Order Code RL31410
CRS Report for Congress
Received through the CRS Web
Superfund Taxes or General Revenues:
Future Funding Issues for the
Superfund Program
Updated March 15, 2006
Jonathan Lee Ramseur
Analyst in Environmental Policy
Resources, Science, and Industry Division
Mark Reisch
Analyst in Environmental Policy
Resources, Science, and Industry Division
James E. McCarthy
Specialist in Environmental Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress
Superfund Taxes or General Revenues:
Future Funding Issues for the Superfund Program
Summary
This report discusses the role of dedicated taxes and other sources of revenue
in funding the Hazardous Substance Superfund Trust Fund. Congress makes annual
appropriations to the Environmental Protection Agency (EPA) from this trust fund
and from general Treasury revenues for the purpose of supporting the Superfund
program, which addresses both short-term (emergency) and long-term cleanup
activity of hazardous substances at contaminated sites.
Three dedicated taxes (on petroleum, chemical feedstocks, and corporate
income) historically provided the majority of the trust fund’s income. The taxes
expired at the end of 1995, however, and the amount of unobligated money in the
fund gradually dwindled. By the end of FY2003, the fund’s unobligated balance was
zero, down from a high of $3.8 billion in 1996. The Administration’s decision to not
request reinstatement of the taxes has been supported by Congress, although some
Members introduced legislation to do so. The annual budgets have compensated for
the lack of dedicated tax revenue by increasing the contribution from the general fund
of the U.S. Treasury. In fiscal years 2004-2006, virtually the entire Superfund
program appropriation came from general Treasury revenues. The FY2007 budget
request follows this course, proposing to fund the vast majority of the $1.26 billion
requested appropriation from general Treasury revenues.
Proponents of reinstating the dedicated taxes contend that the cleanup of
hazardous waste sites and releases (e.g., spills and leaks) should rely on taxes paid
by the chemical and petroleum industries and companies that used the hazardous
substances being cleaned up, not taxpayers. Proponents refer to this as the “polluter
pays” principle. They also contend that in the context of federal budget deficits, it
may be difficult to maintain spending at needed levels without dedicated taxes.
Opponents of reinstating the tax argue, for example, that the tax is overreaching and
unfair, as it applies to all industry sectors and to both compliant and noncompliant
companies. In general, this funding debate applies to 30% of the sites on the
National Priorities List; the remaining 70% of the sites, according to EPA, are
cleaned up by responsible parties.
The President proposed increases (FY2004-FY2007) for Superfund
appropriations in otherwise tight budgets for domestic programs. Congress cut the
Administration request for FY2006 by $37 million. The FY2007 proposal is $20
million less than the Administration’s FY2006 request but $17 million more than the
amount Congress enacted in FY2006. Regarding the tax issue, the President’s
FY2007 budget submission is silent. Several reports, including one for the House
and Senate Appropriations Committees and reports by the EPA Inspector General,
have concluded that spending has fallen short of the program’s needs.
This report, which will be updated as events warrant, provides background
information on income sources for the fund and estimates of program needs through
FY2009.
Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Superfund Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Expiration of the Taxing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Decreased Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
General Treasury Revenue Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Estimates of the Superfund Program’s Future Funding Needs . . . . . . . . . . . 7
Possible Evidence of Insufficient Funding . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Increasing the Superfund Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Congressional and Administration Action . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Administration Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Figures
Figure 1. Hazardous Substance Superfund, Beginning of Year Unobligated
Balance, FY1994-FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Figure 2. Superfund Appropriations: FY2001-FY2006 Enacted and
FY2007 Requested Versus Resources for the Future Projections of Funding
Needs (amounts in millions prior to transfers) . . . . . . . . . . . . . . . . . . . . . . . 9
List of Tables
Table 1. Superfund: Trust Fund Revenues and General Revenue
Contributions, FY1991-FY1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Superfund Taxes or General Revenues:
Future Funding Issues for the
Superfund Program
In February 2002, controversy erupted over the Bush Administration’s proposal,
which Congress accepted, to not request renewal of the Superfund taxes in its
FY2003 budget submission1 — a decision repeated in its FY2004, FY2005, FY2006,
and FY2007 submissions. The tax authority expired in 1995, but the fund’s balance
remained positive until FY2003. Although several Members of Congress have
introduced bills to reinstate the taxes during these years, such efforts have lacked the
necessary support. The Superfund trust fund is used to clean up sites contaminated
by releases of hazardous substances. Without dedicated taxes, and with a relatively
small balance in the trust fund, Congress has been using general revenues for a larger
percentage of cleanup funds. This report reviews income sources for the fund,
provides Superfund program funding estimates for FY2007 and subsequent years,
and discusses whether this funding will be adequate to meet projected program needs.
