The state Attorneys General have a major interest in Superfund reauthorization legislation. As chief legal of ricers of our respective states, we enforce state and federal laws in our states. We help protect the health and welfare of our citizens, our environment and natural resources. Because many steps in the Superfund cleanup process necessarily involve legal issues, we often are called upon to advise our client agencies - both response agencies and natural resource trustee agencies - on how the law should be interpreted and implemented to achieve the desired cleanup or restoration goals. We often are also responsible for negotiating cleanup and natural resource damages settlements, and when a settlement cannot be reached, it is our responsibility to commence and litigate an enforcement action. We also defend state agencies and authorities when Superfund claims are made by the United States Environmental Protection Agency (EPA) and other federal agencies against them.
NAAG also has been deeply involved in the Superfund reauthorization process for many years. At its Summer meeting on June 22-26, 1997, the sole resolution adopted by the state Attorneys General addressed Superfund Reauthorization; a copy of this bipartisan Resolution is attached. The Resolution directly addresses many of the issues that are the subject of S. 1090. The NAAG Resolution arose from the state Attorneys General's recognition of the critical importance of the Superfund program in assuring protection of public health and the environment from releases of hazardous substances at thousands of sites across the country. We want to make the tasks of cleanup and protecting the public less complicated and more efficient, and to reduce the amount of litigation and the attendant costs that result.
While the state agencies that administer cleanup programs are very knowledgeable about the engineering issues involved in selecting remedies and the cleanup process, it is the state Attorneys General who can best evaluate the legal consequences of changes to the current statutory scheme, such as how amendments likely will be interpreted by the courts and the effect of the amendments on enforcement, settlement, and cleanup. We are pleased that we will be able to bring to this Committee our insights and experience in administering the Superfund statute.
INTRODUCTION
In New York, our office has been litigating Superfund cases since 1981. A major impetus for the passage of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) was the chemical dumps exemplified by the infamous Love Canal and related Hooker Chemical Company sites in Niagara Falls, New York. CERCLA provided both the federal and state governments essential legal tools to address the dangers posed by those and thousands of other sites in New York and throughout the country.
Although there were significant problems in the federal implementation of CERCLA during the 1 980's, the current statute is now getting the job done as intended. As a result of CERCLA, our of lice and the State's Department of Environmental Conservation have been able to obtain cleanups at over 600 hazardous waste sites in New York. While state voters in New York approved bonding for and New York committed $1.1 billion for site cleanups, because of the powers provided in CERCLA, responsible parties have contributed more than $2.3 5 billion toward site remediation and two-thirds of sites are being cleaned by the private parties responsible for their creation. Most states have had similar results. On the federal level, some $10 billion of public money has been saved because 70% of all remedial actions at federal Superfund sites are being performed by responsible parties.
A major reason for this success is that cleanup liability under CERCLA is now clearly understood by responsible parties and government. It was not always this way. In the 1 980's, the meaning of numerous terms, the reach of the liability provisions, and the application of the remedy selection provisions were the subjects of contentious litigation. These lawsuits caused delays in cleanups, imposed substantial burdens placed on federal and state programs, and increased everyone's transaction and cleanup costs. Those days are now over: potentially responsible parties (PRPs) now know what the statute means and where they stand, and thus most are ready to settle their liability with government. EPA's practices also have evolved, and it knows what it can require of PRPs. Moreover, EPA has developed practices that lead to earlier settlements and the quicker implementation of remedial decisions. Finally, the states' own Superfund programs have matured. Many of them are modeled on or mainly utilize the federal statute. State officials too understand what CERCLA means and how to use it, and can obtain appropriate cleanups at minimal taxpayer expense. The message is clear: we must avoid changes to CERCLA that will reignite the courtroom battles over the meaning, scope, and implications of the law. At the same time, we must not lose sight of our primary goal - cleanup of sites and protection of the public and future generations. We have no desire to replay the 1980s, even though we were generally successful in the courtrooms.
S. 1090
We are pleased to note that S. 1090 is a departure from earlier bills arising in the Senate and House. S. 1090 contains some of the revisions that have been sought by the states for years, such as the cap at 10% for the state share of remedy operation and maintenance costs. In addition, unlike many previous bills, S. 1090 is limited in its overall scope and selective in its reforms. The bill does not amend the remedy selection and natural resource damages provisions of CERCLA. In many respects, those amendments that are in the bill are more narrow than those previously proposed, and wholesale alterations of existing statutory language are generally avoided. As a result, the defense bar will have fewer opportunities for legal challenges than under earlier reauthorization bills.
