I

103D CONGRESS

1ST SESSION H. R. 1000

To protect financial institutions from liability for damages caused by failure

to remove asbestos from a residential or commercial building in which

the financial institution holds a security interest if an accredited asbestos

management planner has recommended in-place management of the asbestos, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 18, 1993

Mr. SCHUMER introduced the following bill; which was referred jointly to the

Committees on Energy and Commerce, and Banking, Finance and Urban

Affairs

A BILL

To protect financial institutions from liability for damages

caused by failure to remove asbestos from a residential

or commercial building in which the financial institution

holds a security interest if an accredited asbestos management planner has recommended in-place management

of the asbestos, 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. SHORT TITLE.

4 This Act may be cited as the ‘‘Asbestos Management

5 Incentive Act’’.
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1 SEC. 2. FINDINGS.

2 Congress finds the following:

3 (1) Although asbestos is hazardous, the risk of

4 asbestos-related disease depends upon exposure to

5 airborne asbestos fibers.

6 (2) Data available to the Environmental Protec7 tion Agency suggest that average airborne asbestos

8 levels in buildings are very low. Accordingly, the

9 health risk to most building occupants also appears

10 to be very low.

11 (3) The Environmental Protection Agency has

12 estimated that only 20 percent of all buildings (in13 cluding public and commercial buildings, residential

14 apartment buildings of 10 units or more, and Fed15 eral buildings) contain friable asbestos-containing

16 material.

17 (4) The Environmental Protection Agency has

18 found that removal of asbestos is often not the best

19 course of action to reduce asbestos exposure. In fact,

20 by releasing asbestos-containing material fibers into

21 the air, an improper or unnecessary removal can cre22 ate a dangerous situation where none previously ex23 isted and could result in a net increase in human ex24 posures and risks.

25 (5) The Environmental Protection Agency re26 quires asbestos removal only to prevent significant
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1 public exposure to airborne asbestos fibers during

2 building demolition or renovation activities.

3 (6) Many lending institutions require the re4 moval of asbestos, regardless of its condition, from

5 commercial buildings before approving loans secured

6 by those buildings because of the potential liability

7 for the health of the occupants or property damages

8 for failure to remove the asbestos.

9 (7) The Environmental Protection Agency rec10 ommends a pro-active, in-place management pro11 gram whenever intact asbestos-containing material is

12 discovered.

13 (8) The American Medical Association’s Council

14 on Scientific Affairs has stated that ‘‘it is better

15 that society use its limited financial resources in

16 learning how to live safely with [asbestos] than in

17 attempting to remove it totally from the environ18 ment.’’

19 (9) The September 1991 report of the Health

20 Effects Institute’s Asbestos Literature Review Panel

21 stated that ‘‘there does not appear to be sufficient

22 risk to the health of general occupants to justify ar23 bitrarily removing intact asbestos-containing mate24 rial from well-maintained buildings’’. The report also

25 acknowledged that ‘‘because custodial and mainte-
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1 nance workers may be transiently exposed to higher

2 levels of asbestos, their added life-time risk of cancer

3 may be appreciably higher.’’

4 SEC. 3. EFFECT OF ASBESTOS INSPECTION ON LENDING IN5 STITUTIONS.

6 (a) LIABILITY IMMUNITY.—A lending institution that

7 makes a loan or other extension of credit secured by a

8 mortgage or other lien on a commercial building shall not

9 be liable, from the time the loan or other extension of cred10 it is made until it is renegotiated or a superseding loan

11 or other extension of credit is made, under any Federal,

12 State, or local law to any person for injuries, costs, dam13 ages, expenses, loss, or other obligation (including claims

14 for indemnification or contribution and claims by third

15 parties for death, personal injury, illness or loss of or dam16 age to property or economic loss) which results from the

17 presence of asbestos-containing material in the building in

18 any case in which—

19 (1) the building was constructed during the 5-

20 year period ending on the date that the loan or other

21 extension of credit is made, and the building’s con22 struction manager certifies that the building con23 tains no asbestos-containing material; or

24 (2) the building—
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1 (A) is one for which an asbestos inspection

