduce a bill to change 
current law that requires amounts paid to a member of the Armed Forces 
under the Special Separation Benefits and Voluntary Separation 
Incentive Programs be offset from amounts subsequently paid to that 
individual by the Department of Veterans Affairs as disability 
compensation.
  Since the end of the cold war, our country has called on military 
personnel to participate in several dangerous military operations, most 
recently in the Persian Gulf, Somalia, and Haiti. These personnel have 
served our country well. Unfortunately, due to language in the 
Department of Defense [DOD] Authorization Act for fiscal years 1992 and 
1993, veterans who participate in the Department of Defense's 
downsizing by selecting one of two options, either a special separation 
bonus [SSB] lump sum payment or a voluntary separation incentive [VSI] 
monthly payment, are prevented from receiving both disability 
compensation from the VA and benefits from the SSB and VSI programs 
until the separation compensation is offset completely. My bill will 
address this injustice by repealing these provisions and allow for 
concurrent receipt. It will also be retroactive to December 5, 1991, so 
service members not able to receive payment concurrently since 1991 
will be reimbursed for their lost compensation.
   Mr. President, SSB and VSI benefits are for services rendered as 
well as compensation for the veterans' participation in the DOD's 
downsizing. VA disability pay is compensation for mental or physical 
disabilities incurred in that service. These are two separate 
compensations serving two very different purposes. Therefore, it is 
unfair to the veteran to offset one payment with another.
  Aside from the unfairness of offsetting the costs of unrelated 
compensation benefits, many veterans who returned from the Persian Gulf 
war have come down with strange illnesses which are believed to be 
related to their service in the Persian Gulf. Individuals who have 
accepted SSB or VSI payments are suffering both physically and 
financially, as many cannot work under the conditions from which they 
are suffering. Repealing the offset will help ease this financial 
suffering.
  I urge the Congress to correct this injustice to our Nation's 
veterans and provide these veterans with the proper care and 
compensation they deserve.
                                 ______

      By Mr. HELMS (for himself, Mr. Faircloth, and Mr. Warner):
  S. 1295. A bill to prohibit the regulation of any tobacco products, 
or tobacco sponsored advertising, used or purchased by the National 
Association of Stock Car Automobile Racing, its agents or affiliates, 
or any other professional motor sports association by the Secretary of 
Health and Human Services or any other instrumentality of the Federal 
Government, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


                           nascar legislation

  Mr. HELMS. Mr. President, North Carolina is the home of professional 
auto racing and it is on behalf of literally thousands of Tar Heels and 
millions of other NASCAR racing fans across America that I today offer 
in the Senate the companion bill of the Motor Sports Protection Act 
which was introduced in the House on September 6 by the Honorable David 
Funderburk, who ably represents the Second North Carolina Congressional 
District.
  Mr. President, the announcement last month of plans by the Food and 
Drug Administration to designate tobacco has created much concern in my 
State, and other tobacco-producing southern States. This is an example 
of how Washington bureaucrats increase their regulatory power at the 
expense of the livelihoods of the Nation's farmers and manufacturers. 
The FDA's attack on tobacco advertising is sure to have a tremendously 
adverse effect on NASCAR racing.
  The issue is whether companies have a right to advertise 
their products. Advertising is a lawful act and tobacco is a lawful 
commodity. Unless and until tobacco is banned, proper advertising of 
this lawful product must not be denied by bureaucratic wherein.

  So, this bill will limit the Federal bureaucracy from imposing 
advertising restrictions on any sponsors of pro racing. The motor 
sports industry contributes more than $2 billion to the South's economy 
every year. Racing fans are hard working, law-abiding Americans--they 
don't deserve bureaucratic mistreatment.
  Mr. President, not too long ago, the ``King'' of racing Richard Petty 
retired. He left at a time when his name was synonymous with NASCAR 
racing. He was a perfect example of what can be accomplished with 
determination, faith, and family values. Richard Petty's success was 
built on the cooperation of his family, friend, and companies that 
supported him throughout his career.
  My friend, Richard Petty sends word that he will very much appreciate 
Senators' support of this bill, and so will I.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                North Carolina Motor Speedway,

                               Rockingham, NC, September 19, 1995.
     Hon. Jesse A. Helms,
     Senate Dirkson Office Building,
     Washington, DC.
       Dear Senator Helms: I am writing to express my concern 
     about President Clinton's plan to regulate tobacco and their 
     sponsorship of motorsports events at North Carolina Motor 
     Speedway. The FDA's proposed regulation will have a severe 
     impact, not only on the Speedway, but also on Moore, 
     Richmond, and surrounding counties. Loss of sponsorships 
     might mean ticket prices could go up, quality of events and 
     facilities could go down, which could contribute to lower 
     attendance. Our area depends heavily on revenue from those 
     attending motorsports and other sponsored events. Local 
     communities will be an economic loser from reduced attendance 
     at events.
       I would appreciate you writing back to me with your views 
     on this important issue. Thank you.
           Sincerely,
                                                 Jo DeWitt Wilson,
                                                        President.
                                 ______

      By Mr. HATCH (for himself, Mr. Breaux, Mr. Lugar, and Mr. 
        Cochran):
  S. 1296. A bill to amend the Employee Retirement Income Security Act 
of 1974 to clarify the treatment of a qualified football coaches plan; 
to the Committee on Finance.


 the qualified football coaches plan technical corrections act of 1995

  Mr. HATCH. Mr. President, on behalf of myself and Senator Breaux, I 
rise today to introduce the Qualified Football Coaches Plan Technical 
Corrections Act of 1995. We are joined in this effort by Senators 
Lugar, and Cochran.
  As the title indicates, this bill is a technical correction to ensure 
the proper qualification of a retirement plan for many of America's 
college football coaches. All of us in this body are in favor of 
encouraging retirement saving. However, the retirement plan set up for 
many of these football coaches is in serious jeopardy.
  Mr. President, let me explain what brought us to the point we are 
today on this issue. In 1987, Congress recognized the unique aspects of 
the coaching profession and passed legislation to permit the American 
Football Coaches Association [AFCA] to set up and maintain a qualified 
cash and deferred arrangement under Section 401(k) of the Internal 
Revenue Code. The bill amended Title I of ERISA to permit such a plan 
to be treated as a qualified multiemployer plan. Due to the frequency 
with which football coaches change jobs, legislation was needed to 
assist them in maintaining a retirement plan that is adequately 
portable.
  In reliance on this legislation, the American Football Coaches 
Association, which represents over 4,400 college football coaches at 
676 schools, sponsored a 401(k) plan for its members that today has 
over 500 participants.
  However, on the same day this legislation was passed, Congress was 
involved in addressing another problem contained in ERISA that was 
unrelated to the football coaches retirement plan. The problem was an 
unfavorable Tax Court ruling that held that the ERISA standard 
regarding employer withdrawals from pension plans, rather than the 
standard under the Internal 

[[Page S 14745]]
Revenue Code of 1986, applied for purposes of interpreting the Internal 
Revenue Code. Thus, Congress, in an attempt to reject the holding of 
the Tax Court as it applied to Title I of ERISA, included a provision 
stating that Title I and Title IV of ERISA are not appicable in 
interpreting the Internal Revenue Code of 1986. This, of course, had 
the unintended consequence of deeming the football coaches retirement 
plan an invalid plan for purposes of the Internal Revenue Code.
  Following the creation of the retirement plan, the coaches 
association asked the Internal Revenue Service to confirm the 
tax qualified status of the retirement plan. On three separate 
occasions, Mr. President, the Internal Revenue Service issued 
determination letters confirming the tax qualified status of the plan 
for years 1988, 1989, and 1991. It was not until 1992 that the Internal 
Revenue Service determined that the 1987 provision invalidates what 
Congress did in Title I of ERISA to authorize the coaches 401(k) plan. 
In that year, the IRS changed its position on the exempt status of the 
coaches' retirement plan and indicated it would revoke the 
determination letters unless clarifying legislation is passed. The 
horrible result will be a forced termination of the plan by the end of 
1995 which will impose a substantial cost on the football coaches and 
leave them without a retirement plan.