Background
The Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA), which was greatly expanded by the Superfund Amendments and
Reauthorization Act of 1986 (SARA, P.L. 99-499), created the Superfund program2
to clean up the nation’s worst hazardous waste sites and directed the Environmental
Protection Agency (EPA) to prepare a National Priorities List (NPL) to identify sites
that present the greatest risk to human health and the environment. The Superfund
account in EPA’s budget funds the agency’s efforts to remove contamination that
presents an immediate risk and to remediate contamination for which there is a
potential pathway of exposure. Although federal facilities are subject to CERCLA
provisions, the costs of remediation at federal facilities are paid by the federal agency
that caused the contamination, rather than out of the Superfund account.
In a majority of cases, Superfund cleanups are paid for by potentially
responsible parties (PRPs) — usually current or previous owners/operators of the
site. According to EPA, PRPs conduct cleanup at more than 70% of the sites on the
NPL.3 At approximately 30% of the NPL sites, either EPA cannot locate PRPs for
1 The Administration had not requested renewal of the taxes in its FY2002 budget
submission either, but the issue did not become particularly contentious, in part, perhaps,
because the fund had a larger balance at the time.
2 For more information on the Superfund program, see CRS Report RL31154, Superfund:
A Summary of the Law, by Mark Reisch.
3 At many sites, however, EPA cannot immediately locate a financially viable PRP or there
(continued...)
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these properties or the PRPs located do not have the necessary financial resources to
assist with cleanup. It is primarily at this group of NPL sites that EPA uses funds
from the trust fund to conduct cleanup activities. The Superfund funding debate —
that is, whether the trust fund should be supported by a dedicated tax or general
Treasury revenues — applies to this subset of NPL sites.
Superfund Taxes
The trust fund has had several sources of revenue over the years, the most
important being dedicated taxes on petroleum, chemical feedstocks, and corporate
income. The taxes on petroleum (9.7 cents per barrel) and on chemical feedstocks
and imported chemical derivatives (varying amounts, depending on the chemical)
were based on the assumption that many of the hazardous substances to be cleaned
up were derived from these sources. The third tax (referred to as the Corporate
Environmental Income Tax), pegged at 0.12% of corporate income in excess of $2
million, was meant to raise funds from a wide range of companies that may have
used and disposed of hazardous substances.
Table 1. Superfund: Trust Fund Revenues and General
Revenue Contributions, FY1991-FY1995
Amount
Percentage
Source
($ million)
of total
Trust Fund Revenues
Petroleum Tax
$2,800
25.4
Chemical Feedstocks and Imported Derivatives Tax
1,327
12.1
Corporate Environmental Income Tax
3,121
28.4
Cost Recoveries from PRPs
901
8.2
Fines and Penalties
11
0.1
Interest on Investments
1,003
9.1
Subtotal, Trust Fund Revenues
$9,163
83.2
General Revenues
$1,845
16.8
Source: Funds Management Division, U.S. Treasury Department.
Note: FY1991-FY1995 represents the five-year period prior to the expiration of the Superfund taxes.
Proponents of the Superfund taxes argue that the taxes are justified based on the
“polluter pays” principle. Both the Bush Administration and its critics say they
support the “polluter pays” principle, but they mean different things when using that
3 (...continued)
are disputes among the PRPs concerning their degree of responsibility. In such cases, the
statute permits EPA to proceed with cleanup using the trust fund’s resources, locate PRPs
after or during cleanup, and recover the cleanup costs from PRPs at a later date.
