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CLINTON OPPOSING SUPERFUND BILL

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WASHINGTON-The Clinton administration opposes a limited Superfund reform bill that enjoys broad business support despite its lack of comprehensive retroactive liability reform.

U.S. Environmental Protection Agency Administrator Carol Browner, during congressional testimony last week, outlined the administration's chief complaints, among them that the limited liability relief provided by the measure could still allow some polluters to avoid paying their fair share of cleanup costs. As a result, the administration cannot support the bill in its current form, she said.

The Superfund reauthorization bill-the Superfund Acceleration, Fairness and Efficiency Act, H.R. 2727-focuses its liability relief on small businesses and owners and operators of certain types of dump sites. Under the bill, introduced recently by Rep. Sherwood Boehlert, R-N.Y., businesses with 75 or fewer employees and $3 million or less in annual gross revenues or a profit margin of less than 3% would be exempt from Superfund liability provided they did not contribute "significantly" to the damage.

Generators and transporters of materials at a Superfund site would be exempt from liability to the extent that they contributed only municipal solid waste or other non-toxic wastes. Owners and operators of sites also would enjoy some limited immunity from liability depending on the volume and toxicity of the waste they accepted.

Congress has been trying to reauthorize the Comprehensive Environmental Response, Compensation and Liability Act-better known as Superfund-since 1993 but has repeatedly failed. Insurers and risk managers have sought throughout the legislative process to get a bill that would provide the broadest possible relief from retroactive liability for cleaning up Superfund sites where legal dumping took place before CERCLA took effect in late 1980.

The Boehlert measure has drawn considerable support from insurance groups and business groups even though it does not provide as much liability relief as they had sought. Such disparate groups as the Chemical Manufacturers Assn., the National Automobile Dealers Assn. and the National Federation of Independent Business are supporting Rep. Boehlert's approach.

"It doesn't go as far as we wanted it to, but we're ecstatic to see something moving at last," said John Arlington, assistant vp of the American Insurance Assn. in Washington.

Peter Lefkin, senior vp-government affairs in the Washington office of Fireman's Fund Insurance Co., said "All of us would prefer a much broader measure. Nonetheless, Rep. Boehlert is a realist, and we have to support his decision that this is probably the best we can hope for. As in any legislation, we cannot let the perfect be the enemy of the good." He said the Boehlert bill would "rid the system of a large number of potential litigants."

"It reduces the parameters of the chaos that afflicts the current system," Mr. Lefkin said.

"I think it's a shot in the arm for an otherwise lackadaisical legislative process. It's still a step in the right direction despite the lack of comprehensive liability reform," said Francis D. Bouchard, director-federal affairs for the Reinsurance Assn. of America in Washington.

The New York-based Risk & Insurance Management Society Inc., while welcoming parts of the measure, questions the wisdom of exempting small businesses from liability, noted David R. Haight, vp-environmental for RIMS and director-risk management for CF Industries in Long Grove, Ill.

"Basically, Superfund doesn't work and is an impediment to getting things done. In the past, there have been attempts to exclude classes of people. While there are many good things in the bill, they're trying to take the class exemption approach, which really doesn't fix Superfund," said Mr. Haight.

The administration, however, thinks the bill goes several steps too far.

While Ms. Browner praised the measure as a "good-faith effort" during testimony before the House Transportation and Infrastructure Committee's Subcommittee on Water Resources and Environment, which Rep. Boehlert chairs, she said the administration could not support the bill as written.

Of particular concern to the EPA are the liability provisions, which Ms. Browner said could shift the burden of cleanup costs from polluters to taxpayers. She said the liability exemptions should be based on the ability to pay, not on the number of employees on a company's payroll. She also criticized using profit margins as a factor in determining a company's liability, saying there are a number of ways to calculate a profit margin.

Ms. Browner also complained that the Boehlert bill does not provide adequate safeguards for ground water quality, would promote more-rather than less-litigation over cleanup responsibilities, and would permit states to limit the EPA's ability to enforce cleanup standards.

But reform advocates do not take Ms. Browner's complaints as a kiss of death for the bill's chances.

"I look at this, everybody is talking about the same kind of structure of reform; now we seem to be debating the details," said AIA's Mr. Arlington. He noted, for example, that Ms. Browner agreed that small businesses deserve protection under Superfund, although she and Rep. Boehlert disagreed over exactly what constitutes a small business.

"That suggests to me that there's a compromise in here somewhere," said Mr. Arlington.

"It is a consensus vehicle that should politically have enough support on the Democratic side to make its passage clear and decisive on the House and Senate floors. The problem with this bill, as in any piece of legislation, is whether or not the Clinton administration really wants to address the structural problems of Superfund or continue their electioneering for another three years. If the latter is true, nothing will satisfy them," said Mr. Lefkin.

The Boehlert bill is only one of several Superfund reform measures likely to come into play during the current Congress. Reps. James Barcia, D-Mich., and Calvin Dooley, D-Calif., introduced a measure that resembles the Boehlert bill in many respects but that defines a small business as one with fewer than 30 employees. Other Democrats may follow suit with their own measures in coming weeks. Rep. Michael Oxley, R-Ohio, also is considering introducing his own measure. And Senate Republican and Democratic negotiators are continuing to discuss the Senate GOP leadership's Superfund bill, S.8, with Ms. Browner.