S. 3515Senate109th Congress (2005-2007)In Committee

Cleanup Assurance and Polluter Accountability Act of 2006

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SenateIntro Referral Latest Action

Read twice and referred to the Committee on Environment and Public Works.

Environment and Public Works Committee

June 14, 2006

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SenateIntro Referral

Introduced in Senate

June 14, 2006

SenateIntro Referral

Sponsor introductory remarks on measure. (CR S5878-5879)

June 14, 2006

SenateIntro Referral

Read twice and referred to the Committee on Environment and Public Works.

Environment and Public Works Committee

June 14, 2006

Floor Debate

3 members

What members said about S. 3515 on the floor

1 Republican2 Democrats

Sen. Robert MenendezD-NJ · Jun 14, 2006

Mr. President, I rise today with my colleague from Virginia, Senator Allen, to introduce a bill designed to improve the science learning experience for students in low-income and rural schools across the country. Investing in education is about investing in our future. Today's young people will be facing a new world when they enter the workforce--a world that is globally integrated and where technology has transformed the boundaries of human capital. Our tax forms, blueprints, and x-rays can all be analyzed halfway around the world. The greatest asset we have in this country is our collective intellect, and the Nation's competitive future will depend on us nurturing the intellect of the next generation of Americans.

In order to be competitive in the coming decades, we need to ensure that we have given our students the tools to be successful in science, engineering, mathematics, and technology. The Protecting America's Competitive Edge, PACE, Acts, which I am proud to be a cosponsor of, helps provide the tools at all levels of our educational system, from kindergarten through graduate school and beyond. Unfortunately, I am concerned that we may not be paying enough attention to those students that are already in the greatest danger of not reaping the full benefits of America's innovative future, such as minorities, women, and students in low-income or rural schools.

For example, according to the National Science Foundation, only 7 percent of our scientists and engineers are Hispanic, African American, or Native American, despite the fact that they make up 24 percent of the total population. A minority scientist is also far less likely to achieve a post-graduate degree. By 2020, one-quarter of the Nation's schoolchildren will be Hispanic, and another 14 percent will be African American. That's 40 percent of our precious human capital, and we can not neglect that tremendous resource when we talk about improving our competitiveness for the future. No business could afford to leave 40% of its capital sitting idle, and neither can the United States.

That is why I introduced an amendment during the committee markup of the PACE-Energy bill, joined by Senator Allen, which will create a series

of outreach programs designed to get more minority elementary and secondary students excited about science, to make them want to enter these fields that will be such a crucial part of our economic future. A program like this called Hispanic Engineering Science and Technology Week, HESTEC, has been operating very successful for the past few years as the University of Texas--Pan American, and I hope to see that success replicated throughout the Nation.

But these types of programs are only one part of getting students hooked on science. We can spend all the time in the world telling students how exciting it is to be a scientist, but unless we actually let them experience that excitement--unless we let them discover the joy of scientific discovery first-hand--we will still lose them. And that is the job of the science laboratory class. A well-designed, well- equipped, well-staffed high school laboratory can be an incredibly invigorating and illuminating experience for a student. It can teach them far more about scientific principles than they can learn from a book or in a lecture, and more importantly, it teaches them the thrill of actually being a scientist. That, more than anything else, can mean the difference between a student who goes on to become a chemist, an engineer, or a medical researcher, and one who loses interest in science forever.

Unfortunately, a recent report by the National Academy of Sciences, called ``America's Lab Report: Investigations in High School Science,'' made some findings that are extremely troubling for those of us who want to provide all of our students an equal opportunity to succeed in science and technology. It found that schools that have high percentages of minorities and low-income students are ``less likely to have adequate laboratory facilities'' and ``often have lower budgets for laboratory equipment and supplies'' than other schools. The study also found that students in those schools ``spend less time in laboratory instruction than students in other schools.'' Rural schools had some of the same problems.

We cannot expect our country to be adequately prepared for the future unless all of our students are adequately prepared for the future. And unless we do something to improve the laboratory experience for our low-income, minority, and rural students, we simply won't be prepared. That is why I am proud to introduce the partnerships for access to laboratory science bill, originally championed by Congressman Hinojosa, which would authorize partnerships between high-need or rural school districts, higher education institutions, and the private sector, with the goal of revitalizing the high school science labs in those schools. The bill authorizes $50 million in matching grants to help fund comprehensive science instruction improvement plans, with the grant money able to be used for such things as purchasing scientific equipment, renovating laboratory space, designing new experiments or methods of integrating the laboratory with traditional lectures, and providing professional development for high school science lab teachers. This last one is particularly important because one of the key conclusions from the National Academy report is that ``improving high school science teachers' capacity to lead laboratory experiences effectively is critical to advancing the educational goals of these experiences.''

