Superfund reform appears near death for this year.

WASHINGTON Prospects are grim for legislation that would clarify lenders' responsibilities when property held as collateral turns out to be contaminated by hazardous chemicals.

The Senate Finance Committee approved the financing provisions of the Superfund reform bill on Wednesday, thereby clearing it for the Senate floor. But with a labor-related provision stirring up conflict in the House and time running out this session, the measure could be in trouble.

"The odds are not going in our favor right now," said John Byrne, senior counsel for the American Bankers Association. "There's a chance we'll be revisiting Superfund next year."

The bill is being held up by a dispute over an amendment added during the House Public Works and Transportation vote. The provision would require payment of the prevailing wage usually defined as union minimums for contractors working on Superfund clean-up programs that receive federal funding.

"Its become a labor issue, and it doesn't look like anyone is budging in the House," Mr. Byme said.

The bill has already survived a long journey through numerous subcommittee and-full committee votes, "more than most other bills go through," Mr. Byrne said. Until the labor-related provision that was tacked on by Rep. Nick Rahall,' D-W. Va., the bill was kept clean of potential "bill killer" amendments.

The bill had also been carefully protected against any amendments that would upset the delicate and unusual coalition of groups supporting it- environmentalists, bankers, chemical companies, and insurers.

The lender liability provisions would enable the Environmental Protection Agency, in conjunction with the Treasury Department, to issue guidelines requiring lenders to establish procedures to assess environ-mental risk before making a loan. Environmental cleanup responsibilities of federal lending or banking agencies would be clarified under the reform measure as well.

The lender liability provisions would codify a 1992 EPA rule that limits the liability of lenders, insurers, and others, allowing them to operate without fear that environmental contamination caused by borrowers would trigger cleanup liability.

The U.S. Court of Appeals for the District of Columbia ruled in February that the EPA lacked the statutory authority to limit lender liability. Since the decision. lenders have been faced with the same uncertainties as they did before the 1992 EPA rule, when many lenders inherited damage liability when they foreclosed on contaminated properties.

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