I
104TH CONGRESS
1ST SESSION
H. R. 544
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 as-
bestos, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 17, 1995
Mr. SCHUMER introduced the following bill; which was referred to the Com-
mittee on Banking and Financial Services and, in addition, to the Com-
mittee on Commerce, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
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 man-
agement planner has recommended in-place management
of the asbestos, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
isted and could result in a net increase in human ex-
posures and risks.
(5) The Environmental Protection Agency re-
quires asbestos removal only to prevent significant
public exposure to airborne asbestos fibers during
building demolition or renovation activities.
(6) Many lending institutions require the re-
moval of asbestos, regardless of its condition, from
commercial buildings before approving loans secured
by those buildings because of the potential liability
for the health of the occupants or property damages
for failure to remove the asbestos.
(7) The Environmental Protection Agency rec-
ommends a pro-active, in-place management pro-
gram whenever intact asbestos-containing material is
discovered.
(8) The American Medical Association’s Council
on Scientific Affairs has stated that ‘‘it is better
that society use its limited financial resources in
learning how to live safely with [asbestos] than in
attempting to remove it totally from the environ-
ment.’’
(9) The September 1991 report of the Health
Effects Institute’s Asbestos Literature Review Panel
stated that ‘‘there does not appear to be sufficient
risk to the health of general occupants to justify ar-
bitrarily removing intact asbestos-containing mate-
rial from well-maintained buildings’’. The report also
acknowledged that ‘‘because custodial and mainte-
nance workers may be transiently exposed to higher
levels of asbestos, their added life-time risk of cancer
may be appreciably higher.’’
SEC. 3. EFFECT OF ASBESTOS INSPECTION ON LENDING IN-
STITUTIONS.
(a) LIABILITY IMMUNITY.—A lending institution that
makes a loan or other extension of credit secured by a
mortgage or other lien on a commercial building shall not
be liable, from the time the loan or other extension of cred-
it is made until it is renegotiated or a superseding loan
or other extension of credit is made, under any Federal,
State, or local law to any person for injuries, costs, dam-
ages, expenses, loss, or other obligation (including claims
for indemnification or contribution and claims by third
parties for death, personal injury, illness or loss of or dam-
age to property or economic loss) which results from the
presence of asbestos-containing material in the building in
any case in which—
(1) the building was constructed during the 5-
year period ending on the date that the loan or other
extension of credit is made, and the building’s con-
struction manager certifies that the building con-
tains no asbestos-containing material; or
(2) the building—
(A) is one for which an asbestos inspection
was conducted in accordance with section 6
after January 1, 1989, and during the 5-year
period ending on the date that the loan or other
extension of credit is made (as demonstrated by
appropriate documentation);
(B) has not been significantly rebuilt or
renovated in the area that contains asbestos-
containing material since that inspection was
completed;
(C) is one in which that portion of asbes-
tos-containing material which the management
planner recommended for removal has been re-
moved in accordance with the Occupational
Safety and Health Act and the regulations pro-
mulgated pursuant to section 7(a); and
(D) is one in which an operations and
maintenance program is currently being con-
ducted in accordance with section 8 and the
regulations promulgated pursuant to section
7(a) for remaining asbestos-containing mate-
rials which the management planner rec-
ommended be handled in place.
(b) LIMITATION.—The immunity from liability pro-
vided in subsection (a) shall not apply if—
(1) the lending institution requires removal of
asbestos-containing material that the management
planner has recommended be handled in place; or
(2) the lending institution requires an asbestos
inspection of the building despite the fact that—
(A) the loan applicant demonstrates, with
appropriate documentation, that the conditions
in subsection (a)(1) or (a)(2) have been satis-
fied; or
(B) the loan applicant demonstrates, with
appropriate documentation, that all asbestos-
containing material has been removed from the
building.
(c) EXCLUSION.—The immunity from liability pro-
vided in subsection (a) shall not apply to a subsidiary of
a lending institution in any case in which the lending insti-
tution makes a loan or other extension of credit secured
by a mortgage or other lien on a commercial building, and
the subsidiary is the person to which the loan or other
extension of credit is made. For purposes of this sub-
section, the term ‘‘subsidiary’’ means any company that
is owned or controlled, directly or indirectly, by a lending
institution.
(d) EFFECTIVE DATE.—This section shall take effect
upon the promulgation of regulations by the Adminis-
trator of the Environmental Protection Agency pursuant
to section 7(a).
SEC. 4. LIABILITY IN THE EVENT OF FORECLOSURE.
In the case of a lending institution that is immune
from liability with respect to a commercial building under
section 3 and acquires title to such building through fore-
closure or other exercise of rights under a security inter-
est, the immunity from liability shall continue in effect so
long as the lending institution maintains the operations
and maintenance program for the building in accordance
with the regulations promulgated pursuant to section 7(a),
the Environmental Protection Agency asbestos guidance
documents, and this Act.