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phrase. When Administration spokespersons support “polluter pays,” they mean
cleanup funded by responsible parties at sites where such parties have been identified
as owners, operators, or contributors of the waste requiring cleanup, rather than
industrial sectors or corporations in general that may not have contributed directly to
a specific site’s contamination.4
The Administration’s critics use the “polluter pays” term in a broader sense,
however, to mean that the tax money that is used to clean up the other 30% of the
sites should come from industries that profited from the sale or use of the chemicals
being cleaned up, but who may not be directly related to a particular release of a
hazardous substance. Thus, they support resumption of the dedicated taxes on
petroleum and chemical feedstocks as well as the Corporate Environmental Income
Tax, arguing that this approach is more appropriate than funding the trust fund
through general Treasury revenues.
Lesser sources of income to the fund have included interest on the fund’s
balance (which is invested in government securities until expended); cost recoveries
from PRPs; reimbursements to EPA from other federal agencies for emergency
removal activities; and collection of fines and penalties. There has also generally
been an annual contribution to the program from general Treasury revenues.
Table 1 shows the sources of revenue to the fund from 1991 to 1995 (the last
five years before the taxes expired). The three dedicated taxes provided an average
of $1.45 billion per year, 65.8% of total revenues during the period. The taxes
generated nearly four times as much as the contribution from general revenues, which
averaged $369 million per year, or 16.8% of total Superfund revenues during the
period. The remainder of the fund’s income came from interest on investments ($200
million per year) and cost recoveries ($180 million per year).
Expiration of the Taxing Authority
The taxes that supported the trust fund expired at the end of 1995. The
Republican leadership, notably the Chairman of the House Ways and Means
Committee during the 104th through 106th Congresses, opposed reinstating the taxes
except as part of a comprehensive CERCLA reauthorization that would remove or
modify Superfund’s liability provisions.5 No consensus was reached on
reauthorization, and the taxes were not reinstated.
4 In a June 2005 press conference discussing various environmental issues, including the
Superfund taxes, EPA Administrator Stephen L. Johnson stated that he will “keep the focus
on responsible parties,” noting that they are the ones who should pay, “not the taxpayers.”
Bureau of National Affairs, “EPA Chief Will Pursue President’s Policies, Including Push
for ‘Clear Skies’ Legislation,” Environment Reporter, June 10, 2005, p. 1191.
5 See, for example, “CBO Reports Trust Fund Can Survive Through 2000 Without CERCLA
Taxes,” Daily Environment Report, July 16, 1996.
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When the taxes expired, the Office of Management and Budget (OMB) reported
that the fund had an unobligated balance of nearly $4 billion6 and, even after
expiration of the taxes, money continued to be added to it from interest payments,
cost recoveries, and other sources. Thus, the lapse in taxing authority initially had
little effect on the ability to fund the program. The Clinton Administration requested
reinstatement of the taxes annually in its budget submission, but Congress took no
action on these requests. Congress continued to fund the program through a
combination of the existing unobligated trust fund balance and general revenues.
To make the fund last longer, the contribution of general revenues to the annual
appropriation was increased from $250 million annually in FY1993 to FY1998 to
$634 to $700 million in FY2000 to FY2002. The Bush Administration requested
$700 million from general revenues in FY2003 and $1.1 billion in FY2004. In
FY2005, the entire appropriation ($1.25 billion) came from general revenues.
Although the Administration’s FY2007 budget shows an improvement in the
FY2006 starting balance, nearly all of the appropriation came from general revenues
in FY2006. Similarly, OMB estimates that the FY2007 starting balance ($170
million) will be higher than in its preceding year ($97 million), yet the vast majority
of the appropriation will continue to come from general revenues.
The Decreased Fund Balance
In recent years, attention has focused on the dwindling amount of unobligated
funds in the Superfund Trust Fund. As shown in Figure 1, this balance began a
steady decline starting in FY1998. By the end of FY2001, the fund’s unobligated
balance had declined to $860 million. The President’s FY2003 and FY2004 budgets
projected further declines, to $427 million at the end of FY2002 and to $159 million
at the end of FY2003. These numbers were revised in the FY2005 budget
submission (and in Figure 1) to reflect actual cost recoveries and other transactions
in FY2002 and FY2003. The actual amounts show a balance of $564 million at the
beginning of FY2003 and a zero balance at the beginning of both FY2004 and
FY2005.