S. 1090 also includes a brownfields revitalization program, and allows states to give cooperating PRPs protection from liability under certain circumstances, measures that will assist states in implementing their voluntary and brownfields cleanup programs. Unfortunately, other needed revisions that Attorneys General have been seeking for many years are not included. Clarification of the sovereign immunity waiver, modification of the IRS code to allow natural resource trustees to utilize the Fund to perform natural resource damage assessments, and revision of the natural resource damages statute of limitations, among other needed reforms, are not included in S. 1090.
Despite some improvements in the proposed amendments, there are still serious problems with S. 1090's revisions to the liability and allocation provisions of CERCLA. While NAAG supports appropriate amendments to provide incentives to settle, reduce transaction costs, and provide limited exemptions from liability for truly "de micromis parties" and a reasonable limitation on liability for municipal solid waste disposal, many of the provisions of S. 1090 are unclear or go too far, shifting the costs of cleanup from polluters and responsible parties to the taxpayers. The proposed mandatory allocation process is unwise, and rather than making settlement easier and quicker, will complicate and delay settlements.
Most critical, however, is the apparent defunding of the Superfund program, which necessarily will shift hundreds of millions of dollars more in costs, if not billions of dollars, to the states. We all wish that there was no need for CERCLA and the Superfund program, but the need is there and will be there for many years. Because operation of existing remedies, construction of new remedies, response to new spills and unaddressed sites, and governmental performance and oversight of these activities must continue beyond 2004, it is important that sufficient funds be dedicated to the Superfund program. When EPA lacks the funds to perform, the burden will shift to the states, which do not have sufficient resources to carry this burden alone. In addition, by creating new liability exceptions at NPL sites and imposing limits on listing new sites, we believe that S. 1090 will seriously erode the operation of the Superfund program and inevitably shift its costs to the states.
1. LIABILITY EXCEPTIONS AND ALLOCATION/SETTLEMENT PROCESS
A. De minimis and de micromis parties.
NAAG supports reasonable statutory changes that encourage early settlements with de minimis parties and liability exemptions for truly de micromis parties. However, it is important that these provisions be narrowly and carefully written to avoid inappropriate releases from liability and expansion of the "orphan share" that the Fund and the states then may well have to pay. We note that CERCLA always allowed EPA to settle matters quickly and in recent years EPA has been aggressively entering into such settlements without any changes in the law.
Section 122(g) of CERCLA would be amended by S. 1090, altering the current authority regarding expedited settlements for de minimis parties. De minimis status would be presumed if the volumetric contribution is not more than one percent of the total volume. However, creating a statutory presumption will not serve to encourage such settlements and may have the opposite effect. For instance, at many sites, one percent is not the appropriate de minimis level; it is either too low or too high. The statutory presumption in S. 1090 allows an upward deviation from the presumed one percent de minimis level, but not downward, and then only if the President "promptly identifies a greater threshold based on site-specific factors," information the President is not always likely to possess because of the mandated expedited nature of the settlement process. Indeed, the one percent floor would exempt many contributors of waste at larger sites. For instance, the Hardage Superfund site in Oklahoma received over 21 million gallons of industrial waste during the 1970's, including plating wastes, solvents, coal tars, PCBs, and petroleum refining waste. One percent of the waste at the site is 210,000 gallons, an amount of hazardous waste which can wreak havoc on the environment.
Moreover, creation of a presumption will lead to greater transactional costs, for any deviation from a presumption provides an- additional ground for -non-settling parties to challenge the de minimis settlement. PRPs also will litigate the issue of whether they are de minimis based on the presumption, creating even further litigation and higher transaction costs. A statutory presumption should be reconsidered, and instead the appropriate de minimis level should be set on a site-by-site basis without any statutory presumption.
Proposed 107(r) would exempt from liability "de micromis" parties that sent less than 110 gallons or 200 pounds of material containing hazardous substances to a site. We support an exemption for truly de micromis parties, such as Elk Clubs, pizza parlors, and Girl Scout troops, that sent minimal amounts of low-concentration and low-toxicity mixtures to a site. However, depending on site-specific circumstances and the type of hazardous substances involved, 200 pounds of solid material or 110 gallons of liquid (which is more mobile than a solid material and will usually have a weight of approximately 880 pounds - four times the weight exemption for solid materials) can constitute a substantial contribution to a release. For instance, 110 gallons of a spent solvent, such as trichloroethylene, could contaminate 10 billion gallons of drinking water to levels twice the standard. We believe exempting such a party statutorily and presumptively would be unfair and inappropriate, particularly without full consideration of concentration or toxicity, and would lead to extensive litigation by parties near the specified weight or gallonage.
