Brownfields and Superfund Issues in the 108th Congress

Brownfields and Superfund Issues in the 108th Congress

Order Code IB10114
CRS Issue Brief for Congress
Received through the CRS Web
Brownfields and Superfund Issues
in the 108th Congress
Updated October 27, 2004
Mark Reisch
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
Historical Perspective
A Brief Summary of the Cleanup Program
Superfund Issues
Revenue Issues: Appropriations and the Superfund Taxes
Appropriations
The Superfund Taxes
Reauthorizing the Ombudsman
Comprehensive Reauthorization
Liability
Remedy Selection and Cleanup Standards
State Role
Natural Resource Damages
Brownfield Issues
LEGISLATION
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Brownfields and Superfund Issues in the 108th Congress
SUMMARY
The Superfund program for cleaning up
Superfund site for federally funded transporta-
the nation’s worst hazardous waste sites was
tion projects. The conference report (H.Rept.
created by the Comprehensive Environmental
108-375) passed the House and is before the
Response, Compensation, and Liability Act of
Senate.
1980, or CERCLA (P.L. 96-510, as amended).
The brownfields program addresses less
A bill, S. 515, to establish an independ-
serious hazardous waste sites.
ent ombudsman with expanded authorities
related to Superfund, brownfields, and other
Three enactments of the 108th Congress
programs in the Office of Solid Waste and
contain brownfield-related measures, and
Emergency Response passed the Senate by
three other bills have had action. The Eco-
unanimous consent on May 21, 2003; a com-
nomic Development Administration Reau-
panion bill, H.R. 347, was introduced in the
thorization Act, S. 1134/H.R. 2535, estab-
House.
lishes a demonstration program for brownfield
sites employing solar energy technology
CERCLA’s stringent liability regime has
(termed brightfields); it was presented to the
drawn in many parties to pay for hazardous
President on October 15, 2004. P.L. 108-311
waste cleanup and has contributed to the law’s
(H.R. 1308, H.Rept. 108-696), a tax bill sign-
unpopularity in some quarters, although enact-
ed by the President on October 4, 2004, rein-
ment of the Small Business Liability Relief
stated the brownfields tax incentive. Another
and Brownfields Revitalization Act, P.L. 107-
tax bill, signed by the President on October
118, may have blunted some criticism. CER-
22, 2004 (H.R. 4520, H.Rept. 108-755), con-
CLA also established the Superfund trust fund
tains two brownfield provisions. One autho-
that was supported by dedicated taxes until the
rizes tax-exempt facility bonds for “green
authorization for these taxes expired in 1995.
building and sustainable design projects” that
The Administration’s decision not to request
include a brownfield and meet other require-
renewal of the taxes as the trust fund’s balance
ments. The other allows tax-exempt entities
has declined is another continuing issue. H.R.
to invest in the cleanup and redevelopment of
610 and S. 173 have been introduced to rein-
brownfields without incurring unrelated busi-
state the taxes.
ness income tax when they sell the property.
The Superfund appropriation for FY2004
A bill to make the brownfields program
is $1.265 billion, and the brownfield
in the Department of Housing and Urban
appropriation is $171 million (P.L. 108-199).
Development more accessible to small com-
The budget request for FY2005 is $1.4 billion
munities, H.R. 239, was reported on March 5,
for Superfund and $210 million for brown-
2003 (H.Rept. 108-22).
fields.
A provision of the Energy Policy Act,
As of October 2004, 926 non-federal
H.R. 6, directs EPA to establish criteria for the
sites (67%) placed on the Superfund’s Na-
safe and environmentally protective use of
tional Priorities List (NPL) had been removed
mine wastes from the Tar Creek, Oklahoma,
to the Construction Completed List.
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MOST RECENT DEVELOPMENTS
The American Jobs Creation Act (H.R. 4520, H.Rept. 108-755), which the President
signed on October 22, 2004, contains two brownfields provisions. One authorizes tax-exempt
facility bonds for “green building and sustainable design projects” that include a brownfield
and meet other requirements. The other allows tax-exempt entities to invest in the cleanup
and redevelopment of brownfields without incurring unrelated business income tax when
they sell the property.
The Economic Development Administration (EDA) Reauthorization Act, which was
presented to the President on October 15, 2004 (S. 1134, S.Rept. 108-382; H.R. 2535,
H.Rept. 108-242, Part I), establishes a demonstration program to use solar energy technology
at brownfield sites (referred to as “brightfields”), and directs GAO to report on EDA’s grants
for brownfields. Other brownfields language was dropped.
The Working Families Tax Relief Act (P.L. 108-311, H.R. 1308, H.Rept. 108-696),
signed on October 4, 2004, reinstated the brownfields tax incentive, which allows developers
to fully deduct the costs of environmental cleanup in the same year the costs are incurred.
The President’s budget request for FY2005 asked for $1,381.4 million for Superfund
and $210 million for brownfields. The House Appropriations Committee approved $1,257.5
million for Superfund, and $168 million for brownfields (H.R. 5041, H.Rept. 108-674).
Senate Appropriations approved $1,381.4 million for Superfund and $165 million for
brownfields (S. 2825, S.Rept. 108-353).
A provision of the comprehensive energy bill, H.R. 6, reported from the conference
committee (H.Rept. 108-375) and passed by the House on November 18, 2003, authorizes
the use of mine wastes from the Tar Creek Superfund site in highway construction projects
after EPA establishes safe and environmentally protective standards.
The Senate passed Senator Crapo’s S. 515 (S.Rept. 108-50), the Ombudsman
Reauthorization Act, on May 21, 2003; it is now before the House Energy and Commerce
Committee. Representative Michael Bilirakis introduced a companion bill, H.R. 347, in the
House on January 27, 2003.
