SEC. 2501. SHORT TITLE.
This subtitle may be cited as the `Asset Conservation,
Lender Liability, and Deposit Insurance Protection Act of
1996''.
SEC. 2502. CERCLA LENDER AND FIDUCIARY LIABILITY LIMITATIONS AMENDMENTS.
(a) In General.--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 under any provision
of this Act for the release or threatened release of a hazardous substance
at, from, or in connection with a vessel or facility held in a fiduciary
capacity shall not exceed the assets held in the fiduciary capacity.
``(2) Exclusion.--Paragraph (1) does not apply to the extent that
a person is liable under this Act independently of the person's ownership
of a vessel or facility as a fiduciary or actions taken in a fiduciary
capacity.
``(3) Limitation.--Paragraphs (1) and (4) do not limit the liability
pertaining to a release or threatened release of a hazardous substance
if negligence of a fiduciary causes or contributes to the release
or threatened release.
``(4) Safe harbor.--A fiduciary shall not be liable in its personal
capacity under this Act for--
``(A) undertaking or directing another person to undertake a response
action under subsection (d)(1) or under the direction of an on scene
coordinator designated under the National Contingency Plan;
``(B) undertaking or directing another person to undertake any other
lawful means of addressing a hazardous substance in connection with
the vessel or facility;
``(C) terminating the fiduciary relationship;
``(D) including in the terms of the fiduciary agreement a covenant,
warranty, or other term or condition that relates to compliance with
an environmental law, or monitoring, modifying or enforcing the term
or condition;
``(E) monitoring or undertaking 1 or more inspections of the vessel
or facility;
``(F) providing financial or other advice or counseling to other parties
to the fiduciary relationship, including the settlor or beneficiary;
``(G) restructuring, renegotiating, or otherwise altering the terms
and conditions of the fiduciary relationship;
``(H) administering, as a fiduciary, a vessel or facility that was
contaminated before the fiduciary relationship began; or
``(I) declining to take any of the actions described in subparagraphs
(B) through (H).
``(5) Definitions.--As used in this Act:
``(A) Fiduciary.--The term `fiduciary'--
``(i) means a person acting for the benefit of another party as a
bona fide--
``(I) trustee;
``(II) executor;
``(III) administrator;
``(IV) custodian;
``(V) guardian of estates or guardian ad litem;
``(VI) receiver;
``(VII) conservator;
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``(VIII) committee of estates of incapacitated persons;
``(IX) personal representative;
``(X) trustee (including a successor to a trustee) under an indenture
agreement, trust agreement, lease, or similar financing agreement,
for debt securities, certificates of interest or certificates of participation
in debt securities, or other forms of indebtedness as to which the
trustee is not, in the capacity of trustee, the lender; or
``(XI) representative in any other capacity that the Administrator,
after providing public notice, determines to be similar to the capacities
described in subclauses (I) through (X); and
``(ii) does not include--
``(I) a person that is acting as a fiduciary with respect to a trust
or other fiduciary estate that was organized for the primary purpose
of, or is engaged in, actively carrying on a trade or business for
profit, unless the trust or other fiduciary estate was created as
part of, or to facilitate, 1 or more estate plans or because of the
incapacity of a natural person; or
``(II) a person that acquires ownership or control of a vessel or
facility with the objective purpose of avoiding liability of the person
or of any other person.
``(B) Fiduciary capacity.--The term `fiduciary capacity' means the
capacity of a person in holding title to a vessel or facility, or
otherwise having control of or an interest in the vessel or facility,
pursuant to the exercise of the responsibilities of the person as
a fiduciary.
``(6) Savings clause.--Nothing in this subsection--
``(A) affects the rights or immunities or other defenses that are
available under this Act or other law that is applicable to a person
subject to this subsection; or
``(B) creates any liability for a person or a private right of action
against a fiduciary or any other person.
``(7) No effect on certain persons.--Nothing in this subsection applies
to a person if the person--
``(A)(i) acts in a capacity other than that of a fiduciary or in a
beneficiary capacity; and
``(ii) in that capacity, directly or indirectly benefits from a trust
or fiduciary relationship; or
``(B)(i) is a beneficiary and a fiduciary with respect to the same
fiduciary estate; and
``(ii) as a fiduciary, receives benefits that exceed customary or
reasonable compensation, and incidental benefits, permitted under
other applicable law.
``(8) Limitation.--This subsection does not preclude a claim under
this Act against--
``(A) the assets of the estate or trust administered by the fiduciary;
or
``(B) a nonemployee agent or independent contractor retained by a
fiduciary.''.