We need to do a lot to ensure that our Nation stays competitive throughout the 21st century, and this bill is only one small step. But it is a sorely needed step, particularly for those students who need our help the most. I invite my colleagues to join us in support of this bill, and I look forward to working to enact this important piece of legislation.

Sen. Maria CantwellD-WA · Jun 14, 2006

Mr. President, the Wall Street Journal recently reported on a growing phenomenon across the West--towns and cities are struggling to ensure cleanup from decades of environmental contamination on…

Mr. President, the Wall Street Journal recently reported on a growing phenomenon across the West--towns and cities are struggling to ensure cleanup from decades of environmental contamination on properties formally owned by Asarco, LLC.

For over a century, Asarco mined, smelted, and refined metals at sites across the country, leaving behind a legacy of lead, arsenic, and cadmium contamination in more than 90 sites in 22 Western States. But when Asarco filed for bankruptcy in August 2005 suddenly it became unclear if these contaminated sites would ever get cleaned up. Asarco's outrageous legacy of environmental pollution stretches from Helena, MT, to El Paso, TX, and is estimated to total $1 billion nationwide. That is money that taxpayers, not the polluting company, may now have to pay.

In my State, Asarco operated a 14-acre site in Everett from the 1800s until 1912, and two sites in Ruston, a 67-acre property and the larger 97-acre Superfund site on Commencement Bay. When Asarco declared bankruptcy last August, the citizens of Washington State were left with a $100 million Superfund mess. In Tacoma and Ruston, Asarco contractors abandoned cleanup projects midway through, leaving piles of contaminated soil sitting in resident's backyards. Although cleanup resumed thanks to emergency removal funds from the Environmental Protection Agency, these funds only go so far and eventually taxpayers may have to bear the brunt of the costs.

I wish I could say that Asarco is just an exceptionally bad actor, but there is evidence that the company's irresponsible practices are more common than we knew.

That is why in October 2002, I asked the Government Accountability Office to examine how corporate polluters might be avoiding their responsibility under existing environmental law. I was pleased to be joined in requesting this study by then Environment and Public Works Chairman Jeffords, Judiciary Chairman Leahy, and Superfund and Waste Management Subcommittee Chairwoman Boxer. The report found that the Environmental Protection Agency has faced significant challenges in holding polluting corporations responsible for their environmental cleanup obligations, partly due to bankruptcy laws that allow companies to avoid future cleanup costs on sites that were damaged in the past.

In many ways this report confirms what I feared back in 2002, and what became starkly evident last August, that corporate polluters are using bankruptcy and other regulatory loopholes to get out of their environmental cleanup obligations. The report has a whole section on how ``businesses can organize and restructure themselves in ways that allow them to limit their expenditures for environmental cleanups.'' Whether it is using the shield of bankruptcy to evade their obligations, or engaging in corporate shell games with foreign subsidiaries, the ``polluter pays'' principle should hold firm.

To quote again from the report, ``As a result of EPA's inaction, the federal treasury continues to be exposed to potentially enormous cleanup costs associated with businesses not currently required to provide financial assurances.''

Fortunately, the GAO provided not only a thorough analysis of the problem but also a set of detailed recommendations on how to tackle these abuses. Based on their recommendations, I authored the Cleanup Assurance and Polluter Accountability Act of 2006, which I am introducing today along with Senator Jeffords, the ranking member of the Environment and Public Works Committee and Senator Boxer, the ranking member of the Environment and Public Works Subcommittee on Superfund and Waste Management.

My bill: Enables the bankruptcy court to examine 10 years of past transactions--instead of 2 years--between a parent company and its subsidiary for evidence that companies transferred assets to avoid environmental cleanup responsibilities; requires the National Bankruptcy Review Commission to evaluate conflicting goals between the bankruptcy code and environmental laws and to provide recommendations for action to Congress; reasserts and expands upon the 1980 requirement that the Environmental Protection Agency develop financial assurance regulations and ensure that businesses maintain appropriate financial assurances, providing evidence that they're able to pay for cleaning up of environmental damage

should it occur; and requires companies subject to financial assurance requirements to report declarations of bankruptcy directly to the EPA with an estimation of environmental damage and an explanation of current and former owners or partners of the facility.