The House Financial Services Committee reported H.R. 239 (H.Rept. 108-22) on
March 5, 2003. The bill improves the HUD brownfields program.
BACKGROUND AND ANALYSIS
Introduction
Created in 1980 by the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA, P.L. 96-510), Superfund is the principal federal program for
cleaning up hazardous waste sites to protect public health and the environment from releases
of hazardous substances.
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After the taxes that fed the Superfund trust fund ended in 1995, the available balance
in the fund steadily declined. How much was needed to finish addressing the nation’s worst
sites was unknown. To help answer that question Congress directed EPA, in the conference
report dealing with Superfund’s FY2000 appropriation,1 to contract with Resources for the
Future (RFF), an independent research institute, “for an independent analysis of the projected
federal costs over the ten-year period of fiscal years 2000-2010 for implementation of the
Superfund program....” The study was released in July 2001and found, among other things,
that the costs of cleaning up sites and administering the program will increase in the near
term and are not likely to fall below current levels until FY2008. It also identified areas
where EPA could improve its performance.

Prompted by the report, EPA convened an advisory panel of 32 individuals to make
recommendations to the agency on the future costs and direction of the program. The
Superfund Subcommittee of the National Council for Environmental Policy and Technology
(NACEPT) reported in April 2004 with 17 consensus recommendations, and discussions and
opinions of other issues where consensus could not be reached.2 Five members, representing
environmental groups and the New Jersey state environmental agency, did not sign the
report. Among their objections were the report’s failure to acknowledge the need for a stable
source of increased funding, and the lack of a position that had been in earlier drafts that
EPA not consider expected costs when deciding whether to list a site on the NPL.
Regarding the NPL, the group recommended that EPA be consistent over time in
applying the factors it uses in selecting sites for the NPL, and that the Hazard Ranking
System be reviewed by the agency and stakeholders to ensure it adequately considers sites
in sparsely populated areas and takes account of environmental justice concerns.
They also recommended that EPA reach out to affected communities, local
governments, and potentially responsible parties earlier in the site assessment process, and
that it improve its cooperative relationship with the Agency for Toxic Substances and
Disease Registry, and the National Institute of Environmental Health Sciences. The
subcommittee was unable to reach agreement on how to approach and fund “mega sites,”
those NPL sites where cleanup costs are expected to exceed $50 million.
Thus far in the 108th Congress three laws with brownfields provisions have been
enacted. They are discussed in the “Brownfield Issues” section. Also, two relatively
noncontroversial bills have received action, and a rider to the Energy Policy Act, H.R. 6,
directs EPA to establish criteria for the use of granular mine tailings from the Tar Creek,
Oklahoma, Superfund site. The mining wastes would be used for cement or concrete
projects, and for transportation construction projects that employ federal funds. The EPA
criteria are to include an evaluation of whether to establish a numerical standard for
concentrations of lead and other hazardous substances. The House agreed to the conference
report (H.Rept. 108-375) for H.R. 6 on November 18, 2003. The Senate considered the
report on November 21, 2003. A cloture vote to end debate did not pass, 57-40, and there
has been no further action.
1 H.Rept. 106-379 accompanying H.R. 2684, the FY2000 appropriations bill for the Departments of
Veterans Affairs and Housing and Urban Development, and Independent Agencies.
2 The NACEPT Superfund Subcommittee Report can be accessed at [http://www.epa.gov/superfund/].
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The Senate passed the Ombudsman Reauthorization Act (S. 515, S.Rept. 108-50) on
May 21, 2003. The bill would establish the ombudsman’s independence and give the officer
investigative powers over programs in EPA’s Office of Solid Waste and Emergency
Response. (See “Reauthorizing the Ombudsman,” below).
And in the House, the Committee on Financial Services reported H.R. 239 on March
5, 2003 (H.Rept. 108-22). The bill would make brownfield grants administered by the
Department of Housing and Urban Development more accessible, especially to smaller
communities.
Historical Perspective
CERCLA was enacted in 1980 in the wake of discoveries of abandoned hazardous
waste sites around the country. The situation was brought to public attention by the 1978
declaration of a health emergency at the Love Canal neighborhood of Niagara Falls, N.Y.,
where a residential subdivision and a school had been built atop a former chemical dump,
and chemicals were seeping into residents’ basements and surfacing in their yards. In the
following weeks news stories told of greater than normal occurrences of miscarriages, birth
defects, and cancer among the residents.3 Discoveries of other toxic sites in other parts of
the United States were leading news items in the months that followed, and congressional
committees, EPA, and the Surgeon General among others, launched investigations to
determine the number of hazardous sites and related risks to human health.
President Jimmy Carter declared a federal emergency at Love Canal, the first (and only)
time a pollution incident was made eligible for disaster assistance. He did so because
existing federal authority was limited to two small programs under the Clean Water Act, and
to the imminent hazard provision of the Resource Conservation and Recovery Act (RCRA),4
which lacked the full range of authorities necessary to allow comprehensive emergency
action. Among other issues RCRA provided no funds for cleanup. At the state level,
response capability was either very limited or nonexistent.
The legislative track for what became Superfund combined hazardous waste cleanup
with oil spill and chemical spill provisions, amending the Clean Water Act which had passed
the House and Senate in different versions in the 95th Congress. But during the 96th Congress
(1979-1980), one news report after another kept attention focused on the cleanup of dumps
containing hazardous wastes, and this issue was the driving force that ultimately brought
forth the Comprehensive Environmental, Response, Compensation, and Liability Act of
1980, or CERCLA (P.L. 96-510) known by its short title as “Superfund.” The law was
amended and enlarged in 1986 by the Superfund Amendments and Reauthorization Act
(SARA, P.L. 99-499).
