Testimony of New York State Assistant Attorney General
Gordon J. Johnson
Before the Senate Committee on Environment and Public Works

My name is Gordon J. Johnson, and I am the Deputy Bureau Chief of the Environmental Protection Bureau in the Office of New York Attorney General Dennis C. Vacco. I very much appreciate the opportunity to appear before the Committee, and particular thank Senators Chafee and Baucus, as well as Senator Moynihan from New York State, for giving me the time to present comments on S. 8 and the Chairman's Draft Mark of August 28, 1997.

I am appearing today on behalf of my office, which has had considerable experience in natural resource damage cases, and on behalf of the National Association of Attorneys General, NAAG. My office has handled or is now counsel in more than 25 major natural resource damages cases arising from the release of hazardous substances or petroleum products. We also challenged on behalf of the State of New York the initial natural resource damage assessment regulations promulgated by the Department of the Interior in 1986, a case which I argued before the United States Court of Appeals for the District of Columbia Circuit. That case, Ohio v. Department of the Interior, 880 F.2d 432 (D.C. Cir. 1989), led to significant changes in the assessment regulations. When the revised regulations were challenged, New York with other states intervened in support of the rules. The decision in that case, Kennecott Utah Copper Corp. v. Department of the Interior, 88 F.3d 1191 (D.C. Cir. 1996), upheld the Department's rule in large part.

At its Summer meeting on June 22-26, 1997, the sole resolution adopted by NAAG addressed Superfund Reauthorization; a copy of the resolution is attached. Attorney General Vacco was among the group of bipartisan sponsors of the NAAG resolution. The resolution directly addresses the natural resource issues which are the subject of this panel.

The NAAG resolution arose from the state Attorneys General's recognition of the critical importance of the Superfund programs in assuring protection of public health and the environment from releases of hazardous substances at thousands of sites across the country. They also know first hand the problems with the statutory scheme, and the need to limit transaction costs and streamline certain processes required by Superfund today. In particular, the Attorneys General want to make the tasks of assessing natural resource damages and restoring injured or destroyed resources less complicated, and to reduce the amount of litigation that may result when trying to accomplish those goals.

In the following paragraphs, I will first address the issues raised in the NAAG resolution, and then address other significant issues in the current bill and the Chairman's draft of August 28, 1997.

1. Judicial Review

In the resolution, NAAG urges Congress to clarify that in any legal proceeding the restoration decisions of a trustee should be reviewed on the administrative record, and be upheld unless arbitrary and capricious. S. 8, as introduced, contained provisions in  702 regarding the administrative record and public participation which, when read together, appeared to accomplish that goal. The Chairman's mark-up retained the provision regarding the establishment of the administrative record but removed the language in the public participation section providing that judicial review of the trustee's restoration plan decisions would be on that record. S. 8 also removed the rebuttable presumption provided in current law to a trustee who adheres to the assessment regulations when conducting an assessment.

The deletion of the judicial review provision is unfortunate and unwise, and likely will lead to greater litigation, increased expense, and secretive and duplicative assessments. Unless the selection of a plan and the assessment which led to that selection is entitled to the usual administrative presumption of correctness, no trustee could afford to conduct an assessment and select a plan on an open record with full public input knowing that responsible parties would not bound in any fashion by the determination. The key to reducing the costs of assessment and constructing a cooperative relationship with responsible parties is judicial review limited to correction of arbitrary decisions by a trustee. Such a process has been at the center of administrative law processes, and has received the approval of all courts as to its constitutionality. We again urge the Committee to restore the judicial review provision deleted in the recent draft.

