To amend the Comprehensive Environmental Response, Compensation, and Liability Act and the Solid Waste Disposal Act to limit the liabilities under these Acts of both fiduciaries and lending institutions, including finance lessors, guarantors, and others directly or indirectly holding indicia of ownership primarily to protect a security interest in property which is subject to either Act.

Summary: Amends the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 to exclude from the definition of "owner or operator," for purposes of limiting liability for releases of hazardous substances, a person who, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect a security interest in such vessel or facility. Defines "indicia of ownership" as an interest in property acquired:  (1) for securing payment of a loan or indebtedness or the performance of an obligation; (2) evidencing ownership under a lease financing transaction where the lessor does not initially select or ordinarily control the daily operation or maintenance of the property; or (3) in the course of protecting a security interest or right of reimbursement or subrogation under a guaranty. 
Makes liable for any release or threatened release of a hazardous substance attributable to their activities:  (1) a holder of a security interest who takes certain actions concerning transfer, protection, or abandonment of property; and (2) a fiduciary or trustee who acquires ownership or control of a property. 
Makes conforming amendments to the Solid Waste Disposal Act.

SECTION 1. AMENDMENTS TO COMPREHENSIVE ENVIRONMENTAL RESPONSE, 
              COMPENSATION, AND LIABILITY ACT OF 1980.