Although FY2005 started with a zero balance, it ended with $97 million in the
account, creating a starting balance of $97 million in FY2006.7 Moreover, the
FY2007 budget estimates that FY2007 will start with a balance of $170 million and
FY2008 with $197 million. While these estimates, which are subject to variation (in
either direction), represent higher starting balances than in recent years, they do not
approach the balances that existed when the trust fund was supplied mainly by the
Superfund taxes. Based on OMB estimates of starting balances in FY2007 and
FY2008, general Treasury revenues will continue to supply the vast majority of the
program needs.
6 According to the Office of Management and Budget’s Budget of the United States
Government, fiscal years 1996-2003, the unobligated balance of the fund peaked at $3.829
billion at the end of FY1996.
7 Note that the FY2006 budget estimated a FY2006 starting balance of $64 million.
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Figure 1. Hazardous Substance Superfund, Beginning of Year Unobligated
Balance, FY1994-FY2006
$4,000
$3,829
$3,655
$3,500
$3,000
$2,715
$2,674
$2,500
$2,139
$2,154
$2,000
$1,499
$1,500
$1,262
$1,000
$860
$564
$500
$97
$0
$0
0
1994
95
96
97
98
99
2000
2001
2002
2003
2004
2005
2006
Source: Prepared by the Congressional Research Service, with information provided by OMB Budget
of the United States Government, Appendix, Fiscal Years 1996-2007.
Available Funds
The Office of Management and Budget (OMB) produces annual estimates of the
Superfund trust fund’s starting and ending fiscal year balances and revenue from its
funding sources. OMB includes these estimates in the Appendix to the annual
Budget of the United States Government (hereafter referred to as the President’s
budget request for a particular fiscal year). As shown in the annual budget request,
funds that contribute to the trust fund fall into five categories: (1) corporate income
taxes, (2) interfund transactions, (3) cost recoveries, (4) interest and profits on
investments, and (5) fines and penalties.
As discussed above, the corporate income taxes category, originally a dedicated
source of program revenue, expired at the end of 1995. Therefore, this category is
listed at zero. The next category, interfund transactions, represents the estimated
contribution from general Treasury revenues, which is a function of both the level of
congressional appropriation and the trust fund’s fiscal year starting balance. Similar
to recent years, the Administration’s FY2007 budget request proposes $1.26 billion
for the Superfund appropriation to consist of “sums available in the Trust Fund on
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September 30, 2006” (i.e., the end of FY2006, therefore the FY2007 starting balance)
and “up to [$1.26 billion] as a payment from general revenues,”8 if the trust fund
balance is not sufficient to fund the total appropriation. Therefore, any remaining
balance from FY2006 would go toward the FY2007 appropriation, and general
Treasury revenues would fund the remainder of the appropriation, up to the
maximum level enacted by Congress.
The other three fund categories — cost recoveries, interest and profits, and fines
and penalties — help generate the end-of-year balance that is used in the next fiscal
year.
Cost recoveries represent payments to the fund from potentially responsible
parties to reimburse the government for cleanup expenditures at sites for which these
private parties are legally responsible. Recoveries vary from year to year; projecting
them in advance is difficult and may have a larger potential margin of error than
other categories of revenue. Actual recoveries have been declining in recent years.
During the six-year period of fiscal years 1997-2002, they averaged $272 million per
year, but they declined to $147 million in FY2003, $74 million in FY2004, and $63
million in FY2005. OMB estimates recoveries of $54 million in both FY2006 and
FY2007.
Like other government trust funds, the Superfund trust fund earns interest on its
current balance until the money is actually expended. Expenditures can lag
obligations by several years, so there can be a substantial difference between the
unexpended and unobligated balances in the fund. The unexpended Superfund
balance totaled $2.5 billion at the beginning of FY2006. Due to the size of the
unexpended balance, the fund is still earning substantial amounts of interest — $48
million in FY2005. According to the President’s FY2007 budget request, OMB
estimates $91 million in interest earned for FY2006 and an estimated $52 million in
FY2007. These projections assume an interest rate that is historically low. If interest
rates are higher in FY2006 and FY2007 than OMB expects, interest earned on the
unobligated balance would be higher.
