I

104TH CONGRESS

1ST SESSION H. R. 2178

To promote redevelopment of ‘‘brownfields’’ by providing Federal assistance

for brownfield cleanups, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 3, 1995

Mr. BROWN of Ohio (for himself, Mr. GEPHARDT, Mr. DINGELL, Mr. BORSKI,

Mr. RUSH, Mr. KLINK, Mr. MANTON, Mr. STOKES, Mr. TOWNS, and Ms.

FURSE) introduced the following bill; which was referred to the Committee on Commerce

A BILL

To promote redevelopment of ‘‘brownfields’’ by providing

Federal assistance for brownfield cleanups, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. FINDINGS.

4 The Congress finds that:

5 (1) Former industrial and commercial sites

6 commonly referred to as ‘‘brownfields’’, plague

7 urban and rural areas throughout the United States.
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1 (2) Rural and urban communities alike suffer

2 from declining property values and increasing unem3 ployment rates caused by undeveloped brownfields.

4 (3) Community health and safety is jeopardized

5 by the residual toxic contamination found on former

6 industrial sites.

7 (4) Tens of thousands of sites across the coun8 try sit idle or under used because potential devel9 opers and bankers are deterred from investing in the

10 property due to uncertainties regarding liability for

11 cleanup costs.

12 (5) Potential site purchasers are concerned with

13 potential future liability for contamination discov14 ered after the purchase transaction.

15 (6) To promote redevelopment of brownfields,

16 there is a need to create financial and legal incen17 tives and to clarify the liability of purchasers and

18 lenders.

19 SEC. 2. AMENDMENT OF SUPERFUND.

20 The Comprehensive Environmental Response, Com21 pensation, and Liability Act of 1980 (42 U.S.C. 9601 et

22 seq.) is amended by adding the following new title at the

23 end thereof:
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1 ‘‘TITLE VI—CLEANUP OF BROWNFIELDS

2 ‘‘SEC. 601. DEFINITIONS.

3 ‘‘For purposes of this title:

4 ‘‘(1) The term ‘administrative costs’ does not

5 include investigation and identification of the extent

6 of contamination, design and performance of cleanup

7 activities, or monitoring of natural resources.

8 ‘‘(2) The term ‘Administrator’ means the Ad9 ministrator of the Environmental Protection Agency.

10 ‘‘(3) The term ‘assistance’ means a grant or

11 loan under this title.

12 ‘‘(4) The term ‘brownfield site’ means a parcel

13 of land that contains, or contained abandoned or

14 under-used commercial or industrial facilities, the

15 expansion or redevelopment of which is complicated

16 by the presence or potential presence of hazardous

17 substances.

18 ‘‘(5) The term ‘eligible brownfield site’ means a

19 brownfield site for which an eligible applicant may

20 apply for assistance under this title.

21 ‘‘(6) The term ‘eligible applicant’ means any of

22 the following entities that applies to the Adminis23 trator for assistance under this title:

24 ‘‘(A) A general purpose unit of local gov25 ernment.
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1 ‘‘(B) A land clearance authority or other

2 quasi-governmental entity which operates under

3 the supervision and control of a general purpose

4 unit of local government or as an agent of a

5 general purpose unit of local government.

6 ‘‘(C) A regional council or group of general

7 purpose units of local government.

8 ‘‘(D) An Indian Tribe.

9 ‘‘(7) The term ‘environmental remediation’ in10 cludes site characterization and assessment.

11 ‘‘(8) The term ‘loan recipient’ means an eligible

12 applicant that has received a loan under this title

13 from the Administrator.

14 ‘‘SEC. 602. BROWNFIELD CLEANUP ASSISTANCE PROGRAM.

15 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Adminis16 trator shall establish a program to provide assistance for

17 the environmental remediation of eligible brownfield sites.