B. "Small" Business Exemption
Section 107 of CERCLA would be amended by 301 of S.1090 to include a new subsection 107(s), limiting liability at NPL sites for small businesses which are current or former owners or operators, generators or transporters. A "small business" is one that had no more than 75 full-time employees, or its equivalent, in the taxable year before receiving notification from the President that it may be liable, or had less than $3 million in gross revenue for that year. If the company qualifies, it escapes liability for costs and damages arising from activity which resulted in the disposal or treatment of material containing a hazardous substance at a facility before the date of enactment of the subsection. The exception is not applicable if the hazardous substance attributable to the business did or could "contribute significantly to the cost of the response action" at the facility or is affiliated through "any familial or corporate relationship" with a liable party (proposed 107(s)(1)(B)-(C)); or if the business's activity which otherwise would give rise to liability "is determined by a court or administrative body of competent jurisdiction, within the applicable statute of limitation, to have been a violation of any Federal or State law pertaining to the treatment, storage, disposal, or handling of hazardous substances" (proposed 1 22(p)(2)(F)).
While NAAG supports appropriate relief to de minimis parties, the wholesale exclusion of a large class of otherwise liable parties based- solely upon their size or revenues is unwarranted. With this exemption, no matter the amount of material disposed, liability is forgiven. Even if the business engaged in knowing, reckless, or grossly negligent activity, liability is excused. Small businesses which committed illegal acts would not be liable unless they happened to have been caught and convicted "within the applicable statute of limitation," thus rewarding the successful concealment of illegal activities. Ability to pay is irrelevant, except that the very small number of small businesses that would be disqualified from the exemption still would be eligible for a reduction of their liability based on their ability to pay. See, proposed 122(g)(1)(D)(i)(III). The exemption would eliminate many PRPs, especially at municipal-owned, codisposal facilities, and the Fund and the states would have to make up for this share of liability. The states do not have the resources to absorb these shares.
C. Innocent Owner Protection and Contiguous Property Exemption
In.contrast to such bills as H.R. 1300, which effectively exempts current owners from liability, S. 1090 offers a more thoughtful amendment at 103 and 104. The basic structure of the provision remains in 101(35) and, in contrast to H.R. 1300, there is no protection for an innocent landowner who knew or should have known of the disposal of hazardous substances. S. 1090 does change the standard for determining whether an owner should have known of the disposal. To prove that the current owner had no reason to know, the owner has to establish that it undertook all "appropriate inquiries" and exercised appropriate care (stopped the source, prevented future releases and prevented exposure to past releases) . EPA has the authority to adopt the ASTM standards and practices which describe appropriate steps a new owner should take, or to adopt others, taking into consideration various factors. Finally, there is a special provision for property for "residential or other similar use" purchased by a "nongovernmental or noncommercial entity," for which a facility inspection and title search revealed no basis for further investigation. This last special protection is problematical because of the meaning of the phrases "other similar use" and "noncommercial entity" is unclear. This language would need to be clarified before NAAG could support it.
These amendments affect only those current owners related by contract to responsible parties. If the current owner is not related by contract, then the owner does not have to comply with the "due diligence" provisions of 101(35), but only with the "due care" provisions of 107(b). However, it is possible, if not likely, that courts will define what constitutes "due care" without regard to whether the owner complied with the "due diligence" provisions of 101(35). If that occurs, then the net result likely would be that all current owners, possibly even if they have actual knowledge of the disposal before buying, will escape liability as long as they cooperate with the governments or other PRPs doing a cleanup by giving access and staying out of the way. NAAG opposes such a very broad exemption, which comes close to eliminating current owners from CERCLA liability. Such owners will reap the benefits associated with a taxpayer-financed cleanup of their properties, even though they paid very little for their land given their knowledge-of contamination. While S. 1090 provides for a "windfall" lien, it is only available to the federal government, not to states, and is only created upon sale of the property. As a result, owners will receive the protections against state enforcement but the state does not even get the lien's limited benefit.
Given the protections given innocent owners and the current defense regarding acts of unrelated third parties, CERCLA 107(b)(3), we see little need for the contiguous owners provision of 102.
D. Recyclers Exemption
Under the new 107(u), there is no liability at any site for a person arranging for the recycling of certain recyclable material upon demonstration of specified requirements. "Recyclable material" is defined to include (1) plastic, glass, textiles, rubber (not including whole tires) and scrap metal, as well as minor amounts of material incident to or adhering to such scrap; and (2) spent batteries. Special rules are then provided for transactions involving these different kinds of recyclable materials.
