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IB10011: Superfund Reauthorization Issues in the 106th Congress
Resources, Science, and Industry Division
October 30, 2000
Two reauthorization bills have been reported in the House: the Transportation and Infrastructure Committee reported H.R. 1300 (H.Rept. 106-353, Part I), and the Commerce Committee reported H.R. 2580 (H.Rept. 106-775, Part I). The Senate Environment and Public Works Committee has considered a brownfields bill, S. 2700. The outlook for passage of any of them is not bright.
The law's title is the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA, P.L. 96-510). As of April 2000, 19 years after enactment, 685 sites (48%) placed on the Superfund's National Priorities List (NPL) had been removed to the Construction Completed List. Program critics say it is slow, ineffective, and expensive. Program supporters acknowledge that the statute needs to be updated, but argue that Superfund cleanups have prevented widespread health and environmental exposures and have created strong incentives for more careful hazardous waste management.
How to fund the program in the future is a basic issue as the authority to collect the taxes that support the trust fund ended in 1995. Ways and Means Chairman Archer opposes tax reinstatement unless there are major changes in CERCLA. The House and Senate approved $1.40 billion ($1.45 billion requested) for the program in FY2001 (H.R. 4635) on October 19. The President is expected to sign the bill.
CERCLA's broad liability scheme has been a most difficult reauthorization issue. The average cost of cleanup is about $20 million, a large enough amount to often make it worthwhile for parties to pursue legal means to spread the costs rather than to settle. So at large sites, where it is not unusual for there to be over a hundred potentially responsible parties, there can be a commensurate amount of expensive negotiation and litigation. Such situations can be especially burdensome for small businesses and other minor parties.
The law's cleanup standards and remedy selection procedures are also controversial. Requirements for treatment, permanence, and the application of both federal and state regulations have led to what some critics characterize as overly strict risk assessment, and increased costs and delay at many sites. Environmental groups, on the other hand, strongly support cleanup remedies that minimize remaining on-site pollution rather than remedies designed to minimize human and environmental exposures. Business interests also want to limit the scope of natural resource damages that can be assessed against them by putting a cap on the amount of such awards.
A number of states want to have full delegation of the authorities in CERCLA, including remedy selection, control over CERCLA's monies, and the determination of what sites go on and off the NPL. Supporters of the popular brownfields program, aimed at low-level contaminated sites with economic development potential, want to give it a statutory basis and specify what the funding may be used for. Opponents say it is a misuse of Superfund resources to spend them on non-NPL sites. Also, some want to encourage and expand state voluntary cleanup programs by providing them technical and financial support.
An extension to the brownfields cleanup tax incentive was included in the tax relief package passed by the House on October 26. The President said he would veto the bill, H.R. 2614.
The House and Senate passed the conference report containing EPA's FY2001 Superfund appropriation on October 19 (H.R. 4635, H.Rept. 106-674, S.Rept. 106-410, conference report H.Rept. 106-988). It contains $1.27 billion for Superfund and includes $91.6 million for brownfields. An additional $130 million is being funded in new separate accounts for the Agency for Toxic Substances and Disease Registry and the National Institute of Environmental Health Sciences. The total of $1.40 billion is the same as last year. The President is expected to sign H.R. 4635.
On September 26, the Small Business Liability Relief Act, H.R. 5175, failed to achieve the needed two-thirds majority vote for bills taken up under suspension of the rules. The vote in favor was 253-161.
Superfund is the principal federal program for cleaning up hazardous waste sites to protect public health and the environment from releases of hazardous substances. The establishing law's formal title is the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA); comprehensive changes were made by the Superfund Amendments and Reauthorization Act of 1986 (SARA). The Superfund trust fund, created primarily from excise taxes on petroleum and specified chemicals and a corporate environmental income tax, raised about $1.5 billion per year before the collection of taxes expired on December 31, 1995. The law requires responsible parties to pay for cleanups, and the fund is used where a financially viable party cannot be found. The fund also supports the Environmental Protection Agency's (EPA's) enforcement, management activities, and research and development.
Since the taxes that support the fund expired on December 31, 1995, the only revenues now coming into the fund are amounts recovered from potentially responsible parties (PRPs), interest on the fund's investments, fines, and penalties. This lack of income-producing taxes creates some pressure to reauthorize the law. Ways and Means Committee Chairman Bill Archer has said that the taxes would not be restored until there have been fundamental changes in the act, particularly its liability regime. His position has prevented further action on H.R. 1300 and H.R. 2580, both of which have been reported.
EPA does not have unfettered access to the Superfund trust fund. Congress annually appropriates monies from the fund to EPA, and in most years adds a contribution from the general fund of the Treasury, usually $250 million, the maximum authorized in CERCLA through FY1995. For FY1999, however, $325 million was appropriated from the Treasury, and for FY2000 and FY2001 half of the appropriation came from the Treasury.