We suggest language that makes clear the standard of review, thereby limiting the ability of the ever inventive CERCLA lawyers to raise a new issue with which to clog the courts and delay the implementation of restoration plans:

[add to end of paragraph of draft chairman's mark - August 28, 1997 in Administrative Record (new  107(f)(20(C)(v)(I)] In any judicial action under this chapter, judicial review of any issues concerning the selection of a restoration plan shall be limited to the administrative record, and a trustee's selection shall be upheld unless the objecting party can demonstrate, on the administrative record, that the selection is arbitrary and capricious or otherwise not in accordance with law. In reviewing any procedural errors, the court may disallow damages only if the errors were so serious and related to matters of such central relevance to the plan that the plan would have been significantly changed had such errors not been made.

2. Statute of Limitations

The Attorneys General ask that CERCLA be amended to provide that claims for natural resource damages be brought within three years of the completion of a damage assessment. Currently, CERCLA has a complicated two-prong statute of limitations period. The "discovery prong" requires filing a suit within three years of the discovery of the loss and its connection with the release in question, and the "regulatory prong" requires its filing within three years of promulgation of natural resource damage assessment regulations. Final promulgation of regulations that comply with the statutory directives still is not complete.

The language of both prongs is ambiguous, and provides little guidance. What constitutes "discovery of the loss" and "its connection with the release" is far from obvious, and certainly has various interpretation in any given situation. Even the "regulatory prong" has had numerous judicial interpretations. See, Kennecott Utah Copper Corp. v. Dept. of the Interior, 88 F.3d 1191, 1209-13 (D.C. Cir. 1996); United States v. Montrose Chemical Corp. 883 F. Supp. 1496 (E.D. Cal. 1995), rev. sub nom. California v. Montrose Chemical Corp. 104 F.3d 1507 (9th Cir. 1986); Idaho v. M.A. Hanna Co., No. 83-4179, slip op. at 8-9 (D. Idaho July 17, 1995).

These provisions often put a trustee in a difficult position and result in unnecessary litigation: the trustee may have to bring suit before he or she has sufficient information to determine the scope of the injury or to quantify damages, and even before the RI/FS is completed.

In contrast, in the Oil Pollution Act of 1990, Congress adopted a clear rule: the limitations period runs three years after completion of an assessment. , OPA  1017(f)(1)(B). This period has not resulted in uncertainty for trustees or liable parties. In addressing response costs for oil spills, states and the federal government generally have addressed natural resource damages and either settled or dropped claims, or established timetables for an assessment. Trustees cannot afford to delay assessments and thereby extend the liability period because evidence and data needed to conduct an assessment disappears after time. As demonstrated under OPA, NAAG's proposed solution has proved workable and just.

The August 28, 1997 draft complicates the issue further. The pertinent provision, new  705, would apply a third period when trustees and responsible parties enter into an agreement regarding the performance of an assessment. By setting a limit of six years from the signing of the agreement, the provision may well force a trustee to court before the assessment is complete in complicated cases, and limits the flexibility parties need when negotiating an agreement. Indeed, this new provision may well discourage agreements and settlements because responsible parties might prefer to rely on the current ambiguous provisions that still would remain and avoid the certain extension this new provision provides. We suggest the follow language instead:

Statute of Limitations.--(I) Section 113(g)(1) of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. 9613(g)(1)) is amended by striking the first sentence and inserting the following:

"(1) ACTION FOR NATURAL RESOURCES DAMAGES.--Except as provided in paragraphs (3) and (4), no action may be commenced for damages (as defined in section 106(6)) under this Act, unless that action is commenced within 3 years after the date of completion of the natural resources damage assessment in accordance with the regulations promulgated under section 301(c) of this title, or, if the trustee elects not to follow those regulations, of a plan for the restoration, replacement, or acquisition of the equivalent of the injured, lost, or destroyed natural resources adopted after adequate public notice, opportunity for comment, and consideration of all public comments."

(2) Section 112(d) of CERCLA is amended by striking paragraph (2) and inserting the following:

(2) CLAIMS FOR RECOVERY OF DAMAGES.--No claim may be presented under this section for recovery of the damages referred to in section 107(a) unless the claim is presented within 3 years after the date of completion of the natural resources damage assessment in accordance with the regulations promulgated under section 301(c) of this title or if the trustee elects not to follow those regulations, of a plan for the restoration, replacement, or acquisition of the equivalent of the injured, lost, or destroyed natural resources adopted after adequate public notice, opportunity for comment, and consideration of all public comments."

