II 

110TH CONGRESS 

1ST SESSION S. 452 

To amend title 11, United States Code, to ensure that liable entities meet 

environmental cleanup obligations, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 31, 2007 

Ms. CANTWELL (for herself, Mrs. BOXER, and Mr. LAUTENBERG) introduced 

the following bill; which was read twice and referred to the Committee 

on Environment and Public Works 

A BILL 

To amend title 11, United States Code, to ensure that liable 

entities meet environmental cleanup obligations, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Cleanup Assurance and Polluter Accountability Act of 

6 2007’’ or the ‘‘CAPA’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 


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Sec. 3. Definition of Administrator. 

TITLE I—REQUIREMENTS FOR FINANCIAL ASSURANCE 

Sec. 101. Financial assurance directives. 

Sec. 102. No effect on other law. 

TITLE II—RECOVERY OF COSTS IN BANKRUPTCY 

Sec. 201. Extended period for review of transactions. 

Sec. 202. Study and report by the National Bankruptcy Review Commission. 

Sec. 203. No effect on other law. 

1 SEC. 2. FINDINGS. 

2 Congress finds that— 

3 (1) the Environmental Protection Agency faces 

4 considerable challenges when seeking to hold busi5 nesses responsible for their environmental cleanup 

6 obligations because— 

7 (A) the Comprehensive Environmental Re8 sponse, Compensation, and Liability Act of 

9 1980 (42 U.S.C. 9601 et seq.) seeks to hold 

10 parties responsible for environmental damage 

11 based on the principle of ‘‘polluter pays’’; but 

12 (B) in some cases, parties responsible for 

13 environmental damage may file for bankruptcy 

14 protection under title 11, United States Code, 

15 under which the parties are often permitted to 

16 limit or avoid their cleanup responsibilities; 

17 (2) the extent to which businesses with environ18 mental liabilities terminate operations and reorga19 nize under title 11, United States Code, directly af20 fects the extent of cleanup costs borne by taxpayers, 


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1 as well as the timeliness of remediation of contami2 nated sites; 

3 (3) according to an August 2005 Government 

4 Accountability Office report, while more than 

5 231,000 businesses operating in the United States 

6 filed for bankruptcy protection between 1998 and 

7 2003, it is not known how many of those businesses 

8 had environmental liabilities because that informa9 tion is not adequately tracked; 

10 (4) the Environmental Protection Agency con11 tinues to lack timely and complete information on 

12 the thousands of businesses filing for bankruptcy 

13 protection each year; 

14 (5) contrary to the ‘‘polluter pays’’ principle, 

15 taxpayers are more frequently covering the costs of 

16 environmental cleanup because— 

17 (A) potentially responsible businesses are 

18 no longer taxed for that specific purpose; and 

19 (B) the backlog of sites requiring costly 

20 cleanup is growing; 

21 (6) as of the date on which this Act is intro22 duced in the Senate, there are 1,244 cleanup sites 

23 listed on the National Priorities List developed by 

24 the President in accordance with section 

25 105(a)(8)(B) of the Comprehensive Environmental 


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1 Response, Compensation, and Liability Act of 1980 

2 (42 U.S.C. 9605(a)(8)(B)); 

3 (7) pursuant to a congressionally requested 

4 study, the organization entitled ‘‘Resources for the 

5 Future’’ determined that, in 1999, the average cost 

6 to taxpayers of cleaning up a site under the Com7 prehensive Environmental Response, Compensation, 

8 and Liability Act of 1980 (42 U.S.C. 9601 et seq.) 

9 was $12,000,000; 

10 (8) consistent with the principle of ‘‘polluter 

11 pays’’, polluters that are responsible for cleaning up 

12 contamination, not ordinary taxpayers, should bear 

13 the costs of cleaning up a site under that Act; 

14 (9) businesses commonly attempt to protect 

15 their assets using a corporate structure that limits 

16 the liability of parent corporations; 

17 (10) in some cases, assets are transferred be18 tween corporate affiliates (such as parent and sub19 sidiary corporations) specifically for the purpose of 

20 shirking environmental liabilities; 

21 (11) the Environmental Protection Agency 

22 should develop and maintain the expertise— 

23 (A) to prevent the asset transfers described 

24 in paragraph (10); and 


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1 (B) to recover assets so transferred, to the 

2 maximum extent feasible; 

3 (12) the Environmental Protection Agency has 

4 failed to implement a statutory mandate enacted in 

5 1980 to require proof of ability to pay and financial 

6 assurances for potential environmental cleanups 

7 from businesses handling hazardous substances; and 

8 (13) by failing to comply with that mandate, 

9 the Environmental Protection Agency continues to 

10 subject the Superfund program under the Com11 prehensive Environmental Response, Compensation, 

12 and Liability Act of 1980 (42 U.S.C. 9601 et seq.) 