Stakeholders have criticized the Superfund program over the years. Citizens are dissatisfied with the slow rate of cleanup, 12 years on average. The polluting companies and their insurers complain that they are required to pay for "gold plated cleanups." Further, they say the law's retroactive nature is unfair in reaching back to activities that were legal before enactment. And small businesses, social organizations, school districts, municipalities, and others have been drawn into Superfund's liability web for disposing of small amounts of waste -- and have had to employ attorneys to represent their interests. States desire an expanded role in making decisions about sites within their boundaries. Environmental groups defend the retroactive application of the statute, arguing that it is fairer for site owners or operators to bear the costs of site cleanup than to transfer these costs to the taxpayers. They are concerned that proposals which would eliminate the statute's current preference for "treatment" and "permanence" in cleanup remedies would result in a greater number of cleanups that leave pollutants in place and rely on efforts to contain the contamination or limit public access to the site (referred to as "institutional controls"). These groups are particularly concerned about proposed changes to natural resource damage provisions (which require polluters to restore injured natural resources, or acquire their equivalent).
Every state and virtually every congressional district has (or has had) a Superfund site, and the most commonly voiced goal of Superfund reform is relieving small businesses and municipalities of their liability burden, particularly from third-party litigation. In recent years states have been assuming a larger role in carrying out the Superfund program, and there appears to be general agreement to acknowledge this new reality in CERCLA. However, EPA is concerned that it retain the authority to intervene in emergencies. In the quest for a consensus measure, the leading bills have dropped natural resource damages provisions.
Serious efforts in both chambers to bring a reauthorization bill to the floor foundered in the first session, and the positions of key participants in the debate have not changed. Some observers suggest that a brownfields bill might have a better chance, but it would not be free of controversy either. Continuing areas of disagreement include the "state finality" question (whether EPA can intervene at a site that is being or has been cleaned up under a state program), and different views of whether cleanup standards would be eroded if EPA's role is diminished and states' roles increased.
On September 14, 2000, Representative Michael Oxley introduced H.R. 5175, a bill to relieve small businesses of CERCLA liability for "de micromis" quantities of hazardous substances and for municipal solid waste. It also provides expedited settlements for those who disposed of de minimis quantities of hazardous substances, or who have a limited ability to pay. The bill was taken up by the House under suspension of the rules on September 26, but failed to achieve the two-thirds majority needed for passage. The vote was 253-161.
Late in the first session of the 106th Congress two measures were enacted by Congress. The brownfields tax incentive, which allows developers to fully deduct the costs of cleanup in the same year they are incurred, was extended for a year to December 2001, as part of the Tax Extenders bill (P.L. 106-170, H.R. 1180, H.Rept. 106-478). Also, recyclers of paper, plastic, glass, textiles, rubber, metal, and batteries are protected from CERCLA liability by a rider to the Omnibus Appropriation bill (P.L. 106-113, H.R. 3194, H.Rept. 106-479). The provisions (basically Senator Trent Lott's S. 1528) absolve recyclers from liability unless the person has reason to believe the material would be burned, or the consuming facility was not in compliance with environmental laws, or that hazardous substances had been added to the material, or failed to exercise care in managing the material. The liability exemption is inapplicable if the recyclable material contains PCBs in excess of federal standards.
On August 5, 1999, the House Committee on Transportation and Infrastructure ordered H.R. 1300 reported on a vote of 67-2 (H.Rept. 106-353, Part I). The bill authorizes grant programs for brownfield assessments and for remediation. It also provides $25 million per year for state voluntary cleanup programs but preserves EPA's authority to respond to hazardous substance releases. The bill enhances citizen participation. Liability relief is provided to 10 categories of innocent parties. In addition, small businesses (fewer than 75 employees and less than $3 million in gross revenues) are exempted from liability unless their hazardous substances contribute significantly to the costs of cleanup. Generators and transporters of municipal solid waste and sewage sludge are also exempted from liability. Municipal owners or operators of co-disposal landfills are limited to 10% of cleanup costs if their population is less than 100,000, or 20% if the population is more than 100,000. There are also exemptions from liability for "de micromis" parties (contributors of less than 110 gallons or 200 pounds of hazardous substances) if their waste does not add significantly to cleanup costs, and for recyclers who meet certain requirements; and response action (cleanup) contractors' liability protection is extended to protection from state liability.
Under H.R. 1300, remedy selection would consider anticipated use of the land and other resources, and selection would be based on a balancing test. The CERCLA mandate that remedies meet "relevant and appropriate requirements" of other laws would be dropped, and the law's preference for treatment and permanence would be modified consistent with EPA guidance. The bill includes a sense of the committee statement that the taxes be reinstated for a period of 8 years, the reauthorization period of the bill. The Superfund program would be reauthorized at $1.5 billion per year for the first 4 years, then decline gradually to $975 million in FY 2007. For the first 5 years, $300 million per year in mandatory spending would fund orphan shares and the shares of parties that the bill exempts from liability; $200 million is authorized for the last 3 years. Among the other provisions in the bill are ones that would give communities at NPL sites a larger role in decision-making, and that would give adjacent states a role in remedy selection at certain Department of Energy facilities.
