Good afternoon Chairman Chafee, Chairman Smith and Members of the Committee. My name is Bernard Reilly. I am Corporate Counsel for DuPont Company and am here representing the Chemical Manufacturers Association (or CMA). CMA is a non-profit, non-partisan trade association whose member companies produce more than 90 percent of the basic industrial chemicals manufactured in the United States. CMA and DuPont also are members of the Superfund Action Alliance (SAA), a combined group of businesses, trade associations and other concerned organizations that has been actively engaged in the Superfund debate for a number of years.
CMA has worked on Superfund reform since the early 1990s with Members of Congress, the Administration, environmental groups, states, cities, and other business organizations. In addition, we have worked with EPA to improve the Superfund program through administrative reforms.
I would like to commend Chairmen Chafee and Smith for their leadership over the years in trying to reform the Superfund law and for their introduction of S. 1090, the Superfund Program Completion Act. CMA recognizes the Senators' accomplishment in producing this bill. As long time participants in the efforts to reform Superfund, CMA understands that this is not an easy task and looks forward to working with both the Republican and Democratic members of the Committee and the Senate on this bill.
CMA has completed a preliminary review of the recently introduced bill. I would like to spend the next few minutes highlighting what is especially noteworthy, touching on a number of strong areas, and following with some areas that could be improved.
II. NOTEWORTHY AREAS OF S. 1090
Clearly, the most important issue facing Congress at this point is the future direction of the program. As we have previously noted, after 17 years of existence, there is more of Superfund behind us than ahead of us. According to EPA, nearly 90% of all non-federal sites on the National Priority List (NPL) are undergoing cleanup, 60% will be finished by the end of this Congress and 85% will be cleaned up by 2005. Congress needs to determine what remains to be done under Superfund, how long it will take, and how much it will cost. We strongly commend the cosponsors of S. 1090 for recognizing these critical issues and taking appropriate steps to address them.
CMA has prepared estimates of the funding required to complete the job at hand. These indicate that Superfund funding could be dramatically reduced and there would still be sufficient funds to pay for both remaining sites and sites that GAO and EPA have concluded will be added to the NPL in the future. Program spending levels should be adjusted accordingly to fit the future needs of the program in order to ensure that more funds than necessary are not appropriated. S. 1090 does exactly that. Congress should take the next step and direct an independent study of funding needs.
In addition to recognizing that Superfund is moving towards completing the job of cleaning up existing sites, and that the funding levels need to be adjusted accordingly, S. 1090 contains other important provisions. These include: finality for state cleanups; an integral Governor's role in the process of listing sites on the NPL;liability relief to ensure that brownfields sites are redeveloped; and a recognition of the states' primary role in cleanup.
III. AREAS OF S. 1090 THAT COULD BE IMPROVED
Another aspect of this bill deserves credit at the same time that it raises some concerns about its implementation. This particular aspect has to do with the exemptions that are provided for certain parties and the allocation system that is set up to pay for those parties' shares. The bill deserves credit for recognizing that it would be wholly unfair to pass exempt parties' shares to the remaining parties at a site. The allocation system that is set up to determine those shares, however, appears to be flawed. Under this system, industrial parties at these sites not only will continue to pay more than their fair share of liability, they probably also will pay for shares attributable to exempt parties.
As we all know only too well, it is not easy to develop fair, defensible, and acceptable liability allocations. CMA has advocated a streamlined system for several years, calling for the inclusion of certain basic elements but not overburdening the system with detail. The single most important element of any streamlined process is that it be administered by third-party neutrals who do not have a vested stake in the outcome. S. 1090 does not include this element. Instead, the bill designates EPA as the allocator. This is not appropriate given EPA's demonstrated, vested interest in preserving the Trust Fund and culture of assigning liability to "deep pockets." The bill also lacks a defined process for information gathering and deadlines for assuring that allocations are completed in a timely manner.
Fundamental reform to ensure the successful, cost-effective future of the Superfund program requires changes to areas including natural resource damages, remedy selection, and cost recovery programs. Improvements in the NRD program would help to ensure that the program focuses on the restoration of injured or lost resources, not surplus damages. Improvements in Superfund's remedy selection provisions, recognizing what is happening in the field and focusing on risk-based remedy selection, would help to ensure that cleanups are as fast, efficient, and cost- effective as reasonably possible. Finally, improvements in the Superfund cost recovery provisions would ensure that EPA is not allowed to recover costs that are "not unreasonable" and "not unnecessary."
IV. CONCLUSION
Chairman Chafee and Chairman Smith and members of the Committee, thank you for undertaking the hard work necessary to produce the Superfund Program Completion Act. As I have said, the future direction of the program is the most critical issue facing us in reforming Superfund. We see that future as one in which sites currently listed on the NPL are cleaned up, and the remaining sites are addressed under a reduced program with reduced spending levels. We strongly commend you for taking an innovative look at these issues and addressing them in S. 1090.
We appreciate the opportunity to provide input into this challenging process. At this point, I would be happy to answer any questions you may have.