  Mr. President, the original enacting legislation in 1987 was a 
bipartisan effort cosponsored by 34 Members of the Senate and 151 
Members in the House. This clarifying legislation is also a bipartisan 
effort. This bill eliminate the uncertainty that these coaches have 
been forced to live with since 1988.
  Mr. President, I have requested the Joint Committee on Taxation 
estimate the revenue impact of this bill. The Joint Committee concluded 
that this change is technical in nature and would have no revenue 
impact. However, I do want to point out that if this change is not 
made, hundreds of coaches will risk the loss of retirement benefits. 
This is not the message we should send to those who follow in good 
faith, the actions of a prior Congress.
  I wish to commend the Senator from Louisiana, Senator Breaux, for his 
leadership on this issue. I urge my colleagues to support this 
legislation. It is the right thing to do and is long overdue.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

         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 ``Qualified Football Coaches 
     Plan Technical Corrections Act of 1995''.

     SEC. 2. CLARIFICATION OF TREATMENT OF QUALIFIED FOOTBALL 
                   COACHES PLANS.

       (a) In General.--Subparagraph (F) of section 3(37) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1002(37)(F)) is amended by redesignating clause (ii) as 
     clause (iii) and by inserting after clause (i) the following 
     new clause:
       ``(ii) For purposes of the Internal Revenue Code of 1986--
       ``(I) clause (i) shall apply, and
       ``(II) a qualified football coaches plan shall be treated 
     as a multiemployer collectively bargained plan.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 22, 1987.
                                 ______

      By Mr. HATCH (for himself and Mr. D'Amato)
  S. 1297. An Act to amend the Internal Revenue Code of 1986 to 
simplify certain provisions applicable to real estate investment 
trusts.


    THE REAL ESTATE INVESTMENT TRUST TAX SIMPLIFICATION ACT OF 1995

  Mr. HATCH. Mr. President, on behalf of myself and Senator D'Amato, I 
rise today to introduce the Real Estate Investment Trust Tax 
Simplification Act of 1995, legislation to simplify and reform the tax 
law concerning Real Estate Investment Trusts [REITs]. Similar 
legislation has been introduced in the House by Representative E. Clay 
Shaw, Jr. along with many other Representatives.
  REITs were designed to allow small investors to invest in large real 
estate projects that they otherwise could not afford to enter including 
apartment buildings, office buildings, shopping centers, malls, 
warehouses, etc. Real Estate Investment Trusts have become a very 
popular from of investment as indicated by the fact that the market 
capitalization in the whole industry has risen from $9 billion in 1991 
to over $50 billion today.
  Mr. President, if a REIT properly follows all of the rules, it is not 
normally taxed at the entity level, but passes through most items of 
income to the shareholders to report on their own individual tax 
returns. However, there are many complexities and uncertainties--
minefields, if you will, for the unwary that can inadvertently penalize 
investors and even the general public in some circumstances. This bill 
is designed to alleviate these minefields.
  Let me share with my colleagues an example of one of these 
minefields. Under the current rules, in order to gain the benefits of 
REIT taxation, the investment has to be passive in nature. Hence, the 
normal procedure is for the REIT to buy the underlying property and 
lease it out to tenants. However, the REIT must be careful not to 
provide directly to the tenants any services that are not customary in 
the real estate business. If this rule is violated, severe consequences 
can follow. For example, under a literal interpretation of the law, if 
a REIT that operates a retail mall provides wheelchairs to the 
customers of the retail tenants, or even assist the tenant in moving 
into it space, the entity's very status as a REIT could be placed in 
jeopardy. This is ridiculous and needs to be changed.
  Another unnecessary rule, Mr. President, could conceivably cause an 
entire community to lost its health care facility. Let me explain. 
Under the current law, if an operator of a health care facility owned 
by a REIT defaults on its rent payments to the REIT, that health care 
facility could be shut down for a long period of time, even though 
there may be other health care operators willing and able to take over 
the facility. Why? Because current law basically prohibits the REIT 
from operating the facility itself and, at the same time, artificially 
reduces the pool of potential operators that can run the health care 
facility without causing undue tax problems to the REIT and its owners. 
This potential problem faces many REITs and many communities inasmuch 
as REITs currently own about $10 billion of investments in health care 
facilities around the nation. This bill will eliminate the perverse 
incentive to shut down such critical facilities in the unfortunate case 
of foreclosure.
  Mr. President, this bill also relaxes some of the current law's 
onerous penalties for failing to perform some record keeping 
requirements. Currently a REIT could lose its favored tax status simply 
by failing to send out or receive back shareholder demand letters for 
the purpose of verifying the fact that no five or fewer parties own 
controlling interests in the REIT. So, even though the REIT in fact 
meets this test, Mr. President, simply by failing to have on file 
sufficient shareholder letters substantiating this fact, all of the 
REIT shareholders could face the extremely harsh penalty of REIT 
disqualification and double taxation.
  Rather than penalizing the REIT so severely for this oversight, Mr. 
president, this bill would impose a $25,000 penalty for failure to 
comply with this requirement, if the failure is inadvertent in nature. 
The penalty would rise to $50,000 in the case of willful noncompliance. 
I believe my colleagues would agree that this approach makes much more 
sense that the current rules since it serves as an adequate incentive 
to keep the appropriate records without causing the unsuspecting, 
innocent investors severe and unnecessary personal tax penalties.
  Mr. President, this bill also addresses other problems that are 
detailed in the summary of the bill that I ask unanimous consent to be 
included in the Record after my remarks.
  This bill is not controversial and will have a negligible effect on 
revenues, according to the Joint Committee on Taxation. It is important 
to note that this bill is endorsed by the National Association of Real 
Estate Investment Trusts, which represents a high percentage of the 
REIT industry. Whenever we can do things to simplify the tax code 
without causing substantial 

[[Page S 14746]]
revenue loss or negative policy consequences, we should do it. Mr. 
President, this is an opportunity for us to do just that in the area of 
Real Estate Investment Trusts. I urge my colleagues on both sides of 
the aisle to join me in reforming and simplifying the tax law regarding 
this very difficult and complex area of the law.
  Mr. President, I ask unanimous consent that the text of the bill and 
a detailed summary of its provisions be printed in the Record.
  There being no objection, the materials were ordered to be printed in 
the Record, as the follows:

                                S. 1297

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Real 
     Estate Investment Trust Tax Simplification Act of 1995''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
              TITLE I--REMOVAL OF TAX TRAPS FOR THE UNWARY

     SEC. 101. CLARIFICATION OF LIMITATION ON MAXIMUM NUMBER OF 
                   SHAREHOLDERS.

       (a) Rules Relating to Determination of Ownership.--
       (1) Failure to issue shareholder demand letter not to 
     disqualify reit.--Section 857(a) (relating to requirements 
     applicable to real estate investment trusts) is amended by 
     striking paragraph (2) and by redesignating paragraph (3) as 
     paragraph (2).
       (2) Shareholder demand letter requirement; penalty.--
     Section 857 (relating to taxation of real estate investment 
     trusts and their beneficiaries) is amended by redesignating 
     subsection (f) as subsection (g) and by inserting after 
     subsection (e) the following new subsection:
       ``(f) Real Estate Investment Trusts To Ascertain 
     Ownership.--
       ``(1) In general.--Each real estate investment trust shall 
     each taxable year comply with regulations prescribed by the 
     Secretary for the purposes of ascertaining the actual 
     ownership of the outstanding shares, or certificates of 
     beneficial interest, of such trust.
       ``(2) Failure to comply.--
       ``(A) In general.--If a real estate investment trust fails 
     to comply with the requirements of paragraph (1) for a 
     taxable year, such trust shall pay (on notice and demand by 
     the Secretary and in the same manner as tax) a penalty of 
     $25,000.
       ``(B) Intentional disregard.--If any failure under 
     paragraph (1) is due to intentional disregard of the 
     requirement under paragraph (1), the penalty under 
     subparagraph (A) shall be $50,000.
       ``(C) Failure to comply after notice.--The Secretary may 
     require a real estate investment trust to take such actions 
     as the Secretary determines appropriate to ascertain actual 
     ownership if the trust fails to meet the requirements of 
     paragraph (1). If the trust fails to take such actions, the 
     trust shall pay (on notice and demand by the Secretary and in 
     the same manner as tax) an additional penalty equal to the 
     penalty determined under subparagraph (A) or (B), whichever 
     is applicable.
       ``(D) Reasonable cause.--No penalty shall be imposed under 
     this paragraph with respect to any failure if it is shown 
     that such failure is due to reasonable cause and not to 
     willful neglect.''
       (b) Compliance With Closely Held Prohibition.--
       (1) In general.--Section 856 (defining real estate 
     investment trust) is amended by adding at the end the 
     following new subsection:
       ``(k) Requirement That Entity Not Be Closely Held Treated 
     as Met in Certain Cases.--A corporation, trust, or 
     association--
       ``(1) which for a taxable year meets the requirements of 
     section 857(f)(1), and
       ``(2) which does not know, or exercising reasonable 
     diligence would not have known, whether the entity failed to 
     meet the requirement of subsection (a)(6),

