[Congressional Record Volume 142, Number 137 (Saturday, September 28, 1996)]
[Extensions of Remarks]
[Page E1811]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      THE HAZARDOUS WASTE FACILITIES FINANCIAL RESPONSIBILITY ACT

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                        HON. JOHN M. SPRATT, JR.

                           of south carolina

                    in the house of representatives

                       Friday, September 27, 1996

  Mr. SPRATT. Mr. Speaker, I rise today to inform my colleagues of 
legislation I am filing relating to financial responsibility at 
hazardous waste facilities.
  I realize that we are close to the end of the 104th Congress, but I 
felt it was important to introduce this legislation now so we can get a 
head start on debating an issue vital to millions of Americans. That 
issue is: Will we protect Americans living near hazardous waste 
facilities from being caught holding the bag when a costly release of 
hazardous waste occurs?
  The bill is titled the ``Hazardous Waste Facilities Financial 
Responsibility Act,'' and it addresses three problems associated with 
existing financial standards for hazardous waste facilities. Current 
law provides for post-closure care for only a fraction of the period 
when the hazardous waste poses a threat to human health and the 
environment. Current law only requires hazardous waste facility 
operators to demonstrate the ability to pay for clean-ups after they 
occur, not before. And current law allows companies to provide 
corporate guarantees to cover clean-up costs which are easily 
circumvented by the maze-like corporate structures prevalent in the 
industry. By correcting these three problems, the Hazardous Waste 
Facilities Financial Responsibility Act provides the public with 
complete assurance that the costs of care and clean-up at hazardous 
waste facilities will be borne by the owners and operators of those 
facilities.
  First, the bill sets up a procedure for post-closure care of 
hazardous waste facilities that will last as long as necessary to 
protect human health and the environment. Under current law, post-
closure care lasts for 30 years, at which time the Administrator has 
the option to extend it for another 30 years. My bill requires the 
Administrator to continue the post-closure period until it can be 
conclusively demonstrated that such care is no longer needed. The bill 
requires the Administrator to hold hearings, so the public will have 
the chance to be heard before post-closure is terminated.
  Second, the bill ensures that all costs associated with post-closure 
care of the facility are covered including responsibility for credible 
accidents and known corrective action, liability assurances, and 
changes in costs resulting from changes in the facility or its permit. 
This provision corrects a serious flaw in current law, which completely 
excludes these necessary adjustments from the amount which operators 
are required to show they can pay. In essence, operators aren't 
required to show their ability for the cost of clean-up until after a 
costly accident has occurred. At that point, it is too late. The full 
range of potential costs or these facilities must be provided for up 
front.
  Third, the bill eliminates the practice of using a financial test or 
corporate guarantee to assure payment of closure and post-closure 
costs. Many operators of hazardous waste facilities are structured with 
a myriad of layers between parent corporation and operating subsidiary. 
The availability of the corporate guarantee makes it too easy, and too 
tempting, for skilled lawyers to devise corporate structures in which 
both the operating subsidiary and the nominal parent corporation are 
thrown into bankruptcy by unforeseen post-closure costs. Meanwhile, 
assets elsewhere in the corporate structure are protected.
  A perfect example is a hazardous waste dump owned by Laidlaw/GSX 
located just outside my district in Pinewood, SC. In 1989, the 
accounting firm KPMG Peat Marwick did a study of this facility which 
revealed no less than five corporate layers between the company 
operating the landfill, and the deep-pocket corporate parent. Should a 
major accident at this facility occur, what assurance do taxpayers have 
that they won't be caught holding the bag? The Hazardous Waste 
Facilities Financial Responsibility Act will give them this assurance. 
Furthermore, prudent business practice dictates that a company should 
avoid having large potential liabilities uncovered by any insurance or 
financial instrument. We should demand no less protection for citizens 
and taxpayers.

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