(b) Definition of Owner or Operator.--Section 101(20) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42
U.S.C. 9601(20)) is amended by adding at the end the following:
``(E) Exclusion of lenders not participants in management.--
``(i) Indicia of ownership to protect security.--The term `owner or
operator' does not include a person that is a lender that, without
participating in the management of a vessel or facility, holds indicia
of ownership primarily to protect the security interest of the person
in the vessel or facility.
``(ii) Foreclosure.--The term `owner or operator' does not include
a person that is a lender that did not participate in management of
a vessel or facility prior to foreclosure, notwithstanding that the
person--
``(I) forecloses on the vessel or facility; and
``(II) after foreclosure, sells, re-leases (in the case of a lease
finance transaction), or liquidates the vessel or facility, maintains
business activities, winds up operations, undertakes a response action
under section 107(d)(1) or under the direction of an on-scene coordinator
appointed under the National Contingency Plan, with respect to the
vessel or facility, or takes any other measure to preserve, protect,
or prepare the vessel or facility prior to sale or disposition, if
the person seeks to sell, re-lease (in the case of a lease finance
transaction), or otherwise divest the person of 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.
``(F) Participation in management.--For purposes of subparagraph (E)--
``(i) the term `participate in management'--
``(I) means actually participating in the management or operational
affairs of a vessel or facility; and
``(II) does not include merely having the capacity to influence, or
the unexercised right to control, vessel or facility operations;
``(ii) a person that is a lender and that holds indicia of ownership
primarily to protect a security interest in a vessel or facility shall
be considered to participate in management only if, while the borrower
is still in possession of the vessel or facility encumbered by the
security interest, the person--
``(I) exercises decisionmaking control over the environmental compliance
related to the vessel or facility, such that the person has undertaken
responsibility for the hazardous substance handling or disposal practices
related to the vessel or facility; or
``(II) exercises control at a level comparable to that of a manager
of the vessel or facility, such that the person has assumed or manifested
responsibility--
``(aa) for the overall management of the vessel or facility encompassing
day-to-day decisionmaking with respect to environmental compliance;
or
``(bb) over all or substantially all of the operational functions
(as distinguished from financial or administrative functions) of the
vessel or facility other than the function of environmental compliance;
``(iii) the term `participate in management' does not include performing
an act or failing to act prior to the time at which a security interest
is created in a vessel or facility; and
``(iv) the term `participate in management' does not include--
``(I) holding a security interest or abandoning or releasing a security
interest;
``(II) including in the terms of an extension of credit, or in a contract
or security agreement relating to the extension, a covenant, warranty,
or other term or condition that relates to environmental compliance;
``(III) monitoring or enforcing the terms and conditions of the extension
of credit or security interest;
``(IV) monitoring or undertaking 1 or more inspections of the vessel
or facility;
``(V) requiring a response action or other lawful means of addressing
the release or threatened release of a hazardous substance in connection
with the vessel or facility prior to, during, or on the expiration
of the term of the extension of credit;
``(VI) providing financial or other advice or counseling in an effort
to mitigate, prevent, or cure default or diminution in the value of
the vessel or facility;
``(VII) restructuring, renegotiating, or otherwise agreeing to alter
the terms and conditions of the extension of credit or security interest,
exercising forbearance;
``(VIII) exercising other remedies that may be available under applicable
law for the breach of a term or condition of the extension of credit
or security agreement; or
``(IX) conducting a response action under section 107(d) or under
the direction of an on-scene coordinator appointed under the National
Contingency Plan,
if the actions do not rise to the level of participating in management
(within the meaning of clauses (i) and (ii)).
``(G) Other terms.--As used in this Act:
``(i) 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 with regulations issued by the appropriate Federal
banking agency or the appropriate State bank supervisor (as those
terms are defined in section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813) or with regulations issued by the National Credit
Union Administration Board, as appropriate.
``(ii) Financial or administrative function.--The term `financial
or administrative function' includes a function such as that of a
credit manager, accounts payable officer, accounts receivable officer,
personnel manager, comptroller, or chief financial officer, or a similar
function.
``(iii) Foreclosure; foreclose.--The terms `foreclosure' and `foreclose'
mean, respectively, acquiring, and to acquire, a vessel or facility
through--
``(I)(aa) purchase at sale under a judgment or decree, power of
sale, or nonjudicial foreclosure sale;
``(bb) a deed in lieu of foreclosure, or similar conveyance from a
trustee; or
``(cc) repossession,
if the vessel or facility was security for an extension of credit
previously contracted;
``(II) conveyance pursuant to an extension of credit previously contracted,
including the termination of a lease agreement; or
``(III) any other formal or informal manner by which the person acquires,
for subsequent disposition, title to or possession of a vessel or
facility in order to protect the security interest of the person.