Fines and penalties have generally contributed only a minor portion to the
Superfund trust fund. EPA collected $2 million in FY2005, and OMB assumes $2
million in fines and penalties for both FY2006 and FY2007.
OMB estimates that FY2006 and FY2007 will end with a balance of $170
million and $197 million, respectively. Considering the sum of the fiscal year
estimates from the three sources that contribute to these balances,9 OMB’s
projections might be considered optimistic. However, it should be noted that the
Administration’s FY2007 budget request includes a proposed $8 million increase10
8 Appendix to the Budget for Fiscal Year 2007, p. 1032.
9 For FY2006, the estimated value of interest earned, cost recoveries, and fines/penalties is
$147 million. For FY2007, the estimated value is $108 million.
10 The proposal would increase the account from $180 million to $188 million, a 4.8%
(continued...)
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to the Superfund enforcement account. Arguably, the enforcement account increase
could bolster cost recoveries and the collection of fines and penalties.
General Treasury Revenue Requirement
The Administration requests a $17 million increase in program funding, to $1.26
billion in FY2007 compared with the $1.24 billion appropriated in FY2006. As
mentioned above, OMB estimates that of the total FY2007 appropriation, $1.20
billion would come from general Treasury revenues in FY2007. If the appropriation
language were enacted as proposed, the actual amount of general Treasury revenues
would depend on the fund’s starting balance and the appropriation ceiling enacted by
Congress.11 Thus in FY2007, the vast majority of the appropriation12 would come
from general Treasury revenues.
Estimates of the Superfund Program’s Future Funding Needs
To estimate general revenue funding needs for the Superfund in 2007 and later
years, it is first necessary to identify future program needs. In July 2001, Resources
for the Future (RFF), as directed by Congress in the FY2000 VA-HUD-Independent
Agencies appropriation (P.L. 106-74) conference report, released a comprehensive
study to Congress identifying those needs and projecting future costs for fiscal years
2000-2009. The study looked at all major elements of the Superfund program,
including the removal program (for emergency and short-term cleanups); the
remedial program (long-term cleanup); site assessment activities; program staff,
management, and support costs; program administration; and Superfund-related work
of other programs and agencies. The authors developed alternative scenarios for
estimating the number, type, and cost of sites likely to be added to the program in
coming years.
RFF estimated the FY2007 program needs to be $1.7 billion. This was the
report’s “base case” — described as “our best judgement of the future cost of the
Superfund program, given the full body of our research, analyses, and interviews.”
The report also estimated a high and low case, to reflect uncertainties about the
factors used in their cost models. The low estimate for FY2007 is $1.5 billion; the
high estimate is $1.9 billion. Funding needs remain above $1.6 billion annually
through FY2009 (using RFF’s base case), the last year for which RFF estimated
future costs.
10 (...continued)
increase.
11 Precise figures are difficult to achieve, given the uncertainties concerning starting
balances and other variables. If $170 million is indeed available at the start of FY2007, and
Congress sets the appropriation as proposed ($1.260 billion), only $1.09 billion would be
transferred from general Treasury revenues to make up the difference, not the OMB estimate
of $1.20 billion.
12 Assuming Congress provides an appropriation of $1.26 billion, the estimated percentage
of appropriation coming from general Treasury revenues would be either 86% or 95%,
depending on which OMB estimate (starting balance or interfund transfer) is used.
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In years beyond FY2006, RFF estimates that Superfund program needs will
remain just below their projected FY2005 level through at least FY2008, with the
FY2009 amount dropping to $1.6 billion (see Figure 2). The amounts needed to
meet these needs from general revenues (in the absence of Superfund taxes) would
be higher than amounts provided in past years. There are at least three factors
contributing to RFF’s increased need projections.
First, the fund’s unobligated balance, which remained relatively high (see
Figure 1) during the years of Superfund taxes (and the two fiscal years following the
tax expiration), has decreased steadily since FY1997, reaching zero at the end of
FY2003. As discussed earlier, the current sources of the balance — cost recoveries,
interest, and fees — provided significantly less funding support than the Superfund
taxes. OMB estimates that $170 million is projected to remain unobligated at the
end of FY2006 and $197 million at the end of FY2007. As noted above, these
estimates might be viewed as optimistic.
