Superfund Legislation: True Reform or a Hazardous Waste?

On Poin No. 51


Given the green light by House Speaker Dennis Hastert (R-IL) to produce Superfund reform legislation before the session’s end, House Republicans are racing against the clock to meld two bills – H.R.1300, sponsored by Rep. Sherwood Boehlert (R-NY) and H.R. 2580, by Rep. James Greenwood (R-PA) – into one.  The likely outcome?  Reinstatement of the Superfund tax, a federalized brownfields[1] program, new community reporting requirements, as well as more federal funding of a law that has proven a colossal failure. 


While there are some positive elements in the legislation – largely in H.R. 2580, which includes some liability exemptions for innocent parties and gives states some added authority – the bills, overall, expand the federal role in brownfield redevelopment and do not do enough to clean up the Superfund quagmire.  Furthermore, the concoction House Republican leaders are going to come up with by mixing the two is likely to be a poisonous brew.


The Bills: State Empowerment or Federal Expansion?  


Reinstates the Superfund tax.  The Superfund tax, which expired in 1995, included a petroleum tax, chemical feedstock tax, and a corporate environmental income tax.   Compromise legislation likely will contain H.R. 1300’s language to reinstate the tax.  This would be a tremendous mistake.  Supporters argue the tax ensures a “polluter pays” system because it is levied on big business.  This is like saying we should penalize drug manufacturers because it punishes producers of illegal substances.  The tax is levied on many different kinds of corporations and is not determined by which do and do not pollute.  In short, it is a tax on production and output, not on pollution.[2]  Furthermore, the tax fuels a broken system.  According to a recent report by the General Accounting Office (GAO), Superfund is still right up there on the list of government programs that “pose significant financial risk to the government and potential waste and abuse.”[3]  Why should we renew a tax that furthers this financial risk?


Federalizes the cleanup and redevelopment of brownfields.  The bills purport to remove barriers to the redevelopment of brownfields and, in some instances, do bar the federal government from taking action against parties involved in the cleanup of a non-Superfund site.  But, for the most part, the bills would expand federal control over the redevelopment of brownfields, an activity that has been handled by states and cities, not the federal government.  H.R. 1300 stipulates that in order to receive federal grants for cleanup and redevelopment, states would have to show that the funding is to be used to reduce “health and environmental risks.”  By whose definition?  Moreover, this provision assumes that the federal government could afford to provide generous grants to clean up what would likely amount to tens of thousands of sites. 


Another provision, present in both bills, would require a federally funded inventory list and assessment of brownfield sites, a first step to another National Priorities List (NPL), this time for brownfields, and a sure way to extend federal control over future brownfield cleanups.  By listing these sites, they may become even more stigmatized, multiplying the adverse effects of the federal Superfund law and slowing brownfield cleanups overall.


Brownfields are the byproduct of Superfund’s flawed liability system.  For the last 19 years, this system has held innocent parties liable for cleanups, and it has scared potential developers from setting foot near a waste site.  Most sites are not hazardous, though they are stigmatized because of the liability.  The states, not the federal government, have taken the reins in cleaning up these abandoned sites.  If Congress wants to enhance the states’ ability to continue turning these areas into productive land, it should not add federal controls. 


Places some limits on additions to the National Priorities List.  H.R. 1300 would restrict the President, in some instances, from placing new sites on the NPL, including a request from a state that is cleaning up a site.  But the burden of proof would be on the state to show within a year that it had made “reasonable” progress.  H.R. 2580 has better language, requiring a state to give its approval before the President is allowed to place a site on the NPL.


Requires federal counseling on health risks.  Both bills pull federal health agencies into the Superfund cleanup process to ensure “proper” consideration of health risks.  H.R. 1300 goes further than H.R. 2580 by requiring the federal government to hold public meetings, and the federal Agency for Toxic Substances and Disease Registry (ASTDR) to counsel communities, on the human health effects of hazardous substances.  It also stipulates that the President can take judicial action against a developer if the ASTDR releases a public health advisory on the facility.  It is not wise to federalize community education and counseling on health risks.  States, localities, and private groups are much closer to the communities and should be in charge of public information, not Washington bureaucrats who have a poor track record on determining health risks.[4]  Left to the federal government, this provision, which doesn’t require peer review, will likely cause hysteria and slow down or even halt redevelopment efforts.


Provides conditional liability relief.  Both bills provide conditional liability relief to various parties involved in remediation and both contain lengthy sections on whom, by definition, is considered worthy of liability protection.  But neither bill addresses the fundamental and brutally unfair problem with the program’s liability system – the fundamental problem with Superfund.  Until liability is no longer retroactive, or joint-and-several,[5] the Superfund program will remain a failure.


Does require some risk assessment.  H.R. 2580 contains much stronger language than H.R. 1300 requiring the EPA to consider the future land use.  For example, in setting cleanup standards, the EPA would have to consider whether the land will eventually become a playground or industrial park.[6]  While this provision sounds elementary, current law does not require the EPA to consider what the property will be used for after cleanup.  All sites must meet the highest standards regardless of use. 


Unlike H.R. 1300, H.R 2580 calls for “scientifically objective assessments.”  If Congress wants to keep federal the Superfund law, at a minimum, such risk assessment might help bring some reason into cleanup standards.  Under current law, the EPA has not been required to conduct any tests on actual risk to human health.  H.R. 2580 is a first step, but stops short of telling us how science-based risk assessment is going to be enforced.