While we agree that recycling activities should be encouraged, we are nevertheless troubled by this exemption because it still is too broad and elements of it unclear. The special rules provide protection to recyclers so long as they comply with various "federal" regulations or standards. However, only state regulations and standards are applicable in most states and there are no federal requirements in existence. Therefore, the recyclers will have nothing to comply with and can act irresponsibly without incurring liability. Also, while recyclers claiming the exemption are required to demonstrate that they meet certain criteria, the bill is unclear on whether they, or EPA or the States, must demonstrate that they used reasonable care in their recycling activities.
The exemption is particularly inappropriate as it applies to spent lead-acid batteries. Such batteries contain large quantities of lead, an especially toxic substance. Much of the lead in these batteries is in the form of lead oxide and lead sulfate, compounds that are relatively mobile and bioavailable in the environment. The sulfuric acid in these batteries (which has a pH approaching O) greatly enhances the solubility and mobility of these metals. Moreover, the secondary lead smelter industry has repeatedly argued that the RCRA regulations - under either federal or state authority - do not apply to spent batteries. These batteries, the industry argues, are raw material; they are not discarded, and thus not solid wastes and not subject to regulation under RCRA. See United States v. ILCO, Inc. 996 F.2d 1126 (11th Cir. 1993). The lead components of spent lead-acid batteries would also fall within the definition of "scrap metal." The limitations on the exemption for scrap metal are less stringent than the limitations on the exemption for spent batteries. As the exemptions are currently drafted, a person recycling the lead from spent lead-acid batteries could take advantage of the less stringent limitation for scrap metal. At a minimum, these problems need to be addressed.
E. MSW Exemption
Section 301 defines "codisposal landfill" and "municipal solid waste," and amends 107 of CERCLA to add new subsections (q) and (I), both of which address liability involving municipal solid waste ("MSW") and municipal sewage sludge ("sludge") at NPL sites. MSW is defined as (A) all waste generated by households, hotels and motels, and (B) waste generated by commercial, institutional and industrial sources to the extent (i) such materials are "substantially similar" to household or public lodging waste, or (ii) the material is waste that is collected with MSW and, regardless of when generated, is considered conditionally exempt small quantity generator waste under the Solid Waste Disposal Act. The term includes food and yard waste, paper, clothing, appliances, consumer product packaging, disposable diapers, office supplies, cosmetics, glass and metal food containers, grade and high school lab waste, and household hazardous waste.
NAAG supports reasonable limitations on liability for disposal of municipal solid waste. Unfortunately, the limitations provided under 107(q) of S. 1090, as written, are confusing and appear to contradict the exemption provided by 1 07(t). They will not operate as intended, and in any event still are too broad. First, as written, liability at any NPL site is excused in proposed 1 07(q) for anyone liable as a generator or transporter if they are the "owner, operator, or lessee of residential property from which all of the person's municipal waste was generated." Thus, as long as one's MSW comes from residential property, one is immune for liability arising from the generation of other hazardous wastes sent to any NPL site. Similarly, all business and nonprofit groups having less than 100 employees are exempt from any liability at NPL sites. There appear to be significant drafting errors in this provision, and it contradicts the liability provided by 1 07(t). Section 107(q) must be rewritten or removed from the bill. We are concerned about 107(q)'s intent to exempt all but large generators from liability.
Assuming that the bill's real intent is described in the definitions and proposed 107(t), a substantial portion of PRPs would be relieved of liability even beyond those intended to be exempted by proposed 1 07(q). Under the definition of MSW, the relief applies to not just households, but a wide, almost all-inclusive group of business, commercial, institutional and industrial sources. For instance, at a number of hazardous waste sites, cosmetic manufacturers have disposed of sometimes substantial quantities of waste containing a variety of hazardous substances, e.g. acetone. Under S. 1090, such PRPs would escape liability because their wastes, at least arguably, are "substantially similar to waste materials normally generated by households," i.e., cosmetics thrown away by households. Or, for another example, at municipal-owned, codisposal facilities, it is common to have a large volume of MSW and then a small volume of waste from commercial and industrial sources which is highly toxic. Many commercial, institutional and industrial facilities have used solvents in large quantities, and those wastes were often disposed in landfills over the years. PRPs could argue that their solvents are "substantially similar" to solvents used in households and, therefore, exempt.
In proposed 107(t), S. 1090 appears to adopt EPA's current settlement policy for municipal solid waste for generators and transporters, as well as for municipal owners and operators. However, the meaning of proposed subparagraph 107(t)(1)(C) is unclear. NAAG also supports liability limitations for municipalities owning or operating codisposal landfills. Municipalities need assistance in closing codisposal landfill sites that have become contaminated with hazardous substances. We are encouraged by the direction taken by S. 1090 regarding municipalities' and generators' liabilities for codisposal sites, and would be happy to work with the Committee to craft appropriate language to address this subject.