18 ‘‘(b) ELIGIBLE BROWNFIELD SITES.—Any

19 brownfield site shall be eligible for assistance under this

20 title unless the site is one of the following:

21 ‘‘(1) Any facility that is the subject of a

22 planned or an ongoing removal action under title I

23 of this Act.
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1 ‘‘(2) Any facility included, or proposed for in2 clusion, in the National Priorities List maintained

3 by the Administrator under title I of this Act.

4 ‘‘(3) Any facility that is subject to corrective ac5 tion under section 3004(u) or 3008(h) of the Solid

6 Waste Disposal Act (42 U.S.C. 6924(u) or 6928(h))

7 at the time that an application for a grant or loan

8 concerning the facility is submitted under this title.

9 ‘‘(4) Any land disposal unit with respect to

10 which a closure notification under subtitle C of the

11 Solid Waste Disposal Act (42 U.S.C. 6921 et seq.)

12 has been submitted and closure requirements have

13 been specified in a closure plan or permit.

14 ‘‘(5) Any facility with respect to which an ad15 ministrative order on consent or judicial consent de16 cree requiring cleanup has been entered into by the

17 United States under the Solid Waste Disposal Act

18 (42 U.S.C. 6901 et seq.), the Federal Water Pollu19 tion Control Act (33 U.S.C. 1251 et seq.), the Toxic

20 Substances Control Act (15 U.S.C. 2601 et seq.) or

21 title XIV of the Public Health Service Act, com22 monly known as the Safe Drinking Water Act (42

23 U.S.C. 300f and following).
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1 ‘‘(6) Any facility owned or operated by a de2 partment, agency, or instrumentality of the United

3 States.

4 ‘‘(7) Any portion of a facility for which portion

5 assistance for response activities has been obtained

6 pursuant to subtitle I of the Solid Waste Disposal

7 Act (42 U.S.C. 6991 et seq.) from the Leaking Un8 derground Storage Tank Trust Fund established

9 under section 9508 of the Internal Revenue Code of

10 1986.

11 ‘‘(c) ASSISTANCE FOR SITE CHARACTERIZATION AND

12 ASSESSMENT.—Upon the approval of an application made

13 by an eligible applicant, the Administrator may make

14 grants under this subsection to the applicant to be used

15 for the site characterization and assessment of one or

16 more eligible brownfield sites. Site characterizations and

17 assessments carried out with the use of any such grant

18 shall be deemed an ‘appropriate inquiry’ if performed in

19 accordance with generally accepted good commercial and

20 customary standards and practices for purposes of section

21 101(39)(B) of this Act.

22 ‘‘(d) ASSISTANCE FOR ENVIRONMENTAL REMEDI23 ATION.—Upon the approval of an application made by an

24 eligible applicant, the Administrator may make interest

25 free loans under this subsection to such applicant to be
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1 used for environmental remediation (including site charac2 terization and assessment) at one or more eligible

3 brownfield sites. Such environmental remediation shall be

4 for purposes of making such site or sites available for

5 manufacturing, business, or other commercial or residen6 tial purposes. A loan under this section may be used by

7 the loan recipient for environmental remediation carried

8 out by the loan recipient or by other entities at the eligible

9 brownfield site or sites and for providing technical assist10 ance related to such environmental remediation. Such

11 loans may also be used by the loan recipient to make loans

12 and issue loan guarantees to prospective purchasers or de13 velopers of eligible brownfield sites to be used for environ14 mental remediation at the sites. Any such loans made by

15 the loan recipient may be repayable to a revolving fund

16 and used to make additional loans to prospective pur17 chasers or developers to be used for brownfield redevelop18 ment, including environmental remediation and related

19 technical assistance. A loan recipient may charge interest

20 on such loan and use such interest for brownfield redevel21 opment, including environmental remediation and related

22 technical assistance or for capitalizing or administering a

23 revolving loan fund.