2 was conducted in accordance with section 6

3 after January 1, 1989, and during the 5-year

4 period ending on the date that the loan or other

5 extension of credit is made (as demonstrated by

6 appropriate documentation);

7 (B) has not been significantly rebuilt or

8 renovated in the area that contains asbestos9 containing material since that inspection was

10 completed;

11 (C) is one in which that portion of asbes12 tos-containing material which the management

13 planner recommended for removal has been re14 moved in accordance with the Occupational

15 Safety and Health Act and the regulations pro16 mulgated pursuant to section 7(a); and

17 (D) is one in which an operations and

18 maintenance program is currently being con19 ducted in accordance with section 8 and the

20 regulations promulgated pursuant to section

21 7(a) for remaining asbestos-containing mate22 rials which the management planner rec23 ommended be handled in place.

24 (b) LIMITATION.—The immunity from liability pro25 vided in subsection (a) shall not apply if—
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1 (1) the lending institution requires removal of

2 asbestos-containing material that the management

3 planner has recommended be handled in place; or

4 (2) the lending institution requires an asbestos

5 inspection of the building despite the fact that—

6 (A) the loan applicant demonstrates, with

7 appropriate documentation, that the conditions

8 in subsection (a)(1) or (a)(2) have been satis9 fied; or

10 (B) the loan applicant demonstrates, with

11 appropriate documentation, that all asbestos12 containing material has been removed from the

13 building.

14 (c) EXCLUSION.—The immunity from liability pro15 vided in subsection (a) shall not apply to a subsidiary of

16 a lending institution in any case in which the lending insti17 tution makes a loan or other extension of credit secured

18 by a mortgage or other lien on a commercial building, and

19 the subsidiary is the person to which the loan or other

20 extension of credit is made. For purposes of this sub21 section, the term ‘‘subsidiary’’ means any company that

22 is owned or controlled, directly or indirectly, by a lending

23 institution.

24 (d) EFFECTIVE DATE.—This section shall take effect

25 upon the promulgation of regulations by the Adminis-
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1 trator of the Environmental Protection Agency pursuant

2 to section 7(a).

3 SEC. 4. LIABILITY IN THE EVENT OF FORECLOSURE.

4 In the case of a lending institution that is immune

5 from liability with respect to a commercial building under

6 section 3 and acquires title to such building through fore7 closure or other exercise of rights under a security inter8 est, the immunity from liability shall continue in effect so

9 long as the lending institution maintains the operations

10 and maintenance program for the building in accordance

11 with the regulations promulgated pursuant to section 7(a),

12 the Environmental Protection Agency asbestos guidance

13 documents, and this Act.

14 SEC. 5. CONSTRUCTION OF ACT.

15 The requirement by a lending institution that a loan

16 applicant conduct an asbestos inspection in accordance

17 with this Act of a building to be secured by a loan, and

18 the conducting of an operations and maintenance program

19 in the building after foreclosure or other exercise of rights

20 under a security interest, shall not be construed as partici21 pation in the management of the building by the lending

22 institution and shall be considered to be an activity carried

23 out by the lending institution solely to protect the institu24 tion’s security interest.
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1 SEC. 6. ASBESTOS INSPECTION REQUIREMENTS.

2 (a) IN GENERAL.—For purposes of this Act, an as3 bestos inspection of a commercial building, if the loan ap4 plicant chooses to obtain one, shall be conducted by a

5 qualified management planner for the purpose of deter6 mining whether asbestos-containing material is present in

7 the building. If an inspection reveals the presence of asbes8 tos-containing material, the management planner shall

9 recommend specific response actions for each individual

10 area of the building where such material is found. The

11 recommendations shall be made in accordance with the

12 regulations promulgated pursuant to section 7(a) and with

13 the Environmental Protection Agency asbestos guidance

14 documents.

15 (b) MANAGEMENT PLANNER QUALIFICATIONS.—For

16 purposes of this Act, a qualified management planner is

17 a person who meets all of the following requirements:

18 (1) The person must be accredited, pursuant to

19 title II of the Toxic Substances Control Act, as an

20 inspector and management planner for asbestos-con21 taining material in a public or commercial building.

