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Superfund and Brownfield Legislation (4-7-05)

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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.

Recent Action

The House Government Reform Subcommittee on Federalism and the Census held a hearing on April 5, 2005 to discuss the progress of EPA's brownfields programs since enactment of the Brownfields Act of 2002. The hearing came after the Government Accountability Office (GAO) released a report in January suggesting the EPA could do more to spur complete site remediation. Environment and Energy Daily reported (April 5, 2005) that, according to John Stephenson, Director of the GAO's Natural Resources and Environment division, the EPA currently allocates the majority of its brownfields funding to initial site assessments and seed money for clean-up efforts. Expert panelists at the hearing agreed with the GAO, however, that stimulating community redevelopment at brownfields sites must be the ultimate measure of EPA's success. Funding site assessments and providing seed money is insufficient to increase the country's clean-up rate. "The U.S. Chamber of Commerce estimates that, at the current rate of remediation, it will take 10,000 years to clean up our nation's brownfields," said Jonathan Philips, senior director of Cherokee Investment Partners, which is one of the world's largest brownfields redevelopers.

Representatives from the private sector who testified at the hearing recommended that federal tax breaks for companies who invest in redeveloping brownfields would be the most effective solution. These views echoed those of Subcommittee Chairman Michael Turner (R-OH), who used the GAO report and the hearing as a springboard to reconsider his own Brownfields Revitalization Act, which he introduced in the last Congress as H.R. 4480. According to Turner and reported in Environment and Energy Daily on April 5, 2005 current law deters private developers from investing in brownfields. Turner indicated that the law should be amended to include liability protection for potentially responsible parties who contribute over 25 percent of remediation costs, and a 50 percent tax credit for remediation projects undertaken in poor areas. According to E&E Daily, the GAO report included other recommendations that are geared towards loosening eligibility criteria for landowners who seek federal grants and loans. Thomas Dunne, deputy assistant administrator of the EPA's Office of Solid Waste and Emergency Response conceded that the EPA should do more to monitor use of loan money and the progress of cleanup sites. (4/7/05)

Previous Action

 

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. 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.

The FY05 budget request marks the first year that the Superfund program would be funded entirely by taxpayers. Until September 30, 2003, the surplus from the expired industry tax partially funded Superfund cleanups. After the Bush administration signaled it would rather pay for the fund through the general treasury, Senators Boxer, Jeffords, Lautenberg and 23 other democrats introduced S.173, which would reauthorize the "polluter pay" tax until 2014. The bill was defeated on March 26, 2004 by a vote of 43-56.

On March 5, 2003, Senator Michael D. Crapo (R-ID) reintroduced bill S. 515, the EPA Ombudsman Reauthorization Act of 2003, which passed in the Senate the previous year. The bill would have reinstated and expanded the powers of the office of a national independent ombudsman at the EPA. The bill would have given 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 have still reported to the EPA Administrator but would 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. Neither of these bills were brought to a floor vote.

Brownfield programs did win a significant victory in late 2004 in the Corporate Tax Bill. Congress amended the 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."

More information on the background of Superfund activities, including Brownfields legislation, is available at AGI's Superfund & Brownfield Update from the 108th 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 Emily Lehr Wallace, AGI Government Affairs Staff and David Millar, AGI/AAPG 2004 Fall Intern, and Katie Ackerly, AGI/AAPG 2005 Spring Intern and Tim Donahue, AGI/AAPG 2006 Summer Intern


Background section includes material from AGI's Update on Superfund and Brownfields for the 108th Congress.

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

Last updated on April 7, 2005.


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