3 Subsequent studies cast doubts that the wastes were causally related to these effects, however.
4 RCRA established the federal program regulating solid and hazardous waste management.
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CERCLA, as amended, makes potentially responsible parties5 (PRPs) liable for the costs
of response (primarily cleanup) associated with releases6 of hazardous substances, and for
damages (monetary compensation) for injuries to publicly owned natural resources. The
law’s liability standard is strict, joint and several, and retroactive. Generators of hazardous
substances, transporters who selected the disposal site, and past and present owners and
operators of the site can all be held liable. CERCLA also allows PRPs to sue other parties
(usually waste generators) to contribute to the cost of cleanup, sometimes leading to
hundreds of others — including small businesses — being brought into Superfund’s liability
net. This stringent liability regime and its consequent expenses have contributed to the law’s
unpopularity in some quarters, and is a major sticking point in reauthorization. (See
“Comprehensive Reauthorization” below.) The most common source of waste is
manufacturing operations (38.9% of total waste at Superfund sites) and common waste
destinations include municipal landfills (16.5%), recycling operations (8.5%), and industrial
landfills (6.5%).
CERCLA also established the Superfund Trust Fund, which was created primarily from
a corporate environmental income tax, and excise taxes on petroleum and specified
chemicals. It received about $1.5 billion per year before the legislative authority to collect
the taxes expired on December 31, 1995. Congress annually appropriates monies from the
trust fund to EPA, and in most years has added a contribution from the general fund of the
Treasury. Normally the Treasury provided $250 million per year. For FY1999, however,
as the trust fund balance declined in the absence of tax receipts, the Treasury contribution
was increased to $325 million. In each of FY2000-FY2002 $635 million came from general
revenues, for FY2003 the President’s budget requested $700 million from general revenues,
and for FY2004 the budget request included $1.1 billion from general revenues, and
effectively reduced the balance in the fund to zero.
Monies from the fund are used where a financially viable party cannot be found to pay
for cleanups, as well as to support the EPA’s Superfund-related enforcement, management,
and research and development activities. The lack of revenue-producing taxes adds to the
pressure to reauthorize the law. But renewing the taxes involves a political trade-off: some
call for amending CERCLA to address the criticisms of unfair liability rules, slow cleanups,
and overly stringent cleanup requirements.
Although there were serious efforts in the 103rd to 106th Congresses (1993-2000) to
change the law, and comprehensive reauthorization bills were reported in the 103rd, 105th, and
106th Congresses, none reached the floor in either chamber because of opposition by key
members. The successful amendments to CERCLA during that time period have had general
agreement and targeted a fairly narrow area: limiting the liability of financial institutions that
had made loans to PRPs, easing the transfer of military bases to local entities (related to the
5 The party who may ultimately bear the burden of paying for the cleanup and related costs may not
be directly responsible for the activities that caused contamination at the site. Examples are insurers,
and banks that have made loans to the owner or operator of the site.
6 The term “release” is broadly defined to include not only such things as spilling and leaking, but
also the “abandonment or discarding of barrels” and other closed receptacles (CERCLA Section
101(22)). Also, courts have held that a release need not be a discrete event, but can include seepage
over a long period of time.
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Base Realignment and Closure laws), limiting the liability of recyclers, and providing a tax
incentive to encourage the cleanup of brownfields.7 Last Congress’s enactment of the Small
Business Liability Relief and Brownfields Revitalization Act (P.L. 107-118) also fit that
pattern.
Meanwhile, EPA moved to address the criticisms on its own and in 1993 started what
became three rounds of 49 administrative reforms to make the agency’s operation of the
program “faster, fairer, and more efficient.” Industry groups gave the agency credit for
improving the program, but said additional changes requiring legislation were still needed.
From their perspective, these should include replacing CERCLA’s liability regime, reforming
cleanup standards and remedy selection, changing the law’s provisions on natural resource
damages, and instituting a different means of funding the program.
By the end of 2000 the tone of the Superfund reauthorization debate had changed.
According to EPA, 92% of all sites that had been listed on the NPL since its beginning were
either undergoing cleanup construction (remedial or removal), were completed and on the
Construction Completion List, or had been deleted from the NPL because cleanup goals were
met. Attention was more focused on “brownfields,” less seriously contaminated sites where
redevelopment is complicated by potential environmental contamination.
The growth of the brownfields effort coincided with sentiment by some in Congress
(and elsewhere) that Superfund has largely accomplished its original purpose of cleaning up
the worst hazardous waste sites in the nation, and it was time to begin winding the program
down. A 1998 General Accounting Office report8 stated that of approximately 3,000 sites
identified as possible NPL sites, only 232 were named by either EPA (106 sites), a state (100
sites), or both (26 sites), as likely to be placed on the National Priorities List. The reported
bills of the 105th and 106th Congresses also reflected this outlook. The bills enlarged the
brownfields program on the one hand and on the other hand looked to the end of Superfund
by limiting the number of sites that could be added to the NPL or by authorizing declining
appropriations to carry out the program.9
It was in this climate of an uncertain need for the program and a dwindling balance in
the trust fund that Congress commissioned Resources for the Future (RFF) to estimate future
Superfund costs. The study, Superfund’s Future: What Will It Cost?, came out in July 2001
and calculated that in the 10 years from FY2000 to FY2009 the cost of cleaning up
nonfederal sites on the NPL (including estimated additions to the list) and administering the
program would range between $14.0 billion and $16.4 billion, with the best estimate being
$15.1 billion. “A ramp-down of the program is not imminent,” RFF wrote. “EPA’s need for
Superfund monies will not decrease appreciably below FY1999 expenditures of $1.54 billion
until FY2006,” when they would be $1.47 billion in the base case scenario. “Total annual
costs peak in FY2003 [$1.70 billion], driven principally by the cost of Fund-lead actions at
a few mega sites, and then begin a steady but small decline each year. In FY2009, the final