F. Allocation Process for De minimis and Other Parties under Proposed 1 22(g)(1).
Under current law, the President is empowered to perform an allocation whenever "practicable and in the public interest." Section 302 modifies current CERCLA 1 07(g) to require the President to contact each PRP eligible for expedited settlement consideration and to offer to reach a final administrative or judicial settlement with the party, apparently with respect to any response action at any facility. Eligible PRPs are (i) de minimis PRPs; (ii) site owners which did not conduct or permit hazardous substance activities on the property nor contribute to the release or threatened release by any action or omission; and (iii) natural persons, small businesses not otherwise exempt from liability, and municipalities which demonstrate an inability to pay a judgment. If the President concludes that a PRP is not eligible for settlement, the President must state the reasons for that determination to any PRP requesting a settlement. Under the proposal, "[a]s soon as practicable after receipt of sufficient information to make a determination," EPA then is required to determine eligibility and to submit a written settlement offer to each. The information relied upon by EPA must be disclosed upon request.
NAAG supports measures that promote early settlement with de minimis parties. However, we are concerned about the mandatory aspect of this provision and its application to every response action. The requirement that EPA make such offers for every facility may place an overwhelming burden on the agency, detracting significantly from its implementation of remedies. It is our general experience that EPA is prepared to enter into de minimis settlements when it has obtained the necessary information. Expansion of mandatory expedited settlement activities to all parties claiming an inability to pay at the earliest moment seems unwise, given the uncertainties such determinations might have on the state and federal governments' ability to pay for the cleanup once such parties have been excused from liability.
G. "Fair Share" Allocations and the Allocation/Settlement Process
S. 1090 would establish another mandatory allocation procedure for all parties, the "fair share" allocation, in an effort to reach "fair share" settlement at NPL sites. See proposed 122(n)- (p). Although the heading of proposed 122(p)(2) suggest that the provisions are limited to "statutory orphan shares and fair share settlements," which are governed by proposed 1 22(n) and (o), the statutory text provides that "[a]ll contribution and cost recovery actions under this Act" against generators and transporters of MSW, municipal codisposal site owners and operators, de minimis parties and parties unable to pay are stayed until EPA offers them a settlement. Moreover, if the President fails to fund a statutory orphan share or fails to "reimburse a party as required by subsection (g)," or "include a statutory orphan share estimate in any settlement when required to do so," the President is forbidden from issuing any further 106 orders or to commence or maintain any new or existing action to recover response costs at the facility. The President is required to reimburse the parties described above for any cost incurred in excess of the party's allocated share. We note that some of the provisions appear to contain what we assume are drafting errors, and the full meaning and intent of these provisions is unclear.
As written, it appears that the bill provides that EPA inaction will stay adjudication of claims brought by states, or any other party, if EPA has not offered to settle its own claim or even has no claim. For instance, if EPA does not offer-a settlement to a de minimis party that may be liable for any response costs, even at non-NPL sites, a state's action to recover its costs under CERCLA are stayed. This is unwise.
Moreover, if the Fund is insufficient to pay all orphan shares, the United States cannot commence a new action or continue an existing action to recover response costs even from parties who would not be entitled to a settlement or reduction in liability. Nor may it issue a 106 order, even against a party that is not entitled to a settlement offer. See proposed 111(b)(3); 122(p)(2)(B). By forbidding EPA from recovering costs or ordering remedial or removal actions, these provisions not only are self-defeating, but also could result in further endangerment of public health and the environment.
The allocation process regarding orphan shares is likely to be very cumbersome in practice, and is unlikely to accelerate settlements or remove smaller parties from ongoing litigation and allocation. Because the President is required to estimate the orphan share at a site whenever seeking judicial settlement with any party, settlements are likely to be delayed and de minimis parties stalled in court. Moreover, by requiring the court to review orphan share information when evaluating a settlement, the bill is inviting the courts also to evaluate all prior settlements when deciding whether to enter a settlement. This will lead to needless litigation, delay, and costs. Finally, because of conflicts between provisions requiring EPA to treat parties claiming an inability to pay the same as de minimis parties, and the definition and treatment of orphan shares, the allocation process will be very complicated and will invite litigation rather than avoid it.
Finally, other provisions make unclear whether and the extent to which the allocation and settlement provisions will, in effect, reopen past decrees. Because reimbursement of PRPs is expressly provided for by S. 1090, the language at proposed 122(n)(3) stating that a fair share allocation "shall include" response costs not addressed in a settlement approved by a federal court prior to enactment needs clarification, as reevaluation of prior settlements is not expressly prohibited. Reopening of prior liability determinations could well impose huge liabilities on the Fund, making further cleanups impossible, paralyzing EPA and the Superfund program, and shifting costs to the states.