24 ‘‘(e) HAZARDOUS SUBSTANCE SUPERFUND.—Not25 withstanding section 111 of this Act or any provision of
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1 the Superfund Amendments and Reauthorization Act of

2 1986, from the amounts available in the Hazardous Sub3 stance Superfund established under subchapter A of chap4 ter 98 of the Internal Revenue Code of 1986, in each of

5 the first 3 fiscal years commencing after the enactment

6 of this title—

7 ‘‘(1) $15,000,000 are authorized to be appro8 priated from the Hazardous Substance Superfund to

9 be used for making grants under subsection (c); and

10 ‘‘(2) $30,000,000 are authorized to be appro11 priated from the Hazardous Substance Superfund to

12 be used for making loans under subsection (d).

13 All loans made under subsection (d) shall be subject to

14 an agreement by the recipient to repay the full amount

15 of the loan to the United States within 10 years after the

16 date on which the loan is made. Such repayments shall

17 be deposited in, and credited to, the Hazardous Substance

18 Superfund.

19 ‘‘(f) SUNSET.—No amount shall be available from the

20 Hazardous Substance Superfund for purposes of this title

21 after the third year after the date of enactment of this

22 title.

23 ‘‘(g) PROHIBITION.—No portion of any assistance

24 provided under this section to an eligible applicant may

25 be used for payment of penalties or fines. No portion of
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1 any grant provided under this section to an eligible appli2 cant may be used for administrative costs.

3 ‘‘(h) AUDITS.—The Inspector General of the Envi4 ronmental Protection Agency shall audit all grants and

5 loans made under this section to insure that all funds are

6 used for the purposes set forth in this section and that

7 all loans under subsection (d) are repaid in accordance

8 with subsection (e).

9 ‘‘(i) AGREEMENTS.—Each grant and each loan made

10 under this section shall be subject to an agreement which

11 requires the following:

12 ‘‘(1) The agreement shall require the applicant

13 to comply with all applicable State laws (including

14 regulations).

15 ‘‘(2) The agreement shall require that the ap16 plicant shall use the grant or loan exclusively for

17 purposes specified in subsection (c) or (d), as the

18 case may be.

19 ‘‘(3) The agreement shall contain such other

20 terms and conditions that the Administrator deter21 mines necessary to protect the financial interests of

22 the United States and to carry out the purposes of

23 this title.

24 ‘‘(j) LEVERAGING.—The recipient of any assistance

25 under this section may use the assistance for part of a
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1 project at an eligible brownfield site or sites which receives

2 funding from other sources, except that such assistance

3 may only be used for the purposes described in subsection

4 (c) or (d), as the case may be.

5 ‘‘SEC. 603. APPLICATIONS FOR ASSISTANCE.

6 ‘‘(a) IN GENERAL.—Any eligible applicant may sub7 mit an application to the Administrator for a grant or

8 loan, or both under this title for one or more eligible

9 brownfield sites. An application may be submitted to the

10 Administrator through any Regional Office of the Envi11 ronmental Protection Agency. The application shall be in

12 such form as the Administrator determines appropriate.

13 ‘‘(b) APPLICATION REQUIREMENTS.—An application

14 for assistance under this title shall, at a minimum, include

15 each of the following:

16 ‘‘(1) An identification of each eligible

17 brownfield site for which assistance is sought and a

18 description of the redevelopment plan for the area or

19 areas in which each such site is located. Such de20 scription shall include a description of the nature

21 and extent of any known or suspected environmental

22 contamination within the area.

23 ‘‘(2) An analysis that demonstrates the poten24 tial of the grant to stimulate economic development

25 on completion of the environmental remediation.
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1 Such analysis shall include a projection of the num2 ber of jobs expected to be created at the site after

3 remediation and redevelopment and, to the extent

4 feasible, a description of the type and skill level of

5 such jobs and a projection of the increases in reve6 nues accruing to the local, State and Federal gov7 ernment from such jobs.