7 For additional details, see CRS Report RL31154, Superfund: A Summary of the Law.
8 Hazardous Waste: Information on Potential Superfund Sites, Nov. 30, 1998, GAO/RCED-99-22.
9 In the 105th Congress: S. 8. In the 106th Congress: S. 1090, H.R. 1300, and H.R. 2580.
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year of our estimates, the total annual cost ... is $1.33 billion.”10 “Fund-lead actions” are
financed in whole or in part by EPA, and “mega sites” are those with actual or expected costs
of $50 million or more.
Other findings of the report include:
! There are more mega sites, costing an average of $140 million (versus $12
million for non-mega sites) to clean up that will be eligible for the NPL.
Whether they are listed is dependent on such factors as the availability of
funding, political leverage, technological advances, and demographic trends.
This ties into the question of the role and priorities of the NPL, and is an
issue Congress needs to address, according to RFF.11
! EPA needs to improve the quality of the five-year reviews of NPL sites that
CERCLA requires where nonpermanent remedies (e.g., landfill caps) were
employed to verify they still protect human health and the environment.
RFF found that EPA classified many of them as “protective” despite
information in the reviews suggesting that the remedies were either not fully
implemented, not functioning as designed, or are unlikely to meet cleanup
objectives.12
! Two of EPA’s major internal management systems — the Comprehensive
Environmental Response, Compensation, and Liability Information System
(CERCLIS), and the Integrated Financial Management System (IFMS) —
need to be improved so Congress can better follow Superfund dollars.
A Brief Summary of the Cleanup Program
When a hazardous waste site or an incident such as a spill is reported to EPA, the
hazardous substance release is entered into CERCLIS (Comprehensive Environmental
Response, Compensation, and Liability Information System), the agency’s site tracking
database. There were 11,922 active sites in CERCLIS as of November 10, 2003, and 33,387
in the CERCLIS archives; archive status indicates that EPA has completed its assessment of
a site and has determined that no further steps will be taken to list it on the National Priorities
List (NPL). A preliminary assessment is conducted at all CERCLIS sites to quickly
determine if the site poses a sufficient threat to health and the environment to warrant further
investigation, and if it might require an emergency removal. An “emergency removal” is a
short-term, fast-track response to mitigate a dangerous situation that can be ordered at any
time if conditions warrant, regardless of whether a site is on the NPL or not.
10 Katherine N. Probst and David M. Konisky, Superfund’s Future: What Will It Cost? (Washington:
Resources for the Future, 2001), p. xxi.
11 Superfund’s Future: What Will It Cost?, pp. 85-93.
12 Superfund’s Future: What Will It Cost?, pp. 65-70.
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If recommended by the preliminary assessment, a site inspection is conducted, during
which environmental and waste samples are taken for laboratory analysis to determine if
hazardous substances are present and the extent of their migration. Information from the site
assessment is used in the Hazard Ranking System, and sites receiving a sufficiently high
score are placed on the National Priorities List. The term “Superfund site” generally means
a site on the NPL, and the long-term cleanup activities at an NPL site are referred to as
“remedial actions.”
As of October 2004, there were 1,237 sites on the NPL (see [http://www.epa.gov/
superfund/sites/npl/npl.htm]), of which 158 were federal facility sites; another 68 were
proposed for listing, of which 7 were federal facility sites. Proposed and final NPL sites total
1,305. Through December 31, 2002, EPA and the Coast Guard had also conducted more
than 7,399 removal actions, 69% of which were “time critical” in nature. (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 District of
Columbia, the Trust Territories of the Pacific, and the Virgin Islands.
After listing on the NPL, the next step is the remedial investigation, a detailed
examination of the site and the wastes present, which is followed by (or conducted
concurrently with) a feasibility study that examines alternative cleanup approaches. (These
two steps are frequently referred to together as the “RI/FS.”) In the Record of Decision
(ROD) 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 a period of years (which is almost always the case if
groundwater cleanup is involved). As of October 2004, 926 non-federal sites (67% of the
1,378 total non-federal sites listed since inception) had been placed on the Construction
Completion List; and 292 (21% of the 1,378) of those sites and portions of 38 others have
also been deleted from the NPL.
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 are appendices to the NCP. (For details on this and other
Superfund topics, see EPA’s Superfund website: [http://www.epa.gov/superfund/index.
htm]).
Superfund Issues
Revenue Issues: Appropriations and the Superfund Taxes
Appropriations. Congress appropriated $1,264.6 million for the Superfund program
for FY2004 and directed that “such sums as are available from the Superfund trust fund upon
the date of enactment” be used, with the remainder coming from general revenues (H.R.
2673, H.Rept. 108-401). (After a legislatively required recision, the FY2004 amount is
$1,257.5 million.) For FY2003 the appropriation was also $1,264.6 million, of which $700
million came from the Superfund trust fund and the remainder from the general fund of the
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Treasury. The FY2005 request is for $1,381.4 million, and the House Appropriations
Committee approved $1,257.5 million (H.R. 5041, H.Rept. 108-674). The Senate
Appropriations Committee approved the requested amount (S. 2825, S.Rept. 108-353).