The House Commerce Committee ordered H.R. 2580 reported, with amendments, on October 13 on a 30-21 vote. Generally, the bill contains the brownfields and remedy selection provisions of the introduced bill, with the liability provisions of H.R. 1300 added.
EPA Assistant Administrator Tim Fields testified at a hearing prior to the Commerce subcommittee markup that the administration opposed both H.R. 1300 and H.R. 2580, saying that the agency's administrative reforms addressed most of Superfund's problems, and no significant legislative changes were needed. After H.R. 2580 was marked up, Administrator Carol Browner issued a statement that read in part: "The bill carves out major exemptions for large corporate polluters and special interests. It fails to replenish the Superfund Trust Fund, continuing the four-year 'tax holiday' now enjoyed by the largest industrial generators of toxic waste. It limits federal enforcement authorities for cleanups that Americans depend upon to protect their health and the environment. The bill cuts cleanup spending, [and] reduces the number and of pace of cleanups...."
In the Senate, after extensive negotiations did not produce an acceptable bipartisan compromise, the Environment and Public Works Committee (EPW) agreed to end their deliberations on S. 1090 on August 4, 1999. The following day the late Senator John Chafee and Senator Bob Smith (then-EPW chairman, and subcommittee chairman, respectively) introduced S. 1537. It retains the key features of S. 1090 and incorporates a number of provisions that committee members prepared to offer as amendments to it, particularly in the areas of natural resource damages and remedy selection.
The bill limits the liability of PRPs to an amount proportionate to the amount of waste the PRP contributed to the site, effectively ending joint and several liability except for recalcitrant PRPs who refuse to admit any liability at all. This latter group could be liable for the shares of the exempted parties, as well as the "orphan share" for which no viable responsible party can be found. S. 1537 also eliminates or limits liability for recyclers, small businesses, de micromis contributors, municipalities and hazardous waste transporters, as well as prospective purchasers of contaminated land, owners of land contiguous to a contaminated property, and innocent landowners. The bill would also establish two brownfield grant programs, one for site characterization and assessment, and the other for site remediation. A site would be eligible for total grants of up to $350,000; $100 million per year is authorized for the two programs. The bill also limits the number of Superfund sites that can be added to the NPL to 30 per year through FY2004, and listing a site requires the state governor's approval. S. 1537 would not reinstate the Superfund taxes.
Senator Max Baucus introduced S. 1105 on May 24, 1999. The bill authorizes $110 million per year for brownfield assessment grants, grants to capitalize revolving loan funds (RLFs) for brownfield cleanups, and grants to states to create and enhance voluntary cleanup programs. Among other things, it also provides liability relief for prospective purchasers, innocent landowners, contiguous property owners, contributors of small amounts of hazardous waste, and recyclers; codifies EPA's municipal settlement policy; and authorizes $200 million per year for orphan share funding. S. 2334, S. 2335, and S. 2700 are discussed in the Brownfields section.
The National Contingency Plan (NCP, codified at 40 CFR 300) provides a blueprint of how EPA is to respond to hazardous substance releases. It covers methods for discovering and investigating hazardous waste sites, the roles of federal and state agencies, the appropriate level of response activities, and other subjects. The Hazard Ranking System and the National Priorities List (described below) are appendices to the NCP.
There are two types of Superfund response: short-term "removals" to mitigate emergency situations, and long-term "remedial actions" to clean up sites that have been placed on the National Priorities List (NPL). The term "Superfund site" generally means a site on the NPL. After a potential site has been identified, a preliminary assessment is conducted to determine if a site inspection and ranking are warranted.
EPA had 11,327 active sites in its CERCLIS site tracking database as of January 18, 2000, and 31,925 in the CERCLIS archives. Removing sites to the archives has become important because the stigma of being associated with Superfund has often prevented sale or development of CERCLIS-listed property -- even if it was never contaminated.
Sites receiving a sufficiently high score under the Hazard Ranking System are placed on the NPL. As of the May 11, 2000, Federal Register listing (with data through April 27) there were 1,227 sites on the NPL, of which 159 were federal facility sites; another 62 were proposed for listing, of which 7 are federal facility sites. Proposed and final NPL sites total 1,289. Through FY1998, EPA and the Coast Guard had also conducted more than 5,500 removal actions. (The Coast Guard is the lead agency in coastal areas.) There are or have been Superfund sites in all 50 states, as well as in American Samoa, Guam, the Northern Marianas, Puerto Rico, the Trust Territories of the Pacific, and the Virgin Islands.