2. STATE RESPONSE PROGRAM AMENDMENTS
A. Limits on NPL Listing
Section 202 of S. 1090 proposes a limit on the number of new NPL listings. No more than 30 sites per year could be listed, or one site every two years per state on average. We are very troubled by this proposal.
Sites should be listed on the NPL on the basis of the risk they pose to human health and the environment, and not be subject to an arbitrary numerical limit. Sites should be added as long as each poses a serious enough threat to warrant remedial action.
EPA's ability to list a site based on a neutral evaluation of the risks it poses and need for remedial action is important to the states. Possible listing is a major incentive for PRPs to conduct voluntary cleanups. If the possibility of NPL listing is significantly reduced, a major incentive for a PRP to proceed with a cleanup will be lost, forcing the states to cleanup themselves and then seek recovery of their costs. Many states simply cannot afford this course.
B. Revision of the NPL
Section 102(b) of S. 1090 requires EPA to revise the entire NPL in order to change the geographical descriptions of sites and delist portions of sites at which "no release actually occurred," such as those portions whose groundwater is contaminated presumably by migration of contaminants from an area beyond the portion. This task places an unnecessary burden on both EPA and the states, to which EPA will undoubtedly have to look for assistance in performing this reevaluation. We doubt the utility of this exercise, and oppose the provision.
As EPA has explained, "the NPL does not describe releases in precise geographical terms, and that it would be neither feasible nor consistent with the limited purpose of the NPL (as the mere identification of releases) for it to do so." 55 Fed.Reg. 6154, 6156 (Feb. 21, 1990). Indeed, to accurately describe geographical boundaries and to determine whether and where a "release actually occurred" requires a full remedial investigation and feasibility study (RI/FS) and, sometimes, the implementation of the remedial design and remedial action (RD/RA). After all, proof of where a release occurred can often be buried underground, or sometimes just cannot be determined. As EPA has explained on numerous occasions, delisting uncontaminated areas of sites or even accurately defining the geographical extent of releases "would be time-consuming, subject to constant re- verification, and wasteful of resources." Id.; see, e.g. EPA's most recent statement on geographical boundaries, 64 Fed.Reg. 2942, 2943 (Jan. 19, 1999).
Finally, relisting could extinguish state and federal natural resource damages claims under one reading of the existing statute of limitations. One district court has ruled that CERCLA 113(g)(1)'s limited stay of the statute of limitations for natural resource damages claims at NPL sites until the President selects the remedy only applies within the geographical boundary of the site. United States v. ASDRCO Inc., 28 F.Supp.2d 1170 (D. Idaho 1998). New Mexico, New York and other states have filed an amicus brief urging the United States Court of Appeals for the Ninth Circuit to reverse that erroneous reading of the law. If upheld, S. 1090's reevaluation could retroactively eliminate many damage claims of the states and federal natural resource trustees that they concluded were stayed, or force the premature filing of litigation prior to selection of the remedy even though such suits otherwise might be avoided or limited if the remedy selected addresses the restoration of the sites appropriately.
Listing on the NPL does not establish, nor is it intended to establish liability. The reevaluation which would be mandated by this provision would need to be Allowed up repeatedly as new information becomes available. It serves no useful purpose whatsoever.
C. Brownfields Redevelopment and State Voluntary Cleanup Programs
NAAG supports in general 101 and 201 Of S. 109() requiring EPA to establish grant programs to assist in brownfields' characterization and assessment and state response programs. Such grants will assist and strengthen state voluntary cleanup programs. NAAG also favors affording appropriate legal finality to cleanup decisions of qualified state voluntary cleanup programs and brownfields redevelopment programs. See 201 of S. 1090.
We suggest that the Committee make clear, perhaps through the addition of the term "development" to proposed 127(a)(1)(A), that redevelopment of brownfield sites can include noncommercial uses that are beneficial to the community. For instance, some brownfield sites might be developed for use as community centers, parks, libraries, and similar public facilities. Also, while the bill provides for consultation with the Secretary of Housing and Urban Development, it should also provide for consultation with the states.
In addition, New York believes that the redevelopment of brownfields throughout the nation should be encouraged and supported by other appropriate targeted financial incentives. Perhaps the simplest way to do this on a national level would be to add brownfields projects to the list of "qualified facilities" for which tax-exempt bond financing is available pursuant to section 142 of the Internal Revenue Code of 1986.