     shall be treated as having met the requirement of subsection 
     (a)(6) for the taxable year.''
       (2) Conforming amendment.--Paragraph (6) of section 856(a) 
     is amended by inserting ``subject to the provisions of 
     subsection (k),'' before ``which is not''.

     SEC. 102. DE MINIMIS RULE FOR TENANT SERVICES INCOME.

       (a) In General.--Paragraph (2) of section 856(d) (defining 
     rents from real property) is amended by striking subparagraph 
     (C) and the last sentence and inserting:
       ``(C) any impermissible tenant service income (as defined 
     in paragraph (7)).''
       (b) Impermissible Tenant Service Income.--Section 856(d) is 
     amended by adding at the end the following new paragraph:
       ``(7) Impermissible tenant service income.--For purposes of 
     paragraph (2)(C)--
       ``(A) In general.--The term `impermissible tenant service 
     income' means, with respect to any real or personal property, 
     any amount (other than amounts described in subparagraph (B) 
     or (C) of paragraph (1)) received or accrued directly or 
     indirectly by the real estate investment trust for--
       ``(i) services furnished or rendered by the trust to the 
     tenants of such property, or
       ``(ii) managing or operating such property.
       ``(B) Disqualification of all amounts where more than de 
     minimis amount.--If the amount described in subparagraph (A) 
     with respect to a property exceeds 1 percent of all amounts 
     received or accrued directly or indirectly by the real estate 
     investment trust with respect to such property, the 
     impermissible tenant service income of the trust with respect 
     to the property shall include all such amounts.
       ``(C) Exceptions.--For purposes of subparagraph (A)--
       ``(i) services furnished or rendered, or management or 
     operation provided, through an independent contractor from 
     whom the trust itself does not derive or receive any income 
     shall not be treated as furnished, rendered, or provided by 
     the trust, and
       ``(ii) there shall not be taken into account any amount 
     which would be excluded from unrelated business taxable 
     income under section 512(b)(3) if received by an organization 
     described in section 512(a)(2).
       ``(D) Amount attributable to impermissible services.--For 
     purposes of subparagraph (A), the amount treated as received 
     for any service (or management or operation) shall not be 
     less than 150 percent of the actual direct cost of the trust 
     in furnishing or rendering the service (or providing the 
     management or operation).
       ``(E) Coordination with limitations.--For purposes of 
     paragraphs (2) and (3) of subsection (c), amounts described 
     in subparagraph (A) shall be included in the gross income of 
     the corporation, trust, or association.''

     SEC. 103. ATTRIBUTION RULES APPLICABLE TO TENANT OWNERSHIP.

       Section 856(d)(5) (relating to constructive ownership of 
     stock) is amended by adding at the end the following: ``For 
     purposes of paragraph (2)(B), section 318(a)(3)(A) shall be 
     applied under the preceding sentence in the case of a 
     partnership by taking into account only partners who own 
     (directly or indirectly) 25 percent or more of the capital 
     interest, or the profits interest, in the partnership.''
      TITLE II--CONFORMITY WITH REGULATED INVESTMENT COMPANY RULES

     SEC. 201. CREDIT FOR TAX PAID BY REIT ON RETAINED CAPITAL 
                   GAINS.

       (a) General Rule.--Paragraph (3) of section 857(b) 
     (relating to capital gains) is amended by redesignating 
     subparagraph (D) as subparagraph (E) and by inserting after 
     subparagraph (C) the following new subparagraph:
       ``(D) Treatment by shareholders of undistributed capital 
     gains.--
       ``(i) Every shareholder of a real estate investment trust 
     at the close of the trust's taxable year shall include, in 
     computing his long-term capital gains in his return for his 
     taxable year in which the last day of the trust's taxable 
     year falls, such amount as the trust shall designate in 
     respect of such shares in a written notice mailed to its 
     shareholders at any time prior to the expiration of 60 days 
     after the close of its taxable year (or mailed to its 
     shareholders or holders of beneficial interests with its 
     annual report for the taxable year), but the amount so 
     includible by any shareholder shall not exceed that part of 
     the amount subjected to tax in subparagraph (A)(ii) which he 
     would have received if all of such amount had been 
     distributed as capital gain dividends by the trust to the 
     holders of such shares at the close of its taxable year.
       ``(ii) For purposes of this title, every such shareholder 
     shall be deemed to have paid, for his taxable year under 
     clause (i), the tax imposed by subparagraph (A)(ii) on the 
     amounts required by this subparagraph to be included in 
     respect of such shares in computing his long-term capital 
     gains for that year; and such shareholders shall be allowed 
     credit or refund as the case may be, for the tax so deemed to 
     have been paid by him.
       ``(iii) The adjusted basis of such shares in the hands of 
     the holder shall be increased with respect to the amounts 
     required by this subparagraph to be included in computing his 
     long-term capital gains, by the difference between the amount 
     of such includible gains and such holder's credit or refund 
     determined under clause (ii).
       ``(iv) In the event of such designation, the tax imposed by 
     subparagraph (A)(ii) shall be paid by the real estate 
     investment trust within 30 days after the close of its 
     taxable year.
       ``(v) The earnings and profits of such real estate 
     investment trust, and the earnings and profits of any such 
     shareholder which is a corporation, shall be appropriately 
     adjusted in accordance with regulations prescribed by the 
     Secretary.
       ``(vi) As used in this subparagraph, the terms `shares' and 
     `shareholders' shall include beneficial interests and holders 
     of beneficial interest, respectively.''
       (b) Conforming Amendments.--
       (1) Clause (i) of section 857(b)(7)(A) is amended by 
     striking ``subparagraph (B)'' and inserting ``subparagraph 
     (B) or (D)''.
       (2) Clause (iii) of section 852(b)(3)(D) is amended by 
     striking ``by 65 percent'' and all that follows and inserting 
     ``by the difference between the amount of such includible 
     gains and such holder's credit or refund determined under 
     clause (ii).''
     
[[Page S 14747]]

                    TITLE III--OTHER SIMPLIFICATION

     SEC. 301. MODIFICATION OF EARNINGS AND PROFITS RULES FOR 
                   DETERMINING WHETHER REIT HAS EARNINGS AND 
                   PROFITS FROM NON-REIT YEAR.

       Subsection (d) of section 857 is amended by adding at the 
     end the following new paragraph:
       ``(3) Distributions to meet requirements of subsection 
     (a)(2)(B).--Any distribution which is made in order to comply 
     with the requirements of subsection (a)(2)(B)--
       ``(A) shall be treated for purposes of this subsection as 
     made from the earliest accumulated earnings and profits 
     (other than earnings and profits to which subsection 
     (a)(2)(A) applies) rather than the most recently accumulated 
     earnings and profits, and
       ``(B) shall not be treated as a distribution for purposes 
     of subsection (b)(2)(B).''

     SEC. 302. TREATMENT OF FORECLOSURE PROPERTY.

