The Superfund Match

Superfund reauthorization anyone? Here's a look at the players, their strategies, and where this game might be headed.

BY MARK REITER

Mark Reiter is manager of legislative and international affairs for the Institute of Scrap Recycling Industries (Washington, D.C.).

The timing of the first serve in the upcoming Superfund reauthorization match is unclear, but the players—interested industries, environmental groups, and government entities at all levels—are already making their way onto the courts to limber up.

This may seem premature, considering that reauthorization isn't set to be completed until 1994, but getting an early swing at things is natural when so many players are involved. It is also necessary, if the purse—a crucial consensus on a broad and controversial law—is to be won at all in 1994. For although the players, will be playing against each other in the early rounds, in the final one, they will have to rally in the cooperative, not the competitive, sense.

The Origin of the Game

The Comprehensive Emergency Response, Compensation, and Liability Act (CERCLA), as Superfund is formally known, was first enacted in December 1980, during a lame duck session of Congress. That was the year when the nation became transfixed by the emergency facing families in an area near Niagara Falls, N.Y., known as Love  Canal. Into the basements of homes were oozing dangerous chemicals disposed of years earlier by Hooker Chemical Co. (which had been subsequently purchased by Occidental Chemical). Congress responded with the Superfund law in an effort to ensure that such sites would be cleaned up and that the parties responsible for the pollution would pay.

CERCLA has since been reauthorized X times, the last in 1990, when Congress extended the substantive provisions of the statute for four years, after which time the law would need to be reauthorized once again. Because of the possibility that attempts at reauthorization could fail to be completed before the end of 1994, Congress reauthorized the tax or revenue raising provisions for an extra year, thus ensuring that Superfund will remain funded through 1995.

Even with this leeway, the first game of the match must begin soon if Superfund reauthorization is to beat the clock. For all the potential players, this means keeping a careful eye on all of the others that approach the base line—but particularly members of Congress, who will not only serve and return strokes, but will also officiate (see "The Congressional Servers," on below).

On the House side, the Energy and Commerce Committee and the Public Works and Transportation Committee have joint jurisdiction over CERCLA—equal, broad parliamentary authority to legislate on substantive Superfund matters (except any related tax policies). Other House committees that will be involved in some aspects of Superfund reauthorization are the Judiciary Committee (with reference to enforcement matters); the Merchant Marine Committee (with reference to addressing certain waterway and vessel issues); and the Ways and Means Committee (with jurisdiction over revenues to be raised for the fund).

In the Senate there is only one committee with broad, substantive Superfund jurisdiction—the Environment and Public Works Committee. Other Senate committees that will participate in the Superfund reauthorization match are the Judiciary Committee (for enforcement issues) and the Finance Committee (which will oversee revenue proposals for the fund).

Legislative activity will begin in up to three subcommittees—the House Energy and Commerce Committee's Subcommittee on Transportation and Hazardous Materials, the House Public Works and Transportation Committee's Water Resources Subcommittee, and the Senate Environment and Public Works Committee's Superfund, Ocean, and Water Protection Committee. When subcommittee action is complete, bills will move on to the respective full committees for consideration. Because these actions can take place simultaneously, it is entirely possible that the bills developed by each subcommittee and its full committee will differ from one another in various respects.

Volleying the Issues

While Congress will be concerned with all the issues related to CERCLA, most of the other potential players have particular Superfund interests, which will affect how the match eventually plays out.

Scrap is not waste; recycling is not disposal. A fundamental part of the Superfund law is its ability to impose liability for cleaning up a contaminated site upon any party that "arranged for treatment or disposal" of a hazardous substance at that site. CERCLA, however, doesn't define these terms. Instead it relies on its sister statute, the Resource Conservation and Recovery Act (RCRA), as well as Environmental Protection Agency (EPA) interpretations.

Because RCRA includes scrap in its definition of "waste," and the EPA's presumption is that anyone who transacts business in "waste" must be "arranging for treatment or disposal" of that material, this interpretation has pushed many scrap recyclers—particularly those who shipped lead-acid batteries to battery breakers or smelters (whether directly, or through a broker)—into the Superfund program as potentially responsible parties (PRPs). Thus, the scrap recycling industry has one narrow issue to concentrate on: establishing that shipping recyclables for recycling is not the same as arranging for the treatment or disposal of waste.

One strategy the industry will attempt in its effort to win this point is to try to convince Congress to exclude the sale of material for bonafide recycling from liability for "arranging for treatment or disposal" in the law's reauthorization. In addition, the industry will work for an amendment to RCRA that states that scrap is not waste, or that scrap processors are not treating or disposing of their commodities during the recycling process.

The latter approach would be similar to that undertaken last year, when the Institute of Scrap Recycling Industries (ISRI) ( Washington , D.C. ), in cooperation with prominent members of the environmental community, negotiated a RCRA provision that basically stated that recycling is not disposal. The language of that negotiation was embodied in the 1992 RCRA reauthorization bills of both the House Energy and Commerce Committee and the Senate Environment and Public Works Committee, but the committees were unable to get full House or Senate passage of their respective bills before the legislative session ended.

Similar clouds loom on the RCRA schedule for 1993. It is doubtful that RCRA reauthorization will gather much more political support in months to come than it evinced in recent ones. Superfund reauthorization, on the other hand, is expected to have strong popular support, and may even end up including RCRA reauthorization as one of its subtitles.

Strict, joint and several liability. In their serves in the Superfund match, some of the nation's major industry sectors (including the petrochemical and insurance industries as well as electric utilities) are expected to aim for altering the statute's liability scheme, which holds those deemed responsible for contamination to a standard of strict liability as well as joint and several liability. Under the strict liability provision, a PRP can be held liable for any actions that are adverse to public health and the environment, whether or not such actions were knowing, willful, negligent, or grossly negligent. Joint and several liability means that each and every PRP can be held liable for the entire cost of cleaning up a site.