For purposes of 201, federal statutory provisions should be flexible enough to accommodate different state voluntary cleanup laws. States should be able to self-certify, subject to EPA's approval. After such approval, the state should be authorized to issue a release from federal liability when a volunteer complies with a federally-approved state brownfields program. In this fashion state brownfields and voluntary cleanup programs can work to their fullest potential.
3. FUNDING
Rather than dedicating a revenue stream to funding the Hazardous Substance Superfund, S. 1090 depends on an authorization allowing a one-time appropriation of not more than $1 billion from the Fund, to be used to enter into settlement agreements under the amended 122. Monies in the Fund can be used for response actions, i. e., actions designed to protect the public from releases, only if the total amount of monies in the Fund is greater than specified amounts. Appropriations out of the General Fund are limited to a maximum of $900 million for fiscal year 2000, and are reduced by $25 million per year for succeeding years. Approximately $300 million in additional funds are authorized for appropriation out of the General Fund, but may only be used for newly specified purposes. The amount authorized is well below current spending levels.
Like current law, S. 1090 also authorizes payment of natural resource damages from the Fund, but adds that there first must be a plan in place regarding restoration of the injured or destroyed resources. However, the IRS Code's provisions that forbid use of the Fund for such purposes, effectively overriding current 111, are not amended. There should be conforming amendments.
Although S. 1090 imposes numerous additional costs on the Fund through liability exemptions and reimbursement requirements, overall funding is cut. It is likely that EPA will not have enough funds to perform removal and remedial actions, particular given the bill's directive to reimburse PRPs first, leaving either the public unprotected or the states - which do not have the funds - with the responsibility to fill the breach resulting from EPA's inability to fund cleanups. Moreover, because there are no dedicated revenue sources for the Fund, actual appropriations and the Superfund program will become the subject of yearly budget battles and closed-door special amendments during the appropriation process.
It is our federal and state officials' responsibility to protect the public health and the environment and to leave our children a cleaner environment. The funding provisions are inconsistent with this duty. Cleanups now implemented by the federal government and PRPs will be left to the states, whose ability to recover the costs will have been hobbled by other provisions of the bill. PRPs will be much less likely to step forward to clean sites absent extensive litigation because they will know that state governments will lack the funds and often the statutory authority to compel cleanups. This is hardly the legacy to leave the next generation. We strongly urge this Committee to reconsider the funding mechanism, and insure that the Superfund program will have the funds necessary to truly complete the cleanup program without yearly appropriation battles.
NATIONAL ASSOCIATION OF ATTORNEYS GENERAL Adopted Summer Meeting June 22-26, 1997 Jackson Hole, Wyoming
RESOLUTION
SUPERFUND REAUTHORIZATION
WHEREAS, the Attorneys General of the States have significant responsibilities in the implementation and enforcement of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and analogous state laws, including advising client agencies on implementation of the cleanup and natural resource damage programs, commencing enforcement actions when necessary to compel those responsible for environmental contamination to take cleanup actions and to reimburse the states for publicly-funded cleanup, and advising and defending client agencies that are potentially liable under CERCLA;
WHEREAS, the Superfund programs implemented under CERCLA and analogous state laws are of critical importance to assure protection of public health and the environment from uncontrolled releases of hazardous substances at thousands of sites throughout the country;
WHEREAS, Congress is currently considering legislation to amend and reauthorize CERCLA;
WHEREAS, to avoid unnecessary litigation and transaction costs over the interpretation of new terms and new provisions, amendments to CERCLA should be simple, straightforward, and concise;
WHEREAS, the National Association of Attorneys General has adopted resolutions in March 1987, July 1993, and March 1994 on the amendment of CERCLA;
STATE ROLE
WHEREAS, many state cleanup programs have proven effective in achieving cleanup, yet the CERCLA program fails to use state resources effectively;
WHEREAS, state programs to encourage the cleanup and redevelopment of underutilized "brownfields" are making important strides in improving the health, environment, and economic prospects of communities by providing streamlined cleanup and resolution of liability issues for new owners, developers, and lenders;
FEDERAL FACILITIES
WHEREAS, federal agencies should be subject to the same liability and cleanup standards as private parties, yet federal agencies often fail to comply with state and federal law;
LIABILITY
WHEREAS, the core liability provisions of CERCLA, and analogous liability laws which have been enacted by the majority of the states, are an essential part of a successful cleanup program, by providing incentives for early cleanup settlements, and promoting pollution prevention, improved management of hazardous wastes, and voluntary cleanups incident to property transfer and redevelopment;
WHEREAS, the current CERCLA liability scheme has in some instances produced expensive litigation, excessive transaction costs, and unfair imposition of liability;
REMEDY SELECTION
WHEREAS, constructive amendments to CERCLA are appropriate to streamline the process of selecting remedial actions and to reduce litigation over remedy decisions;
NATURAL RESOURCE DAMAGES
WHEREAS, constructive amendments to CERCLA are appropriate to make it less complicated for natural resource trustees to assess damages and to restore injured natural resources, and to reduce the amount of litigation that may result in implementing the natural resource damage program.