       (a) Grace Periods.--
       (1) Initial period.--Paragraph (2) of section 856(e) 
     (relating to special rules for foreclosure property) is 
     amended by striking ``on the date which is 2 years after the 
     date the trust acquired such property'' and inserting ``as of 
     the close of the 3d taxable year following the taxable year 
     in which the trust acquired such property''.
       (2) Extension.--Paragraph (3) of section 856(e) is 
     amended--
       (A) by striking ``or more extensions'' and inserting 
     ``extension'', and
       (B) by striking the last sentence and inserting: ``Any such 
     extension shall not extend the grace period beyond the close 
     of the 3d taxable year following the last taxable year in the 
     period under paragraph (2).''
       (b) Revocation of Election.--Paragraph (5) of section 
     856(e) is amended by striking the last sentence and 
     inserting: ``A real estate investment trust may revoke any 
     such election for a taxable year by filing the revocation (in 
     the manner provided in regulations by the Secretary) on or 
     before the due date (including any extension of time) for 
     filing its return of tax under this chapter for the taxable 
     year. If a trust revokes an election for any property, no 
     election may be made by the trust under this paragraph with 
     respect to the property for any subsequent taxable year.''
       (c) Certain Activities Not To Disqualify Property.--
     Paragraph (4) of section 856(e) is amended by adding at the 
     end the following new flush sentence:

     ``For purposes of subparagraph (C), property shall not be 
     treated as used in a trade or business by reason of any 
     activities of the real estate investment trust with respect 
     to such property to the extent that such activities would not 
     result in amounts received or accrued, directly or 
     indirectly, with respect to such property being treated as 
     other than rents from real property.''

     SEC. 303. SPECIAL FORECLOSURE RULES FOR HEALTH CARE 
                   PROPERTIES.

       Section 856(e) (relating to special rules for foreclosure 
     property) is amended by adding at the end the following new 
     paragraph:
       ``(6) Special rules for qualified health care properties.--
     For purposes of this subsection--
       ``(A) Acquisition by lease terminations.--The term 
     `foreclosure property' shall include any qualified health 
     care property acquired by a real estate investment trust as 
     the result of the termination or expiration of a lease of 
     such property.
       ``(B) Grace period.--For purposes of qualified health care 
     property of a real estate investment trust qualifying as 
     `foreclosure property' under subparagraph (A), the qualified 
     health care property shall cease to be foreclosure property 
     on the date which is 2 years after the date such trust 
     acquired such property.
       ``(C) Extensions.--If the real estate investment trust 
     establishes to the satisfaction of the Secretary that an 
     extension of the grace period in Subparagraph (B) is 
     necessary to the orderly leasing or liquidation of the 
     trust's interest in such qualified health care property, the 
     Secretary may grant one or more extensions of the grace 
     period for such qualified health care property. Any such 
     extension shall not extend the grace period beyond the date 
     which is 6 years after the date such trust acquired such 
     qualified health care property.
       ``(D) Income from independent contractors.--For purposes of 
     applying paragraph (4)(C) with respect to qualified health 
     care property which is foreclosure property, income derived 
     or received by the trust from an independent contractor shall 
     be disregarded to the extent such income is attributable to--
       (i) leases existing on the date the real estate investment 
     trust acquired the qualified health care property, or
       (ii) leases extended or entered into after the trust 
     acquired such property from lessees pursuant to terms set 
     forth in such existing leases or on terms under which the 
     trust receives a substantially similar or lesser benefit in 
     comparison to the previous lease for such property.
       ``(E) Qualified health care property.--The term `qualified 
     health care property' means any real property (including 
     interests therein), and any personal property incident to 
     such real property, which--
       ``(i) is a hospital, outpatient medical clinic, nursing 
     facility, assisted living facility, or other licensed health 
     care facility which extends medical or nursing or ancillary 
     services to patients and which, immediately before the 
     termination, expiration, or breach of the lease of or 
     mortgage secured by such facility, was operated by a provider 
     of such services which was eligible for participation in the 
     medicare program under title XVIII of the Social Security Act 
     with respect to such facility, or
       ``(ii) is necessary or incidental to the use of such a 
     health care facility.''

     SEC. 304. PAYMENTS UNDER HEDGING INSTRUMENTS.

       Section 856(c)(6)(G) (relating to treatment of certain 
     interest rate agreements) is amended to read as follows:
       ``(G) Treatment of certain hedging instruments.--Except to 
     the extent provided by regulations, any--
       ``(i) payment to a real estate investment trust under an 
     interest rate swap or cap agreement, option, futures 
     contract, forward rate agreement, or any similar financial 
     instrument, entered into by the trust in a transaction to 
     hedge any indebtedness incurred or to be incurred by the 
     trust to acquire or carry real estate assets, and
       ``(ii) gain from the sale or other disposition of any such 
     investment,

     shall not be taken into account under paragraphs (2), (3), 
     and (4).

     SEC. 305. EXCESS NONCASH INCOME.

       Section 857(e)(2) (relating to determination of amount of 
     excess noncash income) is amended--
       (1) by striking subparagraph (B),
       (2) by striking the period at the end of subparagraph (C) 
     and inserting a comma,
       (3) by redesignating subparagraph (C) (as amended by 
     paragraph (2)) as subparagraph (B), and
       (4) by adding at the end the following new subparagraphs:
       ``(C) the amount (if any) by which--
       ``(i) the amounts includible in gross income with respect 
     to instruments to which section 860E(a) or 1272 applies, 
     exceed
       ``(ii) the amount of money and the fair market value of 
     other property received during the taxable year under such 
     instruments, and
       ``(D) amounts includible in income by reason of 
     cancellation of indebtedness.''

     SEC. 306. PROHIBITED TRANSACTION SAFE HARBOR.

       Clause (iii) of section 857(b)(6)(C) (relating to certain 
     sales not to constitute prohibited transactions) is amended--
       (1) by striking ``(other than foreclosure property)'' in 
     subclauses (I) and (II) and inserting ``(other than sales of 
     foreclosure property or sales to which section 1033 
     applies)'', and
       (2) by striking ``(as determined for purposes of computing 
     earnings and profits)'' in subclause (II) and inserting 
     ``(determined without regard to any adjustment for 
     depreciation or amortization)''.

     SEC. 307. SHARED APPRECIATION MORTGAGES.

       (a) Bankruptcy Safe Harbor.--Section 856(j) (relating to 
     treatment of shared appreciation mortgages) is amended by 
     redesignating paragraph (4) as paragraph (5) and by inserting 
     after paragraph (3) the following new paragraph:
       ``(4) Coordination with 4-year holding period.--
       ``(A) In general.--For purposes of section 857(b)(6)(C), if 
     a real estate investment trust is treated as having sold 
     secured property under paragraph (3)(A), the trust shall be 
     treated as having held such property for at least 4 years 
     if--
       ``(i) the secured property is sold or otherwise disposed of 
     pursuant to a case under title 11 of the United States Code,
       ``(ii) the seller is under the jurisdiction of the court in 
     such case, and
       ``(iii) the disposition is required by the court or is 
     pursuant to a plan approved by the court.
       ``(B) Exception.--Subparagraph (A) shall not apply if--
       ``(i) the secured property was acquired by the trust with 
     the intent to evict or foreclose, or
       ``(ii) the trust knew or had reason to know that default on 
     the obligation described in paragraph (5)(A) would occur.''
       (b) Clarification of Definition of Shared Appreciation 
     Provision.--Clause (ii) of section 856(j)(5)(A) is amended by 
     inserting ``or appreciation in value'' after ``gain'' each 
     place it appears.

     SEC. 308. WHOLLY OWNED SUBSIDIARIES.

       Section 856(i)(2) (defining qualified REIT subsidiary) is 
     amended by striking ``at all times during the period such 
     corporation was in existence''.
                        TITLE IV--EFFECTIVE DATE

     SEC. 401. EFFECTIVE DATE.

