Superfund Reformers Remain Hopeful

Recycling-related legislation in 1996 could be in danger of getting lost amid ongoing partisan struggles in Congress and the hubbub surrounding the upcoming Presidential elections. Most observers say Superfund is the most likely to see new legislation, while flow control and RCRA may have to wait. However, despite pressing concerns about the Superfund program grinding to a halt if no reauthorization package is passed, it is still not a sure bet that legislation will make it through.

"From the rumblings we’re hearing, safe drinking water and Superfund are about the only ones that stand a chance of getting any kind of treatment in the next few months before the election season gets in full dudgeon," says J. Thomas Wolfe, counsel and managing director of government relations for the Institute of Scrap Recycling Industries, Washington. "Superfund is probably the high-stakes gambler’s one to watch, because of its history – in 1980, it passed at the 11th hour, and in fall of 1986, it passed at the very end of the Congress in an election year."

Superfund, officially the Comprehensive Environmental Response, Compensation and Liabilities Act of 1980 (CERCLA) was enacted to clean up sites badly contaminated by hazardous waste. The program was reauthorized in 1986, and is due for reauthorization this year. Program authorization for CERCLA expired in September 1994, and taxing authority – the ability to raise additional funds – for the Hazardous Substances Superfund expired December 31, although there is still a balance in the fund.

The program awaits two decisions from Congress – the amount that will be appropriated for Superfund enforcement in the fiscal year 1996 budget, and reauthorization which, if enacted, will be coupled with fairly sweeping reforms.

"The program is still up and running, though at reduced levels, waiting on appropriations," says an U. S. Environmental Protection Agency spokesman. "If Congress passes a reform bill, they might not reinstate taxing authority. But they may appropriate money from the fund to EPA. And cleanups stop if there is no reauthorization."

The existing Superfund program has been widely criticized as being expensive, inefficient and unfair. Criticism has especially been leveled against the policies of strict joint and several liability and retroactive liability, which have affected some recycling businesses.

Joint and several liability means that if any one party to a Superfund site can be identified, he may be liable for the actions of others. "The strict nature of it means that you don’t have to demonstrate any negligence or any deliberate action, that the fact that you fall into a category specified in the legislation is enough to make you liable," explains Wolfe.

The retroactive nature of the law means that companies or individuals can be liable for actions that were legal when they were done, before 1980 when Superfund was enacted. "A lot of people have been very concerned about that, because whatever action they took was legal at the time, and they don’t see it as their responsibility to step in and clean up something that they did without having some type of government sanction on it," says Wolfe.

Although many agree that doing away with these two characteristics of the law is fair and desirable, the problem is finding ways to pay for cleanup once these people are off the hook.

"There are plenty of ways to pay for it, but none of them are palatable," says Wolfe. "There certainly is the opportunity to raise the tax – the environmental income tax or the feedstock tax on chemicals that funds the Superfund now, but I don’t think there’s anyone that’s real interested in a tax increase. And I don’t see anybody else stepping up to the plate with dollars to offer."

Currently, Superfund reform bills are working their way through both the House of Representatives and the Senate. The House bill, HR 2500, or the Reform of Superfund Act of 1995 (ROSA), was introduced last October by Rep. Michael Oxley (R-Ohio), chairman of the House Subcommittee on Commerce, Trade and Hazardous Materials.

In the Senate, Sen. Robert Smith (R-N.H.), chairman of the Senate Subcommittee on Superfund, Waste Control, and Risk Assessment, introduced S 1285, known as the Accelerated Cleanup and Environmental Restoration Act of 1995 (ACRA). Both proposals originally repealed retroactive liability and streamlined cleanup procedures.

At press time, the House bill had made considerably more progress through the system than the Senate bill.

"HR 2500 passed through Congressman Oxley’s subcommittee and we are now revising it to get it to the point where we can move it through the full Commerce Committee," according to Peggy Peterson, communications director for Chairman Oxley. Peterson adds she is confidant that the bill will make it through the full committee.

The provision eliminating retroactive liability will likely be dropped and replaced with something else, says Peterson, although she wouldn’t specify.

"It’s fair and it reimburses companies for liability that was unfair in the first place," she says. "Nonetheless, it’s been subject to a lot of criticism, so we’re reviewing it now and it’s likely it will be replaced with something else."

HR 2500 is a comprehensive re-write and reauthorization of the entire Superfund program. It re-works the liability scheme and the remedy section and addresses brownfields – how to encourage redevelopment of abandoned property.

Also included in Title 9 of the bill is a provision addressing RCRA remediation, which mainly concerns hazardous waste, as well as a re-write of the section of Superfund dealing with natural resources development – restoring damage done to natural areas after Superfund cleanup.

The bill enhances the role of states in Superfund cleanup, while lessening the role of the federal EPA, says Peterson. "States have been incredibly successful at completing Superfund cleanups," she explains.

"The whole point of the bill is to speed cleanup and reduce the cost," Peterson continues. "When you decrease the cost you increase the likelihood that it’s actually going to happen, because the problem is, right now, the average Superfund site takes 12 to 15 years to clean up, which to us is completely unacceptable."