In this preliminary period, the players concentrating on this issue are tossing around various concepts to limit strict joint and several liability. One proposal calls for removing from liability all PRPs at sites currently on the Superfund National Priorities List. Under this concept, the federal government would then clean up these sites with money in the Superfund fund, and Superfund liability would become prospective—that is, applied to future Superfund sites. Another idea is to remove joint and several liability, retaining only strict liability as a basis for Superfund action.

It should be noted that the environmental community considers strict, joint and several liability the underpinning of the Superfund statute. Thus, environmentalists will likely try for an overhead smash into industry's court to preserve the existing CERCLA liability scheme.

Paying for orphan shares. All the major industries that face the threat of being name PRPs are likely to address a related cost-liability issue in their reauthorization game plan: CERCLA's mixed funding provisions, which outline the use of monies from the federal Superfund fund as well as from PRP funds in site cleanups. Many of these industries believe that the existing mixed funding provisions of CERCLA allow the EPA to use the federal fund for "orphan shares" (the portion of site contamination that can be assigned to an unknown responsible party, to nonviable or bankrupt responsible parties, or to recalcitrants—responsible parties that refuse to settle with the government) rather than to impose strict, joint and several liability on settling companies. In addition, some industries have called on the government to litigate against the recalcitrants to recover the costs of the orphan shares plus treble damages.

The EPA, however, believes that the Superfund law does not permit the funding of orphan or recalcitrant shares in the presence of strict, joint and several liability, because such liability permits the government to hold any one party liable for the entire cleanup cost. If anyone is to litigate against recalcitrants, the agency argues, it should be the PRPs that paid for the orphan shares.

De minimis settlements. As it's currently written, CERCLA encourages the EPA to enter into settlements with PRPs whose contributions to site contamination has been minimal in volume or toxicity—that is, de minimis—in terms of total site contamination. The law does not specify exactly what is considered minimal however, so various players in the reauthorization match are expected to strive for inclusion of language that establishes that PRPs that contributed to a certain percentage of total site contamination are to be considered de minimis parties.

How clean is clean? What level of cleanup is required at a Superfund site to make it "clean" and "safe"? Under the current CERCLA standards, the answer is the level equal to all "applicable and appropriate rules and requirements" (known as ARARs) of federal and state law. This means that after a cleanup has been completed, contaminants in the air, water, and soils at the site should not exceed any federal or state standard (whichever is more stringent) that is applicable or otherwise relevant. For example, if a solvent has contaminated the groundwater, the cleanup standard might be the maximum contaminant level established by the Federal Safe Drinking Water Act for the particular solvent, or if the contamination was in a state with a more stringent statute, the clean wouldn't be clean until it met the state standard.

The problem that some of the reauthorization match players have with ARARs is that, given the myriad environmental statutes at not only state levels, but also the federal level, there is often great difficulty in choosing an ARAR at a given site. Limiting the number of potential ARARs, they believe, would speed up the cleanup process by ending uncertainty in selecting cleanup remedies. Some in the environmental community, on the other hand, argue that unlimited ARARs give the best assurance that the most stringent standards will be used to clean up Superfund sites.

Match Point

Because the Clinton administration must focus early on on the key issues of the new president's campaign—the economy and health care reform—it is unrealistic to expect early action from the White House on Superfund or other significant environmental legislative initiatives. On Capitol Hill, however, there is a strong likelihood that the key House and Senate subcommittees will begin the Superfund hearing process sometime this spring.

Legislative activity beyond the hearing stage is, for now, difficult to predict because it is not yet known whether the Clinton administration will write its own Superfund reauthorization legislation for congressional consideration, or whether it will ask key representatives and senators to delay action until the administration is ready to be engaged.

Given the controversial nature of this legislation and the high stakes it represents both environmentally and fiscally, it is not likely that Superfund reauthorization will be enacted much before the 103rd Congress adjourns in October 1994. In fact, it is entirely possible that it will not be enacted even by then. In that case, Superfund will slip to the 104th Congress, leaving the ball in an unknown court.[END]

The Congressional Servers

The reauthorization match is likely to be dominated by the actions of the following congressional players:

In the House Energy and Commerce Committee,

John Dingell (D-Mich.), committee chairman

Carlos Moorhead (R-Calif.), (probable) ranking minority member of committee

Al Swift (D-Wash.), chairman of the Transportation and Hazardous Materials Subcommittee

Rick Boucher (D-Va.), committee member

Dan Schaefer (R-Colo.), committee member

In the House Public Works and Transportation Committee,

Norman Y. Mineta (D-Calif.), committee chairman

Bud Shuster (R-Pa.), ranking minority member of committee

Doug Applegate (D-Ohio), chairman of the Water Resources Subcommittee

In the Senate Environment and Public Works Committee,

Max Baucus (D-Mont.), committee chairman

John Chafee (R-R.I.), ranking minority member of committee

Frank R. Lautenberg (D-N.J.), chairman of the Superfund, Ocean, and Water Protection Subcommittee

David Durenberger (R-Minn.), ranking minority member of the subcommittee

George Mitchell (D-Maine), committee member and Senate majority leader

Joe Lieberman (D-Conn.), committee member

Harry Reid (D-Nev.), committee member

Bob Smith (R-N.H.), committee member

John Warner (R-Va.), committee member

It should be noted that at this writing, the Senate committee and subcommittee had not yet organized for the 103rd Congress. Thus, it is possible that the subcommittee chairman and/or subcommittee jurisdictions will change.—M.R.