       The amendments made by this Act shall apply to taxable 
     years beginning after the date of the enactment of this Act.
                                                                    ____



                      section-by-section analysis

              TITLE I. REMOVAL OF TAX TRAPS FOR THE UNWARY

     SEC. 101. SHAREHOLDER DEMAND LETTER

       Sections 856(a)(5) and 856(a)(6) require that a REIT have 
     at least 100 beneficial owners, and that it not be ``closely 
     held'' within the meaning of the personal holding company 
     rules. A REIT that is disqualified because it fails to meet 
     the requirements in section 856(a) generally may not elect 
     REIT status again for a period of 5 years.
       In addition, section 857(a)(2) disqualified a REIT for any 
     year in which it does not comply with Internal Revenue 
     Service (``IRS'') regulations prescribed to ascertain the 
     ``actual ownership'' of the REIT's outstanding shares. 
     Sections 1.857-8(d) and (e) of the Income Tax Regulations 
     (the ``Regulations'') 

[[Page S 14748]]
     require a REIT to demand, from its shareholders of record, a written 
     statement identifying the ``actual owner'' (for income tax 
     purposes) of the stock held in such shareholder's name. The 
     Regulations specify which shareholders must be sent such 
     letter, based on the total number of REIT shareholders and 
     the percentage of shares held by each record holder. This 
     demand letter must be sent within 30 days of the close of the 
     REIT's taxable year.
       Failure to comply with the rules in Regulations section 
     1.857-8, through inadvertence or otherwise, technically 
     causes disqualification of REIT status for the taxable year, 
     notwithstanding that the REIT may satisfy the substantive 
     share ownership rules in section 856(a)(6). As in the case of 
     any disqualification under section 856(a), a REIT that is 
     disqualified under the shareholder demand letter regulations 
     may not elect REIT status again for a period of 5 years 
     without IRS consent.
       Even those REITs that comply with the demand letter 
     regulations, and are not aware of any violations of the 
     ownership test, cannot know for certain whether they complied 
     with such tests, the ownership information is not in the 
     hands of the REIT and the REIT cannot compel its shareholders 
     to respond to the demand letter. This uncertainty is 
     increased for publicly-traded REITs that have a large portion 
     of their shares held in ``street name.''
       This bill proposes that a failure to comply with the 
     shareholder demand letter regulations should not, by itself, 
     disqualify a REIT if the REIT otherwise establishes that it 
     satisfies the substantive rules involved. Under these 
     circumstances, a $25,000 penalty ($50,000 for intentional 
     violations) would be imposed for any year in which the REIT 
     did not comply with the shareholder demand letter regulations 
     and the REIT would be required, when requested by the IRS, 
     to send curative demand letters. This bill strikes the 
     right balance between the ``atomic bomb'' consequences of 
     present law and the need to provide a disincentive for 
     REITs not to send out demand letters.
       Also under this bill, a REIT would be deemed to satisfy the 
     share ownership requirements in section 856(a)(6) if it 
     complies with the shareholder demand letter regulations and 
     does not know, or have reason to know, of an actual violation 
     of the ownership rules. Thus, a REIT that complies with the 
     regulations, but is unable to discover an actual ownership 
     violation and has no reason to suspect such a violation, 
     would not be disqualified before it has reason to know of 
     such violation. This amendment is vital to protect companies 
     that exercise their best efforts to comply with the ownership 
     rules, but somehow later discover that a technical violation 
     exists.

     SEC. 102. PROPERTY MANAGEMENT--DE MINIMIS RULE FOR TENANT 
                   SERVICES INCOME.

       The REIT tax provisions include several independent 
     contractor rules. The primary rule is found in section 
     856(d)(2)(C), which generally provides that ``rents from real 
     property'' do not include amounts received with respect to 
     the property if the REIT furnishes services to the tenants, 
     or manages or operates the property, other than through an 
     independent contractor. Congress modified this rule in 1986 
     by adding the language at the end of section 856(d)(2)(C). 
     This language permits the REIT to receive amounts for 
     furnishing customary services or managing property, without 
     using an independent contractor, provided such amounts would 
     be excluded from unrelated business taxable income under 
     section 512(b)(3) if received by a section 511(a)(2) exempt 
     organization.
       Congress' relaxation of the independent contractor rule has 
     helped the industry in efficiently managing rental properties 
     on a competitive basis. However, certain problems persist. 
     Under the existing language of section 856(d)(2)(C), the 
     receipt of even a de minimis amount of non-qualified income 
     or rendering a small amount of impermissible services with 
     respect to a given property may disqualify all rents received 
     with respect to such property. The disqualification of the 
     entire property's rents could jeopardize the REITS's 
     qualified status.
       The present independent contractor rule creates significant 
     administrative burdens for REITs because of the need to 
     ensure that no REIT personnel ever perform any disqualifying 
     service. In addition, due to the inherent ambiguity of the 
     rule, significant time and expense are incurred by both REITs 
     and the IRS in applying for and issuing private letter 
     rulings that delineate permissible and impermissible 
     services. Further, even a vigilant and conservative REIT 
     cannot control whether a particular employee performs a 
     service to its tenants that may taint the rents on a 
     property. Last, the present rule unreasonably penalizes a 
     REIT for providing services (which may be directly related to 
     the operation of its property) to a tenant (by tainting all 
     amounts received from that tenant) that it may, with much 
     less chance of disqualification, provide to third parties.
       This bill proposes a de minimis exception to the 
     independent contractor rule. This proposal would simplify 
     REIT administration and would remove the risk of 
     disqualifying a REIT that inadvertently performs nominal, 
     although impressible, services. Further, the proposal would 
     not encourage international disregard for the independent 
     contractor rule, because of the relatively small amount of 
     services that it would permit.
       The approach taken in this bill would provide a simple, 
     bright line test that the IRS could administer easily.

     SEC. 103. ATTRIBUTION RULES APPLICABLE TO TENANT OWNERSHIP.

       Section 856(d)(2)(B) generally disqualifies rents received 
     from any person, if the REIT owns 10% or more of the 
     ownership interests in such person or has an interest equal 
     to 10% or more in the assets or net profits of such person. 
     For purposes of determining the REIT's ownership interest in 
     a tenant, the attribution rules of section 318 apply, except 
     that 10% is substituted for 50% when it appears in 
     subparagraph (C) of section 318(a)(2) and 318(a)(3). Under 
     section 318(a)(3)(A), stock owned, directly or indirectly, by 
     a partner is considered owned by the partnership. In 
     addition, under section 318(a)(3)(C) a corporation is 
     considered as owning stock that is owned, directly or 
     indirectly, by or for a person who also owns more than 50% 
     (10% for REITs) of the stock in such corporation.
       The attribution rules may create an unintended result when 
     several persons who own collectively 10% of a REIT's tenant, 
     also own collectively 10% of the REIT. So long as these 
     persons are unrelated and their individual interest in each 
     entity is less than 10%, then no violation of section 
     856(d)(2) occurs. However, if each of these persons happen to 
     obtain an interest, no matter how small, in the same 
     unrelated partnership, then the attribution rules may cause 
     the rents received from the tenant to be disqualified under 
     section 856(d)(2). Such a result could occur even though 
     section 318(a)(5)(C) specifically provides that the stock 
     ownership interests of a partner are not to be attributed to 
     another partner via the partnership.
       Under one understanding of current law, the problem arises 
     because all of the partners' shares of stock in the tenant 
     are attributed to the unrelated partnership under section 
     318(a)(3)(A). Since the partnership also is considered as 
     owning the partners' shares in the REIT, section 318(a)(3)(C) 
     treats the REIT as owning all of the shares in the tenant 
     that are deemed held by the partnership. Thus, the rule in 
     section 856(d)(2) is violated.
       The potential for disqualification, under one reading of 
     current law, is detailed in the following example: Pension 
     Plan A holds stock representing 10% of the value in REIT. The 
     remaining shares of REIT are publicly held. Pension Plan A 
     and Corporation B each hold a 1% interest by value in 
     Partnership, and the remainder of Partnership's interests are 
     publicly held. Partnership holds various securities in 
     entities other than REIT. Tenant, which leases retail space 
     from REIT, is 10% owned by Corporation B, with the remaining 
     interest publicly-held. Under section 318(A)(3)(A), 
     Partnership is deemed to own A's 10% interest in the value of 
     REIT and B's 10% interest in Tenant. Further, section 
     318(a)(3)(C) provides that REIT is deemed to own any stock 
     held by its 10% shareholder. As a result, REIT could be 
     deemed to own Partnership's deemed interest in Tenant. If 
     so, the Tenant's rent payments to REIT would be 
     disqualified.
       These attribution rules disqualify amounts as rent even 
     when the relationship between the tenant and the REIT is 
     tenuous at best and abuse of the REIT concept is 
     inconceivable. In any event, the rules are largely 
     unenforceable because one partner will not know what the 
     other partners own. The problem is particularly problematic 
     with institutional investors that own small percentage 
     interests in multiple partnerships owning securities and 
     other assets unrelated to a REIT.
       One understanding of the interplay between section 
     318(a)(3)(A) and (a)(3)(C) with the facts described above is 
     equivalent to applying attribution rules to shares of stock 
     held by partners. As noted, this is contrary to the policy 
     set forth in section 318(a)(5)(C), which prohibits the 
     reattribution of stock constructively owned by a partnership 
     (via a partner) to another partner in the partnership. 
     Without this partner-to-partner attribution, neither A nor B 
     in the examples above, directly or indirectly, hold the 10% 
     interest in both REIT and Tenant that section 856(d)(2)(B) 
     requires for disqualification. Congress solved a similar 
     problem of ``partner to partner'' attribution in another REIT 
     context. In determining whether a REIT is ``closely held'' 
     for purposes of section 856(a)(6), the attribution rules in 
     section 544 apply. In 1986, Congress enacted section 856(h), 
     which provides in part that the attribution rules in section 
     544 will apply as if they did not include the phrase ``or by 
     or for his partner.''
       This bill would modify the application of section 
     318(a)(3)(A) (attribution to partnerships), for purposes of 
     section 856(d)(2), so that attribution would occur only when 
     a partner owns a 25% or greater interest in the partnership. 
     Applying a percentage threshold (rather than suspending 
     entirely the application of section 318(a)(3)(A) would 
     prevent the potentially abusive technique of placing 
     ``dummy'' partnerships between individuals and the REIT. This 
     is a common sense approach that would simplify monitoring the 
     ownership interests of all involved parties.