These measures will go a long way toward closing these costly loopholes in our bankruptcy code and protecting tax payers from unjust corporate maneuvering to evade cleanup responsibility at polluted sites.

Communities across the country continue to bear the burden of Asarco's irresponsible behavior. The GAO report confirms that this abuse is not specific to Asarco but is increasingly widespread. It will take many more years to clean up the mess that a few bad actors have left behind. We can't afford to stand by and allow another Asarco to happen. We must not ask the taxpayers to continue footing the bill for others' reckless actions. I look forward to working with my congressional colleagues to enact these protections into law.

Sen. Maria CantwellD-WA · Jun 14, 2006

Mr. President, the Wall Street Journal recently reported on a growing phenomenon across the West--towns and cities are struggling to ensure cleanup from decades of environmental contamination on…

I wish I could say that Asarco is just an exceptionally bad actor, but there is evidence that the company's irresponsible practices are more common than we knew.

Sen. John E. SununuR-NH · Jun 14, 2006

Mr. President, I rise today to introduce the Moving to Work Charter Program Act--legislation that would expand the successful Moving to Work demonstration project. Unfortunately, today's housing…

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Introduced in SenateIssued June 14, 2006

109th CONGRESS

2d Session

S. 3515

IN THE SENATE OF THE UNITED STATES

June 14, 2006

Ms. Cantwell (for herself, Mrs. Boxer, and Mr. Jeffords) introduced the following bill; which was read twice and referred to the Committee on Environment and Public Works

A BILL

To amend title 11, United States Code, to ensure that liable entities meet environmental cleanup obligations, and for other purposes.

Short title; table of contents

(a)

Short title

This Act may be cited as the Cleanup Assurance and Polluter Accountability Act of 2006.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Definition of Administrator.

TITLE I—Requirements for Financial Assurance

Sec. 101. Financial assurance directives.

Sec. 102. No effect on other law.

TITLE II—Recovery of Costs in Bankruptcy

Sec. 201. Extended period for review of transactions.

Sec. 202. Study and report by the National Bankruptcy Review Commission.

Sec. 203. No effect on other law.

Findings

Congress finds that—

(1)

the Environmental Protection Agency faces considerable challenges when seeking to hold businesses responsible for their environmental cleanup obligations because—

(A)

the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) seeks to hold parties responsible for environmental damage based on the principle of polluter pays; but

(B)

in some cases, parties responsible for environmental damage may file for bankruptcy protection under title 11, United States Code, under which the parties are often permitted to limit or avoid their cleanup responsibilities;

(2)

the extent to which businesses with environmental liabilities terminate operations and reorganize under title 11, United States Code, directly affects the extent of cleanup costs borne by taxpayers, as well as the timeliness of remediation of contaminated sites;

(3)

according to an August 2005 Government Accountability Office report, while more than 231,000 businesses operating in the United States filed for bankruptcy protection between 1998 and 2003, it is not known how many of those businesses had environmental liabilities because that information is not adequately tracked;

(4)

the Environmental Protection Agency continues to lack timely and complete information on the thousands of businesses filing for bankruptcy protection each year;

(5)

contrary to the polluter pays principle, taxpayers are more frequently covering the costs of environmental cleanup because—

(A)

potentially responsible businesses are no longer taxed for that specific purpose; and

(B)

the backlog of sites requiring costly cleanup is growing;

(6)

as of the date on which this Act is introduced in the Senate, there are 1,244 cleanup sites listed on the National Priorities List developed by the President in accordance with section 105(a)(8)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9605(a)(8)(B));

(7)

pursuant to a congressionally requested study, the organization entitled Resources for the Future determined that, in 1999, the average cost to taxpayers of cleaning up a site under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) was $12,000,000;

(8)

consistent with the principle of polluter pays, polluters that are responsible for cleaning up contamination, not ordinary taxpayers, should bear the costs of cleaning up a site under that Act;

(9)

businesses commonly attempt to protect their assets using a corporate structure that limits the liability of parent corporations;

(10)

in some cases, assets are transferred between corporate affiliates (such as parent and subsidiary corporations) specifically for the purpose of shirking environmental liabilities;

(11)

the Environmental Protection Agency should develop and maintain the expertise—

(A)

to prevent the asset transfers described in paragraph (10); and

(B)

to recover assets so transferred, to the maximum extent feasible;

(12)

the Environmental Protection Agency has failed to implement a statutory mandate enacted in 1980 to require proof of ability to pay and financial assurances for potential environmental cleanups from businesses handling hazardous substances; and

(13)

by failing to comply with that mandate, the Environmental Protection Agency continues to subject the Superfund program under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) and taxpayers in the United States to the obligation to pay enormous cleanup costs that should be borne by the responsible parties.