8 ‘‘(c) APPROVAL.—After the first 12 months after the

9 enactment of this title, the Administrator shall make an10 nual evaluations of all applications received during the

11 prior calendar year and provide assistance under this title

12 to those eligible applicants submitting applications during

13 such prior year which the Administrator determines have

14 the highest rankings under the ranking criteria established

15 by the Administrator. For the first 12 months after the

16 enactment of this title, at the end of each 6-month period

17 after the enactment of this title, the Administrator shall

18 provide assistance under this title to those eligible appli19 cants submitting applications before the end of such 6-

20 month period which the Administrator determines have

21 the highest rankings under the ranking criteria established

22 by the Administrator.

23 ‘‘(d) RANKING CRITERIA.—In determining whether

24 to provide assistance under this title to any applicant, the

25 Administrator shall establish a ranking system for applica-
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1 tions. The ranking system shall include the following cri2 teria:

3 ‘‘(1) The extent to which the assistance will

4 stimulate the availability of other funds for environ5 mental remediation and subsequent redevelopment of

6 the area in which the eligible brownfield sites are lo7 cated.

8 ‘‘(2) The potential of the development plan for

9 the area in which the eligible brownfield sites are lo10 cated to stimulate economic development of the area

11 on completion of the environmental remediation,

12 such as the following:

13 ‘‘(A) The relative increase in the estimated

14 fair market value of the area as a result of the

15 environmental remediation.

16 ‘‘(B) The potential of the assistance to cre17 ate new, or expand existing, business and em18 ployment opportunities (particularly full-time

19 employment opportunities) upon completion of

20 the environmental remediation.

21 ‘‘(C) The estimated additional tax revenues

22 expected to be generated by economic redevelop23 ment in the area in which the brownfield site is

24 located.
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1 ‘‘(3) The estimated extent to which the assist2 ance would facilitate the identification of, or reduc3 tion of, health and environmental risks.

4 ‘‘(4) The financial involvement of State and

5 local governments in the environmental remediation

6 proposed at the eligible brownfield site or sites con7 cerned and the extent to which such remediation and

8 the proposed redevelopment is consistent with any

9 applicable State or local community economic devel10 opment plan.

11 ‘‘(5) The extent to which the site characteriza12 tion and assessment or the remediation and subse13 quent development of the eligible brownfield site or

14 sites involves the active participation and support of

15 the local community.

16 ‘‘(6) Such other factors as the Administrator

17 considers relevant to carry out the purposes of this

18 title.’’.

19 SEC. 3. LENDER LIABILITY.

20 (a) LENDER LIABILITY RULE.—Effective on the date

21 of enactment of this section, the final rule issued by the

22 Administrator of the Environmental Protection Agency on

23 April 29, 1992 (57 Fed. Reg. 18344), shall be deemed

24 to have been validly issued pursuant to the authority of

25 the Comprehensive Environmental Response, Compensa-
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1 tion, and Liability Act of 1980, and to have been effective

2 according to the final rule’s terms. No additional adminis3 trative or judicial proceedings shall be necessary with re4 spect to such final rule.

5 (b) JUDICIAL REVIEW.—Notwithstanding section

6 113(a) of the Comprehensive Environmental Response,

7 Compensation, and Liability Act of 1980, no court shall

8 have jurisdiction to review the final rule issued by the Ad9 ministrator of the Environmental Protection Agency on

10 April 29, 1992 (57 Fed. Reg. 18344).

11 (c) DELEGATION.—Nothing in this subsection shall

12 be construed to limit the authority of the President or his

13 delegate to amend the final rule issued by the Adminis14 trator of the Environmental Protection Agency on April

15 29, 1992 (57 Fed. Reg. 18344), in accordance issued by

16 the Administrator of the Environmental Protection Agen17 cy on April 29, 1992 (57 Fed. Reg. 18344), in accordance

18 with applicable provisions of law.

