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Superfund and Brownfield Legislation (12-3-04)

The debate in Congress over reauthorizing the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA) of 1980 has transformed in the last few years. CERCLA, more commonly known as Superfund, is the primary federal program for the clean-up of sites contaminated with hazardous waste. The Superfund program has seen its budget decrease over the past years due to end of the Superfund trust tax. Recent legislation has been focused on funding the Superfund program. Additionally, legislation has arisen to reinstate and strengthen the office of an independent national ombudsman at the US Environmental Protection Agency.

In addition, the past few congressional sessions have seen a switch in focus away from the Superfund program, to cleaning up lesser contaminated areas, commonly referred to as Brownfields. The Brownfield Program sites, mostly former industrial zones in urban areas, are not subject to the lengthy Superfund listing and clean-up process that proponents say prevent condemned areas from being remediated in a timely manner. With the passing of Brownfield legislation in 2002, Congress is now focused on ways to fund and make the Brownfield monies more accessible.

Most Recent Action

As many as 350,000 contaminated sites nationwide will require cleanup over the next 30 years, costing property owners and parties responsible for the damage as much as $250 billion, according to a new U.S. EPA report that estimates future market and technology trends. Greenwire reported that," the bulk of the contaminated sites comes from about 150,000 underground storage tanks and another 175,000 hazardous waste properties. Despite their quantity, EPA said those two categories account for just 22 percent of the $250 billion in estimated cleanup costs. The remaining contaminated sites, made up from Superfund National Priorities List and also those operated by DOD and DOE, are considered larger and more complex for cleanup." The study estimates that there are 235,000 - 355,000 superfund sites from projections based on the rate of new sites found in the late 1990s and early 2000s. So far, only about 77,000 sites have already been discovered. Click here to see the report (12/3/04)

Just prior to the recess in mid-October, Congress amended the corporate tax bill to include a tax break for not-for-profit corporations that clean up Brownfields. Sponsored by Senator James Inhofe (R-OK) and Senator Max Baucus (D-MT), the amendment exempts these corporations from a federal tax on unrelated business income. According to the IRS, "Unrelated business income is income generated by a trade or business activity not substantially related to the express purpose of the organization." Robert Colangelo, executive director of the National Brownfield Association, praised the amendment saying, "Providing incentives for investors should bring more capital to the market. More capital means lower cleanup costs." (10/18/04)

Current Congress

On January 23, 2003, Senator Frank Lautenberg (D-NJ) introduced legislation to increase funding for the Superfund program. Lautenberg proposed S.Amdt. 192 to the Continuing Resolution for fiscal year (FY) 2003, H.J.Res. 2. The amendment was tabled by a 53-45 vote. The amendment would have increased the Superfund program's budget by $100 million.

On January 28, 2003, Rep. Robert E. Andrews (D-NJ) introduced H.R. 402, the Brownfield Cleanup Enhancement Act of 2003, that proposes to amend the Internal Revenue Code of 1986. The bill would allow a tax credit for qualified state and local brownfields cleanup bonds. Additionally, it would set a national limit on the amount of bonds and provide for allocation among the states. H.R. 402 was referred to the House Ways and Means Committee with no further action.

On February 13, 2003, the House Financial Services Committee passed H.R. 239, sponsored by Rep. Gary G. Miller (R-CA), the Brownfields Redevelopment Enhancement Act, and sent it to the House floor for debate. The bill proposes to amend the Housing and Community Development Act of 1974. H.R. 239's target is to give small communities more opportunities to access brownfield development funds by de-linking the section 108 loan guarantees from the department of Housing and Urban Development's (HUD) Brownfields Economic Development Initiative grants. H.R. 239 also authorizes a Pilot Program for National Redevelopment of Brownfields. This bill would allow the HUD secretary to fund a common area for economic development loans.

On March 5, 2003, Senator Michael D. Crapo (R-ID) reintroduced bill S. 515, the EPA Ombudsman Reauthorization Act of 2003 that passed the Senate last year. The bill would reinstate and expand the powers of the office of a national independent ombudsman at the EPA. The bill would give the office more administrative and investigative powers such as the power to issue subpoenas, the ability to hold public hearings, and speak freely with members of Congress. The ombudsman position under S. 515 would still report to the EPA Administrator but will be appointed by the president and confirmed by the Senate. The bill was referred to the Senate Environmental and Public Works Committee (EPW) with no further action. A similar bill, H.R. 347 was introduced January 27, 2003, by Rep. Michael Bilirakis (R-FL) in the House.