Definition of Administrator

In this Act, the term Administrator means the Administrator of the Environmental Protection Agency.

Requirements for Financial Assurance

101.

Financial assurance directives

(a)

Completion of requirements

(1)

Definitions

In this subsection, the terms damages, hazardous substance, and response have the meanings given those terms in section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601).

(2)

Regulations and classes of facilities

(A)

Statement of policy

In 1980, Congress directed the Administrator to promulgate financial assurance requirements under section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. 9608(b)), but, as of the date of enactment of this Act, the Administrator has failed to promulgated those regulations.

(B)

Regulations and classes

The Administrator shall—

(i)

as soon as practicable after the date of enactment of this Act, but in no case later than 18 months after that date, finalize regulations under section 108(b) of the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. 9608(b));

(ii)

(I)

as soon as practicable after the date of enactment of this Act, but in no case later than 1 year after that date, publish in the Federal Register proposed financial assurance rules for the classes of facilities identified under clause (iii) that, as determined by the Administrator in accordance with the criteria under section 108(b)(1) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9608(b)(1)), present the highest degree and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous substances; and

(II)

for each fiscal year thereafter, publish and promulgate additional proposed and final financial assurance rules for additional classes of facilities described in subclause (I), giving highest priority to classes of facilities that may contain sites at which unreimbursed response costs are greater than or equal to $12,000,000;

(iii)

not later than 1 year after the date of enactment of this Act, submit to Congress a report that, at a minimum—

(I)

includes a list of not less than 5 classes of facilities that the Administrator determines have met the criteria identified in section 108(b)(1) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9608(b)(1)); and

(II)

includes a description (including the name, location, number, and costs) of response actions or potential response actions for which remaining unreimbursed response costs exist, or for which the Administrator reasonably anticipates there will be unreimbursed response actions carried out under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) as of the date of the report; and

(iv)

submit to Congress an annual update of the report required under clause (iii) that includes additional classes of facilities described in clause (iii)(I).

(3)

Notification of bankruptcy

Each owner and operator of a facility that is included in class of facilities regulated under paragraph (2)(B) and that files for bankruptcy protection under title 11, United States Code, shall submit to the Administrator and the regional office of the Environmental Protection Agency of the region in which the facility is located a notification of the filing that includes—

(A)

an estimate of environmental impacts (and the costs of remediating the impacts) resulting from activities at the facility; and

(B)

a description of all current and former corporate relationships of the facility (such as parents, subsidiaries, partners, and affiliates), including parents, subsidiaries, partners, and affiliates located in other States or regions.

(4)

Risk of default

In promulgating the regulations described in paragraph (2)(B), the Administrator shall give priority to the development of requirements relating to owners and operators of facilities or industries whose prior actions or practices indicate a high risk of default on environmental liabilities.

(b)

Requirement of financial assurance

(1)

Financial assurance agreements

(A)

Definition of affected person or entity

In this paragraph, the term affected person or entity means—

(i)

a person entering into a settlement agreement or consent decree under section 122 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9622) or the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.); and

(ii)

a treatment, storage, or disposal facility receiving a corrective action permit or order under section 3004(u) or 3008(h) of the Solid Waste Disposal Act (42 U.S.C. 6924(u), 6928(h)).

(B)

Requirement

In addition to any other applicable financial assurance requirements, the Administrator shall require that each affected person or entity shall—

(i)

enter into a financial assurance agreement that reflects the degree and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous substances with the Administrator as part of the final settlement agreement, consent decree, or other arrangement; and

(ii)

provide at the time of issuance of a settlement agreement or consent decree described in subparagraph (A)(i), or a corrective action permit or order described in subparagraph (A)(ii), as applicable, such financial assurances as are required under applicable law and as may be needed to cover all potential response costs and damages.

(2)

Tracking of settlements

For each fiscal year, the Administrator shall track the number of settlements, consent decrees, corrective action permits, and orders described in paragraph (1)(A) (including those that are and are not supported by financial assurances or otherwise in compliance with paragraph (1)), including, with respect to those settlements, consent decrees, corrective action permits, and orders—

(A)

the amount of any financial assurance relating to such a settlement, consent decree, corrective action permit, or order;

(B)

the estimated value of any environmental actions secured by the financial assurances;

(C)

the name of each responsible party; and

(D)

the name of each financial institution or other entity providing the financial assurance, as appropriate.