After listing, the next step is the remedial investigation, a detailed examination of the site and the wastes present, which is followed by a feasibility study that examines alternative cleanup approaches. (These two steps are frequently referred to together as the "RI/FS.") EPA decides which alternative to pursue, and the Agency or its designee -- frequently the U.S. Army Corps of Engineers -- prepares specifications and plans for the selected remedy. Cleanup construction may be followed by a requirement to operate, maintain, or monitor the site for several years. The Congressional Budget Office has estimated that the average cleanup time for the first 1,249 NPL sites will be at least 12 years. EPA deletes sites from the NPL when no further action is appropriate. As of April 27, 2000, 685 sites (48% of the 1,439 total listed since inception) had been placed on the Construction Completion List; 212 (15% of the 1,439) of those sites and portions of 18 others have also been deleted from the NPL. At House Government Reform hearings, the General Accounting Office (GAO) presented a draft report (released in March 1997, and updated in February 1998) that said for sites listed in 1996, it took EPA 9.4 years to go from site discovery to final listing on the NPL, compared to 5.8 years in the 1986-1990 period. Actual cleanup times increased from 3.9 years in 1986-1990 to 10.6 years for those completed in 1996, and to 11.5 years for those completed in 1997. (For details on this and other Superfund topics, see CRS Report 97-312, Superfund Fact Book. See also EPA's Superfund web site: http://www.epa.gov/superfund/index.htm).
In the FY2001 budget request EPA asked for $1.45 billion for the Superfund program, a decrease of $50 million from the FY2000 request, but an increase of $50 million from the amount Congress appropriated last year; it included $91.6 million for brownfields. The House and Senate approved $1.27 billion for the FY2001 Superfund program (H.R. 4635, H.Rept. 106-674, S.Rept. 106-410), but that does not include $130 million being funded in new separate accounts for the Agency for Toxic Substances and Disease Registry and the National Institute of Environmental Health Sciences. On balance the amount for the Superfund program is the same as the FY2000 appropriation, $1.4 billion. Also as in FY2000, half of the appropriation comes from the Superfund Trust Fund and half from general revenues. Brownfields would receive $91.6 million, as requested.
The House passed H.R. 4635 on June 21, 2000. The Senate passed a substitute measure on October 12 that reflected an agreement between a group of House and Senate leaders and the Clinton Administration. The Senate version now also includes the energy and water development appropriations bill (formerly H.R. 4733) which had been vetoed by the President. Both chambers passed the conference report (H.Rept. 106-988) on October 19.
Renewing Superfund's taxes is both a practical and political concern as the balance in the Superfund Trust Fund is drawn down. The fund's principal sources of revenue are excise taxes on petroleum and designated chemical feedstocks, and a corporate environmental income tax. The trust fund has historically supplied most of the monies (about 83%) for the Superfund program, with general revenues from the Treasury providing the rest (about 17%). GAO estimates the fund's available balance at the end of FY1999 to be $1.4 billion, down from $2.1 billion at the end of FY1998.
Congress, if it chose, could fund the program entirely through general revenues, and some Republican leaders have said they would not allow the program to go unfunded. GAO has said that there is nothing in CERCLA or the congressional budget resolution to prevent the appropriation from being funded completely from general revenues. The last two appropriations have helped extend the life of the fund by increasing the Treasury contribution from the usual $250 million in most previous years, and reducing the amount taken from the fund. The FY1999 $1.5 billion appropriation included $1.175 billion from the fund (78%) and $325 million from general revenues (22%) for a total appropriation of $1.5 billion. For the FY2000 $1.4 billion appropriation, 50% or $700 million came from the trust fund and an equal amount came from general revenues. EPA Administrator Carol Browner and others have opposed this approach saying it amounts to taxpayers paying for cleanups instead of the polluters.
The Natural Resources Defense Council has expressed its "strong concern" that the taxes be reauthorized in order to keep cleanups moving forward. Business interests, including the Business Roundtable, the American Petroleum Institute, and the Chemical Manufacturers Association, have testified against authorizing any taxes unless there is comprehensive reform of the law, and API in particular wants Congress to change the overall tax structure.
As recently as October 1999, Ways and Means Chairman Bill Archer reportedly remains opposed to reinstating the taxes until CERCLA has been renewed and its liability provisions changed. He has suggested creating a dedicated revenue stream from existing corporate income taxes to replace the expired Superfund taxes.
On September 23, 1999, President Clinton vetoed the $792 billion tax-cut bill, H.R. 2488 (H.Rept. 106-289), which contained a provision to combine the Superfund Trust Fund and the Leaking Underground Storage Tank (LUST) Trust Fund (balance $1.8 billion) into a new Environmental Remediation Trust Fund. The new fund would have been used for both programs. The funds would have been separated again when CERCLA was reauthorized, and the LUST fund would have been reimbursed for any amounts spent on the Superfund program.