3. Superfund Monies For Assessments

When CERCLA was amended in 1986, Congress provided in CERCLA that the Superfund Trust Fund could be used by state and federal trustees to conduct damage assessments, recognizing in particular that many state trustees lack the funds to pay for the necessary expertise to conduct assessment themselves. In conference, language was added to the amendments to the Internal Revenue Code which had the practical effect of negating that CERCLA provisions. NAAG long has asked that the conflict between the IRS Code and CERCLA be eliminated and that state trustees be able to draw on the Fund to conduct assessments, as they can currently to conduct RI/FS's.

4. Use of Reliable Assessment Methodologies

Just as Congress does not direct EPA to use only certain scientific methodologies in the changing and developing area of remedial science, NAAG believes that Congress should retain the ability of trustees to recover damages based on any reliable assessment methodology. S. 8, however, provides that assessments must be conducted only in accordance with regulations not yet promulgated by the President, and effectively forbids the use of one methodology, the admittedly controversial "contingent valuation" methodology, in the assessment process. We believe that state trustees should not be compelled to use one federally dictated method to assess damages, particularly given the myriad types of hazardous substances and release scenarios and the experience of state trustees in assessing damages in ways that are reliable and cost-effective. The precise methodologies allowed is a matter of scientific expertise best left to the regulatory and judicial process for resolution.

5. Liability Cap

We are pleased that S. 8 does not alter the current liability cap. We are confident that trustees will continue to use their good sense, and in any event that the courts will not award excessive damages. Calamities such as the Exxon Valdez spill and the contamination of the Hudson River convince us that there may be circumstances where altering the current liability cap may result in a gross injustice to the people of the United States.

6. Recovery of Enforcement and Oversight Costs

S. 8 provides that trustees may recover the costs of their assessments, but is silent with respect to the related costs of enforcement and recovering the damages and a trustee's cost of overseeing restoration of damaged resources. The NAAG resolution asks that Congress clarify that such costs are inherent in a sound assessment process, and explicitly provide that trustees can recover both the costs of enforcement, including attorney fees generally incurred by a state Attorney General's office, and the costs of overseeing the implementation of a natural resource damage restoration.

The NAAG resolution is consistent with the general and uncontroversial policy that persons responsible for the release of hazardous substances have an obligation to make the public whole in the event that there is an injury to our natural resources. Well over a hundred years ago in cases on the abatement of nuisances and the public trust doctrine, the courts made clear several bedrock principles. The states and the federal governments are trustees for the people, and that their trust corpus includes this nation's glorious natural resources. We, as trustees, have an obligation to protect these often irreplaceable resources from harm, and those that harm them have the obligation to restore them for all the people. A strong and clear natural resource damages remedy is essential to accomplishing these goals.

Implementation of CERCLA's natural resource damage provisions had a difficult birth and early childhood. The initial assessment regulations were deeply flawed, and states such as mine had to go to court to seek their repromulgation. Contrary to Congress's directive, the federal agencies entrusted with implementation of the Superfund natural resource damages program gave them little attention at first. Since the 1989 decision in the Ohio v. Department of the Interior case, however, the' federal program has matured. States have continued their progress in implementing fair and just recovery programs at state levels, relying in large part with the tools provided by CERCLA. We recognize that like almost any tool, the natural resource damage provisions of CERCLA could use some sharpening. We ask that this Committee and Congress maintain the central provisions of CERCLA that make the public whole when a release causes injury.

OTHER ISSUES

S. 8 and the August 28, 1997 draft address a number of natural resource damage issues important to the remedy provided by CERCLA. In the following paragraphs, I address some of the major issues, relying on the experiences of my office and those of other Attorneys General, as well as the experiences of trustees since the early 1980's with the natural resource damage provisions.