13 and taxpayers in the United States to the obligation 

14 to pay enormous cleanup costs that should be borne 

15 by the responsible parties. 

16 SEC. 3. DEFINITION OF ADMINISTRATOR. 

17 In this Act, the term ‘‘Administrator’’ means the Ad18 ministrator of the Environmental Protection Agency. 

19 TITLE I—REQUIREMENTS FOR 

20 FINANCIAL ASSURANCE 

21 SEC. 101. FINANCIAL ASSURANCE DIRECTIVES. 

22 (a) COMPLETION OF REQUIREMENTS.— 

23 (1) DEFINITIONS.—In this subsection, the 

24 terms ‘‘damages’’, ‘‘hazardous substance’’, and ‘‘re25 sponse’’ have the meanings given those terms in secVerDate Aug 31 2005 04:52 Feb 02, 2007 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S452.IS S452

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1 tion 101 of the Comprehensive Environmental Re2 sponse, Compensation, and Liability Act of 1980 (42 

3 U.S.C. 9601). 

4 (2) REGULATIONS AND CLASSES OF FACILI5 TIES.— 

6 (A) STATEMENT OF POLICY.—In 1980, 

7 Congress directed the Administrator to promul8 gate financial assurance requirements under 

9 section 108(b) of the Comprehensive Environ10 mental Response, Compensation, and Liability 

11 Act (42 U.S.C. 9608(b)), but, as of the date of 

12 enactment of this Act, the Administrator has 

13 failed to promulgated those regulations. 

14 (B) REGULATIONS AND CLASSES.—The 

15 Administrator shall— 

16 (i) as soon as practicable after the 

17 date of enactment of this Act, but in no 

18 case later than 18 months after that date, 

19 finalize regulations under section 108(b) of 

20 the Comprehensive Environmental Re21 sponse Compensation and Liability Act (42 

22 U.S.C. 9608(b)); 

23 (ii)(I) as soon as practicable after the 

24 date of enactment of this Act, but in no 

25 case later than 1 year after that date, pubVerDate Aug 31 2005 04:52 Feb 02, 2007 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S452.IS S452

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1 lish in the Federal Register proposed fi2 nancial assurance rules for the classes of 

3 facilities identified under clause (iii) that, 

4 as determined by the Administrator in ac5 cordance with the criteria under section 

6 108(b)(1) of the Comprehensive Environ7 mental Response, Compensation, and Li8 ability Act of 1980 (42 U.S.C. 

9 9608(b)(1)), present the highest degree 

10 and duration of risk associated with the 

11 production, transportation, treatment, stor12 age, or disposal of hazardous substances; 

13 and 

14 (II) for each fiscal year thereafter, 

15 publish and promulgate additional pro16 posed and final financial assurance rules 

17 for additional classes of facilities described 

18 in subclause (I), giving highest priority to 

19 classes of facilities that may contain sites 

20 at which unreimbursed response costs are 

21 greater than or equal to $12,000,000; 

22 (iii) not later than 1 year after the 

23 date of enactment of this Act, submit to 

24 Congress a report that, at a minimum— 


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1 (I) includes a list of not less than 

2 5 classes of facilities that the Admin3 istrator determines have met the cri4 teria identified in section 108(b)(1) of 

5 the Comprehensive Environmental Re6 sponse, Compensation, and Liability 

7 Act of 1980 (42 U.S.C. 9608(b)(1)); 

8 and 

9 (II) includes a description (in10 cluding the name, location, number, 

11 and costs) of response actions or po12 tential response actions for which re13 maining unreimbursed response costs 

14 exist, or for which the Administrator 

15 reasonably anticipates there will be 

16 unreimbursed response actions carried 

17 out under the Comprehensive Envi18 ronmental Response, Compensation, 

19 and Liability Act of 1980 (42 U.S.C. 

20 9601 et seq.) as of the date of the re21 port; and 

22 (iv) submit to Congress an annual up23 date of the report required under clause 

24 (iii) that includes additional classes of fa25 cilities described in clause (iii)(I). 


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1 (3) NOTIFICATION OF BANKRUPTCY.—Each 

2 owner and operator of a facility that is included in 

3 class of facilities regulated under paragraph (2)(B) 

4 and that files for bankruptcy protection under title 

5 11, United States Code, shall submit to the Admin6 istrator and the regional office of the Environmental 

7 Protection Agency of the region in which the facility 

8 is located a notification of the filing that includes— 

9 (A) an estimate of environmental impacts 

10 (and the costs of remediating the impacts) re11 sulting from activities at the facility; and 

12 (B) a description of all current and former 

13 corporate relationships of the facility (such as 

14 parents, subsidiaries, partners, and affiliates), 

15 including parents, subsidiaries, partners, and 

16 affiliates located in other States or regions. 