NOW, THEREFORE, BE IT RESOLVED THAT THE NATIONAL ASSOCIATION OF ATTORNEYS GENERAL urges Congress to enact CERCLA reauthorization legislation that:
A. State Role
1. Provides for delegation of the CERCLA program to qualified states, and for EPA authorization of qualified state programs, with maximum flexibility;
2. Reaffirms that CERCLA does not preempt state law;
3 Ensures that states are not assigned a burdensome proportion of the cost of operation and maintenance of remedial actions and in no event to exceed 10 percent;
4. Clarifies that in any legal action under CERCLA, response actions selected by a State shall be reviewed on the administrative record and shall be upheld unless found to be arbitrary and capricious or otherwise not in accordance with law;
B. Federal Facilities
5. Provides for state oversight of response actions at federal facilities, including removal actions.
6. Provides a clear and unambiguous waiver of federal sovereign immunity from actions under state or federal law;
C. Liability
7. Provides a liability system that: a) includes the core provisions of the current CERCLA liability system that are essential to assure the effectiveness of the cleanup program; b) provides incentives for prompt and efficient cleanups, early cleanup settlements, pollution prevention, and responsible waste management; c) addresses the need to encourage more settlements, discourage excessive litigation, reduce transaction costs, -and apply cleanup liability more fairly and equitably, especially where small contributors and municipal waste landfills are involved; and d) assures adequate funding for cleanup and avoids unfunded state mandates;
8. Provides reasonable limitations on liability for disposal of municipal solid waste;
9. Provides an exemption from liability for "de micromis" parties that sent truly minuscule quantities of waste to a site;
10. Encourages early settlements with de minimis parties that sent minimal quantities of waste to a site;
D. Remedy Selection
11. Provides for the consideration of future land use in selecting remedial actions, provided that future land use is not the controlling factor, and provided that remedial actions based on future land use are conditioned on appropriate, enforceable institutional controls;
12. Retains the requirement that remedial actions attain, at a minimum, applicable state and federal standards;
13. Retains the prohibition on pre-enforcement review of remedy decisions;
14. Provides that cost-effectiveness should be considered, among other factors, in remedy selection;
15. Allows EPA or the state agency to determine whether to reopen final records of decision for remedial actions, as under current law;
E. Natural Resource Damages
16. Clarifies that in any legal action, restoration decisions of a natural resource trustee shall be reviewed on the administrative record and shall be upheld unless found to be arbitrary and capricious or otherwise in accordance with law, without precluding record review on other issues;
17. Provides that claims for damages for injuries to natural resources must be brought within three years of that completion of a damage assessment;
18. Allows Superfund monies to be used for assessments of damages resulting from injures to natural resources and for efforts to restore injured natural resources;
19. Retains the ability of trustees to recover damages based on any reliable assessment methodology;
20. Does not revise the cap on liability for natural resource damages so as to reduce potential damage recoveries;
21. Clarifies that trustees are entitled to recover legal, enforcement, and oversight costs;
F. Brownfields
22. Strengthens state voluntary cleanup and brownfields redevelopment programs by providing technical and financial assistance to those programs, and by giving appropriate legal finality to cleanup decisions of qualified state voluntary cleanup programs and brownfield redevelopment programs;
G. Miscellaneous
23. Allows EPA to continue to list new sites on the National Priorities List based upon threats to health and the environment, with the concurrence of the state in which the site is located.
BE IT FARTHER RESOLVED that the CERCLA Work Group, in consultation with and with approval of the Environmental Legislative Subcommittee of the Environment Committee, and in consultation with NAAG'S officers is authorized to develop specific positions related to the reauthorization of CERCLA consistent with this resolution; and the Environmental Legislative Subcommittee, or their designees, with the assistance of the NAAG staff and the CERCLA Work Group, are further authorized to represent NAAG's position before Congress and to federal agencies involved in reauthorization decisions consistent with this resolution and to provide responses to requests from federal agencies and Congressional members and staff for information, technical assistance, and comments denying from the experience of the state Attorneys General with environmental cleanup programs in their states.
BE IT FURTHER RESOLVED that NAAG directs its Executive Director and General Counsel to send this resolution to the appropriate Congressional Committees and Subcommittees, and to the appropriate federal agencies.
ABSTAIN: Attorney General Don Stenberg