Provisions in the Superfund legislation that clarify lender liability in cases in which banks foreclose on properties in need of environmental cleanup easily survived mark-up in the House Ways and Means Committee Aug. 18, clearing the way for a committee vote in September and possible passage by year-end. While some amendments were offered and approved by the committee, none of those amendments pertained to the Superfunds lender liability clarifications, the one issue mortgage lenders have lobbied strongly for. The Superfund, formally known as the Comprehensive Environmental Response, Compensation, and Liability Act, provides a legal framework for the financial framework for cleanup of hazardous waste sites. Mortgage bankers had sought clarification of the secured creditor exemption to Superfund liability sufficient enough for the courts to exclude lenders from unwarranted liabilityeven when the lender forecloses a property to protect its security interest. The legislation approved in committee would provide that. A Superfund companion bill has been approved by the Senate Energy and Commerce Committee and was referred to the finance committee Aug. 3. The finance committee, chaired by Sen. Daniel Moynihan, D-N.Y., has 30 days to finish its review. Provided no snags emerge, the bill can then be voted on by the full Senate, something likely to occur by mid-September. Many of the issues within the bill were embraced by a majority of banking and insurance trade groups, but the bills progress has nonetheless been impeded by the recently splintered property/casualty insurance industry, which has been divided in its support for funding the Environmental Insurance Resolution Fund. Democratic leaders of the House Ways and Means Committee had struck a compromise with insurers that would support a tax provision that for the first four years would be 70%-based on past commercial insurance policies, or retrospective, and 30%-based on future policies, or prospective. By the fifth year, all taxes would be prospective and revenues would be used to fund EIRF for the purpose of settling lawsuits between polluting companies and their insurers who must pay Superfund cleanup costs. Lawmakers predict the tax will generate roughly 90% of the $8 billion needed over the next 10 years. The compromise wasnt embraced by all, however. The Alliance of American Insurers, a trade group representing 215 property/casualty insurance companies, immediately sent a letter to acting Chairman of the House Ways and Means Committee Sam Gibbons, D-Fla., calling the agreement hastily negotiated by just a few parties on behalf of the entire insurance and reinsurance industries.
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