19 SEC. 4. PURCHASER LIABILITY.

20 The Comprehensive Environmental Response, Com21 pensation, and Liability Act of 1980 is amended as fol22 lows:

23 (1) Section 101 is amended by adding the fol24 lowing after paragraph (38):
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1 ‘‘(39) BONA FIDE PROSPECTIVE PURCHASER.—

2 The term ‘bona fide prospective purchaser’ means a

3 person who acquires ownership of a facility after the

4 date of enactment of this paragraph, or a tenant of

5 such a person, who can establish each of the follow6 ing by a preponderance of the evidence:

7 ‘‘(A) All active disposal of hazardous sub8 stances at the facility occurred before that per9 son acquired the facility.

10 ‘‘(B) The person made all appropriate in11 quiry into the previous ownership and uses of

12 the facility and its real property in accordance

13 with generally accepted good commercial and

14 customary standards and practices. In the case

15 of property for residential or other similar use,

16 purchased by a nongovernmental or non17 commercial entity, a site inspection and title

18 search that reveal no basis for further inves19 tigation satisfy the requirements of this sub20 paragraph.

21 ‘‘(C) The person provided all legally re22 quired notices with respect to the discovery or

23 release of any hazardous substances at the fa24 cility.
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1 ‘‘(D) The person exercised appropriate

2 care with respect to hazardous substances

3 found at the facility by taking reasonable steps

4 to stop on-going releases, prevent threatened

5 future releases of hazardous substances, and

6 prevent or limit human or natural resource ex7 posure to hazardous substances previously re8 leased into the environment.

9 ‘‘(E) The person provides full cooperation,

10 assistance, and facility access to persons au11 thorized to conduct response actions at the fa12 cility, including the cooperation and access nec13 essary for the installation, integrity, operation,

14 and maintenance of any complete or partial re15 sponse action at the facility.

16 ‘‘(F) The person is not affiliated with any

17 other person liable for response costs at the fa18 cility, through any direct or indirect familial re19 lationship, or any contractual, corporate, or fi20 nancial relationship other than that created by

21 the instruments by which title to the facility is

22 conveyed or financed.’’.

23 (2) Section 107 is amended by adding the fol24 lowing new subsections after subsection (m):
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1 ‘‘(n) BONA FIDE PROSPECTIVE PURCHASERS.—Not2 withstanding subsection (a), a person who is a bona fide

3 prospective purchaser of a facility and who does not im4 pede the performance of a response action or natural re5 source restoration at a facility shall not be liable under

6 this section to the extent liability at such facility is based

7 solely on paragraph (1) of subsection (a) for a release or

8 threat of release from the facility. Not later than 18

9 months after the enactment of this subsection, the Admin10 istrator shall issue guidelines explaining the criteria by

11 which a person may qualify as a bona fide purchaser. Such

12 guidelines shall be readily available to the public.

13 ‘‘(o) PROSPECTIVE PURCHASER AND WINDFALL

14 LIEN.—(1) In any case in which there are unrecovered

15 response costs at a facility for which an owner of the facil16 ity is not liable by reason of subsection (n), and the condi17 tions described in paragraph (2) are met, the United

18 States shall have a lien upon such facility for such unre19 covered costs. Such lien—

20 ‘‘(A) shall not exceed the increase in fair mar21 ket value of the property attributable to the response

22 action at the time of a subsequent sale or other dis23 position of property;
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1 ‘‘(B) shall arise at the time costs are first in2 curred by the United States with respect to a re3 sponse action at the facility;

4 ‘‘(C) shall be subject to the requirements for

5 notice and validity established in paragraph (3) of

6 subsection (l); and

7 ‘‘(D) shall continue until the earlier of satisfac8 tion of the lien or recovery of all response costs in9 curred at the facility.

10 ‘‘(2) The conditions referred to in paragraph (1) are

11 the following:

12 ‘‘(A) A response action for which there are un13 recovered costs is carried out at the facility.

14 ‘‘(B) Such response action increases the fair

15 market value of the facility above the fair market

16 value of the facility that existed within six months

17 before the response action was taken.

