AUDIT OF SUPERFUND ACTIVITIES IN THE ENVIRONMENT AND NATURAL RESOURCES DIVISION FOR FISCAL YEARS 2015 AND 2016 INTRODUCTION In 1980, the Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) to clean up hazardous waste sites throughout the United States.2 The law addressed concerns about the need to clean up abandoned hazardous waste sites and the future release of hazardous substances into the environment. When CERCLA was enacted, the Environmental Protection Agency (EPA) was assigned responsibility for preparing a National Priorities List to identify sites that presented the greatest risk to human health and the environment. Waste sites on the National Priorities List were generally considered the most contaminated in the nation, and EPA funds could be used to clean up those sites. The cleanup of these sites was to be financed by the potentially responsible parties – generally the current or previous owners or operators of the site. In cases where the potentially responsible party could not be found or was incapable of paying cleanup costs, CERCLA established the Hazardous Substance Superfund Trust Fund (Trust Fund) to finance cleanup efforts. The Trust Fund also pays for the EPA’s enforcement, as well as research and development activities. In 1986 CERCLA was amended when Congress passed the Superfund Amendments and Reauthorization Act (SARA).3 SARA stressed the importance of using permanent remedies and innovative treatment technologies in the cleanup of hazardous waste sites, provided the EPA with new enforcement authorities and settlement tools, and increased the authorized amount of potentially available appropriations for the Trust Fund. Executive Order 12580, issued January 23, 1987, gives the Attorney General responsibility for all Superfund litigation. Within the Department of Justice (DOJ), the Environment and Natural Resources Division (ENRD) administers cases against those who violate CERCLA’s civil and criminal pollution-control laws. Superfund litigation and support are assigned to the following ENRD sections: Appellate, Environmental Crimes, Environmental Defense, Environmental Enforcement, Land Acquisition, Natural Resources, and Law and Policy. Beginning in FY 1987, the EPA entered into interagency agreements with the ENRD to reimburse the ENRD for its litigation costs related to its CERCLA activities. As shown in Table 1, cumulative budgeted reimbursements for Superfund litigation totaled over $810 million between FYs 1987 and 2016, which represented 27 percent of the ENRD’s total budget during this period. 2 42 U.S.C. Chapter 103 (2016). 3 SARA is incorporated into 42 U.S.C. Chapter 103 (2016). 1 Table 1 Comparison of the ENRD’s Appropriations and Budgeted Superfund Reimbursements (FYs 1987 through 2016) Budgeted Superfund Total ENRD Budget Reimbursements 1987 - 2009 $ 1,441,251,000 $ 647,509,160 $ 2,088,760,160 2010 109,785,000 25,600,000 135,385,000 2011 108,010,000 25,550,000 133,560,000 2012 108,009,000 24,550,000 132,559,000 2013 101,835,764 23,050,000 124,885,764 2014 107,643,000 23,050,000 130,693,000 2015 110,024,350 21,430,000 131,454,350 2016 110,512,000 20,145,000 130,657,000 Totals $2,197,070,114 $810,884,160 $3,007,954,274 Source: ENRD Budget History Report for FYs 1987 through 2016 FY ENRD Appropriations The EPA and the ENRD Statement of Work required the ENRD to maintain a system that documented its Superfund litigation costs. Accordingly, the ENRD implemented a management information system developed by a private contractor. This system is designed to process financial data from the ENRD’s Expenditure and Allotment (E&A) Reports into: (1) Superfund direct costs, including direct labor costs and other direct costs; (2) non-Superfund direct costs; and (3) allocable indirect costs.4 The EPA authorized reimbursements to the ENRD in the amount of $21.43 million during FY 2015 and $20.145 million during FY 2016 in accordance with the most recent EPA Interagency Agreements, DW-15-92343901-6 and DW15-92343901-7, respectively. Excise taxes imposed on the petroleum and chemical industries as well as an environmental income tax on corporations maintained the Trust Fund through December 31, 1995, when the taxing authority for Superfund expired. Since that time, Congress has not enacted legislation to reauthorize the tax. Currently, the funding for Superfund is composed of appropriations from EPA’s general fund, interest, fines, penalties, and recoveries. Consequently, the significance of the ENRD’s Superfund litigation can be seen in the commitments and recoveries the EPA has obtained, with the EPA receiving over $13 billion in commitments to clean The E&A Report is a summary of the total costs incurred by the ENRD during the fiscal year. The report includes all costs (both liquidated and unliquidated) by subobject class and a final indirect cost rate calculation for the fiscal year. Other direct costs charged to