    The Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 is amended--
            (1) by striking the last sentence of paragraph 101(20)(A); 
        and
            (2) by inserting the following new paragraphs 101(20) (E) 
        and (F):
                    ``(E)(i) The term `owner or operator' does not 
                include a person who, without participating in the 
                management of a vessel or facility, holds indicia of 
                ownership primarily to protect his or her security 
                interest in the vessel or facility.
                    ``(ii) The term `indicia of ownership' means any 
                legal or equitable interest in property acquired 
                directly or indirectly--
                            (I) for the purpose of securing payment of 
                        a loan or indebtedness, a right of 
                        reimbursement or subrogation under a guaranty, 
                        or the performance of another obligation,
                            (II) evidencing ownership under a lease 
                        financing transaction where the lessor does not 
                        initially select or ordinarily control the 
                        daily operation or maintenance of the property, 
                        or
                            (III) in the course of protecting a 
                        security interest or right of reimbursement or 
                        subrogation under a guaranty.
                `Indicia of ownership' include evidence of interests in 
                mortgages, deeds of trust, liens, surety bonds, 
                guaranties, lease financing transactions where the 
                lessor does not initially select or ordinarily control 
                the daily operation or maintenance of the property, 
                other forms of encumbrances against property recognized 
                under applicable law as vesting the holder of the 
                security interest with some indicia of title, legal or 
                equitable title obtained at, or in lieu of, 
                foreclosure, and their equivalents. A person may, but 
                is not required to, hold title in property in order to 
                hold indicia of ownership in that property.
                    ``(iii) A `holder of a security interest' is a 
                person who holds indicia of ownership in property 
                primarily to protect a security interest. A `holder of 
                a security interest' includes the initial holder (such 
                as a loan originator) and any subsequent holder (such 
                as a successor-in-interest or subsequent purchaser of 
                the security interest on the secondary market); 
                guarantor; lease financier or any successor where the 
                lessor does not initially select or ordinarily control 
                the daily operation or maintenance of the property; any 
                person who holds indicia or ownership primarily to 
                protect a security interest; or a receiver or other 
                person who acts on behalf or for the benefit of a 
                holder of a security interest.
                    ``(iv) The term `security interest' means an 
                interest in property created or established for the 
                purpose of securing a loan, right of reimbursement or 
                subrogation under a guaranty, or other obligation or 
                constituting a lease financing transaction. Security 
                interests include mortgages, deeds of trust, liens, 
                lease financing transactions in which the lessor does 
                not initially select or ordinarily control the daily 
                operation or maintenance of the property, trust receipt 
                transactions, and their equivalents. Security interests 
                may also arise from transactions such as sales and 
                leasebacks, conditional sales, installment sales, 
                certain assignments, factoring agreements, accounts 
                receivable financing arrangements, and consignments, if 
                the transaction creates or establishes an interest in 
                property for the purpose of securing a loan, right of 
                reimbursement or subrogation under a guaranty or other 
                obligation.
                    ``(v) The term `participating in the management of 
                property' means actual participation in the management 
                or operational affairs of the property by the holder, 
                and does not include the mere capacity to influence, or 
                ability to influence, or the unexercised right to 
                control facility operations. A holder is participating 
                in management while the borrower is still in possession 
                of the property encumbered by the security interest, 
                only if the holder either--
                            ``(I) exercises decisionmaking control over 
                        the borrower's environmental compliance, such 
                        that the holder has undertaken responsibility 
                        for the borrower's solid waste handling or 
                        disposal practices; or
                            ``(II) exercises control at a level 
                        comparable to that of a manager of the 
                        borrower's enterprise, such that the holder has 
                        assumed or manifested responsibility for the 
                        overall management of the enterprise 
                        encompassing the day-to-day decisionmaking of 
                        the enterprise with respect to--
                                    ``(aa) environmental compliance; or
                                    ``(bb) all, or substantially all, 
                                of the operational (as opposed to 
                                financial or administrative) aspects of 
                                the enterprise other than environmental 
                                compliance. Operational aspects of the 
                                enterprise include functions such as 
                                that of facility or plant manager, 
                                operations manager, chief operating 
                                officer, or chief executive officer. 
                                Financial or administrative aspects 
                                include functions such as that of 
                                credit manager, personnel manager, 
                                controller, chief financial officer, or 
                                similar functions.
                    ``(vi) The term `primarily to protect a security 
                interest' includes indicia of ownership acquired as a 
                consequence of having or exercising rights as a holder 
                of a security interest where the same is necessary or 
                appropriate to protect the security interest, to 
                provide for compliance with laws, to preserve the value 
                of the property or benefits therefrom, or to recover a 
                loan, indebtedness or right of reimbursement or 
                subrogation under a guaranty or to redress any other 
                obligation secured by such interest or to recover 
                property subject to a finance lease. A holder of a 
                security interest who directly or indirectly acquires 
                full title or a right to title or possession of such 
                property upon default under the security interest, or 
                at, or in lieu of, foreclosure, or, in the case of a 
                finance lease, upon expiration, cancellation, or 
                termination of such lease, shall continue to hold 
                indicia of ownership primarily to protect a security 
                interest so long as such holder is diligently 
                proceeding to sell or convey title or the right to 
                title or to re-lease such property on commercially 
                reasonable terms at the earliest possible time, while 
                preserving the property in the interim.
                    ``(vii) The term `property' means real and personal 
                property and includes facilities, storage tanks, 
                equipment, vessels, vehicles, and other modes of 
                transportation whether by sea, land, or air.
                    ``(viii)(I) The term `guarantor' includes 
                guarantors and sureties of security interests, 
                securities, and other obligations, issuers of letters 
                of credit and other credit enhancements, title 
                insurers, and entities which directly or indirectly 
                acquire indicia of ownership in the course of 
                protecting a security interest or acting as such 
                guarantors, sureties, issuers of letters of credit or 
                other credit enhancements or title insurers, and the 
                term `guaranty' includes guaranties, surety bonds, 
                title insurance policies, letters of credit and other 
                credit enhancements, and other agreements with a 
                guarantor relating to the obligations described in this 
                subclause (I).
                    ``(II) `Directly or indirectly' includes any 
                interest in property, security interest, indicia of 
                ownership title, or right to title held or acquired by 
                a fiduciary or similar entity for the benefit of a 
                holder of a security interest.
                    ``(ix) The terms `borrower', `debtor', and 
                `obligor' mean a person whose property is encumbered by 
                a security interest and includes a lessee under a lease 
                financing transaction.
                    ``(x) Actions taken by a holder of a security 
                interest to foreclose, sell, liquidate, release or 
                otherwise divest or cause the transfer of property 
                subject to a security interest; or preserve or protect 
                the value of such property; or otherwise to exercise 
                rights of a holder of a security interest specified in 
                subparagraph (v) above; or to assist the borrower, 
                debtor, obligor, or lessee in winding down its 
                operations or activities related to such property; or 
                to abandon or release the property prior to foreclosure 
                or its equivalents; or to require or conduct response 
                action on, or relating to, the property; shall not be 
                deemed `participating in the management of property' 
                within the meaning of this subsection (101)(20)(E). 
                Completion of an environmental inspection or evaluation 
                consistent with good commercial or customary practice 
                by or for the use of a holder of a security interest is 
                probative evidence that a holder of a security interest 
                is acting to preserve and protect the property during 
                the time the holder of a security interest may have 
                possession or control of such property, except that 
                this Act does not require a holder of a security 
                interest to conduct nor does it require any 
                environmental inspection or evaluation to qualify for 
                this exemption.
                    ``(xi) A holder of a security interest who, in 
                taking actions referred to in subparagraph (x) above 
                respecting property, actively and directly causes or 
                exacerbates a release of a hazardous waste for which a 
                Federal or an authorized State government determines 
                that response action is necessary, shall be liable for 
                the cost of such response action to the extent only 
                that the release is directly attributable to such 
                holder's activities, except that such a holder shall 
                not be liable for response action costs arising from a 
                release which commences before and continues after such 
                holder takes any action referred to in subparagraph (x) 
                above.
                    ``(F)(i) The term `fiduciary' means any entity 
                which is considered a fiduciary under section 3(21) of 
                the Employee Retirement Income Security Act of 1974, as 
                amended from time to time, or who is acting as trustee, 
                executor, administrator, custodian, guardian of 
                estates, conservator, committee of estates of disabled 
                persons, personal representative, receiver, agent, 
                nominee or in any other fiduciary capacity for the 
                benefit of another entity.
                    ``(ii) A fiduciary who acquires ownership or 
                control of property without having owned, operated, or 
                participated in the management of that property prior 
                to assuming ownership or control as fiduciary, other 
                than for the benefit of a holder of a security 
                interest, shall not be an `owner' or `operator' under 
                this Act.
                    ``(iii) Such a fiduciary who willfully, knowingly, 
                or recklessly causes (in a direct and active manner) a 
                release of a hazardous substance, for which a Federal 
                or an authorized State government determines that 
                response action is necessary, shall be liable for the 
                cost of such response action to the extent only that 
                the release is directly attributable to the fiduciary's 
                activities, except that such a fiduciary shall not be 
                liable for response action costs arising from a release 
                which commences before and continues after such 
                fiduciary acquires ownership or control of the 
                property.
                    ``(iv) Nothing in this subsection shall prevent 
                claims against the assets that constitute the estate 
                held by the fiduciary or the filling of actions against 
                the fiduciary in its representative capacity.