For brownfields, the FY2004 appropriation is $171 million ($170 million after the
recision), an increase from the $167.7 million provided for FY2003. Beginning with
FY2003 the brownfields program is no longer funded from the Superfund account. The
FY2005 request was $210 million, the House committee approved $168 million, and the
Senate committee approved $165 million.
The Superfund Taxes. Until the legislative taxing authority expired on December
31, 1995, the Superfund Trust Fund’s principal sources of revenue were excise taxes on
petroleum and designated chemical feedstocks, and a corporate environmental income tax.
The trust fund historically supplied most of the monies appropriated (about 83%) for the
Superfund program, with general revenues from the Treasury providing the rest (about 17%).
Superfund taxes have become an issue because the Administration has not requested
that they be renewed. Since FY1999 Congress has extended the life of the fund by increasing
the General Revenues contribution from the usual $250 million in most previous years, and
reducing the amount taken from the fund. The fund still receives monies from fines and
penalties, cost recoveries from PRPs to reimburse government expenditures where private
parties are legally responsible, and interest earned on the unexpended balance in the fund;
the budget request projects income of $209 million from these sources for FY2005.
The Natural Resources Defense Council and the Environmental Defense Fund have
expressed their “strong concern” that the taxes be reauthorized in order to keep cleanups
moving forward. Business interests, including the Business Roundtable, the American
Petroleum Institute (API), and the American Chemistry Council (ACC; formerly the
Chemical Manufacturers Association) have testified against authorizing any taxes unless
there is comprehensive reform of the law, and API and ACC want Congress to change the
overall tax structure. (For additional information, see CRS Report RL31410, Superfund
Taxes or General Revenues: Future Funding Options for the Superfund Program.)
Reauthorizing the Ombudsman
Congress first created an ombudsman at EPA in the 1984 amendments to the Resource
Conservation and Recovery Act (RCRA) to handle concerns and inquiries from the public,
and to help small businesses comply with the many new hazardous waste management
requirements of that law. The agency gradually increased the position’s purview to include
other programs in the Office of Solid Waste and Emergency Response (OSWER), including
Superfund. When the legislative authorization for the officer expired in 1988, the agency
continued the position, and later installed ombudsmen in each of EPA’s 10 regional offices.
In recent years the post became more visible as the ombudsman investigated citizen
complaints referred by Members of Congress, and questions arose about the adequacy of the
position’s resources and independence from agency influence.
The Senate passed the Ombudsman Reauthorization Act, S. 515 (S.Rept. 108-50), on
May 21, 2003. The bill would establish an independent Office of the Ombudsman within
EPA to receive complaints and render assistance to any person regarding the agency’s
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hazardous waste programs. Introduced by Senator Mike Crapo, S. 515 passed without
amendment under unanimous consent, and is now before the House Committee on Energy
and Commerce. Representative Michael Bilirakis introduced a companion bill, H.R. 347,
on January 27, 2003.
The bills are essentially the same as S. 606 (S.Rept. 107-320), which passed the Senate
in the last Congress. They specify that the ombudsman shall be appointed by the President
and confirmed by the Senate for a five-year term, and may be reappointed once. The
ombudsman would be empowered to conduct investigations, issue subpoenas, make findings
of fact, hold public hearings, and make nonbinding recommendations to the EPA
Administrator concerning programs under the jurisdiction of OSWER. In addition to the
Superfund and brownfield programs, OSWER administers EPA’s solid waste (RCRA),
leaking underground storage tank, oil spill, and chemical emergency preparedness and
prevention activities. The ombudsman is to appoint a deputy ombudsman in each EPA
region, and would have control over an independent staff, and an annual budget of $3 million
for FY2003-FY2004, $4 million for FY2005-FY2008, and $5 million for FY2009-FY2012.
The bills contain whistle-blower protection for anyone contacting the ombudsman, and
provide criminal penalties for obstructing the proceedings of or making false or fraudulent
statements to the ombudsman.
EPA Administrator Whitman opposed S. 515, saying in a letter to Chairman Inhofe that
it gave the ombudsman “extraordinarily broad and intrusive investigatory powers,” and
would hamper EPA’s enforcement efforts.
Comprehensive Reauthorization
Several issues proved particularly challenging in the attempts to reauthorize CERCLA
during the 1990s. The ones most debated are briefly discussed below, with a comment on
how the reported bills during that time generally dealt with the issue.
Liability. CERCLA’s liability scheme (joint and several liability on a strict and
retroactive basis) drew in many parties, sometimes hundreds at a particular site, in protracted
and expensive litigation. The bills of the 1990s consequently provided protection against
CERCLA liability for more than a dozen categories of parties (although not all categories
appeared in each bill). Some of them (lenders and recyclers13) were granted relief in other
legislation, and the 2002 enactment of the Small Business Liability Relief and Brownfields
Revitalization Act (P.L. 107-118) protected a variety of groups including those who sent only
very small quantities of hazardous waste to a Superfund site, who only sent municipal solid
waste, and several categories of “innocent parties.”
To limit litigation the bills would have established an allocation process, conducted by
a neutral person, to divide cleanup costs among responsible parties. Those not accepting the
allocation would have been subject to CERCLA’s joint and several liability.
13 Asset Conservation, Lender Liability and Deposit Insurance Protection Act (P.L. 104-208, division
A, title II, subtitle E), and the Superfund Recycling Equity Act (P.L. 106-113, appendix I, title VI).
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Remedy Selection and Cleanup Standards. CERCLA states a preference for
treatment of hazardous wastes (as opposed to removing them to another, safer, location).
The bills either deleted the treatment preference or limited it to highly contaminated “hot
spots.” The bills also sought to better tailor the remedy to the individual site by requiring
remedy selection to consider current and reasonably anticipated uses of land and water
resources, state and local viewpoints, and reasonableness of cost.