Designing True Reform Legislation


True brownfields reform.  Brownfields exist because Superfund created a system that holds innocent parties potentially liable, and therefore impedes cleanup and redevelopment activities.  As a result, many of these sites, most of which are in the inner city, lie dormant.  Over the last few years, however, states and municipalities have started to work with developers, banks, and other parties to turn these areas back into safe, productive, tax-generating parcels of land.  Today, almost all states have enacted or will soon enact legislation providing tax breaks and/or liability relief to businesses that clean up and reopen these abandoned sites.


Washington’s involvement in brownfields – primarily, to dole out and track the results of federal grants – has been a failure.  Last April, the GAO released a report concluding that federal agencies, most prominently the EPA, had failed to track the results of over $400 million given to the states for brownfield cleanups.[7]


If states need any assistance from the federal government, it’s the elimination of regulations that stand in the way of state and local redevelopment efforts.  The more confident private parties feel that the federal government will not intercede, the more willing they will be to clean up infested areas and turn them into productive land sites. 


President Clinton could start by dropping so-called “environmental justice” programs, which discourage brownfield redevelopment.[8]  A 1998 EPA guidance document impedes industrial development by making inner-city pollution a civil rights offense, placing the burden on the developer to prove that industrial activity will not have a “disparate impact” on minorities.  The requirement simply makes it too risky for developers to rebuild in the inner city, even though abandoned industrial sites created by the Superfund program are predominately located within inner city neighborhoods.[9]


True liability reform.  More important than any other reform is the assurance that all innocent parties involved in the past or future use of the contaminated site will not be held liable.  This can only be addressed – not through carve-outs – but through the elimination of retroactive, strict, and joint-and-several liability.


True risk assessment reform.  By law, the EPA does not have to show that the pollution at a Superfund site is actually causing any human harm.  Nor does the agency have to show the benefits will outweigh the costs or that the benefits will be achieved at the lowest possible cost.[10]  Given this gross lack of accountability, it is not surprising that numerous sites have been found to pose no health threat whatsoever.  According to a study by the GAO, cleanups at 21 percent of the cleanups at 149 sites in the study were not necessary.[11]  Most alarming was the discovery in a 1991 National Research Council study that found:  “In some cases, unnecessary or inappropriate remediation might create more of a hazard than would be caused by leaving such materials undisturbed.”[12]  Accordingly, true reform would be based on sound science and accurate risk assessment. 


No tax reinstatement.  Rep. Bill Archer, chairman of the House Ways and Means Committee, has indicated he will not move any legislation in his committee that reinstates the tax unless there is accompanying sweeping Superfund reform.  He has said that these two bills both miss the mark by leaving in place a broken system.  The tax exacerbates that broken system. There is $1.3 billion in the Superfund trust fund.  This is more than enough to cover the cost of pending cleanups while Congress goes back to the drawing board.


Superfund has been a complete failure, which begs the question as to why lawmakers are working so hard to save the program.  Even the President has had unpleasant things to say about it.[13]  Superfund attempts to address what are truly local problems, which is why states have a superior track record in regard to both sites under state cleanup laws and brownfields.  Accordingly, the best reform would focus on minimizing the federal role by devolving power back to state and local levels. 


Conclusion.  During this Congress, a bill focusing strictly on brownfields reform – by simply providing liability relief to all parties that clean sites under state programs – would be a good step in that direction.  This simple reform could have profound impacts by essentially devolving control of these sites to states, allowing inner city development at a time when our robust economic growth would help spur more cleanups than ever.


[1] Brownfields are industrial sites that have been abandoned due to contamination, though they are almost always not hazardous.  States have been responsible for brownfield cleanup and redevelopment.

[2] For a good discussion of this, see Richard L. Stroup, “Superfund: The Shortcut That Failed,” PERC Policy Series, No. PS-5, May 1996.

[3] Government Accounting Office, “Superfund: Progress Made By the EPA and Other Federal Agencies To Resolve Program Management Issues,” GAO/RCED-99-111, April 29, 1999.

[4] For further discussion, see “The Risks of Government Regulation,” Environmental Briefing Book, Competitive Enterprise Institute, March 1999.

[5] Retroactive liability refers to parties whose actions at one time were legal but because of changes in the law are now held liable and punished retroactively.  Joint-and-several liability means that even those parties even with only tangential involvement with the site can be held liable for the full amount of damages.

[6] See Wayne T. Brough, “Superfund: The Good, the Bad, and the Broken,” Citizens for a Sound Economy Foundation Issue Analysis, No. 70, Feb. 27, 1998.

[7] GAO, #GAO/RCED-99-86, April 1999.

[8] In fact, H.R. 1300 contains a provision that would require the EPA to conduct a study on NPL sites’ area population, race, and income levels, potentially opening the flood gates for federal “environmental justice” challenges and, thus, impeding redevelopment efforts.

[9] For more on “environmental justice,” see Jonathan Adler, “The EPA’s Latest Injustice,” CEI Update, May 1, 1998.

[10] Richard L. Stroup, op. cit.

[11] General Accounting Office, “Superfund: Cleanups Nearing Completion Indicate Future Challenges,” Sept. 1993, cited in Brough, “Superfund: The Good, the Bad, and the Broken.” op. cit.

[12] National Research Council, Environmental Epidemiology, Public Health and Hazardous Wastes, National Academy of Sciences, 1991, op. cit.

[13] President Clinton referred to Superfund as “a disaster” at a briefing back in 1993.  Rudy Abramson, “The Superfund Cleanup: Mired in its Own Mess,” Los Angeles Times, May 10, 1993.