An attempt to reinstate the Superfund taxes via an amendment to the military pay raise bill (S. 4) was defeated on a constitutional point of order February 24, 1999. Senator Graham's amendment (S.Amdt. 29) was rejected by 20-80 because it would have turned S. 4 into a tax bill, which must originate in the House under Article I of the Constitution.
The most controversial element of CERCLA is its broad liability scheme. The generators of the hazardous substances, the transporters who selected the site, and the owners and operators (both past and present) of the facility or property where the substance was released are all liable under current law. Liability is strict, joint and several, and retroactive, and defenses allowed by the act are few. While pervasive policy reasons support this approach (e.g., polluters should pay rather than the taxpayers), the program has run into implementation problems with certain groups of potentially responsible parties (PRPs). Given that it is common for a waste disposal facility to have received wastes from throughout the region in which it operates, it is not unusual for there to be several hundred PRPs liable for cleanup costs at some Superfund sites. That, coupled with the high cost of cleanup -- the average cost is currently around $20 million per site -- has led PRPs to try to spread the costs as much as possible. The result has been a large amount of litigation, not only among waste generators, but also between them and their insurance companies, which frequently claim that the policies they wrote were not intended to cover the kind of pollution, or the kind of liability, encountered at Superfund sites.
The litigation (and related transactions) are both costly and time-consuming, and for years business and industry groups, especially the insurance industry, have called for the repeal of CERCLA's liability regime. The jurisdictional committees examined the issue during the 104th Congress and considered repealing retroactive liability for actions prior to CERCLA's December 1980 passage, or alternatively prior to 1987. The January 1, 1987 cutoff date coincides with the use of new insurance policy language, as well as the institution of stricter solid waste record-keeping requirements.
The Congressional Budget Office (CBO) said that repealing prior liability would reduce transaction costs and increase efficiency for the nation as a whole, but that the main trade-off would be shifting responsibility for cleanup from PRPs to the federal government. To accommodate this shift without increasing the annual cost of the program would require some combination of cost savings, increased federal spending, and reduction in the pace of cleanup, or alternatively, a change in standards to lower the cost of cleanup. Under two different sets of assumptions, repealing liability for pre-1987 actions would save the nation as much as $1.0-1.1 billion annually in transaction costs, mainly from the private sector, according to CBO. The federal government would have an estimated net increase in cleanup costs of $1.4-1.6 billion per year, plus a one-time cost of as much as $6.5-7.5 billion to reimburse PRPs for ongoing expenses under existing cleanup commitments, plus $5.3-6.0 billion for past costs.
If a cutoff date of December 31, 1980, were used, CBO said, private and federal transaction costs would fall about 50% and 30% respectively, compared with 90% under the 1987 cutoff. The shift in cleanup costs to the federal government would come to $1.3 billion per year, and reimbursing PRPs would total about $5.5 billion for ongoing work, and $4.4 billion for past work. These high costs prompted the committees to look for ways other than full repeal of retroactive liability to reduce the liability burden, particularly for small businesses, lenders, and municipalities. Environmental groups have opposed liability cut-off dates, arguing that reimbursement of PRPs would contradict the "polluter pays principle" and leave less money to address pending site cleanups.
There have been two common elements in the major liability reform proposals. First, they provided exemptions or limits to liability for certain groups and certain categories of waste. In general, the groups protected from liability included innocent parties (e.g., owners who inherited contaminated land, but did not cause or contribute to the release of hazardous substances); small contributors at multi-party sites, such as municipal landfills; and small businesses. Relief from liability has also been proposed for municipal solid waste, municipal sewage sludge, and small amounts of hazardous materials provided the material did not contribute significantly to response costs. Which groups and waste categories to relieve has been one of the contentious issues.
The second common element is establishment of a fast-track allocation process to apportion liability shares at a site among the responsible parties, performed by a neutral allocator. Any responsible party that did not accept the allocation and settle would be subject to CERCLA's joint and several liability, under which EPA could seek recovery of all outstanding response costs. Environmental and business groups have approved of the allocation process, but have reservations about some of the liability exemptions. (See also CRS Report 98-136, Superfund Act Reauthorization: Liability Issues.)
Cleanup standards have also been controversial. CERCLA Section 121 states a preference for "treatment which permanently and significantly reduces the volume, toxicity or mobility of the hazardous substances, pollutants, and contaminants ..." (emphasis added). The Section also emphasizes cost effectiveness by referring to it several times as a factor to be considered in selecting remedies.
Section 121 requires Superfund cleanups to meet "ARARs"; any "legally applicable or relevant and appropriate standard, requirement, criteria or limitation" that has been promulgated under federal or state environmental laws. The ARARs include such things as the Clean Water Act's water quality criteria, the Solid Waste Disposal Act's land disposal restrictions, and some states' ground water anti-degradation provisions that require cleanup to background levels. EPA can waive the ARARs in some situations.