CERCLA also requires cleanups to meet “applicable or relevant and appropriate
requirements” (ARARs) of other federal and state environmental laws, which has caused
contention about which cleanup standards and levels should apply at each site. The bills
deleted the words “relevant and appropriate” to help clarify which federal and state laws and
regulations do apply to cleanups.
The bills all required EPA to conduct facility-specific risk assessments or evaluations
and to communicate the results in easily understood language. They all also established
modified groundwater cleanup and protection requirements, though in different ways and
with different levels of stringency.
State Role. CERCLA gives the federal government the lead role in cleaning up
hazardous waste sites, and unlike most other environmental laws, does not envision that
states would assume responsibility to run the program. All of the bills of the 1990s would
have authorized EPA either to delegate or authorize program responsibility over all or some
NPL facilities in a state, and for all or some aspects of cleanup activity, give states the
flexibility to choose which ones; federal funding would have been provided. The bills would
have reduced states’ share of operation and maintenance costs from 100% to no more than
10%; and some of them would have given state governors a veto over the addition of new
sites to the National Priorities List.
Natural Resource Damages. CERCLA requires liable parties to make good the
environmental harm they cause by restoring or replacing publicly owned natural resources
they have injured or destroyed, and by paying damages for the lost use of the resources.14
Several large lawsuits in the multi-hundred-million-dollar range, and the possibility of others,
have concerned industrial interests and led them to seek limits to the amounts of natural
resource damages they are required to pay. The bills would have barred recovery for “non-
use” values (values that are unrelated to actual use of the resource), and would have based
damage assessments on site-specific conditions and restoration requirements.
Brownfield Issues
The Brownfields program for cleaning up less seriously contaminated sites was formally
established by Title II of the Small Business Liability Relief and Brownfields Revitalization
Act (Brownfield Act, P.L. 107-118), signed by the President on January 11, 2002.
Brownfields are “real property, the expansion, redevelopment, or reuse of which may be
complicated by the presence or potential presence of a hazardous substance, pollutant, or
14 Liability for lost use has resulted from judicial interpretation of CERCLA.
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contaminant;”15 they are not traditional Superfund sites. Generally, they are not highly
contaminated and therefore present lower risks to health.
The new Brownfields Act provides for: (1) a program to provide “assessment grants”
to characterize, assess, and conduct planning at brownfield sites, and to perform targeted site
assessments; and (2) a program to provide “remediation grants” to capitalize revolving loan
funds, or to be used directly to clean up one or more sites. Assessment grants are limited to
$200,000, which EPA may increase to $350,000 based on the anticipated level of
contamination, the size, or the status of ownership of the site. The remediation grants may
be awarded on a community-wide or site-by-site basis, and are limited to $1 million. The
law authorizes $200 million for each of five years for these programs, and dedicates $50
million per year (or 25% of the amount appropriated if less than $200 million) for the
assessment and cleanup of relatively low-risk sites contaminated with petroleum or
petroleum products. Technical assistance, training, and research are also authorized.
The new law also provides protection from Superfund liability for individuals in certain
situations that are said to inhibit brownfields development, namely for owners of land
contaminated by a source on contiguous property, and for prospective purchasers of property
that is known to be contaminated. These provisions essentially codify existing EPA policy.16
In addition, the Brownfields Act clarifies the Superfund law’s “innocent landowner” defense.
CERCLA provides a defense against liability for a person who unknowingly purchased
contaminated land, provided the person made “all appropriate inquiry” prior to the
transaction. The Brownfields Act spells out what comprises all appropriate inquiry for the
purchaser to qualify as an innocent landowner under the law. These provisions would apply
to all contaminated sites, not just brownfields.
In addition, the new law authorizes $50 million per year for five years to assist states
in establishing or enhancing their voluntary cleanup programs, which address contaminated
sites that do not require federal action, but need cleanup before they can be considered for
reuse. States may also use these grants to capitalize a revolving loan fund, or to develop a
risk-sharing pool, an indemnity pool, or insurance mechanism to provide financing for
response actions. The Brownfields Act also addresses the “state finality” issue,17 and forbids
the federal government from intervening at sites being cleaned up under a state program,
except where: (1) the state requests assistance; (2) the contamination has or will migrate
across state lines, or onto federally owned or controlled property; (3) EPA determines, after
taking into account the response actions already taken, that a release or threatened release
may present an imminent and substantial endangerment to public health or welfare, or the
environment; or (4) EPA, after consultation with the state, determines that information not
known by the state has been discovered that requires further remediation to protect public
health or welfare, or the environment. This ban on federal enforcement is contingent on the
state maintaining a public record of sites where response action is completed, and sites that
15 New CERCLA §101(39).
16 Policy Towards Owners of Residential Property at Superfund Sites, OSWER Dir. No. 9834.6 (July
3, 1991), and Final Policy Toward Owners of Property Containing Contaminated Aquifers, 60 Fed.
Reg. 34790 (1995).
17 New CERCLA §128(b).
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are scheduled to be cleaned up in the coming year. (See CRS Report RL30972, The
Brownfields Program Authorization: Cleanup of Contaminated Sites.)
In the 108th Congress, at least 10 bills with brownfield components have been
introduced, and four provisions in three laws were enacted. The tax bill that was signed by
the President on October 22, 2004, the American Jobs Creation Act (H.R. 4520, H.Rept. 108-
755), contains two of the provisions. One creates tax incentives for cleaning up moderately
and heavily contaminated properties, and requires eligible entities to spend at least $550,000
on remediation. The tax break is available only to tax-exempt investors such as university
endowments, private pension funds, and charitable foundations and allows them to invest in
larger brownfields without incurring unrelated business income tax when they sell the
properties. (Similar provisions were in H.R. 3527 and S. 1936.)
