[Congressional Record Volume 141, Number 78 (Thursday, May 11, 1995)]
[Extensions of Remarks]
[Pages E1009-E1010]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


         SUPERFUND LIABILITY ALLOCATION ACT OF 1995, H.R. 1616

                                 ______


                            HON. FRED UPTON

                              of michigan

                    in the house of representatives

                         Thursday, May 11, 1995
  Mr. UPTON. Mr. Speaker, if ever a Federal program needed reform, it 
is the Superfund Program. It was first created in 1980 under the 
Comprehensive Environmental Response, Compensation & Liability Act 
[CERCLA]. It was changed and reauthorized in 1986 under the Superfund 
Amendments and Reauthorization Act [SARA]. It was supposed to be 
reauthorized in the last Congress and committees in the House and in 
the other body reported comprehensive reform bills, but this effort 
fell short in the final days of the session.
  At the center of the Superfund Program are liability provisions 
arguably more draconian than found in any other Federal statute. 
Superfund liability is retroactive, meaning that potentially 
responsible parties can be held liable for lawful actions taken before 
enactment of CERCLA or SARA. Superfund liability is also strict, 
meaning that there is no need to prove negligence to establish 
liability. It is also joint and several, meaning that a party or 
parties that contributed small amounts of contamination to a 
contaminated site can be held liable for all cleanup expenses.
  With Superfund site cleanups now averaging $30 million, the incentive 
to avoid any liability at any cost is strong. Small wonder that 
Superfund has launched a tidal wave of litigation. At least $1 in $4 
spent on Superfund cleanups is spent on lawyers and the consultants 
needed to support lawyers in litigation to avoid Superfund liability or 
to transfer liability to other parties via so-called contribution 
suits.
  In my district, one of these contribution suits eventually involved 
more than 700 firms and organizations. More recently, a firm that had 
negotiated a cleanup plan costing nearly $20 million with EPA turned 
around and filed contribution suits against three dozen local firms. 
More important than the moneys involved, these Superfund-driven suits 
have divided whole communities and created resentment that will last 
for years. This can't be what Congress wanted to happen when the 
program was created.
  In response to these unpleasant realities, I am today joining the 
gentleman from Virginia [Mr. Boucher], in introducing the Liability 
Allocation Act of 1995. Mr. Boucher and I first addressed these issues 
in November 1993 in the Superfund Liability Reform Act (H.R. 3624). 
After negotiations with the administration and other Superfund 
stakeholders, we introduced a revised version of H.R. 3624 as H.R. 
4351, also entitled the Superfund Liability Allocation Act. This latter 
measure became section 412 of H.R. 3800, as reported by the then 
Committee on Energy and Commerce, and section 413 of the same bill as 
reported by the then Committee on Public Works and Transportation. As I 
mentioned earlier, H.R. 3800 was not considered by the House prior to 
adjournment in 1994.
  This legislation would create an entirely new system of liability 
under Superfund, one based upon proportionality and the allocation of 
liability shares among potentially responsible parties. It places a 
moratorium on the commencement of cost recovery and contribution suits 
for cleanup costs until the allocation process is concluded and a stay 
on all existing cost recovery and contribution litigation. Each party's 
liability would be calculated in expedited manner; parties will pay 
only their equitable share of the cleanup costs, those clearly related 
to their respective roles at the site and to the amount of waste they 
actually contribute; finally, the expedited process for assigning 
liability and the limited court review of that process should 
significantly decrease transaction costs for all parties at Superfund 
sites.
  The new system established under this bill would operate as follows:
  First, after a site is listed on Superfund's National Priority List, 
EPA notifies all parties at the site that they are required to 
participate in the liability allocation process.
  Second, the parties choose from an EPA-approved list of private 
allocators to conduct the allocation.
  Third, EPA and any of the parties may nominate additional parties to 
be included in the process or may excuse parties from the process.
  Fourth, EPA is able to provide expedited settlements to ``de 
minimis'' and ``de micromis'' parties to enable such parties to avoid 
having to participate in the 18-month allocation process, satisfying 
small business' major concern.
  Fifth, the allocator is armed with the necessary information-
gathering powers, including subpoena power, and is able to enforce such 
powers with the backing of the Justice Department. Parties who do not 
cooperate in providing information are subject to stiff civil and 
criminal penalties.
  Sixth, each party is given the opportunity to be heard, including 
submitting an initial statement and commenting on the draft allocation 
report before the final report is issued.
  Seventh, after considering the ``Gore Factors''--including the 
party's role at the site and the toxicity and volume of material--the 
allocator issues a report identifying each party's share of liability 
for the cleanup costs at the site.
  Eighth, each party may settle with the EPA based on its allocated 
share. As consideration, the party is shielded from joint and several 
liability and from actions for contribution from other parties. Any 
party who rejects its allocated share will be exposed to joint and 
several liability and remains unprotected from contribution suits. 
Although the allocation is nonbinding as to the parties, the exposure 
to joint and several liability serves as a disincentive to reject the 
allocated share.
  Ninth, the Government is bound by the allocation unless there is 
proof of bias, fraud or unlawful conduct on the allocator's part or if 
``no rational interpretation of the facts before the allocator, in 
light of the factors he is required to consider, would form a 
reasonable basis'' for the allocation. The Government only has 180 days 
during which such review can occur, after which the right to reject the 
allocation is waived.
  Tenth, the orphan share--for defunct and insolvent parties--is paid 
out of the Superfund.
  Eleventh, the Government reimburses parties who pay for the cleanup 
for amounts spent beyond their allocated shares. The Government also 
pursues recalcitrant parties who fail to pay their allocated shares.
  Mr. Speaker, many interests worked together in developing this 
legislation. If the [[Page E1010]] adage that success has many fathers 
while failure is an orphan is accurate, than the father of this 
excellent proposal is my cosponsor and learned friend from Virginia, 
Mr. Boucher. We have cosponsored several bills in the past and each of 
these bills has done well in the legislative process. It is a pleasure 
to join him again in offering this legislation.
  We urge every member of this House to join us in cosponsoring H.R. 
1616, the Superfund Liability Allocation Act of 1995, and ask that they 
call David Luken of my staff (ext. 53761) or Andrew Wright of Mr. 
Boucher's staff (ext. 53861) to do so.


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