I note that the August 28, 1997 draft suggests some revisions to S. 8 that address certain problems state trustees and my office found in the bill as introduced. I comment on those revisions first.

A. Consistency Requirement

The August 28, 1997 draft rewrote the consistency provision of S. 8 at  703, removing troublesome language and creating in its place a provision requiring a trustee to "take into account" implemented or planned removal and remedial actions when selecting a restoration alternative. The trustee also is required to advise EPA of the selection, confirm that the selected plan is, "to the extent practicable, consistent with the response action planned or accomplished at the facility," and to explain any significant inconsistencies.

The proposal provides a workable solution to the hypothetical problems that might arise between EPA cleanup measures and trustee restoration plans. New York would suggest one minor alteration: in cases where EPA has not implemented or planned any removal or remedial action and the site is not on the NPL, notice need not be given EPA of the selected plan. While in most significant cases a state normally will include EPA in the process at least on an informational basis, requiring the statement adds just another layer of paper and imposes another mandate on state trustees in cases where EPA has had no involvement and plans no future involvement.

B. Payment Period

S. 8 provided that payment of damage over a period of years would be appropriate. While periodic payment settlements are far from uncommon in this area, S. 8 included the "period of time over which the damages occurred" among the factors to be considered when establishing as schedule for payment. The August 28, 1997 draft wisely removed that consideration. With that and the other changes, the provision is appropriate.

C. Lead Federal Trustee

The August 28, 1997 draft modifies the provision regarding the appointment of a lead federal trustee appropriately. S. 8 at  702(a). The revised provision requires regulations to provide for a "lead federal administrative trustee" at a facility undergoing an assessment, who presumably will coordinate the federal trustees' activities administratively. This role is important, because it will give state trustees the ability to contact one federal official when seeking to coordinate state efforts with federal activities.

We think that the Committee should clarify either in the bill expressly or through the committee's report that the "lead federal administrative trustee" would be the lead only among the federal trustees, not among the federal, state and tribal trustees. At many sites, it is much more appropriate and effective for a lead trustee who handles matters with the responsible parties or among all the trustees to be a state or tribal trustee. Who should be the lead among all trustees should be left to the trustees to decide, and co-lead trustees should be allowed.

Finally, we do not think it is appropriate for the lead federal trustee to be a responsible party, a situation which may occur in cases addressing damages arising from releases at a Department of Energy or military facility. In those situations, the lead federal administrative trustee should be from one of the federal agencies not liable for damages in order to eliminate even the appearance to the public and the states that the fox is deciding on repairs to the chicken house.

D. Interim Losses and "Temporary Restorations"

By arguably limiting a trustee's ability to recover interim damages to natural resources, the provisions of S. 8, even as modified by the August 28, 1997 draft, significantly depart from the principle that when natural resource are damaged, the party responsible for that damage has an obligation to make our citizens whole. While S. 8 places emphasis, appropriately, on restoration or replacement of injured or damaged resources, arguable restrictions on recovery of interim losses may also have the ironic effect of delaying that restoration. Moreover, in cases where the injury to the resources cannot be repaired except by natural recovery because restoration is infeasible or grossly expensive, the language of the August 28, 1997 draft could be read to imply that a trustee cannot recover any damages whatsoever, leaving the public alone to bear the consequences and costs of injured or destroyed natural resources.

Restoration of injured natural resources, or their replacement or acquisition of their equivalent when restoration is not feasible or appropriate, has always been the goal of a trustee. Natural resources almost always provide numerous ecological and human services and have intrinsic values to society that are difficult to quantify, and thus the first step in insuring proper compensation is to restore the resource. Pending that restoration, however, our citizens do suffer losses which also should be compensated. The August 28, 1997 draft's explicit inclusion of language allowing recovery for "temporary replacement of the lost services" is a step in the right direction, but is too limited.