17 (4) RISK OF DEFAULT.—In promulgating the 

18 regulations described in paragraph (2)(B), the Ad19 ministrator shall give priority to the development of 

20 requirements relating to owners and operators of fa21 cilities or industries whose prior actions or practices 

22 indicate a high risk of default on environmental li23 abilities. 

24 (b) REQUIREMENT OF FINANCIAL ASSURANCE.— 

25 (1) FINANCIAL ASSURANCE AGREEMENTS.— 


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1 (A) DEFINITION OF AFFECTED PERSON OR

2 ENTITY.—In this paragraph, the term ‘‘affected 

3 person or entity’’ means— 

4 (i) a person entering into a settlement 

5 agreement or consent decree under section 

6 122 of the Comprehensive Environmental 

7 Response, Compensation, and Liability Act 

8 of 1980 (42 U.S.C. 9622) or the Solid 

9 Waste Disposal Act (42 U.S.C. 6901 et 

10 seq.); and 

11 (ii) a treatment, storage, or disposal 

12 facility receiving a corrective action permit 

13 or order under section 3004(u) or 3008(h) 

14 of the Solid Waste Disposal Act (42 

15 U.S.C. 6924(u), 6928(h)). 

16 (B) REQUIREMENT.—In addition to any 

17 other applicable financial assurance require18 ments, the Administrator shall require that 

19 each affected person or entity shall— 

20 (i) enter into a financial assurance 

21 agreement that reflects the degree and du22 ration of risk associated with the produc23 tion, transportation, treatment, storage, or 

24 disposal of hazardous substances with the 

25 Administrator as part of the final settleVerDate Aug 31 2005 04:52 Feb 02, 2007 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S452.IS S452

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1 ment agreement, consent decree, or other 

2 arrangement; and 

3 (ii) provide at the time of issuance of 

4 a settlement agreement or consent decree 

5 described in subparagraph (A)(i), or a cor6 rective action permit or order described in 

7 subparagraph (A)(ii), as applicable, such 

8 financial assurances as are required under 

9 applicable law and as may be needed to 

10 cover all potential response costs and dam11 ages. 

12 (2) TRACKING OF SETTLEMENTS.—For each 

13 fiscal year, the Administrator shall track the number 

14 of settlements, consent decrees, corrective action 

15 permits, and orders described in paragraph (1)(A) 

16 (including those that are and are not supported by 

17 financial assurances or otherwise in compliance with 

18 paragraph (1)), including, with respect to those set19 tlements, consent decrees, corrective action permits, 

20 and orders— 

21 (A) the amount of any financial assurance 

22 relating to such a settlement, consent decree, 

23 corrective action permit, or order; 


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1 (B) the estimated value of any environ2 mental actions secured by the financial assur3 ances; 

4 (C) the name of each responsible party; 

5 and 

6 (D) the name of each financial institution 

7 or other entity providing the financial assur8 ance, as appropriate. 

9 (3) CRITERIA FOR ACCEPTANCE OF APPRO10 PRIATE FINANCIAL ASSURANCE.—In determining 

11 whether to accept financial assurances provided 

12 under paragraph (1), the Administrator shall take 

13 into consideration— 

14 (A) the level of financial risk to the Fed15 eral Government if liable parties default on the 

16 obligations of the parties; 

17 (B) varying financial risks posed by finan18 cial assurance mechanisms; 

19 (C) any concerns about various forms of fi20 nancial assurance; and 

21 (D) such other criteria as the Adminis22 trator reasonably determines could affect the 

23 amount of unreimbursed response costs of the 

24 Federal Government. 


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1 (c) FULL USE OF AVAILABLE ENFORCEMENT

2 TOOLS.—In carrying out this section, the Administrator 

3 shall— 

4 (1) make full use of administrative offsets and 

5 liens on assets for enforcement purposes, as appro6 priate; and 

7 (2) not later than 1 year after the date of en8 actment of this Act, issue guidance for enforcement 

9 of the requirements of this section relating to the 

10 use of administrative offsets and asset liens. 

11 (d) ADJUSTMENT OF FINANCIAL TEST OF SELF-IN12 SURANCE FOR INFLATION.—In using or authorizing the 

13 use of any financial test, the Administrator shall adjust 

14 upward, to account for changes since 1982 in the Con15 sumer Price Index for all-urban consumers, United States 

16 city average, as published by the Bureau of Labor Statis17 tics, the dollar amount of the tangible net worth require18 ment of the financial test of self-insurance accepted by the 

19 Administrator as a financial assurance mechanism from 

20 persons subject to regulation under this Act. 

21 SEC. 102. NO EFFECT ON OTHER LAW. 

22 Nothing in this title limits any obligation of a person 

23 under the Comprehensive Environmental Response, Com24 pensation, and Liability Act of 1980 (42 U.S.C. 9601 et 

25 seq.) or any other provision of law. 