The other provision in H.R. 4520 authorizes the issuance of tax-exempt facility bonds
for certain green building and sustainable design projects that are to be certified by the U.S.
Green Building Council’s Leadership in Energy and Environmental Design activity. The
projects must include at least 1 million square feet of building or 20 acres of land, and must
include a brownfield site, and meet other requirements. The authority for issuing bonds ends
on September 30, 2009.
Also enacted was the Working Families Tax Relief Act (P.L. 108-311, H.R. 1308,
H.Rept. 108-696), which reinstated the brownfields tax incentive retroactively for two years
(to December 31, 2005). The tax break allows a developer to fully deduct the costs of
environmental cleanup in the year the costs are incurred (called “expensing”), rather than
spreading the costs over a period of years (“capitalizing”).
The fourth provision is in the Economic Development Administration (EDA)
Reauthorization Act, S. 1134, and would establish a demonstration program for “brightfield”
sites, which are defined as brownfields redeveloped using solar energy technologies. It also
calls for GAO, within one year, to prepare an evaluation of EDA’s grants for the economic
development of brownfields that were made over the last 10 years. Other language making
brownfields eligible for certain EDA grants was dropped. S. 1134 was reported, amended,
on October 1, 2004 (S.Rept. 108-382), passed the Senate and the House on October 6 and
7, and was presented to the President on October 15, 2004. The companion House bill was
H.R. 2535 (H.Rept. 108-242, Part I). Three other bills that would authorize brightfield or
brownfield activities at EDA are H.R. 1341, H.R. 1491, and S. 645.
H.R. 239 was not enacted, but was reported by the House Financial Services Committee
on March 5, 2003 (H.Rept. 108-22). The bill removes the connection between HUD’s
Brownfield Economic Development Initiative (BEDI) program and the department’s Section
108 loan guarantees. The effect is to make the BEDI grants more obtainable by a larger
number of cities, particularly smaller communities. The bill also authorizes a pilot program
to set up a common loan pool for brownfield redevelopment projects, and authorizes funds
as needed for five years, through FY2007. The President’s FY2004 budget request proposes
eliminating the HUD brownfields program.
Representative Andrews introduced H.R. 402, which would amend the Internal Revenue
Code to allow a limited tax credit to holders of qualified brownfields cleanup bonds that are
issued by state or local governments. It sets a national limit on the amount of such bonds and
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provides for allocation among the states. Another tax-related bill is Representative Weller’s
H.R. 2815, which would make permanent the brownfields tax incentive that expired at the
end of 2003. (As noted above, P.L. 108-311 extends the tax break through December 31,
2005.) The bill would also remove the “recapture” provision, making the tax break more
valuable (and brownfield redevelopment more attractive), and would expand the class of
substances eligible for tax-favored cleanup to include petroleum and other material.
LEGISLATION
H.R. 239 (Gary Miller)
Facilitates HUD assistance for redeveloping brownfields. Introduced January 8, 2003;
referred to Committee on Financial Services; reported (H.Rept. 108-22), March 5, 2003.
H.R. 347 (Bilirakis)
See S. 515.
H.R. 402 (Andrews)
Provides a limited tax credit for qualified brownfields cleanup bonds issued by state or
local governments. Introduced January 28, 2003; referred to Committee on Ways and
Means.
H.R. 610 (Pallone)
Reinstates the taxes funding the Superfund Trust Fund, and the Oil Spill Liability Trust
Fund through FY2008, and extends the taxes funding the Leaking Underground Storage
Tank Trust Fund through FY2008. Introduced February 5, 2003; referred to Committee on
Ways and Means.
H.R. 805 (Houghton)
Amends the Internal Revenue Code to exempt from tax certain “settlement funds”
(escrow accounts) established under CERCLA to be used for cleanup if the U.S. government
is effectively the beneficial owner, and other conditions are met. Introduced February 13,
2003; referred to Committee on Ways and Means.
H.R. 1334 (Quinn)
See S. 645.
H.R. 1420 (Andrews)
Requires anyone who undertakes a Superfund response action to make publicly
available an accounting of the funds used for the response. Introduced March 25, 2003;
referred to Committees on Energy and Commerce, and on Transportation and Infrastructure.
H.R. 1491 (Oberstar)
Authorizes programs and activities to improve energy use related to transportation and
infrastructure facilities. Among other things, authorizes $200 million over five years for the
Secretary of Commerce to provide demonstration grants for the development of “brightfield”
sites (brownfields redeveloped using solar energy technologies). Introduced March 27, 2003;
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referred to Committees on Transportation and Infrastructure, Science, Ways and Means,
Resources, International Relations, and Financial Services.
H.R. 2116 (Brad Carson)
Directs EPA to provide relocation and other assistance for residents at the Tar Creek,
Oklahoma, Superfund site. Introduced May 15, 2003; referred to Committees on
Transportation and Infrastructure, and on Energy and Commerce. The bill was included in
H.R. 6 (conference report H.Rept. 108-375); conference report agreed to in House November
18, 2003.