In addition, the new bill aims to reduce the amount of litigation involved in Superfund cleanup. Currently, the EPA identifies the contributor to the site, or potentially responsible party, with the most resources. In turn, that entity sues smaller contributors for their share, and more time and resources are spent in court than on actual cleanup.

"There’s even cases in small towns where the Superfund site is the municipal landfill, and EPA finds three or four or five of the big companies that dump there and makes them the PRPs," says Peterson. "In one case, those PRPs sued every small business in the entire town because they contributed to this landfill in some shape or form."

Under the current situation, she says, many companies find it cheaper to sue than to actually do any cleanup, as the average cost of cleaning up a site runs around $30 million.

"We’re trying to make it more reasonable and a more likely option that a company would say ‘yeah, I’ll clean that up, that’s going to be a better and more viable option for me than to just delay and sue,’" says Peterson.

Although the Senate version is not as far along, it has many of the same goals as the House version. Currently, a lot of the discussion in the Senate centers around retroactive liability reform and the ramifications if it is enacted.

"Jeff Merrifield, the principal staffer on the Senate side, who’s very sharp, is looking at those questions, and he’s also looking at what is happening in the House with the idea of revising S 1285 so that you don’t have a very contentious conference," says Wolfe. "I think there’s an intention on the part of the Senate to let the House go first – let them iron out a lot of the bugs – and then the folks in the Senate will take a look at that, and try to accept what of it they can verbatim, and put whatever they can’t accept in their own bill."

Once through both houses, a House-Senate Conference Committee will have to resolve differences between the two version of the bill. The House and Senate then would have to pass the final bill before President Clinton signs it. All of this should occur before mid-October, if it is going to happen.

Of particular interest to recyclers is ISRI’s recycling bill, HR 820, which was offered by Rep. Blanche Lambert Lincoln (D-Ark.) early in 1995. The purpose of the bill is to relieve scrap recyclers of Superfund liability, both retroactively and prospectively. The provision was also introduced in the Senate, as S 607.

The recycling provision seems to be firmly established as an amendment to the House bill, but has not yet been included in the Senate version. However, Wolfe is fairly sure it will be included in the final version of the Senate bill. It is well supported, with 132 co-sponsors in the House and 24 in the Senate at press time. This represents bipartisan support, says Wolfe.

"We’ve got Jesse Helms and Barbara Boxer on this bill, so it goes across the spectrum," he says. "Our piece was in the Administration’s bill last year. So we’re hoping that if anything does start to move, we will get some consideration also."

The provision basically says that people who sold materials such as scrap metal, paper or plastics for recycling purposes should not be considered to have been "arranging for disposal" under Superfund, says Wolfe.

"Both RCRA and Superfund in the past have seen recycling as a subset of disposal, a way to deal with material that has exhausted its life in commerce," he says. "We argue that recycling is the opposite of disposal. It’s not disposal, so the magic words in Superfund that say if you ‘arrange for disposal’ of something, you’re liable for its cleanup, should not apply to people that did not dispose but recycled."

If a recycler either contaminated his own site or sent hazardous materials to another site that became contaminated, he would still be liable, says Wolfe. The recycling provision only covers "material that meets a specification grade, is traded in commerce and is used to make something new; that was never in the chain, or was diverted from the waste stream and put into the recycling process," he explains.

Even if the final Superfund reform bill is written without repealing retroactive liability, says Wolfe, there are a number of special cases that will probably be provided for. One of these involves municipalities that are liable for hazardous substances dumped in their landfills.

"There is a lot of desire to give those people relief because everybody has lots of municipalities in their districts," says Wolfe. "There doesn’t seem to be any political downside to doing that, except there are probably a few PRPs in the industrial sector that are in those landfills that will see their shares go up."

There is also widespread sympathy for de minimis contributors to Superfund sites, who contributed either small volumes of material, or material with very low toxicity, he adds. "There’s a lot of will to give them a break – if not let them out altogether, at least let them pay a minimal premium to get out of the litigation chain. So I think that would be one portion of the legislation that you could see moving ahead if anything moved."

As more time that goes by without much action on Superfund in either house, it would appear that the chance of passing any type of reform legislation this year would be slim. However, indicators seem to show that both Democrats and Republicans see the environment as a key issue this year.

In addition, just before press time, Chairman Bliley gave a speech before the Conference of Mayors in which he put forth the idea of viewing Superfund as an urban development issue.

This could change the whole focus of the debate, according to a Bliley staff member.

"This has been looked at as an environmental issue, but it is really an urban issue," he says. "If we can structure the debate that way, and if we can get people to understand how few dollars have actually gone to moving dirt, then maybe we could get a real compromise."

If the current budget negotiations (still unresolved at press time) result in vastly limited funds for the EPA, speculates Wolfe, this could hurt the administration of the Superfund law.

"To the extent that appropriated monies are used for such basic necessities like just keeping the EPA Superfund staff office open with telephone service and secretaries and things like that, if the appropriations are cut way back, then those activities will have to be cut way back, too," says Wolfe. "The question is, how far can you destaff the program and still keep it running?"