[Congressional Record Volume 142, Number 141 (Thursday, October 3, 1996)]
[Senate]
[Pages S12292-S12293]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     LENDER LIABILITY PROVISIONS IN THE OMNIBUS APPROPRIATIONS BILL

  Mr. LAUTENBERG. Mr. President, earlier this week we passed the 
omnibus appropriations bill. Included in

[[Page S12293]]

that bill are provisions that clarify lender liability issues under 
Superfund. These are important provisions that make it clear that 
lenders that do not participate in management are not liable under 
Superfund or the underground storage tank provisions of RCRA.
  It is also important, however, that we clarify a critical aspect of 
these provisons. First, you and I are aware of the colloquy in the 
Congressional Record of September 30, 1996, between Senators Smith and 
D'Amato regarding the Asset Conservation, Lender Liability, and Deposit 
Insurance Protection Act of 1996. The colloquy seems to suggest that 
under the bill, EPA has no authority whatsoever to promulgate 
regulations on CERCLA liability. That was not my understanding of the 
intent of the lender and fiduciary provisions.
  My understanding is that our intention was to substantially endorse 
EPA's addressing of lender liability under Superfund in its 1992 lender 
liability rule, and to validate EPA's prior exercise of rulemaking 
authority for lenders and fiduciaries. Addressing lender liability 
specifically in this bill was necessary because, in 1980, Congress did 
not foresee how its original language, protecting security interest 
holders from liability, would be interpreted. Congress also could not 
have foreseen the restrictive view in Kelley v. EPA, 15 F.3d 1100 (D.C. 
Cir. 1994), of EPA's authority to issue rules interpreting Superfund 
authority. The omnibus appropriations bill specifically addresses and 
modifies the earlier interpretations of the original language. Should 
new circumstances again arise concerning interpretations of lender and 
fiduciary liability, we believe and it is our intent that EPA has the 
authority to clarify and refine the liability rules applying to lenders 
and fiduciaries.
  Mr. Baucus, is it correct that nothing in the lender liability 
provisions in the omnibus appropriations bill, precludes EPA from 
issuing rules to clarify and refine the rules applying to lenders and 
fiduciaries?
  Mr. BAUCUS. Yes, what you have expressed is my understanding of the 
intent of Congress in enacting this legislation.
  Mr. LAUTENBERG. That earlier colloquy also talked about a recent 
opinion of the U.S. Court of Appeals for the District of Columbia, 
Kelley v. EPA, 15 F.3d 1100 (D.C. Cir. 1994), reh'g denied, 25 F.3d 
1088 (D.C. Cir. 1996). I think it is important that we avoid any 
misunderstanding, based on that case, concerning EPA's authority to 
issue rules. The Kelley decision struck down EPA's original lender 
liability rule, but this legislation recognizes EPA's authority to 
promulgate rules in this area. This is consistent with our general 
intent that EPA should use its expertise to issue authoritative 
interpretations of CERCLA, whether by guidance or regulation. For 
example, EPA has issued guidances pertaining to the liability of 
residential homeowners, de minimis and de micromis parties, and others. 
Such clarifications and expressions of prosecutorial discretion have 
served to reduce litigation and given the regulated community and 
others clarity over questions of liability.
  Mr. Baucus, is it correct that the lender liability provisions in the 
omnibus appropriations bill are intended to reaffirm EPA's ability to 
issue such interpretative guidance?
  Mr. BAUCUS. Yes, that is my understanding of the intent of the lender 
and fiduciary liability provisions.

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