individual cases include special masters, expert witnesses, interest penalties, travel, filing fees, transcription (court and deposition), litigation support, research services, graphics, and non-capital equipment. Indirect costs are the total amounts paid in the E&A Reports less direct charges and are allocated based on the direct Superfund salary costs on each case. 4 2 B. Summary of Requirements Summary of Requirements Environment & Natural Resources Division Salaries and Expenses (Dollars in Thousands) Program Activity FY 2016 Enacted Positions Environment and Natural Resources Total Direct Balance Rescission Total Direct with Rescission Reimbursable FTE Total Direct and Reimb. FTE 537 Actual FTE 542 537 542 Other FTE: LEAP Overtime Grand Total, FTE Program Activity Environment and Natural Resources Total Direct Balance Rescission Total Direct with Rescission Reimbursable FTE Total Direct and Reimb. FTE Other FTE: LEAP Overtime Grand Total, FTE FY 2017 Continuing Resolution Amount Positions Est. FTE Amount FY 2018 Technical and Base Adjustments Positions Est. FTE Amount FY 2018 Current Services Positions Est. FTE Amount 110,512 537 526 110,302 -20 -9 3,498 517 517 113,800 110,512 0 110,512 537 526 110,302 0 110,302 -20 -9 3,498 0 3,498 517 517 113,800 0 113,800 74 616 115 641 0 -9 115 632 0 0 616 0 0 641 0 0 -9 0 0 632 2018 Increases Positions Est. FTE Amount 2018 Offsets Positions Est. FTE Amount 2018 Request Positions Est. FTE Amount 20 10 1,798 0 0 0 537 527 115,598 20 10 1,798 0 1,798 0 0 0 0 0 537 527 115,598 0 115,598 0 10 0 0 115 642 0 0 10 0 0 0 0 0 642 Exhibit B - Summary of Requirements H. Summary of Reimbursable Resources Summary of Reimbursable Resources Environment & Natural Resources Division Salaries and Expenses (Dollars in Thousands) Collections by Source All Other Sources Department of Agriculture Department of Commerce Department of Defense Department of Energy Department of Health and Human Services Department of Homeland Security Department of Interior Department of Justice Department of State Department of Treasury Environmental Protection Agency Federal Trade Commission Securities and Exchange Commission Budgetary Resources Obligations by Program Activity Environment and Natural Resources Budgetary Resources 2016 Actual 2017 Estimate 2018 Request Increase/Decrease Reimb. Reimb. Amount Reimb. Reimb. Amount Reimb. Reimb. Amount Reimb. Reimb. Amount Pos. FTE Pos. FTE Pos. FTE Pos. FTE 0 0 400 0 0 801 0 0 801 0 0 0 0 18 0 0 0 0 0 0 0 0 0 0 4 0 0 0 0 0 0 0 0 0 0 1,000 0 0 1,873 0 0 1,873 0 0 0 0 200 0 0 315 0 0 315 0 0 0 0 2,500 0 0 6,300 0 0 6,300 0 0 0 0 0 0 0 0 0 0 0 0 0 115 0 0 0 0 0 0 0 74 0 0 500 4,600 20,000 300 5 20,732 1,000 11,000 0 0 0 0 0 115 0 0 0 0 0 0 0 115 0 0 100 5,730 30,040 400 0 25,970 3,471 0 0 0 0 0 0 115 0 0 0 0 0 0 0 115 0 0 100 5,730 30,040 400 0 25,970 3,471 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 115 74 62,259 115 115 75,000 115 115 75,000 0 0 0 2016 Actual 2017 Estimate 2018 Request Increase/Decrease Reimb. Reimb. Amount Reimb. Reimb. Amount Reimb. Reimb. Amount Reimb. Reimb. Amount Pos. FTE Pos. FTE Pos. FTE Pos. FTE 115 74 62,259 115 115 75,000 115 115 75,000 0 0 0 115 74 62,259 115 115 75,000 115 115 75,000 0 0 0 Exhibit H - Summary of Reimbursable Resources I. Detail of Permanent Positions by Category Detail of Permanent Positions by Category Environment & Natural Resources Division Salaries and Expenses (Dollars in Thousands) Category FY 2016 Enacted Direct Pos. Security Specialists (080) Personnel Management (0200-0260) Clerical and Office Services (0300-0399) Accounting and Budget (500-599) Paralegals / Other Law (900-998) Attorneys (905) Paralegal Specialist (0950) Business & Industry (1100-1199) Information Technology Mgmt (2210-2299) Total Headquarters Washington D.C. US Fields Foreign Field Total 1 5 52 4 88 370 0 3 14 537 460 77 0 537 Reimb. Pos. 0 2 20 1 19 69 0 1 3 115 99 16 0 115 FY 2017 Continuing Resolution Direct Pos. Reimb. Pos. 1 5 52 4 88 370 0 3 14 537 460 77 0 537 FY 2018 Request ATBs 0 2 20 1 19 69 0 1 3 115 99 16 0 115 Exhibit I - Detail of Permanent Positions by Category Program Increases 0 0 0 0 0 -20 0 0 0 -20 -15 -5 0 -20 0 0 0 0 0 12 5 3 0 20 20 0 0 20 Program Offsets Total Direct Pos. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 5 52 4 88 362 5 6 14 537 465 72 0 537 Total Reimb. Pos. 0 2 20 1 19 69 0 1 3 115 99 16 0 115 2016, the EPA reached a settlement or took an enforcement action at 100 percent of non-federally owned Superfund sites with viable, liable parties.1 Special accounts are created when funds are received as part of a settlement to fund a site cleanup. Funds received in settlements with PRPs are used to clean up the specific Superfund sites that were the subject of the settlement agreement. Having the ability to use special accounts provides needed cleanup dollars at many sites that otherwise may not have received funding absent the EPA’s enforcement efforts. In FY 2016, the EPA created 27 special accounts, collected $165.6 million for response work and accrued $0.9 million in interest for a total of $166.5 million in new funding.2 The agency disbursed or obligated $306.7 million for response work (excluding reclassifications). In FY 2016, the Superfund Enforcement program secured private party commitments exceeding $1.15 billion. Pursuant to CERCLA Section 120, the EPA must enter into interagency agreements, also commonly referred to as Federal Facility Agreements (FFAs), with responsible federal entities to ensure protective and timely cleanup of their National Priorities List (NPL) sites. The agreements provide that the EPA oversee the cleanups to ensure they protect public health and the environment. These FFAs govern cleanups at 174 federal facility Superfund sites, which include many of the nation’s largest and most complex cleanup projects totaling between $4.0 billion and $7.0 billion annually. FY 2018 Activities and Performance Plan: In FY 2018, the EPA is requesting to merge the Superfund Federal Facilities Enforcement program with the Superfund Enforcement program. The agency will optimize the resources between the two programs. Within our resource levels, the agency will prioritize its efforts on the most significant sites in terms of environmental impact (particularly those that may present an imminent and/or substantial endangerment) and potential cost liability to the government. In FY 2018, the agency will continue its efforts to establish special accounts to facilitate cleanup. As special account funds may only be used for sites and uses specified in the settlement agreement, both special account resources and annually appropriated resources are critical to the Superfund program to clean up Superfund sites. Due to resource levels within the FY 2018 budget request, DOJ support for Superfund enforcement will need to come from DOJ’s base resources. The EPA may seek to increase use of unilateral administrative orders to achieve cleanups to account for a potential limited ability to sue PRPs in federal court. To the extent DOJ resources are available, DOJ’s support will be used to negotiate and enter consent decrees with PRPs to perform remedial actions, to pursue judicial actions to compel PRP cleanup, and to pursue judicial actions to recover monies spent in cleaning up contaminated sites. For additional information, refer to: http://www.epa.gov/enforcement/enforcement-annual-results-fiscal-year-fy-2016. In FY 2016, $26.4 million in interest was earned on the special account funds invested in the Superfund Trust Fund. However, there was a time lag for those funds to be captured in the agency’s system and made available for use. 1 2 351 In terms of federal facility work in FY 2018, the EPA will focus its resources on resolving formal disputes under the Federal Facility Agreements (FFAs). Cost Recovery Support The agency will streamline the financial management aspects of Superfund cost recovery and the collection of related debt to the federal government. The EPA’s financial, programmatic, and legal offices will continue to maintain the accounting and billing of Superfund oversight costs attributable to responsible parties. These costs represent the EPA’s cost of overseeing Superfund site cleanup efforts by responsible parties as stipulated in the terms of settlement agreements. In FY 2016, the agency collected $165.6 million in cost recoveries, of which $1.3 million were returned to the Superfund Trust Fund and $164.3 million were deposited in site-specific, interest bearing special accounts. A list of FY 2018 performance measures and targets is located in the FY 2018 Performance Measures tab. FY 2018 Change from FY 2017 Annualized Continuing Resolution (Dollars in Thousands): • (-$40,229.0 / -251.9 FTE) This change reflects the streamlining of the agency’s identification of Potentially Responsible Parties (PRPs), settlement negotiations for cleanup and recovery costs when the agency has expended funds for cleanups. This change extends the timeline of support and modernization of the Superfund Cost Recovery Package Imaging and On-Line System (SCORPIOS). • (-$20,145.0) This eliminates the EPA’s financial support to the Department of Justice (DOJ) to assist the EPA in initiating and prosecuting civil, judicial, and administrative site remediation cases and ensure that responsible parties perform cleanup actions at sites where they are liable. • (+$4,450.0 / +26.7 FTE) This merges the Superfund Federal Facility Enforcement program into the Superfund Enforcement program. Statutory Authority: Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) as amended, §120. 352 115TH CONGRESS 1ST SESSION H. R. 3354 AN ACT Making appropriations for the Department of the Interior, environment, and related agencies for the fiscal year ending September 30, 2018, and for other purposes. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, 67 1 2 BUILDINGS AND FACILITIES For construction, repair, improvement, extension, al- 3 teration, and purchase of fixed equipment or facilities of, 4 or for use by, the Environmental Protection Agency, 5 $39,553,000, to remain available until expended. 6 HAZARDOUS SUBSTANCE SUPERFUND 7 (INCLUDING TRANSFERS OF FUNDS) 8 For necessary expenses to carry out the Comprehen- 9 sive Environmental Response, Compensation, and Liabil10 ity Act of 1980 (CERCLA), including sections 111(c)(3), 11 (c)(5), (c)(6), and (e)(4) (42 U.S.C. 9611) 12 $1,116,374,000, to remain available until expended, con13 sisting of such sums as are available in the Trust Fund 14 on September 30, 2017, as authorized by section 517(a) 15 of the Superfund Amendments and Reauthorization Act 16 of 1986 (SARA) and up to $1,116,374,000 as a payment 17 from general revenues to the Hazardous Substance Super18 fund for purposes as authorized by section 517(b) of 19 SARA: Provided, That funds appropriated under this 20 heading may be allocated to other Federal agencies in ac21 cordance with section 111(a) of CERCLA: Provided fur22 ther, That of the funds appropriated under this heading, 23 $7,778,000 shall be paid to the ‘‘Office of Inspector Gen24 eral’’ appropriation to remain available until September 25 30, 2019, and $15,496,000 shall be paid to the ‘‘Science •HR 3354 EH 68 1 and Technology’’ appropriation to remain available until 2 September 30, 2019. 3 LEAKING UNDERGROUND STORAGE TANK TRUST FUND 4 PROGRAM 5 For necessary expenses to carry out leaking under- 6 ground storage tank cleanup activities authorized by sub7 title I of the Solid Waste Disposal Act, $91,874,000, to 8 remain available until expended, of which $66,505,000 9 shall be for carrying out leaking underground storage tank 10 cleanup activities authorized by section 9003(h) of the 11 Solid Waste Disposal Act; $25,369,000 shall be for car12 rying out the other provisions of the Solid Waste Disposal 13 Act specified in section 9508(c) of the Internal Revenue 14 Code: Provided, That the Administrator is authorized to 15 use appropriations made available under this heading to 16 implement section 9013 of the Solid Waste Disposal Act 17 to provide financial assistance to federally recognized In18 dian tribes for the development and implementation of 19 programs to manage underground storage tanks. 20 21 INLAND OIL SPILL PROGRAMS For expenses necessary to carry out the Environ- 22 mental Protection Agency’s responsibilities under the Oil 23 Pollution Act of 1990, $18,047,000, to be derived from 24 the Oil Spill Liability trust fund, to remain available until 25 expended. •HR 3354 EH 61 cy. The funds are used to correct unsafe conditions, protect health and safety of employees and Agency visitors, and prevent deterioration of structures and equipment. Appropriation enacted, 2017 .............................................................. Budget estimate, 2018 ....................................................................... Recommended, 2018 ........................................................................... Comparison: Appropriation, 2017 .................................................................... Budget estimate, 2018 ................................................................ $34,467,000 39,553,000 39,553,000 +5,086,000 0 The bill provides $39,553,000 as requested, and $5,086,000 above the fiscal year 2017 enacted level. The Committee supports proposed projects that will reduce Agency operational and rent costs. EPA should prioritize projects based on anticipated cost savings and allocate funds accordingly. HAZARDOUS SUBSTANCE SUPERFUND The Hazardous Substance Superfund (Superfund) program was established in 1980 by the Comprehensive Environmental Response, Compensation, and Liability Act to clean up emergency hazardous materials, spills, and dangerous, uncontrolled, and/or abandoned hazardous waste sites. The Superfund Amendments and Reauthorization Act (SARA) expanded the program substantially in 1986, authorizing approximately $8,500,000,000 in revenues over five years. In 1990, the Omnibus Budget Reconciliation Act extended the program’s authorization through 1994 for $5,100,000,000 with taxing authority through calendar year 1995. The Superfund program is operated by EPA subject to annual appropriations from a dedicated trust fund and from general revenues. Enforcement activities are used to identify and induce parties responsible for hazardous waste problems to undertake cleanup actions and pay for EPA oversight of those actions. In addition, responsible parties have been required to cover the cost of fund-financed removal and remedial actions undertaken at spills and waste sites by Federal and State agencies. Funds are paid from this account to the Office of Inspector General and Science and Technology accounts for Superfund related activities. Appropriation enacted, 2017 .............................................................. Budget estimate, 2018 ....................................................................... Recommended, 2018 ........................................................................... Comparison: Appropriation, 2017 .................................................................... Budget estimate, 2018 ................................................................ $1,088,769,000 762,063,000 1,116,374,000 +27,605,000 +354,311,000 The bill provides $1,116,374,000 for the Hazardous Substance Superfund program, which is $27,605,000 above the fiscal year 2017 enacted level and $354,311,000 above the budget request. Unless otherwise stated herein or in the table at the end of this report, the recommendation continues funding for all Superfund programs, activities, and subactivities at the fiscal year 2017 enacted level. Operations and Administration.—The recommendation includes $123,105,000, which is $5,000,000 below the fiscal year 2017 enacted level based upon estimates for rent, facility, and security savings. The recommendation does not concur with the Agency’s proposed allocation of resources for workforce reshaping. VerDate Sep 11 2014 22:22 Jul 12, 2017 Jkt 023918 PO 00000 Frm 00061 Fmt 6659 Sfmt 6602 E:\HR\OC\A918.XXX A918 62 Superfund Cleanup.—The Committee recommends $766,167,000, which is $47,605,000 above the fiscal year 2017 enacted level. The Committee appreciates the Administration’s commitment to streamline and improve the program, and concurs with the designation of the program as a national infrastructure priority. The Committee expects the recommended resources will accelerate remediation at highly contaminated, orphan sites. Further, the Committee expects the additional funding will also support pipeline activities such as remedial investigations, feasibility studies, and remedial designs which are critical steps prior to construction. Additional Guidance.—The Committee has included the following additional guidance with respect to funding provided under this account: Financial Assurance.—The Committee is aware of concerns raised by States, stakeholders, and the Small Business Administration’s Office of Advocacy regarding the Agency’s proposed rule on financial assurance for hardrock mining. Those comments indicate the rule as proposed in January 2017 was duplicative of other financial assurance programs and unworkable. Accordingly the Committee has included bill language to prevent the proposed rule from being finalized in its current form. LEAKING UNDERGROUND STORAGE TANK TRUST FUND PROGRAM Subtitle I of the Solid Waste Disposal Act, as amended by the Superfund Amendments and Reauthorization Act, authorized the establishment of a response program for cleanup of releases from leaking underground storage tanks. Owners and operators of facilities with underground tanks must demonstrate financial responsibility and bear initial responsibility for cleanup. The Federal trust fund is funded through the imposition of a motor fuel tax of onetenth of a cent per gallon. In addition to State resources, the Leaking Underground Storage Tank (LUST) Trust Fund provides funding to clean up sites, enforces necessary corrective actions, and recovers costs expended from the Fund for cleanup activities. The underground storage tank response program is designed to operate primarily through cooperative agreements with States. Funds are also used for grants to non-State entities, including Indian Tribes, under Section 8001 of the Resource Conservation and Recovery Act. The Energy Policy Act of 2005 expanded the authorized activities of the Fund to include the underground storage tank program. In 2006, Congress amended section 9508 of the Internal Revenue Code to authorize expenditures from the trust fund for prevention and inspection activities. Appropriation enacted, 2017 .............................................................. Budget estimate, 2018 ....................................................................... Recommended, 2018 ........................................................................... Comparison: Appropriation, 2017 .................................................................... Budget estimate, 2018 ................................................................ $91,941,000 47,429,000 91,874,000 ¥67,000 +44,445,000 The bill provides $91,874,000 for the Leaking Underground Storage Tank (LUST) Trust Fund Program, $67,000 below the fiscal year 2017 enacted level and $44,445,000 above the budget request. VerDate Sep 11 2014 22:22 Jul 12, 2017 Jkt 023918 PO 00000 Frm 00062 Fmt 6659 Sfmt 6602 E:\HR\OC\A918.XXX A918 VerDate Sep 11 2014 22:22 Jul 12, 2017 Jkt 023918 PO 00000 Frm 00157 Fmt 6659 Sfmt 6602 E:\HR\OC\A918.XXX A918 Insert offset folio 041 here 23918A.039 157