``(iv) Lender.--The term `lender' means--
``(I) an insured depository institution (as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813));
``(II) an insured credit union (as defined in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752));
``(III) a bank or association chartered under the Farm Credit Act
of 1971 (12 U.S.C. 2001 et seq.);
``(IV) a leasing or trust company that is an affiliate of an insured
depository institution;
``(V) any person (including a successor or assignee of any such person)
that makes a bona fide extension of credit to or takes or acquires
a security interest from a nonaffiliated person;
``(VI) 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 buys or sells loans
or interests in loans;
``(VII) a person that insures or guarantees against a default in the
repayment of an extension of credit, or acts as a surety with respect
to an extension of credit, to a nonaffiliated person; and
``(VIII) a person that provides title insurance and that acquires
a vessel or facility as a result of assignment or conveyance in the
course of underwriting claims and claims settlement.
``(v) Operational function.--The term `operational function' includes
a function such as that of a facility or plant manager, operations
manager, chief operating officer, or chief executive officer.
``(vi) Security interest.--The term `security interest' includes a
right under a mortgage, deed of trust, assignment, judgment lien,
pledge, security agreement, factoring agreement, or lease and any
other right accruing to a person to secure the repayment of money,
the performance of a duty, or any other obligation by a nonaffiliated
person.''.
SEC. 2503. CONFORMING AMENDMENT.
Section 9003(h) of the Solid Waste Disposal Act (42 U.S.C. 6991b(h))
is amended by striking paragraph (9) and inserting the following:
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``(9) Definition of owner or operator.--
``(A) In general.--As used in this subtitle, the terms `owner' and
`operator' do not include a person that, without participating in
the management of an underground storage tank and otherwise not engaged
in petroleum production, refining, or marketing, holds indicia of
ownership primarily to protect the person's security interest.
``(B) Security interest holders.--The provisions regarding holders
of security interests in subparagraphs (E) through (G) of section
101(20) and the provisions regarding fiduciaries at section 107(n)
of the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 shall apply in determining a person's liability as an
owner or operator of an underground storage tank for the purposes
of this subtitle.
``(C) Effect on rule.--Nothing in subparagraph (B) shall be construed
as modifying or affecting the final rule issued by the Administrator
on September 7, 1995 (60 Fed. Reg. 46,692), or as limiting the authority
of the Administrator to amend the final rule, in accordance with applicable
law. The final rule in effect on the date of enactment of this subparagraph
shall prevail over any inconsistent provision regarding holders of
security interests in subparagraphs (E) through (G) of section 101(20)
or any inconsistent provision regarding fiduciaries in section 107(n)
of the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980. Any amendment to the final rule shall be consistent with
the provisions regarding holders of security interests in subparagraphs
(E) through (G) of section 101(20) and the provisions regarding fiduciaries
in section 107(n) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980. This subparagraph does not preclude judicial
review of any amendment of the final rule made after the date of enactment
of this subparagraph.''.
SEC. 2504. LENDER LIABILITY RULE.
(a) In General.--Effective on the date of enactment of this Act,
the portion of the final rule issued by the Administrator of the Environmental
Protection Agency on April 29, 1992 (57 Fed. Reg. 18,344), prescribing
section 300.1105 of title 40, Code of Federal Regulations, shall be
deemed to have been validly issued under authority of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42
U.S.C. 9601 et seq.) and to have been effective according to the terms
of the final rule. No additional judicial proceedings shall be necessary
or may be held with respect to such portion of the final rule. Any
reference in that portion of the final rule to section 300.1100 of
title 40, Code of Federal Regulations, shall be deemed to be a reference
to the amendments made by this subtitle.
(b) Judicial Review.--Notwithstanding section 113(a) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42
U.S.C. 9613(a)), no court shall have jurisdiction to review the portion
of the final rule issued by the Administrator of the Environmental
Protection Agency on April 29, 1992 (57 Fed. Reg. 18,344) that prescribed
section 300.1105 of title 40, Code of Federal Regulations.
(c) Amendment.--No provision of this section shall be construed as
limiting the authority of the President or a delegee of the President
to amend the portion of the final rule issued by the Administrator
of the Environmental Protection Agency on April 29, 1992 (57 Fed.
Reg. 18,344), prescribing section 300.1105 of title 40, Code of Federal
Regulations, consistent with the amendments made by this subtitle
and other applicable law.
(d) Judicial Review.--No provision of this section shall be construed
as precluding judicial review of any amendment of section 300.1105
of title 40, Code of Federal Regulations, made after the date of enactment
of this Act.
SEC. 2505. EFFECTIVE DATE.
The amendments made by this subtitle shall be applicable with respect
to any claim that has not been finally adjudicated as of the date
of enactment of this Act.