Second, the amounts needed for cleanup were projected to increase beginning
in FY2002, as numerous “mega sites”moved beyond the analysis and design phases
and into actual construction of remedies. (Mega sites are sites at which the projected
cleanup cost is $50 million or more. The average cost at mega sites is projected to
be $140 million.) In the RFF analysis, the cost of remedial action was projected to
remain above historic levels through FY2007, and the cost of the Superfund program
as a whole was projected to remain above FY2001 levels through at least FY2009.13
Third, EPA’s Office of Inspector General (IG) highlighted the concern that
hardrock mining sites may have a significant financial impact on the trust fund. The
IG identified “156 hardrock mining sites nationwide that have the potential to cost
between $7 billion and $24 billion to cleanup.” Although the IG points out there is
uncertainty regarding the risks to human health and the environment at these sites,14
there is also uncertainty concerning PRPs and their ability to pay for cleanup.15
Possible Evidence of Insufficient Funding
In FY2002 through FY2004, cleanup was delayed at numerous sites because of
a lack of funds. According to a report from the EPA IG, “EPA obligated a total of
$320 million” to remedial action construction activities in FY2002, “a difference of
$97 million from the Regions’ total need of $417 million.” The IG report identified
seven sites for which the Regions requested construction funding but got none, and
five other sites that together received only $15 million of the $38 million requested.
In addition, the Agency obligated only $43 million of the $60 million requested for
13 Ibid., pp. 127, 266.
14 This factor is important because sites must be on the NPL to qualify for long-term cleanup
(remedial) assistance from the trust fund.
15 EPA Office of Inspector General, Annual Superfund Report to Congress for Fiscal Year
2004, EPA-350-R-05-001, Aug. 2005, p. 3.
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Long-Term Response Actions at sites where construction was complete but a need
for continuing treatment activities (most likely for ground water) remained.16
Figure 2. Superfund Appropriations: FY2001-FY2006 Enacted and FY2007
Requested Versus Resources for the Future Projections of Funding Needs
(amounts in millions prior to transfers)
2,000
1,854
1,763
1,748
1,724
1,691
1,699
1,668
1,615
1,566
1,500
1,311
1,270
1,265
1,258
1,247
1,242
1,259
1,000
500
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
Need Projected by RFF
Appropriated
Requested
Sources: Prepared by the Congressional Research Service with information from the following sources:
FY2001-FY2005 enacted amounts are from prior year funding comparisons in committee reports on annual
appropriations bills from FY2002-FY2006; FY2006 enacted and FY2007 requested amounts are from EPA’s FY2007
budget justification; projected funding levels are from a Resources for the Future report, Superfund’s Future: What Will
It Cost?
In FY2003, the remedial action program was $175 million short of the Regions’
total needs, according to the IG. The IG identified an additional 11 sites that could
not begin construction because of a funding shortfall, and at least five other sites that
did not receive their full funding request in that year.17
Although the IG did not report on the subject in FY2004, a survey of EPA staff
by the House Energy and Commerce Committee Democratic staff found a reported
16 Letter of October 25, 2002, from Nikki L. Tinsley, EPA Inspector General, to Senator
James Jeffords, Chairman, Committee on Environment and Public Works, and Senator
Barbara Boxer, Chair, Superfund, Toxics, Risk, and Waste Management Subcommittee, pp.
1-3.
17 U.S. EPA, Office of Inspector General, Congressional Request on Funding Needs for
Non-Federal Superfund Sites, Report 2004-P-00001, Jan. 7, 2004, pp. 4, 8-9.
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shortfall of $263.1 million.18 EPA challenged some of the committee data, but it
confirmed in letters to House and Senate Democrats that it did not start construction
at 19 sites that were ready for construction in FY2004 because of a lack of funding.19
Increasing the Superfund Appropriation
Congress could increase appropriation levels, in order to meet the increased
funding needs, such as those identified by RFF. The Administration notes that it
requested increases in funding in both its FY2004 request for $1.39 billion and its
FY2005 request for $1.38 billion, which Congress did not provide. Congress cut the
FY2004 and FY2005 requests by $132 million and $134 million, respectively.