      TITLE II. CONFORMITY WITH REGULATED INVESTMENT COMPANY RULES

     SEC. 201. CREDIT FOR TAX PAID BY REIT ON RETAINED CAPITAL 
                   GAINS.

       Under the regulated investment company ((``RIC'') 
     provisions, RICs (also known as mutual funds) always have 
     been permitted to pass through a credit to their shareholders 
     for taxes paid on retained capital gains. This 

[[Page S 14749]]
     treatment helps preserve the capital base of the company, 
     while respecting the principle of a single level of 
     taxation.
       Under section 857(b)(3)(A)(ii) and section 4981(c)(1)(B), a 
     REIT need not distribute capital gains to its shareholders, 
     but may be subject to tax on such undistributed gains under 
     section 1201(a). A subsequent distribution of such gains is 
     taxable to the REIT's shareholders, resulting in a double 
     tax.
       This double tax is inconsistent with the original 
     Congressional intent to create a real estate entity parallel 
     to RICs, and limits a REIT's ability to effectively manage 
     assets. Because of the potential double tax on capital 
     transactions, a REIT usually is compelled to either 
     distribute any sale proceeds or not complete the transaction.
       This would amend section 857(b)(3) to mirror the rules 
     applicable to RICs.

                    TITLE III. OTHER SIMPLIFICATION

     SEC. 301. EARNINGS & PROFITS--DISTRIBUTION RULE.

       Enacted in 1986, section 857(a)(3) requires newly-electing 
     REITs to distribute, during their first REIT taxable year, 
     earnings and profits (``E&P'') that were accumulated in non-
     REIT years. The ordering rule in section 316 complicates the 
     E&P distribution requirement, by treating all distributions 
     as being made from the most recently accumulated E&P. Under 
     this rule, the unexpected realization of income near the end 
     of the year can convert previous distributions of accumulated 
     E&P into distributions from current E&P. For example, assume 
     a company distributes $200x in November, which represents its 
     current E&P to date ($100x) and its entire accumulated E&P 
     ($100x), and makes no other distributions during the year. If 
     the company earns an additional $10x in December, its 
     accumulated E&P as of the end of the year is $10x, 
     notwithstanding the prior $200x distribution.
       The effect of the E&P rule in section 316 could be 
     disastrous for a newly-electing REIT that is required to 
     distribute all of its accumulated E&P during its first REIT 
     year. The year-end receipt of any form of unanticipated 
     income, such as unexpected overages from shopping mall 
     tenants, could cost the new REIT its qualification. Most 
     REITs (and most taxpayers, for that matter) cannot determine 
     precisely the amount of their income before the end of the 
     year. Ordinarily, the receipt of nominal amounts of income 
     near the end of the year do not cause problems for 
     established REITs, since they can use the ``subsequent 
     declared dividend'' election in section 858 to make sure they 
     meet their annual requirements to distribute 95 percent of 
     their income.
       However, the requirement in section 857(a)(3) effectively 
     overrides the 95 percent income distribution requirement, 
     since no accumulated E&P can be distributed until the REIT 
     distributes 100 percent of current E&P. In addition, the 
     section 858 election, which historically was available 
     for all required distributions, cannot be used for section 
     857(a)(3) distributions since this election is available 
     only for distributions of current E&P.
       The ability to retain a small percentage of current 
     earnings and the section 858 election both have been part of 
     the REIT tax rules since 1960. Until 1986, REITs were not 
     required to distribute any portion of their accumulated E&P. 
     These adverse effects of the new accumulated E&P distribution 
     requirement on both of these provisions is an unintended 
     consequence of the 1986 change.
       This bill would deem section 857(a)(3) distributions as 
     being made first from accumulated E&P, then from current E&P. 
     This provision would ensure that year-end receipts of 
     unanticipated income would not cause a new REIT to be 
     disqualified. The proposal would not affect the requirement 
     that such REIT also must distribute 95% of its current 
     income, nor would it otherwise alter the traditional ordering 
     rule for E&P distributions.

     SEC. 302. FORECLOSURE PROPERTY.

       A REIT is permitted to conduct a trade or business using 
     property acquired through foreclosure for 90 days after it 
     acquired such property, provided the REIT makes a foreclosure 
     property election. After the 90-day period, the REIT may no 
     longer conduct such trade or business, except through an 
     independent contractor from whom the REIT does not derive or 
     receive any income. Property is eligible for a foreclosure 
     election if a REIT acquired it through foreclosure on a loan 
     or default on a lease, but not if a REIT acquired it because 
     a lease expired.
       If it makes the foreclosure property election in section 
     856(e)(5), a REIT may hold foreclosure property for resale to 
     customers without being subject to the 100% penalty tax under 
     the prohibited transaction rules. Non-qualifying income from 
     foreclosure property generally is subject to the highest 
     corporate tax rate. The foreclosure property election is 
     valid for 2 years, but may be extended up to 6 years with the 
     IRS' consent. Under section 856(e)(4)(C), foreclosure 
     property status is lost if, at some time after 90 days from 
     the date such property is acquired, the property is used in a 
     trade or business conducted by the REIT (other than through 
     an independent contractor from whom the REIT does not derive 
     any income).
       This bill would make the period covered by an election 
     three years and the initial foreclosure property election 
     valid until the last day of the third full taxable year 
     following the election. The present 2-year period is not a 
     realistic time period for disposing of foreclosure property, 
     especially in a depressed real estate market. In addition, 
     this bill would reduce recordkeeping and filing requirements 
     associated with managing foreclosure property and the need 
     for the IRS to review extension requests.
       Further, this bill would modify the rule in section 
     856(e)(4)(C) that requires a REIT to use an independent 
     contractor to manage foreclosure properties. This 
     modification would make the rule parallel to the primary 
     independent contractor rule in section 856(d)(2)(C). This 
     change would reduce the technical complexity and 
     administrative costs associated with managing foreclosure 
     property: it would provide a single, consistent standard 
     for managing both foreclosure and non-foreclosure 
     properties.

     SEC. 303. SPECIAL FORECLOSURE RULES FOR HEALTH CARE 
                   PROPERTIES.