On March 26, 2003, the Senate voted 43-56 to defeated S. 173 that planned to amend the Internal Revenue Code of 1986. The Toxic Clean-up Polluter Pays Renewal Act, sponsored by Senators Barbara Boxer (D-CA), Frank Lautenberg (D-NJ), and Jon Corzine (D-NJ) planned to reinstate the Hazardous Substance Superfund tax, which would be collected from chemical and oil companies, and the Corporate Environmental Tax. The taxes would have increased the Superfund budget by nearly $360 million. E&E Publishing reported Environment and Public Works Committee (EPW) Chairman James Inhofe (OK) as saying, "This is a tax increase for any business that does more than $2 million in business a year… It has nothing to do with polluters." A similar bill, H.R. 610, was introduced in the House on February 5, 2003, by Rep. Frank Pallone Jr. (D-NJ).

On March 18, 2003, Senators Carl Levin (D-MI), Jim Jeffords (I-VT), and Susan Collins (R-ME) introduced legislation to amend the Public Works and Economic Development Act of 1965, to provide assistance to communities for the redevelopment of brownfield sites. The Brownfields Redevelopment Assistance Act of 2003, S. 645, plans to provide $60 million annually for five years to create grants that would be available for business development, aid in diversifying a community's economy, economic development planning, and industrial development. From a press release produced by his office, Levin said: "Brownfields redevelopment is a fiscally sound way to bring investment back to neglected neighborhoods, clean up the environment, maximize use of existing infrastructure, create jobs, and relieve development pressure on our urban fringe and farmlands." The bill was referred to the Senate Environmental and Public Works Committee with no further action. A similar bill, H.R. 1334, was introduced by Representatives Jack Quinn (R-NY) and Marty Meehan (D-MA) in the House.

On May 22, 2003, the Senate passed the EPA Ombudsman Reauthorization Act of 2003, S. 515, by unanimous consent. The bill would reinstate and expand the powers of the office of a national independent ombudsman at the EPA. Senator Wayne Allard (R-CO), who originally introduced the bill in 1999, said in a press release that he applauded "the senate for approving the measure that will benefit people and communities across the country.…" The bill was sent to the House and referred to the Energy and Commerce Subcommittee on Environment and Hazardous Materials. (7/22/03)

On July 17, 2003, the EPA announced that it will begin remediating eleven new Superfund projects, leaving twelve other proposed sites to be left for another time. The new sites are an addition to 450 sites (729 separate projects) that are currently being cleaned up. According to the EPA, the new projects were "principally chosen based on the human health risk posed by the site." Both Greenwire and the New York Times reported that the EPA's decision to clean up the new sites was based on their economic redevelopment potential. The new sites along with a few other unfunded sites will split $49 million of the $277 million appropriated for the agencies fiscal year (FY) 2003 spending. For FY 2004, the EPA has requested an additional $150 million to remediate ten to fifteen new sites. (7/22/03)

The General Accounting Office (GAO) released a study commissed by Senator George Voinovich (R-OH) on September 3rd finding that the industry-financed trust fund that has helped offset the cost of Superfund cleanup projects for years will run out of money at the end of this fiscal year (September 30, 2003). The trust fund revenues from taxes, cost recoveries, interest, fines and penalies have decreased from more than $2 billion in fiscal year (FY) 1995 to less than $370 million in FY02. The decline in these revenues exist because the government's authority to tax relevant industry expired in 1995 and neither President Clinton nor President Bush sought to reauthorize it. Without those revenues, the trust fund is supplemented with appropriations from the general fund. Those have grown from $283 million in FY95 to $676 million in FY02 even though the programs annual expenditures have remained between $1.3 and $1.7 billion. Also during that time, the Environmental Protection Agency (EPA) has continued to place hazardous waste sites on the National Priorities List (NPL) for cleanup. While the program is often criticized for a plethora of red tape and arduously long time tables for clean up, the report also finds that sites are being cleaned up and taken off of the list. That said, in these tight budgetary times there is ample motivation for lawmakers to put the program back on sound financial footing by reauthorizing the special tax on the chemical and oil industries and the environmental tax on corporations. (9/3/03)