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1 TITLE II—RECOVERY OF COSTS 

2 IN BANKRUPTCY 

3 SEC. 201. EXTENDED PERIOD FOR REVIEW OF TRANS4 ACTIONS. 

5 Section 548 of title 11, United States Code, is 

6 amended by adding at the end the following: 

7 ‘‘(f) The trustee may avoid any transfer of an interest 

8 of the debtor in an asset that was made during the 10- 

9 year period preceding the date of the filing of the petition, 

10 if— 

11 ‘‘(1) the debtor had, on or after the date on 

12 which such transfer was made, environmental liabil13 ities under section 107(a) of the Comprehensive En14 vironmental Response, Compensation, and Liability 

15 Act of 1980 (42 U.S.C. 9607(a)); and 

16 ‘‘(2) the debtor made such transfer with actual 

17 intent to hinder, delay, or defraud any person with 

18 respect to any such liability under that Act (42 

19 U.S.C. 9601 et seq.).’’. 

20 SEC. 202. STUDY AND REPORT BY THE NATIONAL BANK21 RUPTCY REVIEW COMMISSION. 

22 (a) STUDY.— 

23 (1) INCONSISTENCIES BETWEEN BANKRUPTCY

24 AND ENVIRONMENTAL LAWS.— 

25 (A) ACTION BY ADMINISTRATOR.— 


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1 (i) IN GENERAL.—Not later than 1 

2 year after the date of enactment of this 

3 Act, the Administrator, in consultation 

4 with the Department of Justice, shall sub5 mit to Congress a report that recommends 

6 methods to substantially strengthen the 

7 ability of the United States to secure as8 sets needed to pay for response costs at 

9 sites contaminated with hazardous sub10 stances. 

11 (ii) PUBLIC NOTICE AND COMMENT.— 

12 The Administrator shall provide public no13 tice and an opportunity for comment relat14 ing to the report under clause (i) for a pe15 riod of not less than 60 days. 

16 (B) ACTION BY NATIONAL BANKRUPTCY

17 REVIEW COMMISSION.—The National Bank18 ruptcy Review Commission (referred to in this 

19 section as the ‘‘Commission’’) shall reconvene 

20 and evaluate the interaction between title 11, 

21 United States Code, and the Comprehensive 

22 Environmental Response, Compensation, and 

23 Liability Act of 1980 (42 U.S.C. 9601 et seq.), 

24 and specifically recommend what actions could 

25 be taken, consistent with the report submitted 


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1 under subparagraph (A), to substantially 

2 strengthen the ability of the United States to 

3 secure assets needed to pay for response costs 

4 at sites contaminated with hazardous sub5 stances by addressing— 

6 (i) the challenges that the Environ7 mental Protection Agency faces when at8 tempting to hold bankrupt and other fi9 nancially distressed businesses responsible 

10 for their cleanup obligations; and 

11 (ii) the fact that the nature of envi12 ronmental damage and cleanup gives com13 panies significant time to reorganize their 

14 business structures to maximize corporate 

15 benefits and minimize potential environ16 mental liabilities. 

17 (2) USE OF GAO REPORT.—In conducting the 

18 study under paragraph (1)(B), the Commission shall 

19 take into consideration the work of the Government 

20 Accountability Office in its August 2005 report on 

21 the subject of inconsistencies between title 11, 

22 United States Code, and the Comprehensive Envi23 ronmental Response, Compensation, and Liability 

24 Act of 1980 (42 U.S.C. 9601 et seq.). 

25 (b) REPORT.— 


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1 (1) TIMING.—Not later than 18 months after 

2 the date of enactment of this Act, the Commission 

3 shall submit to Congress a report on the results of 

4 the study conducted under this section. 

5 (2) CONTENT.—The report submitted under 

6 paragraph (1) shall contain a detailed statement of 

7 the findings and conclusions of the Commission, to8 gether with any recommendations for methods to 

9 substantially strengthen the ability of the United 

10 States to secure assets needed to pay for response 

11 costs at sites contaminated with hazardous sub12 stances. 

13 (c) OTHER AUTHORITY.—In carrying out this sec14 tion, the Commission may— 

15 (1) conduct public meetings at which testimony 

16 and other evidence may be taken, the minutes of 

17 which shall be made available upon request and pay18 ment of photocopying and mailing expenses; and 

19 (2) obtain official data from any Federal agen20 cy, department, or court necessary to the implemen21 tation of its duties. 

22 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

23 authorized to be made available to the Commission to 

24 carry out this section, $1,500,000, to remain available 

25 until expended. 


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1 SEC. 203. NO EFFECT ON OTHER LAW. 

2 Nothing in this title or any amendment made by this 

3 title limits any obligation of a person under any other pro4 vision of law. 

Æ 


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