       Health care REITs play an important economic role in both 
     the health care and REIT industries. For example, REITs have 
     invested about $10 billion in health care properties, either 
     as owners or lenders. This amount represents approximately 
     13% of the real estate investment by all REITs. These 
     properties range from nursing homes and extended care 
     facilities to acute care facilities.
       These REITs face unique problems under the foreclosure 
     property rules when the lessee/operator of a health care 
     facility terminates its lease, either through expiration or 
     default. Unlike most other forms of rental properties, if a 
     health care property lease terminates, it is extremely 
     difficult to close the facility because medical services to 
     patients must be maintained. In fact, a variety of government 
     regulations mandate measures to protect patients' welfare, 
     which greatly restrict the ability to simply terminate the 
     facility. In addition, because of the limited number of 
     qualified health care providers, it can be very difficult to 
     find a substitute provider that also will lease the property.
       When a health care REIT acquires property either through a 
     loan foreclosure, lease default, or lease expiration, the 
     REIT must be able to ensure that the facility will remain 
     open beyond the initial 90-day period. For many patients, 
     especially those in rural areas, there may be no available 
     alternative facilities in the locality. Frequently, if space 
     is available in an alternative facility, such facility may 
     not accept government-paid patients (i.e., Medicare, Medicaid 
     or county assistance), which account for 70% of the residents 
     in properties of health care REITs. Patients in facilities 
     owned by health care REITs typically include the frail 
     elderly, the chronically ill and the disabled who require 
     long term care. They cannot, and should not, be evicted and 
     forced to relocate away from supportive family and friends, 
     which could jeopardize their health and cause treatment 
     setbacks.
       The 90-day time period during which a REIT is permitted to 
     operate a facility is inadequate for the REIT to conclude a 
     lease with a health care provider. Health care properties 
     typically are acquired in a sale-leaseback transaction in 
     which the original owner continues to operate the facility as 
     a lessee. After this lessee vacates the property, it is very 
     difficult to find a qualified health care provider that is 
     willing to assume not only the operational responsibilities 
     for the facility, but also the long-term financial risks 
     associated with being a lessee. This is particularly true 
     when the original lessee abandoned the facilities because of 
     financial problems.
       Regulatory requirements further complicate and delay the 
     releasing process. Potential lessees may be required to 
     obtain up to 30 separate licenses from separate government 
     agencies before they can assume control of a facility. In 
     addition, many states impose certificate of need requirements 
     when facility operators are changed. These proceedings can 
     become adversarial and protracted.
       Therefore, in order to keep a health care facility 
     operational after the 90-day period has expired under the 
     foreclosure property rules, a REIT must be able to hire a 
     licensed health care provider that also qualifies as an 
     independent contractor (a party from whom the REIT does not 
     derive or receive any income or profits). The limited pool of 
     licensed providers that could qualify as independent 
     contractors may be dramatically reduced, since many of these 
     providers already lease other health care properties owned by 
     the REIT. As existing lessees of the REIT, these providers 
     generate income to the REIT, and thus may be viewed by the 
     IRS as disqualified from serving as independent contractors 
     with respect to a second REIT property.
       The problems that arise from foreclosing on a defaulted 
     lease or mortgage also exist in the case of a health care 
     provider/lessee who abandons the facility upon the expiration 
     of a lease. A final decision whether or not to renew the 
     lease may not be made until expiration occurs, giving the 
     REIT little or no lead time to find a substitute provider/
     lessee. Even if adequate notice is given to the REIT that the 
     provider/lessee intends to quit the business, this notice 
     does not increase the pool of health care providers that 
     could qualify as independent contractors.
       This bill provides that in the case of qualified health 
     care properties, a health care provider will not be 
     disqualified as an independent contractor for purposes of the 
     foreclosure property rules solely because the REIT receives 
     rental income from the provider with respect to one or more 
     other properties. In addition, the bill provides that REIT 
     could make a foreclosure property election with respect to 
     lease expirations of qualified health care properties.

[[Page S 14750]]

       These changes would help ensure that important health care 
     facilities are not forced to be closed because of a technical 
     requirement in the Code. As with any properties that are 
     subject to a foreclosure election, non-rental income realized 
     by the REIT under this proposal would be subject to the 
     highest corporate tax rate.

     SEC. 304. PAYMENTS UNDER HEDGING INSTRUMENTS.

       In 1988, Congress added section 856(c)(6)(G), which 
     generally provides that income from an interest rate swap or 
     cap agreement used to hedge a variable rate indebtedness is 
     treated as qualifying income under section 856(c)(2). In 
     addition, such agreement is treated as a security for 
     purposes of section 856(c)(4)(A), which limits a REIT's gain 
     on the sale of securities held for less than 1 year to 30% of 
     gross income.
       A swap agreement is a contractual arrangement between 
     parties that permits them to convert existing variable rate 
     interest payments or receipts into fixed rates, and vice 
     versa. Thus, swaps may be used to hedge against potential 
     increases in interest rates on debt exposures, as well as to 
     capture higher rates on fixed income streams. Interest rate 
     caps likewise may be used to hedge interest payments or 
     receipts, but such hedge is effective only over a specified 
     range.
       There are a number of financial products available, in 
     addition to swaps and caps, that may be important tools in a 
     company's effort to hedge its exposure to increased 
     liabilities and to protect current high returns. As the REIT 
     industry has grown and become more knowledgeable in managing 
     its investments, more and more REITs are using financial 
     instruments of all kinds as a conservative method of managing 
     their interest rate exposure.
       A REIT should be permitted to use the wide variety of 
     financial instruments that are available for managing its 
     liability exposures, whether the interest rates are fixed or 
     variable. Financial markets world-wide have undergone 
     revolutionary changes over the past decade. These changes 
     have brought about dramatic liquidity in interest rate and 
     currency markets, which in turn have significantly increased 
     the volatility in these markets.
       This bill would amend the REIT rules to allow all types of 
     hedges of REIT liabilities. It would also insure that any 
     income from a hedge mechanism will be excluded from either 
     the numerator or denominator of any of the REIT income tests. 
     This rule would not permit a REIT to speculate in hedging 
     instruments, nor alter the REIT's primary mission to invest 
     in real estate assets.

     SEC. 305. EXCESS NONCASH INCOME.

       Generally, REITs are required to distribute 95% of their 
     taxable income to shareholders each year. In 1986, Congress 
     recognized the inequity of requiring a REIT to distribute 
     ``phantom income'' items, in which the REIT recognizes income 
     but receives no corresponding cash. Congress enacted section 
     857(a)(1)(B) to exclude certain excess noncash income from 
     the distribution requirement.
       A REIT has been compelled to return property to a seller 
     rather than accept a cancellation and restructuring of a 
     seller-financed mortgage, because of the REIT's inability to 
     distribute the resulting noncash income. Moreover, REITs 
     often accrue original issue discount (``OID'') income 
     resulting from their investments. In addition, REITs are 
     precluded under the current rules from repurchasing bonds at 
     a discount that were issued at rates that are now ``above 
     market.'' This inability to refinance adversely affects the 
     capital requirements for REITs.
       Under this bill, all forms of OID and REMIC excess 
     inclusion income (to the extent not offset by distributions), 
     and cancellation of indebtedness income would be treated as 
     excess noncash income for purposes of the distribution 
     requirement in section 857(a). As a matter of policy, these 
     forms of noncash income are indistinguishable from the types 
     that are excepted from the distribution requirement. This 
     bill would extend the special rules for OID income and REMIC 
     excess inclusion income to both accrual basis and cash basis 
     REITs. The bill would not alter the existing rule that 
     imposes an excise tax on certain undistributed REIT income.
       In addition, since the proposal would affect only a REIT's 
     distribution requirements, a REIT would not receive a 
     dividends paid deduction with respect to the phantom income. 
     Thus, a REIT might be compelled to pay a corporate level tax 
     to the extent its dividends paid deductions is less than 
     its taxable income. These changes are just a logical 
     extension of the 1986 changes.

     SEC. 306. PROHIBITED TRANSACTION SAFE HARBOR.