On January 8th, the U.S. Environmental Protection Agency (EPA) released a report addressing the sufficiency of funding for nonfederal Superfund sites. The EPA estimated that the Fiscal Year (FY) 2003 shortfall was $174.9 million. But even with less funding, the EPA was able to meet its goal of cleaning up 40 Superfund sites in 2003. However, there are currently 1,283 toxic waste sites on the National Priorities List. Given that under the previous Administration there were, on average, 87 cleanups per year it would take more than 14 years to clean up all these sites if no others were added to the list. According to Greenwire, Democrats plan to use this study -- requested by Senators Barbara Boxer (D-CA) and Jim Jeffords (I-VT), and Reps. Hilda Solis (D-CA) and John Dingell (D- MI) -- to build a case for increased Superfund dollars in FY 2005. Additionally, Sen. Boxer is sponsoring S. 173 that would reauthorize the "polluter-pays" program until January 1, 2014. The bill is cosponsored by 23 Democrats and Sen. Jeffords. (1/15/04)

On February 3rd, environmentalists asked the Bush Administration to bring back the taxes on oil and gas companies that fund the Superfund program. Last levied in 1995, the taxes that funded the Superfund program were allowed to expire and Congress has refused to reauthorize them each year since. In 1996 the Superfund program had $3.8 billion and is now down to tens of millions of dollars. To aid the severely diminished fund, President Bush has suggested using money from the general treasury.

Environmentalists say that Superfund sites may not be cleaned up properly due to the shortfall in funds and that by not reinstating the taxes a legacy of toxic waste is being left to future generations. U.S. EPA spokesman Dave Ryan told Greenwire that there is no funding problem with the Superfund program. President Bush's fiscal year 2005 budget calls for a 10% increase to the Superfund program. Ryan also pointed out that the revival of the tax is up to Congress, not the Bush Administration, signaling that environmentalists may want to take their fight to Capitol Hill. (2/4/04)

On March 9th the U.S. EPA proposed adding 11 facilities to its list of toxic waste sites in need of Superfund cleanup. None of the proposed listings are classified as "megasites", meaning sites that are the most complicated and expensive to clean up. Some environmental groups, such as the Sierra Club, are disappointed that the notice does not move any of the 21 sites it proposed for listing last year to the final national priority list. Greenwire reports that the spokesperson for the Sierra Club is worried that the EPA is reluctant to add new sites because of the close examination given to the program's spending priorities. EPA's Director of Superfund Site Cleanup said that unfinished work on the planning documents required for implementation of the cleanup technologies prevented the EPA from moving forward on listing several sites proposed last year to the national priority list. (3/9/04)

At a field hearing on March 15, the Department of Energy (DOE) was accused of knowingly failing to protect workers at the Yucca Mountain nuclear waste repository construction site. Senator Harry Reid (D-Nev.), the only senator to attend the hearing, was quoted by Greenwire as saying "I'm terribly disappointed in the Department of Energy. The department needs to get real about this - rather than talk about what they're doing [now], talk about what they failed to do." The allegations are that the DOE knew about hazardous conditions in the construction site in both 1992 and 1994, but did not require worker protections until 1996. Despite these accusations, the DOE has not been named in a civil lawsuit brought about by a former Yucca Mountain tunnel supervisor. Only the DOE subcontractors are named in the suit, an intentional strategy that the plaintiff's attorney would not comment on. (3/16/04)

The FY 2005 budget request marks the first year that the Superfund program would be funded entirely by taxpayers. Although the tax, which was originally levied against oil and gas companies, expired in 1995 there was enough surplus that each year between 1996 and 2004 the Superfund program was still partially funded by the tax. The budget request for the Superfund program for FY 2005 is $1.2 billion. Senators Frank Lautenberg (D-NJ.) and Jon Corzine (D-NJ.) have sponsored an amendment that would reinstate the tax and according to Lautenberg "actually relieve the taxpayer burden by $1 billion a year." The amendment was voted down in the Senate on March 12th for the second year in a row.