H.R. 2535 (LaTourette)/S. 1134 (Bond)
Economic Development Administration Reauthorization Act. H.R. 2535, among other
things, authorizes grants for brownfield sites. Also authorizes $5 million per year for five
years for demonstration program for “brightfield” sites. Introduced June 19, 2003; referred
to Committees on Transportation and Infrastructure (T&I), and on Financial Services (FS);
reported, amended, from T&I, July 25, 2003 (H.Rept. 108-242, Part I); FS granted an
extension for consideration not later than September 2; FS discharged, September 2, 2003;
passed House October 21, 2003; referred to Senate Committee on Environment and Public
Works (EPW). S. 1134 is similar; no provision for “brightfields.” Introduced May 22, 2003;
referred to EPW; reported, amended, October 1, 2004 (S.Rept. 108-382); passed Senate and
House, October 6 and 7; presented to President October 15, 2004.
H.R. 2815 (Weller)
Makes permanent the brownfields tax incentive, expands the class of substances eligible
for tax-favored cleanup, and eliminates the recapture provision. Introduced July 22, 2003;
referred to the Committee on Ways and Means.
H.R. 3543 (Capuano)
Limits CERCLA liability for service station dealers for releases of recycled oil between
the enactment date of the 1986 Superfund amendments and the promulgation of used oil
regulations in 1993. Introduced November 20, 2003; referred to Committees on Energy and
Commerce, and on Transportation and Infrastructure.
H.R. 3527 (N. Johnson)/S. 1936 (Baucus)
Allows eligible tax-exempt entities to invest in larger brownfields without incurring
unrelated business income tax when they sell. See text. H.R. 3527 introduced November
19, 2003, referred to Committee on Ways and Means. S. 1936 introduced November 24,
2003; referred to Committee on Finance.
H.R. 3891 (Hart)
Allows the use of redevelopment bonds for environmental remediation. Introduced
March 4, 2004; referred to Committee on Ways and Means.
H.R. 3892 (Hart)
Authorizes “Brownfield IRAs” allowing a site owner to put up to $1 million per year
free from federal taxation into a special account for future use in brownfield assessment and
cleanup. The money would have to be used within 10 years. Introduced March 4, 2004;
referred to Committee on Ways and Means.
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S. 173 (Boxer)
Toxic Clean-up Polluter Pays Renewal Act. Reinstates the Superfund taxes until
January 1, 2014. Introduced January 15, 2003; referred to Committee on Finance.
S. 515 (Crapo)/H.R. 347 (Bilirakis)
Ombudsman Reauthorization Act of 2003. See text. S. 515 introduced March 5, 2003;
referred to Committee on Environment and Public Works; reported without amendment
(S.Rept. 108-50) and passed Senate by unanimous consent, May 21, 2003; referred to House
Committee on Energy and Commerce (E&C). H.R. 347 introduced January 27, 2003;
referred to E&C.
S. 645 (Levin)/H.R. 1334 (Quinn)
Creates a brownfield program in the Economic Development Administration, and
authorizes $60 million per year for five years. S. 645 introduced March 18, 2003; referred
to Committee on Environment and Public Works. H.R. 1334 introduced March 18, 2003;
referred to Committees on Transportation and Infrastructure, and on Financial Services.
S. 1072 (Inhofe, by request)/H.R. 2088 (Don Young, by request)
The surface transportation reauthorization bill; among other things makes eligible for
funding the remediation of brownfield sites associated with the construction of certain
transportation projects. S. 1072 introduced May 15, 2003; referred to Committee on
Environment and Public Works; reported (S.Rept. 108-222) with an amendment in the nature
of a substitute with brownfield provisions deleted, January 9, 2004. H.R. 2088 introduced
May 14, 2003; referred to Committees on Transportation and Infrastructure, Ways and Means,
the Budget, Science, Resources, the Judiciary, Energy and Commerce, Government Reform,
and Rules.
S. 1936 (Baucus)
See H.R. 3527.
S.Amdt. 192, as modified, to H.J.Res. 2 (Lautenberg)
Increases the FY2003 Superfund appropriation, $1,272,888,000, in H.J.Res. 2 by $100
million. Proposed January 23, 2003; tabled by vote of 53-45. (Cong. Rec. p. S1429-S1431)
S.Amdt. 408 to S.Con.Res. 23 (Lautenberg)
Reinstates the Superfund taxes. Proposed March 25, 2003; not agreed to by 43-56 vote.
S.Amdt. 2703 to S.Con.Res. 95 (Lautenberg)
Reinstates the Superfund taxes. Proposed March 11, 2004; not agreed to by 43-53 vote.
FOR ADDITIONAL READING
Klee, Ann R. and Ernie Rosenberg. “The Moribund State of CERCLA Reauthorization,”
Natural Resources & Environment, Winter 1999, pp. 451 ff.
Probst, Katherine N. “Superfund’s Future,” The Environmental Forum, March/April 2002,
pp. 32-41.
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Probst, Katherine N. and David M. Konisky. Superfund’s Future: What Will It Cost?
Washington: Resources for the Future, 2001. 294 pp.
U.S. EPA. Office of Inspector General. EPA Regional Superfund Ombudsmen Program
Needs Structure. March 13, 2003. 11 pp. Report No. 2003-S-00004
U.S. General Accounting Office. Issues Raised by the Reorganization of EPA’s Ombudsman
Function. October 2002. 23 pp. GAO-03-92
____. EPA’s National and Regional Ombudsmen Do Not Have Sufficient Independence. July
2001. 35 pp. GAO-01-813
____. The Role of Ombudsmen in Dispute Resolution. 49 pp. April 2001. GAO-01-466
CRS Reports
CRS Report RL30972. The Brownfields Program Authorization: Cleanup of Contaminated
Sites.
CRS Report RL31911. “Innocent Landowners” and “Prospective Purchasers” under the
Superfund Act.
CRS Report RL31154. Superfund: A Summary of the Law.
CRS Report RL31410. Superfund Taxes or General Revenues: Future Funding Options for
the Superfund Program.
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