18 ‘‘(3) No lien under this section shall arise (A) with

19 respect to property for which the property owner preceding

20 the first bona fide prospective purchaser is not a liable

21 party or has resolved its liability under this Act, or (B)

22 where an audit or inquiry by an environmental profes23 sional gives the bona fide prospective purchaser no knowl24 edge or reason to know of the release of hazardous sub25 stances.’’.
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1 SEC. 5. FIDUCIARIES.

2 (a) LIABILITY.—Section 107 of the Comprehensive

3 Environmental Response, Compensation, and Liability Act

4 of 1980 (42 U.S.C. 9601 et seq.) is amended by adding

5 the following at the end thereof:

6 ‘‘(p) FIDUCIARIES.—(1) The personal obligations and

7 liabilities under subsection (a)(1) of this section with re8 spect to a vessel or facility of a person who is a fiduciary

9 with respect to such vessel or facility shall be limited to

10 the extent to which the assets held in a fiduciary capacity

11 are sufficient to indemnify such person, unless—

12 ‘‘(A) the obligations and liabilities would have

13 arisen even if such person had not served as fidu14 ciary;

15 ‘‘(B) such fiduciary’s own failure to exercise

16 due care with respect to a vessel or facility caused

17 or contributed to the release of hazardous sub18 stances following establishment of the trust, estate,

19 or fiduciary relationship;

20 ‘‘(C) the fiduciary had a role in establishing the

21 trust, estate, or fiduciary relationship, and such

22 trust, estate, or fiduciary relationship has no objec23 tively reasonable or substantial purpose apart from

24 the avoidance or limitation of liability under this

25 Act;
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1 ‘‘(D) the fiduciary has not complied with such

2 other requirements as the Administrator may set

3 forth by regulation;

4 ‘‘(E) the trust, estate or fiduciary relationship

5 was not created as part of, or to facilitate, one or

6 more estate plans or pursuant to the incapacity of

7 a natural person;

8 ‘‘(F) the trust, estate, or fiduciary relationship

9 was organized for the primary purpose of, or is en10 gaged in, actively carrying on a trade or business for

11 profit;

12 ‘‘(G) the person acts in a capacity other than

13 a fiduciary capacity, and directly or indirectly bene14 fits from a trust or fiduciary relationship; or

15 ‘‘(H) the person is a beneficiary and fiduciary

16 with respect to the same fiduciary estate, and as a

17 fiduciary, receives benefits exceeding customary or

18 reasonable compensation and incidental benefits that

19 are permitted under other applicable law.

20 ‘‘(2) A fiduciary shall not be personally liable for un21 dertaking or directing another to undertake a response ac22 tion under subsection (d)(1).

23 ‘‘(3) Except to the extent provided in paragraphs (1)

24 and (2), a fiduciary shall be liable under this section with

25 respect to a vessel or facility to the same extent as any
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1 other person and shall be personally subject to the obliga2 tions and liabilities under this section to the same extent

3 as if the vessel or facility were held by the fiduciary free

4 of trust.’’.

5 (b) DEFINITION.—Section 101 of such Act is amend6 ed by adding after paragraph (39) the following new para7 graph:

8 ‘‘(40) FIDUCIARY.—(A) Except as provided in

9 subparagraph (B), the term ‘fiduciary’ means a per10 son who owns or controls property—

11 ‘‘(i) as a fiduciary within the meaning of

12 section 3(31) of the Employee Retirement In13 come Security Act of 1974, or as a trustee, ex14 ecutor, administrator, custodian, guardian, con15 servator, or receiver acting for the exclusive

16 benefit of another person; and

17 ‘‘(ii) who has not previously owned or oper18 ated the property in a nonfiduciary capacity.

19 ‘‘(B) The term ‘fiduciary’ does not include any

20 person described in subparagraph (A)—

21 ‘‘(i) who acquires ownership or control of

22 property to avoid the liability of such person or

23 any other person under this Act; or
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1 ‘‘(ii) who owns or controls property on be2 half of or for the benefit of a holder of a secu3 rity interest.’’.

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