According to Greenwire, Julie Wolk, environmental health advocate for U.S. Public Interest Research Group, said "By refusing to reinstate Superfund's polluter-pays fees, the Senate voted to extend a $4 million-per-day tax holiday for polluters and continue charging regular taxpayers for toxic waste site cleanups." In addition, Greenwire reports that Sylvia Lowrence, former EPA deputy enforcement director, said the shift to taxpayer funding in Superfund takes away a major point of leverage that EPA has in forcing industry funded cleanups. She also said that the shift will mean that the EPA will be less likely to clean up sites where the company or companies responsible for contamination cannot be found. (3/15/04)

A new report on the Superfund Program was released in April from the EPA. It recommends a range of actions from putting more senior employees in charge of more complicated cleanups, to establishing measures of cleanup progress at individual sites to more rigorous government studies on health risks. The panel assembling the report did not offer a recommendation on funding, which was one of their original tasks. This caused five of the panelists to withhold their signatures from the recommendation document. The panel generally agreed that the backlog of sites needing clean-up is a problem, but could not agree on how much money would be required. These five panelists issued 10 recommendations for improving the program.

In addition, others on the panel believe that other concerns, such as health risks and regulating toxic emissions were not fully addressed and submitted a three-page list of comments as an appendix to the report. EPA officials are still assessing the report and are looking into developing long-term goals for the Superfund Program. (4/19/04)

Background

The Superfund hazardous waste cleanup program was created by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA). Major revisions were made by the Superfund Amendments and Reauthorization Act of 1986 (SARA). The Superfund program provides a system requiring polluting parties to take responsibility for remediating seriously contaminated areas. In the case of lands where the responsible parties cannot be determined, the area is placed on the Superfund National Priorities List (NPL) where the US Environmental Protection Agency's (EPA) Superfund trust funds -- a tax levied on petroleum and chemicals supplies -- are use to clean up the site. The Bush Administration has not sought to reauthorize the corporate Superfund tax that expired in 1995. The needed $700 million to meet clean-up obligations will come out of the general treasury in the absence of the corporate Superfund tax.

The first Brownfield legislation approved by the president and Congress was H.R. 2869, the Small Business Liability Relief and Brownfields Revitalization Act of 2001. The Brownfields program was designed to promote the clean up and economic redevelopment of low-level contamination sites not on the NPL. Starting in fiscal year (FY) 2003, funding for the brownfield program will be separate from the Superfund account. More detailed information can be found on AGI's Superfund & Brownfield Update from the 107th Congress.

The EPA and the Department of Housing and Urban Development (HUD) both administer brownfield programs. The EPA focuses on assessment and cleanup and HUD focuses on redevelopment. HUD administers provides grants through a program called the Brownfields Economic Development Initiative program (BEDI) that provides Community Development Block Grants (CDBG). To acquire a CDBG, states and local governments are required to obtain a section 108 loan guarantee.

The 1984 amendments to the Resource Conservation and Recovery Act (RCRA), first established a National Hazardous Waste Ombudsman at the EPA. Over time the position has evolved to aid citizens and industry in complying with CERCLA, hazardous waste programs, and other EPA programs. Controversy has surrounded the office of the ombudsman. On April 22, 2002, then national ombudsman Robert J. Martin, resigned from the position due to EPA Administrator Christie Whitman's moving the position from the Office of Solid Waste and Emergency Response to the Office of Inspector General in the fall of 2001. On November 20, 2002, the Senate passed S. 606. The Ombudsman Reauthorization Act of 2002, introduced by Senators Larry Craig (R-ID), Mike Crapo (R-ID), Wayne Allard (R-CO), and Charles Grassley (R-IA), would have reinstated a national independent ombudsman at the EPA. S. 606 would expand the duties of the ombudsman to include assisting citizens in resolving problems relating to any program or requirement under CERCLA and other program administered by EPA.

More information on the background of Superfund activities, including Brownfields legislation, is available at AGI's Superfund & Brownfield Update from the 107th Congress.

Sources: United States Senate, US House of Representatives, National Council for Science and Environment, Library of Congress, Greenwire, E&E Publishing, US Environmental Protection Agency, New York Times, EV WORLD, The Washington Post, and the U.S. General Accounting Office.

Contributed by Deric R. Learman, AGI/AIPG 2003 Summer Intern; Emily Lehr Wallace, AGI Government Affairs Staff and Gayle Levy, AGI/AAPG 2004 Spring Semester Intern.

Background section includes material from AGI's Update on Superfund and Brownfields for the 107th Congress.

Please send any comments or requests for information to AGI Government Affairs Program.

Last updated on December 3, 2004.


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