(3)

Criteria for acceptance of appropriate financial assurance

In determining whether to accept financial assurances provided under paragraph (1), the Administrator shall take into consideration—

(A)

the level of financial risk to the Federal Government if liable parties default on the obligations of the parties;

(B)

varying financial risks posed by financial assurance mechanisms;

(C)

any concerns about various forms of financial assurance; and

(D)

such other criteria as the Administrator reasonably determines could affect the amount of unreimbursed response costs of the Federal Government.

(c)

Full use of available enforcement tools

In carrying out this section, the Administrator shall—

(1)

make full use of administrative offsets and liens on assets for enforcement purposes, as appropriate; and

(2)

not later than 1 year after the date of enactment of this Act, issue guidance for enforcement of the requirements of this section relating to the use of administrative offsets and asset liens.

(d)

Adjustment of financial test of self-insurance for inflation

In using or authorizing the use of any financial test, the Administrator shall adjust upward, to account for changes since 1982 in the Consumer Price Index for all-urban consumers, United States city average, as published by the Bureau of Labor Statistics, the dollar amount of the tangible net worth requirement of the financial test of self-insurance accepted by the Administrator as a financial assurance mechanism from persons subject to regulation under this Act.

102.

No effect on other law

Nothing in this title limits any obligation of a person under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) or any other provision of law.

Recovery of Costs in Bankruptcy

201.

Extended period for review of transactions

Section 548 of title 11, United States Code, is amended by adding at the end the following:

(f)

The trustee may avoid any transfer of an interest of the debtor in an asset that was made during the 10-year period preceding the date of the filing of the petition, if—

(1)

the debtor had, on or after the date on which such transfer was made, environmental liabilities under section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9607(a)); and

(2)

the debtor made such transfer with actual intent to hinder, delay, or defraud any person with respect to any such liability under that Act (42 U.S.C. 9601 et seq.).

202.

Study and report by the National Bankruptcy Review Commission

(a)

Study

(1)

Inconsistencies between bankruptcy and environmental laws

(A)

Action by Administrator

(i)

In general

Not later than 1 year after the date of enactment of this Act, the Administrator, in consultation with the Department of Justice, shall submit to Congress a report that recommends methods to substantially strengthen the ability of the United States to secure assets needed to pay for response costs at sites contaminated with hazardous substances.

(ii)

Public notice and comment

The Administrator shall provide public notice and an opportunity for comment relating to the report under clause (i) for a period of not less than 60 days.

(B)

Action by National Bankruptcy Review Commission

The National Bankruptcy Review Commission (referred to in this section as the Commission) shall reconvene and evaluate the interaction between title 11, United States Code, and the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.), and specifically recommend what actions could be taken, consistent with the report submitted under subparagraph (A), to substantially strengthen the ability of the United States to secure assets needed to pay for response costs at sites contaminated with hazardous substances by addressing—

(i)

the challenges that the Environmental Protection Agency faces when attempting to hold bankrupt and other financially distressed businesses responsible for their cleanup obligations; and

(ii)

the fact that the nature of environmental damage and cleanup gives companies significant time to reorganize their business structures to maximize corporate benefits and minimize potential environmental liabilities.

(2)

Use of GAO report

In conducting the study under paragraph (1)(B), the Commission shall take into consideration the work of the Government Accountability Office in its August 2005 report on the subject of inconsistencies between title 11, United States Code, and the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.).

(b)

Report

(1)

Timing

Not later than 18 months after the date of enactment of this Act, the Commission shall submit to Congress a report on the results of the study conducted under this section.

(2)

Content

The report submitted under paragraph (1) shall contain a detailed statement of the findings and conclusions of the Commission, together with any recommendations for methods to substantially strengthen the ability of the United States to secure assets needed to pay for response costs at sites contaminated with hazardous substances.

(c)

Other authority

In carrying out this section, the Commission may—

(1)

conduct public meetings at which testimony and other evidence may be taken, the minutes of which shall be made available upon request and payment of photocopying and mailing expenses; and

(2)

obtain official data from any Federal agency, department, or court necessary to the implementation of its duties.

(d)

Authorization of appropriations

There is authorized to be made available to the Commission to carry out this section, $1,500,000, to remain available until expended.

203.

No effect on other law

Nothing in this title or any amendment made by this title limits any obligation of a person under any other provision of law.