While these requirements (the preference for permanence and treatment, and the mandate to meet ARARs) have made Superfund a technology-forcing law, promoting research into new means of permanently eliminating contamination, they have also created at least three areas of concern. First, critics say that EPA's risk assessment process during the remedial investigation phase of response overstates the true risk posed to the vast majority of people. This phase is important because the assessment determines in large part what remedial actions might be appropriate for the site and how much they will cost.
Second, critics say Section 121 has led to increased expense and delay. Despite the "cost effective" language in the statute, many PRPs have complained that EPA has little regard for cost when selecting the remedies they must implement. They suggest giving cost greater weight, eliminating ARARs or the preference for permanence and treatment, and taking future land use into consideration when selecting a remedy.
Third, experience with the Superfund program has shown that some cleanups are too difficult to achieve. The 1980 enactment did not foresee that some types of wastes and some kinds of sites were not amenable to solution with current levels of technology. While EPA can waive ARARs due to "technical impracticability," the waiver has not been greatly used, in part because of concern over public reaction.
Considerable debate has surrounded the proposed elimination of the preference for "permanence" and "treatment" in selection of Superfund remedies. Health and environmental groups have maintained that remedies that rely on the containment or isolation of pollutants may be ineffective and that a preference needs to be retained for cleanup plans which actually detoxify or remove contaminants. There appears to be consensus that future land and water use need to be taken into account in selecting remedies. Business interests strongly favor changes in EPA's risk assessment, wanting them to reflect actual site-specific conditions; environmental organizations would like to see a single national standard to provide all communities the same level of protection. Most interested parties favor the elimination of the "relevant and appropriate" ARARs language (but keeping the "applicable") because at times it has led to delays and disagreements between federal and state regulators as well as with PRPs. (See also CRS Report 97-914, Superfund Cleanup Standards Reconsidered.)
CERCLA requires parties responsible for a release of hazardous substances that causes "an injury to, destruction of, or loss of natural resources" to reimburse the U.S. government and/or the appropriate state or tribal government for the costs of restoring the resources, or acquiring the equivalent of the natural resources injured by the release. But the law is not clear on two other costs that regulations and some court decisions have recognized. One is damages associated with lost use of the resource, such as the costs of providing alternative fishing opportunities where a fishing stream is contaminated. The other is damages associated with non-use (or passive use) values, values unrelated to the person's actual use of the resource to date. Examples are the "option value" of hiking or fishing in a place one hasn't been to, the "existence value" of whooping cranes one hasn't seen and doesn't intend to, and the "bequest value" of passing a resource on to future generations.
These non-use values are the most controversial as responsible parties fear that they will be used to seek substantial and potentially arbitrary monetary damages. An increasing number of NRD claims has been filed in recent years. One of the largest cases involved the Clark Fork River basin in Montana, where the state and U.S. governments sought $765 million for environmental injuries from mining activities. The suits were settled in 1998 for a total of $260 million (Montana v. ARCO, D. Mont., No. CV-83-317-HLN-PGH, 6/19/98; and U.S. v ARCO, D. Mont., No. CV-89-39-BU-PGH, 11/16/98). (See also CRS Report RL30242, Natural Resources: Assessing Nonmarket Values through Contingent Valuation.)
States have been lobbying for greater control over the Superfund program. States have gained substantial experience in managing cleanups, and many now have the resources and technical expertise necessary to conduct and oversee remedial actions. At present, EPA and states enter into cooperative agreements on a site-by-site basis that authorize the states to undertake most of the cleanup activities the Agency would perform. This does not, however, include remedy selection. While EPA must consult with the affected state before undertaking a remedial action, the state's concurrence is not required. Disagreements between federal and state regulators regarding the application of ARARs or the ultimate selection of a remedy can significantly delay a cleanup and increase its costs.
Proponents of change suggest that the law be amended to authorize EPA to either delegate responsibility for the Superfund program to a requesting state, or alternatively, to authorize the state program to be operated in lieu of the federal Superfund program. Business groups are generally in favor of more state involvement in the Superfund program, but are especially concerned that PRPs only have to respond to one regulator/decision-maker at a site, whether federal or state. Environmental groups have pointed out that resources and capabilities vary widely among the states, and legislation redefining the state role should be flexible enough to accommodate different situations.
States would also like the power to veto EPA-proposed listings on the National Priorities List (NPL). The NPL-veto authority was law for a brief period of time. EPA's FY1996 appropriation act (P.L. 104-134) contained a provision, valid only until the end of the fiscal year, requiring the concurrence of a state's Governor before a site in that state could be placed on the NPL. After the provision expired, the National Governors Association and several Senators expressed concern to EPA, and the agency directed its regional offices to determine the position of the Governor on sites being considered for placement on the list. Legally, EPA has final authority on listings. The Agency has threatened to list only one site over a state's objections, the Fox River site in Wisconsin; it was proposed on July 27, 1998, but has not been formally listed. (See also CRS Report 97-953, Superfund and the States.)