Although the Administration’s request in FY2006 ($1.28 billion) was lower than in
previous years, Congress cut the proposal by $40 million, enacting $1.24 billion. The
Administration requested $1.26 billion for FY2007, a $20 million decrease from its
previous request but $20 million above the amount enacted by Congress in FY2006.
Given RFF’s projected funding needs for the Superfund program and the
relatively minimal amounts available to the fund from sources other than general
revenues, Congress will face competing interests if it attempts to appropriate all of
Superfund’s needs. RFF estimates that general Treasury revenue contributions as
high as $1.5 billion per year would be needed to finance Superfund through the rest
of the decade in the continued absence of Superfund taxes. This could prove difficult
in light of current interest in deficit reduction.
Congressional and Administration Action
Congressional Action. The adequacy of funding for Superfund and whether
to reinstate the Superfund taxes have generated substantial debate over the last four
years20 and may continue to do so in the second session of the 109th Congress.
As of March 2006, the 109th Congress has seen three bills seeking reinstatement
of the Superfund taxes, one bill concerning the appropriation level (not including the
actual appropriation bill, H.R. 2361), and one recorded vote regarding Superfund
funding.
18 U.S. House, Committee on Energy and Commerce Democrats, “Dramatic Funding
Shortfalls Revealed in Superfund Program,” Press Release, Aug. 16, 2004.
19 See “FY04 Cleanup Delays Renew Democrats’ Criticism of Superfund Budget,”Inside
EPA Superfund Report, Oct. 25, 2004. The data in the article were confirmed by EPA in a
personal communication Mar. 3, 2005.
20 There were four recorded votes on these issues in the 108th Congress. Senator Lautenburg
offered three amendments regarding funding or tax reinstatement: S.Amdt. 192 was
defeated 53-45 on January 23, 2003; S.Amdt. 408 failed, 56-43, on March 25, 2003; and
S.Amdt. 2703 was defeated on March 11, 2004, on a vote of 52-44. Representative Markey
offered H.Amdt. 345 (to increase funding), which was defeated 309-114 on July 25, 2003.
Three stand-alone bills were introduced in the 108th Congress: H.R. 610 (Rep. Pallone)
would have reinstated the Superfund taxes as they were in 1995; H.R. 3655 (Rep. Kucinich)
would have extended the taxes through FY2013; S. 173 (Sen. Boxer) would have reinstated
the Superfund taxes until January 1, 2014. No action was taken on any of these bills.
CRS-11
In the first session, Representative Terry introduced H.R. 434, which would
transfer $124 million from EPA’s Science and Technology account in FY2005 to
fund additional cleanups and would authorize additional cleanup funds through 2009
by limiting authorizations for Science and Technology.
Representative Terry offered an amendment (H.Amdt. 175) to the House
appropriations bill that includes funding for EPA (H.R. 2361). The amendment
sought to increase the Superfund appropriation by $130 million, while eliminating
an equal amount from EPA’s Science and Technology account. The amendment
failed May 19, 2005, on a vote of 76-344.
Three other bills introduced in 2005 were H.R. 3584, introduced by
Representative Pallone and similar to the legislation introduced by Senator Boxer in
the 108th Congress, which would reinstate the Superfund taxes until 2016; H.R. 4199,
introduced by Representative Boehlert, which would reinstate the corporate
environmental income tax until 2014; and H.R. 4481, introduced by Representative
Hinchey, which would permanently reinstate Superfund’s dedicated taxes. The bill
would also temporarily increase the tax rate by 50% for two years to establish and
fund a “Gulf Hurricanes Cleanup Account.” Funds within this Superfund account
would address the hazardous substance releases caused or exacerbated by Hurricanes
Katrina and Rita.
Administration Position. During a briefing for reporters on June 8, 2005,
recently appointed EPA Administrator Stephen L. Johnson said that he opposed
reimposing the tax on the chemical industry that was formerly used to fund the trust
fund. Instead, Johnson said he will seek to fund additional cleanups through
“additional efficiency to be gained in the program.” Johnson stated he will “keep the
focus on responsible parties,” noting that these are who should pay, “not the
taxpayers.”21
21 Bureau of National Affairs, “EPA Chief Will Pursue President’s Policies, Including Push
for ‘Clear Skies’ Legislation,” Environment Reporter, June 10, 2005, p. 1191.