22 (2) The person must not own or control or be

23 under the control of (A) any entity which carries out

24 response actions for asbestos-containing material

25 from buildings, (B) any owner or manager of the

26 building being inspected, or (C) any lending institu-
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1 tion making a loan or other extension of credit se2 cured by a mortgage or other lien on the building

3 being inspected. For purposes of this paragraph, a

4 person controls an entity if the person, directly or

5 indirectly, owns any amount of the voting stock or

6 other type of ownership interest in the entity.

7 (c) ACCREDITATION OF MANAGEMENT PLANNERS

8 FOR PUBLIC AND COMMERCIAL BUILDINGS.—Section 206

9 of the Toxic Substances Control Act (15 U.S.C. 2646) is

10 amended as follows:

11 (1) Paragraph (2) of subsection (a) is amended

12 by inserting before the comma the following: ‘‘or for

13 a public or commercial building’’.

14 (2) Clause (ii) of subsection (a)(1)(A) is amend15 ed by inserting before the period the following: ‘‘or

16 for public or commercial buildings’’.

17 SEC. 7. ENVIRONMENTAL PROTECTION AGENCY REQUIRE18 MENTS.

19 (a) ASBESTOS INSPECTION AND MANAGEMENT

20 STANDARDS FOR PUBLIC AND COMMERCIAL BUILD21 INGS.—Not later than 1 year after the date of the enact22 ment of this Act, the Administrator of the Environmental

23 Protection Agency shall promulgate regulations governing

24 the inspection and management of asbestos in public and
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1 commercial buildings for purposes of this Act only. The

2 regulations shall include—

3 (1) detailed guidelines for management plan4 ners to determine whether asbestos-containing mate5 rial should be removed or managed in place in a

6 public or commercial building;

7 (2) appropriate practices for conducting oper8 ations and maintenance programs in public or com9 mercial buildings in which asbestos-containing mate10 rial is managed in place; and

11 (3) standards, applicable to persons complying

12 with section 8(1), for periodic surveillance of asbes13 tos-containing material that is managed in place in

14 commercial buildings, including standards for the

15 training of maintenance and custodial staff working

16 in such buildings that are equivalent to the stand17 ards for the training of maintenance and custodial

18 staff of local educational agencies under title II of

19 the Toxic Substances Control Act.

20 (b) REVISION OF ENVIRONMENTAL PROTECTION

21 AGENCY ASBESTOS GUIDANCE DOCUMENTS.—The Ad22 ministrator of the Environmental Protection Agency shall

23 periodically update, revise, and republish the Environ24 mental Protection Agency asbestos guidance documents.
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1 SEC. 8. OPERATION AND MAINTENANCE REQUIREMENTS.

2 For purposes of section 3(a)(2)(D), the following re3 quirements must be met after an asbestos inspection of

4 the building concerned is conducted:

5 (1) The owner or operator shall ensure that the

6 remaining asbestos-containing material is visually in7 spected, not less frequently than every 6 months, by

8 a member of the maintenance or custodial staff, or

9 another person, who has undergone training in ac10 cordance with the standards contained in the regula11 tions promulgated pursuant to section 7(a)(4).

12 (2) All remaining accessible asbestos-containing

13 material in public and maintenance areas of the

14 building, including asbestos in thermal system insu15 lation and spray-on and trowelled-on asbestos-con16 taining material but excluding intact vinyl floor tile

17 and ceiling tile in public areas, shall be prominently

18 labeled. The owner or operator shall ensure that ac19 cess to any remaining asbestos-containing material

20 located in inaccessible areas, such as in spaces be21 tween floors or walls of the building, is permitted

22 only to persons who have been notified of the pres23 ence of the asbestos-containing material.

24 (3) After the inspection referred to in section

25 3(a)(2)(A), a report on the inspection shall be kept

26 on file in the building. Such report shall include an
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1 accounting of remaining asbestos-containing mate2 rial, any such material recommended for removal,

3 and any removal that has taken place since the pre4 vious inspection. Such report shall be available in

5 the building, in the administrative offices or other

6 appropriate place for inspection by tenants and em7 ployees in the building, maintenance workers of the

8 building, and building contractors. The inspection

9 report shall be updated after each subsequent in10 spection pursuant to paragraph (1) and after any

11 change in condition of asbestos-containing material

12 being managed in place.