SEC. 5. CONSTRUCTION OF ACT.
The requirement by a lending institution that a loan
applicant conduct an asbestos inspection in accordance
with this Act of a building to be secured by a loan, and
the conducting of an operations and maintenance program
in the building after foreclosure or other exercise of rights
under a security interest, shall not be construed as partici-
pation in the management of the building by the lending
institution and shall be considered to be an activity carried
out by the lending institution solely to protect the institu-
tion’s security interest.
SEC. 6. ASBESTOS INSPECTION REQUIREMENTS.
(a) IN GENERAL.—For purposes of this Act, an as-
bestos inspection of a commercial building, if the loan ap-
plicant chooses to obtain one, shall be conducted by a
qualified management planner for the purpose of deter-
mining whether asbestos-containing material is present in
the building. If an inspection reveals the presence of asbes-
tos-containing material, the management planner shall
recommend specific response actions for each individual
area of the building where such material is found. The
recommendations shall be made in accordance with the
regulations promulgated pursuant to section 7(a) and with
the Environmental Protection Agency asbestos guidance
documents.
(b) MANAGEMENT PLANNER QUALIFICATIONS.—For
purposes of this Act, a qualified management planner is
a person who meets all of the following requirements:
(1) The person must be accredited, pursuant to
title II of the Toxic Substances Control Act, as an
inspector and management planner for asbestos-con-
taining material in a public or commercial building.
(2) The person must not own or control or be
under the control of (A) any entity which carries out
response actions for asbestos-containing material
from buildings, (B) any owner or manager of the
building being inspected, or (C) any lending institu-
tion making a loan or other extension of credit se-
cured by a mortgage or other lien on the building
being inspected. For purposes of this paragraph, a
person controls an entity if the person, directly or
indirectly, owns any amount of the voting stock or
other type of ownership interest in the entity.
(c) ACCREDITATION
OF MANAGEMENT PLANNERS
FOR PUBLIC AND COMMERCIAL BUILDINGS.—Section 206
of the Toxic Substances Control Act (15 U.S.C. 2646) is
amended as follows:
(1) Paragraph (2) of subsection (a) is amended
by inserting before the comma the following: ‘‘or for
a public or commercial building’’.
(2) Clause (ii) of subsection (a)(1)(A) is amend-
ed by inserting before the period the following: ‘‘or
for public or commercial buildings’’.
SEC. 7. ENVIRONMENTAL PROTECTION AGENCY REQUIRE-
MENTS.
(a) ASBESTOS
INSPECTION
AND
MANAGEMENT
STANDARDS
FOR PUBLIC
AND COMMERCIAL BUILD-
INGS.—Not later than 1 year after the date of the enact-
ment of this Act, the Administrator of the Environmental
Protection Agency shall promulgate regulations governing
the inspection and management of asbestos in public and
commercial buildings for purposes of this Act only. The
regulations shall include—
(1) detailed guidelines for management plan-
ners to determine whether asbestos-containing mate-
rial should be removed or managed in place in a
public or commercial building;
(2) appropriate practices for conducting oper-
ations and maintenance programs in public or com-
mercial buildings in which asbestos-containing mate-
rial is managed in place; and
(3) standards, applicable to persons complying
with section 8(1), for periodic surveillance of asbes-
tos-containing material that is managed in place in
commercial buildings, including standards for the
training of maintenance and custodial staff working
in such buildings that are equivalent to the stand-
ards for the training of maintenance and custodial
staff of local educational agencies under title II of
the Toxic Substances Control Act.
(b) REVISION
OF ENVIRONMENTAL PROTECTION
AGENCY ASBESTOS GUIDANCE DOCUMENTS.—The Ad-
ministrator of the Environmental Protection Agency shall
periodically update, revise, and republish the Environ-
mental Protection Agency asbestos guidance documents.
SEC. 8. OPERATION AND MAINTENANCE REQUIREMENTS.
For purposes of section 3(a)(2)(D), the following re-
quirements must be met after an asbestos inspection of
the building concerned is conducted:
(1) The owner or operator shall ensure that the
remaining asbestos-containing material is visually in-
spected, not less frequently than every 6 months, by
a member of the maintenance or custodial staff, or
another person, who has undergone training in ac-
cordance with the standards contained in the regula-
tions promulgated pursuant to section 7(a)(4).