First, while the draft provides that a restoration alternative selected by a trustee may include such temporary replacement, it should clarify that a trustee may begin providing such services before the restoration plan is selected at the end of an often lengthy assessment study, and that the costs of such pre-selection provision of services will be recoverable.

Second, even if a resource recovers naturally quickly following a release, the public still has suffered quantifiable and compensable damages. For instance, when public recreational facilities, such as beaches, are closed for days after a spill, temporary replacement often will not be practicable or implementable on a short-term basis even though the public has suffered an injury. Trustees still should be able to recover damages and use sums to improve beach access or otherwise enhance the resource.

Third, the bill should be clarified to confirm that temporary replacement is allowed in non-restoration alternatives. A trustee may also evaluate "replacement" and "acquisition" alternatives when evaluating plans. Pending implementation of such plans if selected, a trustee also should' be able to recover for providing replacement services.

E. Double Recovery Language

CERCLA presently contains a clause expressly prohibiting double recovery: "[t]here shall be no double recovery under this chapter for natural resources damages, including the costs of damage assessment or restoration, rehabilitation, or acquisition for the same release and natural resource." CERCLA  107(f)(1). While double recovery has not been an issue in the years since 1980, S. 8 rewrites the otherwise clear language. Unfortunately, the new version may create fertile ground for litigation. A strained reading of the new language may suggest that anyone who has recovered response costs which are used to restore an injured resource - and remedial work often has that consequence, obviously - cannot recover natural resource damages. Moreover, the new language appears to preempts state laws, and could result in significant unfairness. For instance, most states have long allow recovery for spills which kill fish in a river, with recoveries paid to a state's fish stocking programs. Such damages may not necessarily be recoverable under S. 8. Thus, this new language would appear to prevent a state from recovering such damages in the event of a natural resource recovery under CERCLA as amended by S. 8. Moreover, recovery by a state for just this element of typical damages may preclude any recovery under S. 8 for all the other effects of a release.

Double recovery has not been raised as a problem, and the current language protects against such a result. We urge the Committee to return to the current statutory language.

F. Injury Before 1980

Section 701(7) of the August 28, 1997 draft imposes significant and unwarranted restrictions on recovery of damages when a release occurred prior to 1980 even though damages resulting from that release still are being incurred. First, under current law, a trustee can recover if the caused by a pre-1980 release continue after 1980. CERCLA  107(f)(1) [last sentence]. Under S. 8, a trustee may recover only if the injury continues. This one word substitution may be read to preclude recovery of all damages whatsoever for a pre-1980 release, even one which continues to have significant impacts and harms, because some courts have concluded that the "injury" occurs at the moment of release while damages occur thereafter. See, e.g., In re Acushnet River & New Bedford Harbor Proceedings, 716 F. Supp. 676, 681-687 (D. Mass. 1989). Claims now being litigated for numerous sites could well be affected and extinguished.

At common law, the creator of a nuisance which continues to cause damage after its creation still is liable for its abatement. This well-grounded common law doctrine is at the heart of the natural resource damages remedy, and should not be discarded by this Committee.

G. Apparent Ban on Modeling

Modeling of releases and spills to calculate damage quickly and inexpensively is not only permitted by current law, but expressly encouraged. CERCLA  301(c)(2). Especially when damages resulting from a spill are not extensive, modeling avoids the costs associated with damage assessment and the necessary scientific procedures and analyses that otherwise might be required to complete a site-specific assessment.

In contrast, S. 8 provides that all aspects of the assessment process shall, "to the extent practicable, be based on facility-specific information." S. 8 at  703(a). This provision could be read as essentially prohibiting modeling despite the huge savings in assessment costs resulting from its use. We believe that the provision is counterproductive and may well increase assessment costs - which would be paid by liable parties - to many times more than any miscalculation modeling of restoration costs might yield at a specific site. We urge this Committee to allow modeling and other types of expedited assessments as possible methodologies that could be considered when promulgating assessment regulations.