SEC. 2. AMENDMENTS TO SOLID WASTE DISPOSAL ACT.

    The Solid Waste Disposal Act is amended--
            (1) by adding at the end of section 1004 the following 
        paragraph:
            ``(41) The terms `owner', `operator', `generator', 
        `transporter', and `person' do not include any entity which 
        would not be an `owner' or `operator' within the meaning of 
        paragraphs 101(20) (E) or (F) of the Comprehensive 
        Environmental Response, Compensation, and Liability Act of 
        1980.'';
            (2) by adding at the end of paragraph 9003(h)(a) the 
        following sentence: ``This definition shall be construed to be 
        parallel to the provisions of paragraph 101(20)(E) of the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980.'', and
            (3) by adding at the end of section 3006 the following 
        subsection:
    ``(i) Amendments Made by 1993 Act.--The provisions of section 
1004(41) of this Act shall apply in each State having an interim or 
finally authorized State program to the same extent that such 
provisions apply in other States.''.

SEC. 3. SCOPE OF APPLICATION.

    The provisions of this Act shall apply to--
            (1) all indicia of ownership acquired prior to the date of 
        enactment that are held primarily to protect a security 
        interest in property; and
            (2) each fiduciary with respect to any property acquired by 
        the fiduciary prior to the date of enactment.