Because Superfund emphasizes the "worst first" in prioritizing cleanup, some lower risk sites not on the NPL receive little attention. Connected to reauthorization efforts are two popular programs which seek to expand cleanup of such sites. Business and industry groups have favored these efforts, but oppose using Superfund money for non-NPL sites.
Senator Lincoln Chafee, the Superfund Subcommittee chairman, introduced S. 2700 on June 8, 2000, which authorizes $150 million per year in FY2001-2005 for brownfield assessment grants and cleanup grants. It also would provide $50 million annually to enhance state brownfield programs, and limits EPA enforcement at state sites unless the state requests it, contamination migrates across state lines or onto federal property, or there is imminent danger. S. 2700 relieves liability from contiguous property owners, prospective purchasers, and innocent landowners. He also introduced two bills on March 30, 2000. S. 2334 expands the definition of sites eligible for the brownfields tax break (described below) to include any brownfield in a metropolitan area, and extends it to the end of 2007. S. 2335 authorizes the U.S. Army Corps of Engineers to carry out cleanups (forbidden by present law) at publicly owned brownfields; $100 million per year is authorized in FY2001-FY2005.
The brownfields program for cleaning up less serious industrial and commercial hazardous waste sites targets idle or underused facilities where redevelopment is complicated by potential environmental contamination. It is an EPA initiative, done under Superfund's authority, but not specifically authorized in CERCLA. EPA's program includes: $200,000 grants for assessment and other pre-remedial activities; $350,000 grants to establish revolving loan funds (RLFs) for cleanups; grants for job training; and other activities. EPA changed certain policies that impeded brownfield redevelopment, such as clarifying the circumstances in which the agency would enforce Superfund liability against brownfield owners. Twenty-six bills with brownfields provisions have been introduced in the 106th Congress. The focus of most of them generally is to codify in law the program EPA created, and to specify uses of the funds. While there is little opposition to the program, the oil and chemical industries in particular object to the use of Superfund money that they say should be dedicated to cleaning up NPL sites, not redeveloping brownfields. Using money for this purpose depletes the fund and increases the need for additional taxes, they say.
The Superfund reauthorization bills (H.R. 1300, H.R. 2580, H.R. 2956, S. 1090, S. 1105 and S. 1537 -- see "Action in the 106th Congress," above), as well as H.R. 1750, H.R. 1756, S. 20, S. 23, and S. 2590 would authorize the brownfield programs for assessment grants and revolving loan fund grants. All, except S. 23, include non-controversial provisions relieving CERCLA liability in certain situations: the owners of property neighboring a contaminated site would not incur liability if contaminated groundwater migrated to their properties (except H.R. 2580), and liability would not attach to prospective purchasers, nor to innocent landowners, provided they did not contribute to the contamination. H.R. 1537 would also provide liability relief for prospective purchasers. Nine of the bills would restrict federal enforcement of Superfund liability at sites that have been cleaned up under a state's program and released from state liability; i.e., would impose "state finality" (H.R. 1300, H.R. 1391, H.R. 1537, H.R. 1750, H.R. 2580, S. 23, S. 1090, S. 1537, and S. 2590); some of them provide exceptions allowing EPA to take action at a site if: the state requests it, there is a threat to public health or the environment, previously unknown conditions are discovered, there is a change in the proposed use of the site, and/or contamination crosses state lines.
Nine other bills would provide financing or tax benefits. H.R. 1756 would allow the use of tax-exempt bonds for brownfields cleanup, and would allow a tax credit of 50% of the cleanup costs if the site meets certain conditions; the credit must be taken over 5 years. Also, that bill and H.R. 1537 would authorize "brownfield IRAs," allowing a taxpayer to set aside up to $5 million per year free of taxation for the costs of cleaning up a brownfields site. The money would be taxed when removed from the "IRA," but amounts spent on cleanup would be tax deductible." H.R. 3579 would allow a tax credit on qualified brownfields cleanup bonds. H.R. 1630, H.R. 2264, H.R. 2574, S. 1792, S. 2334, and S. 2436 would extend or make permanent the tax incentive provided by the Taxpayer Relief Act of 1997, and/or expand the eligible sites beyond those defined in the Act; the last four bills would do both.