13 (4) After each inspection pursuant to para14 graph (1), the owner of the building shall notify

15 maintenance workers of the building, either in writ16 ing or by posting notice, that an inspection has oc17 curred and that an inspection report is available for

18 inspection.

19 SEC. 9. RELATIONSHIP TO OTHER LAW.

20 (a) CLEAN AIR ACT.—Nothing in this Act shall be

21 construed or interpreted to preempt, supersede, or other22 wise affect any requirement to remove asbestos from a

23 building pursuant to section 112 of the Clean Air Act (42

24 U.S.C. 7412), as implemented through regulations known
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1 as the national emission standards for hazardous air pol2 lutants (40 C.F.R. 61).

3 (b) LIMITED REQUIREMENTS.—Nothing in this Act

4 shall be construed or interpreted as a general requirement

5 for inspections or operations and maintenance programs

6 in public and commercial buildings. The requirements of

7 sections 6, 7, and 8 are established solely to enable lending

8 institutions to satisfy the conditions of this Act for pur9 poses of obtaining immunity from liability under section

10 3.

11 SEC. 10. DEFINITIONS.

12 For purposes of this Act, the following definitions

13 apply:

14 (1) The term ‘‘asbestos-containing material’’

15 has the meaning given that term by section 202(4)

16 of the Toxic Substances Control Act (15 U.S.C.

17 2642(4)).

18 (2) The term ‘‘commercial building’’ means any

19 building that is not a publicly owned building and

20 that is not a school building as defined in section

21 202(13) of the Toxic Substances Control Act, except

22 that such term does not include any residential

23 building of fewer than 10 units that is not part of

24 a complex of other residential buildings under com25 mon ownership.
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1 (3) The term ‘‘EPA asbestos guidance docu2 ments’’ means—

3 (A) the most current version of the publi4 cation of the Environmental Protection Agency

5 titled ‘‘Guidance for Controlling Asbestos-Con6 taining Materials in Buildings’’ (also known as

7 the ‘‘Purple Book’’);

8 (B) the most current version of the publi9 cation of the Environmental Protection Agency

10 titled ‘‘Managing Asbestos in Place’’ (also

11 known as the ‘‘Green Book’’); and

12 (C) any other publication of the Environ13 mental Protection Agency, including any guid14 ance documents published pursuant to section

15 7(a), published for the purpose of enabling

16 building owners to select and apply appropriate

17 asbestos control and abatement actions in their

18 buildings.

19 (4) The term ‘‘lending institution’’ means (A) a

20 bank, savings and loan association, credit union, or

21 similar institution insured by, or subject to the su22 pervision, approval, or regulation of, the Board of

23 Governors of the Federal Reserve System, the Fed24 eral Deposit Insurance Corporation, the Comptroller

25 of the Currency, the Office of Thrift Supervision, or
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1 the National Credit Union Administration; (B) any

2 other person, including an insurance company, that

3 makes direct loans or other extensions of credit se4 cured by mortgages or other liens on commercial

5 buildings; (C) any Federal agency to the extent the

6 agency makes direct loans or other extensions of

7 credit secured by mortgages or other liens on com8 mercial buildings; and (D) the Federal Deposit In9 surance Corporation, the National Credit Union Ad10 ministrator Board, and the Resolution Trust Cor11 poration, in such corporation’s or Board’s capability

12 as conservator, receiver, or liquidating agency for

13 any insured depository institution (as that term is

14 defined in section 3 of the Federal Deposit Insur15 ance Act). The term does not include any institution

16 or Federal agency engaged primarily in the purchase

17 of mortgage loans.

18 (5) The term ‘‘mortgage’’ means a lien as is

19 commonly given to secure advances on, or the un20 paid purchase price of, a commercial building (and

21 related real estate) under the laws of the State in

22 which the building is located, together with the cred23 it instrument, if any, secured thereby. The term in24 cludes second mortgages and other subsequent liens
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1 on a commercial building given to secure advances

2 or loans.

3 (6) The term ‘‘response action’’ has the mean4 ing given that term by section 202(11) of the Toxic

5 Substances Control Act (15 U.S.C. 2642(11)).

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