(2) All remaining accessible asbestos-containing
material in public and maintenance areas of the
building, including asbestos in thermal system insu-
lation and spray-on and trowelled-on asbestos-con-
taining material but excluding intact vinyl floor tile
and ceiling tile in public areas, shall be prominently
labeled. The owner or operator shall ensure that ac-
cess to any remaining asbestos-containing material
located in inaccessible areas, such as in spaces be-
tween floors or walls of the building, is permitted
only to persons who have been notified of the pres-
ence of the asbestos-containing material.
(3) After the inspection referred to in section
3(a)(2)(A), a report on the inspection shall be kept
on file in the building. Such report shall include an
accounting of remaining asbestos-containing mate-
rial, any such material recommended for removal,
and any removal that has taken place since the pre-
vious inspection. Such report shall be available in
the building, in the administrative offices or other
appropriate place for inspection by tenants and em-
ployees in the building, maintenance workers of the
building, and building contractors. The inspection
report shall be updated after each subsequent in-
spection pursuant to paragraph (1) and after any
change in condition of asbestos-containing material
being managed in place.
(4) After each inspection pursuant to para-
graph (1), the owner of the building shall notify
maintenance workers of the building, either in writ-
ing or by posting notice, that an inspection has oc-
curred and that an inspection report is available for
inspection.
SEC. 9. RELATIONSHIP TO OTHER LAW.
(a) CLEAN AIR ACT.—Nothing in this Act shall be
construed or interpreted to preempt, supersede, or other-
wise affect any requirement to remove asbestos from a
building pursuant to section 112 of the Clean Air Act (42
U.S.C. 7412), as implemented through regulations known
as the national emission standards for hazardous air pol-
lutants (40 C.F.R. 61).
(b) LIMITED REQUIREMENTS.—Nothing in this Act
shall be construed or interpreted as a general requirement
for inspections or operations and maintenance programs
in public and commercial buildings. The requirements of
sections 6, 7, and 8 are established solely to enable lending
institutions to satisfy the conditions of this Act for pur-
poses of obtaining immunity from liability under section
3.
SEC. 10. DEFINITIONS.
For purposes of this Act, the following definitions
apply:
(1) The term ‘‘asbestos-containing material’’
has the meaning given that term by section 202(4)
of the Toxic Substances Control Act (15 U.S.C.
2642(4)).
(2) The term ‘‘commercial building’’ means any
building that is not a publicly owned building and
that is not a school building as defined in section
202(13) of the Toxic Substances Control Act, except
that such term does not include any residential
building of fewer than 10 units that is not part of
a complex of other residential buildings under com-
mon ownership.
(3) The term ‘‘EPA asbestos guidance docu-
ments’’ means—
(A) the most current version of the publi-
cation of the Environmental Protection Agency
titled ‘‘Guidance for Controlling Asbestos-Con-
taining Materials in Buildings’’ (also known as
the ‘‘Purple Book’’);
(B) the most current version of the publi-
cation of the Environmental Protection Agency
titled ‘‘Managing Asbestos in Place’’ (also
known as the ‘‘Green Book’’); and
(C) any other publication of the Environ-
mental Protection Agency, including any guid-
ance documents published pursuant to section
7(a), published for the purpose of enabling
building owners to select and apply appropriate
asbestos control and abatement actions in their
buildings.
(4) The term ‘‘lending institution’’ means (A) a
bank, savings and loan association, credit union, or
similar institution insured by, or subject to the su-
pervision, approval, or regulation of, the Board of
Governors of the Federal Reserve System, the Fed-
eral Deposit Insurance Corporation, the Comptroller
of the Currency, the Office of Thrift Supervision, or
the National Credit Union Administration; (B) any
other person, including an insurance company, that
makes direct loans or other extensions of credit se-
cured by mortgages or other liens on commercial
buildings; (C) any Federal agency to the extent the
agency makes direct loans or other extensions of
credit secured by mortgages or other liens on com-
mercial buildings; and (D) the Federal Deposit In-
surance Corporation, the National Credit Union Ad-
ministrator Board, and the Resolution Trust Cor-
poration, in such corporation’s or Board’s capability
as conservator, receiver, or liquidating agency for
any insured depository institution (as that term is
defined in section 3 of the Federal Deposit Insur-
ance Act). The term does not include any institution
or Federal agency engaged primarily in the purchase
of mortgage loans.
(5) The term ‘‘mortgage’’ means a lien as is
commonly given to secure advances on, or the un-
paid purchase price of, a commercial building (and
related real estate) under the laws of the State in
which the building is located, together with the cred-
it instrument, if any, secured thereby. The term in-
cludes second mortgages and other subsequent liens
on a commercial building given to secure advances
or loans.
(6) The term ‘‘response action’’ has the mean-
ing given that term by section 202(11) of the Toxic
Substances Control Act (15 U.S.C. 2642(11)).
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HR 544 IH——2