The Taxpayer Relief Act of 1997 ( P.L. 105-34) provided a tax break for cleaning up brownfields by allowing developers to deduct from their income the costs of environmental cleanup at brownfields in the same year that the expenditures are incurred. Previous Internal Revenue Service rules required cleanup costs to be spread over a number of years. Eligible facilities include the 76 sites announced by EPA before February 1997; empowerment zones and enterprise communities; and census tracts with a poverty rate above 20%, and adjacent commercial and industrial areas. The $417 million tax break was extended for one year to December 31, 2001, by the Tax Extenders bill (P.L. 106-170, H.R. 1180, H.Rept. 106-478). Another 2-year extension (until the end of 2003) was included in the tax relief package attached to H.R. 2614, passed by the House on October 26, 2000. The provision also makes all brownfields certified by a state environmental agency eligible for the tax break; Superfund sites are excluded. The President said he would veto the bill. (See also CRS Report 97-731, Superfund and the Brownfields Issue.)
The Superfund program and state hazardous waste cleanup programs have focused on sites posing the greatest threat to human health and the environment. However, there remain many low- and medium-risk sites. For them, 44 states have initiated voluntary cleanup (or response) programs in which the owner or developer works cooperatively with the state, as opposed to an often adversarial enforcement-driven program. Rededication and certification of cleanup can take less time, and many states offer such additional benefits as technical assistance, financial support, and importantly, liability assurances. Some feel these programs should be encouraged and expanded. But as with the brownfields program, there is discontent on the part of industry and business groups over this use of the Superfund taxes they have paid. Also, environmental groups have expressed concern that cleanup standards might be relaxed when cleanups are performed under a state voluntary program. Six bills, including four of the Superfund reauthorization bills (H.R. 1300, S. 1090, S. 1105, and S. 1537) have provisions that would provide financial and other assistance to help establish, expand, or certify state voluntary cleanup programs. The other two bills are H.R. 1391, and H.R. 1750. (See also CRS Report 97-731, Superfund and the Brownfields Issue.)
Superfund Reauthorization Bills
H.R. 1300 (Boehlert)
H.R. 2580 (Greenwood)
H.R. 2956 (Pallone)
S. 1090 (J. Chafee, B.
Smith, and Lott)
S. 1105 (Baucus)
S. 1537 (J. Chafee, and B.
H.R. 1391 (Regula)
H.R. 1537 (Quinn)
H.R. 1630 (Coyne)
H.R. 1750 (Towns)
H.R. 1756 (Franks)
H.R. 1776 (Lazio)
H.R. 2264 (N. Johnson)
S. 20 (Lautenberg)
S. 1408 (Jeffords)
S. 1573 (Lieberman)
S. 1792 (Roth)
S. 2334 (L. Chafee)
S. 2335 (L. Chafee)
S. 2700 (L. Chafee)
P.L. 106-113, H.R. 3194, Division B, S. 1948 (Lott)
H.R. 375 (Frelinghuysen)
H.R. 376 (Frelinghuysen)
H.R. 410 (Rahall)
H.R. 617 (DeGette)
H.R. 5175 (Oxley)
S. 1528 (Lott)
S.Amdt. 29 (Graham)
Klee, Ann R. and Ernie Rosenberg. "The Moribund State of CERCLA Reauthorization," Natural Resources & Environment, Winter 1999, p. 451 ff.
Planin, Eric. "Lott under Pressure on Superfund Law," Washington Post, October 14, 2000, p. A2.
U.S. Congressional Budget Office. The Total Costs of Cleaning Up Nonfederal Superfund Sites. January 1994. 46 p.
U.S. Environmental Protection Agency. Superfund Reforms Annual Report FY1998. March 1999, 60 p.
U.S. General Accounting Office. Environmental Protection: Agencies Have Made Progress in Implementing the Federal Brownfield Partnership Initiative. April 1999. 20 p.
---- . Superfund: Analysis of Costs at Five Superfund Sites. January 28, 2000.
____. Superfund: EPA Can Improve Its Monitoring of Superfund Expenditures. June 1999.
----. Superfund: EPA's Use of Funds for Brownfield Revitalization. March 1998. 28 p.
____. Superfund: Information on the Program's Funding and Status. October 1999. 30 p.
____. Superfund: Status of the Trust Fund. April 16, 1998. 5 p.
____. Superfund Program: Activities of the Agency for Toxic Substances and Disease Registry and the Department of Justice. March 18, 1999. 22 p.
U.S. Conference of Mayors. Recycling America's Land: A National Report on Brownfields Redevelopment, Volume III. February 2000. 107 p.
The Urban Institute, et al. The Effects of Environmental Hazards and Regulation on Urban Redevelopment. (Prepared for U.S. Dept. Of Housing and Urban Development, and U.S. EPA) February 1998. 86 p.
CRS Report 96-774. Taxes to Finance Superfund. 10 p.
CRS Report 97-312. Superfund Fact Book (Updated January 27, 1999). 46 p.
CRS Report 97-731. Superfund and the Brownfields Issue. (Updated June 2, 2000). 15 p.
CRS Report 98-136. Superfund Act Reauthorization: Liability Issues. 20 p.
CRS Report RL30242. Natural Resources: Assessing Nonmarket Values through Contingent Valuation. 21 p.
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