       A REIT may be subject to a 100% tax on net income from 
     sales of property in the ordinary course of business 
     (``prohibited transactions''). In 1986, Congress recognized 
     the need for a bright line safe harbor for determining 
     whether a REIT's property sale constituted a prohibited 
     transaction. Congress further liberalized these rules in 1978 
     and 1986 to better comport with industry practice and to 
     simplify a REIT's ability to sell long-term investment 
     property without fear of being taxed at a 100% rate.
       Because of certain limitations contained in the safe 
     harbor, some of the industry's largest and most successful 
     members cannot use the exception, thus, their ability to 
     responsibly manage their property portfolio is impeded. The 
     most restrictive limitation for these companies is the 
     limitation on the number of sales per year.
       The limitation relating to aggregate tax bases penalizes 
     the companies that are the least likely to have engaged in 
     dealer activity. The most successful REITs have typically 
     held their properties the longest, resulting in low adjusted 
     bases due to depreciation or amortization deductions. Thus, 
     the aggregate bases of all the REIT properties will be 
     relatively much lower for purposes of the safe harbor 
     exception than a REIT that routinely turns over its 
     properties every 4 years. Accordingly, the REIT that holds 
     its properties for the longer term is penalized.
       Under this bill, any real property asset disposed of as a 
     result of an involuntary conversion (e.g., its destruction, 
     seizure, or condemnation) would not be considered for 
     purposes of determining compliance with the 7 sales per year 
     safe harbor. This change would ensure that a diligent REIT is 
     not removed for the safe harbor as a result of events beyond 
     its control.
       In addition, in order not to penalize companies that hold a 
     large number of depreciated properties as long-term 
     investments, this bill would change the alternative aggregate 
     bases exception to use the adjusted bases of properties 
     before reduction for any allowed or allowable depreciation or 
     amortization. This change simply carries out the intent of 
     the safe harbor.

     SEC. 307. SHARED APPRECIATION MORTGAGES.

       Section 856(j) generally provides that income recognized by 
     a REIT from a shorter holding period is substituted for that 
     of the contract for the purposes of applying the 30% 
     limitation in section 856(c)(4) and the prohibited 
     transaction safe harbor rule of section 857(b)(6)(C)(i). The 
     character of the underlying property as dealer property 
     (i.e., section 1221(l) property) in its holder's hands also 
     is substituted for the shared appreciation mortgage (``SAM'') 
     contract's character for purposes of imposing the prohibited 
     transaction tax.
       Congress enacted section 856(j) in 1986, partly in response 
     to the REIT industry's request for statutory authority that a 
     REIT may receive interest based on a borrower's sales profits 
     under limited circumstances. As a practical matter, a REIT 
     cannot control the holding period, character or disposition 
     of property underlying a SAM contract that it does not own. 
     Attempts to provide contractual controls on these items give 
     little assurance to a REIT and merely dilute its competitive 
     position as a lender.
       This bill would create a safe harbor that would not 
     penalize a REIT lender for events beyond its control, for 
     example, the borrower's bankruptcy. It also would clarify 
     that shared appreciation mortgages can be based on 
     appreciation in value as well as gain.

     SEC. 308. WHOLLY OWNED SUBSIDIARIES.

       In 1986, Congress recognized that for purposes of limiting 
     liability, investors commonly hold separate parcels of real 
     estate in separate corporations. Congress therefore enacted 
     section 856(i), under which a REIT ``qualified subsidiary'' 
     that holds property as a separate corporation is ignored for 
     federal tax purposes. To be a qualified subsidiary, the REIT 
     must own 100% of a corporation's stock ``at all times during 
     the period such corporation was in existence.''
       The requirement in the phrase quoted above has presented 
     some problems not envisioned in 1986. For example, several 
     real estate operating companies operating as regular C 
     corporations have elected REIT status since 1991. As is 
     typical with corporations owning real estate, these electing 
     companies had subsidiaries that owned various real estate 
     properties. The IRS was asked whether the existing 
     subsidiaries could be REIT qualifying subsidiaries because 
     before the parent's REIT election, the subsidiaries were not 
     held by a REIT. The IRS has issued several private letter 
     rulings holding that they can so qualify. However, to reach 
     this result, the IRS used the artificial construct of deeming 
     the subsidiaries as being liquidated as of the REIT election 
     and then reincorporated.\2\ Similar issues arise if a REIT 
     acquires all of the stock of a non-REIT corporation owning 
     real estate, either in a taxable or tax-free transaction.
     \1\ ``Section'' refers to a section of the Internal Revenue 
     Code of 1986, as amended (``Code''), unless otherwise 
     indicated.
     \2\ See PLRs 9527020, 9421034, 9307018, 9205030, 9124041 and 
     9051043. See also PLR 9409035.
       There is no sound policy reason why a non-REIT corporation 
     may not become a qualified subsidiary once a REIT owns all of 
     its stock. Under section 857(a)(3)(B), all pre-REIT E&P of 
     the subsidiary should be distributed to the REIT's 
     shareholders before the end of the REIT's taxable year. In 
     addition, all of the subsidiary's pre-REIT built-in gain 
     should be subject to tax under the normal rules of section 
     337(d).
       This bill provides that any corporation could be a 
     qualified subsidiary if a REIT owns all of its shares, 
     regardless of the prior ownership of its shares. Again, this 
     approach is a logical modification of the 1986 change that 
     should remove an unnecessary barrier to REIT acquisitions.
                                 ______

      By Mr. LEAHY (for himself, Mr. Jeffords, Mr. Gregg, and Mr. 
        Smith):
  S.J.Res. 38. A joint resolution granting the consent of Congress to 
the Vermont-New Hampshire Interstate Public Water Supply Compact; to 
the Committee on the Judiciary.

[[Page S 14751]]



     VERMONT-NEW HAMPSHIRE INTERSTATE PUBLIC WATER SUPPLY COMPACT 
                              LEGISLATION

 Mr. LEAHY. Mr. President, today I am pleased to introduce a 
joint resolution with Senators Jeffords, Gregg and Smith to allow the 
States of Vermont and New Hampshire to implement an interstate public 
water supply compact. Both States have enacted this compact through 
their State legislature, and the affected towns are currently awaiting 
congressional approval so that they can move forward in their 
partnership.
  Most members are familiar with compacts since they have become common 
tools to address local problems. Like all compacts, this one is a 
binding agreement between States established for the purpose of 
addressing problems shared by those States. This particular compact 
allows Vermont and New Hampshire to construct and maintain joint public 
drinking water systems.
  According to the compact in this Senate joint resolution, Vermont and 
New Hampshire municipalities are granted the authority to apply jointly 
for federal financing and raise appropriate revenue for the creation of 
drinking water facilities. The agreement also allows for joint 
management and maintenance to help cut costs while still meeting 
minimum health standards for drinking water. While public water 
projects will be carried out according to eight common guidelines 
stipulated in the joint resolution, this joint resolution does not 
create a new governmental authority and does not supersede any existing 
laws or agreements of member states. Finally, the States of Vermont and 
New Hampshire initiated and drafted this compact cooperatively and 
enactment was pursued voluntarily by each legislature.
  This compact carries on a tradition of cooperative efforts to meet 
interstate objectives between Vermont and New Hampshire. These two 
States currently implement the New Hampshire-Vermont interstate sewage 
and waste disposal facilities compact. In addition, both States are 
members of the broader New England interstate water pollution control 
compact and the Connecticut River Valley Flood control compact. On a 
national level, literally dozens of compacts have been considered and 
approved by Congress to address water issues. The Vermont-New Hampshire 
Public Water Supply compact reflects the principles of previous 
compacts which have effectively addressed interstate concerns.
  We are introducing this bill today in order to satisfy article 1, 
section 10 of the U.S. Constitution. Article 1, section 10 mandates 
that ``No state shall without the consent of Congress enter into 
agreement or compact with another state or with a foreign power.'' The 
courts have established two reasons for Congressional consent. One is 
to prevent undue injury to the interest of noncompacting states, the 
other is to protect the Constitutional interests of the federal 
government against interference from the states. I believe that this 
compact serves the interests of the two member states well, does not 
affect other states, and protects the constitutional interests of the 
federal government. It is in this spirit that I introduce this joint 
resolution for the consideration and approval by the U.S. 
Senate.

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