H. Identification of Trustee Responsibilities

S. 8 requires the assessment regulations include procedures for trustees to identify the resources under their trusteeship and the legal bases for their authority. These procedures are not useful, and could create issues for time-consuming litigation as well as foster jurisdictional disputes among state, federal and tribal trustees. In New York, we have repeatedly worked with other trustees from the federal government, tribes and other states. Cooperation is fostered when we agree to avoid debates over the status and nature of our trusteeships, and has allowed us to work more cooperatively and efficiently with responsible parties. This provision of S. 8 is unnecessary.

I. Timeliness of Suit

The August 28, 1987 draft adds a paragraph prohibiting recovery by a trustee if the resource has returned to baseline condition before the trustee files a claim or incurs assessment or restoration costs. This provision would unfairly penalize the public and award polluters when a trustee lacks the finances or opportunity to address immediately a particular release even though the public has suffered considerable injury until the resource recovered.

For instance, a release may close recreational facilities or kill fish, but before a trustee can turn his or her attention to the matter, the resource may have returned to baseline conditions. As discussed above, such events do cause damage which should be compensable. More ominous, however, is the inducement created by this section for a responsible party to withhold crucial information about a spill and its effects from the trustee and the public until the resource has naturally recovered. We urge that this provision be deleted from the bill.

J. Non-use Values

S. 8 expressly prohibits recovery for "any impairment" of non-use, or passive use values. In New York, we believe that such a provision could inappropriately devalue natural resources, and may force the State and its taxpayers to bear themselves the costs arising from improper release of hazardous substances.

The value of a natural resource is a combination of its value as a useful commodity, such as the value of an aquifer as drinking water or seal pelts as clothing, and its passive values. These passive values include the value placed on having a resource available for future use, and the fact that we repeatedly pay to have resources available merely because we value their existence. My state expends thousands of dollars a year to protect and propagate endangered species, even though we cannot think of any use for a piping plover, for instance. We protect whales and will incur costs to save stranded ones not because the whales are "useful" as commodities, but because we value their existence. Unique resources, such as majestic canyons and rivers like the Grand Canyon and the Hudson River, are valuable to society not only for their actual uses as parks, waterways, or recreational facilities, but because they just are.

By prohibiting recoveries predicated on these values, S. 8 ignores the costs borne by government to protect and safeguard these resources. Under S. 8, a spiller who kills endangered species may not have to pay any damages whatsoever when it is not possible to restore the species through a breeding program, even though government may have expended thousands of dollars that year alone to protect the species. There is no doubt that the resource has been injured and that we, the public, have suffered damages, yet we will have no remedy under S. 8.

Moreover, the provision is susceptible to misuse in litigation. It will certainly be used in legal arguments to oppose restoration plans in situations where nonuse values predominate and influence a plan's conclusion that the cost of restoration is not disproportionate to the benefits of restoration.

There are numerous safeguards in our legal and political systems to prevent the inappropriate use of nonuse values. The settlements reached in natural resource damage cases to date reflect trustees' common-sense utilization of the economic concepts relating to both use and passive use valuation. New York urges that this provision be dropped from the bill.

September 4, 1997


NATIONAL ASSOCIATION OF ATTORNEYS GENERAL

Adopted Summer Meeting, June 22-26, 1997

Jackson Hole, Wyoming

RESOLUTION

SUPERFUND REAUTHORIZATION

WHEREAS, the Attorneys General of the States have significant responsibilities in the implementation and enforcement of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and analogous state laws, including advising client agencies on implementation of the cleanup and natural resource damage programs, commencing enforcement actions when necessary to compel those responsible for environmental contamination to take cleanup actions and to reimburse the states for publicly-funded cleanup, and advising and defending client agencies that are potentially liable under CERCLA;

WHEREAS, the Superfund programs implemented under CERCLA and analogous state laws are of critical importance to assure protection of public health and the environment from uncontrolled releases of hazardous substances at thousands of sites throughout the country;

WHEREAS, Congress is currently considering legislation to amend and reauthorize CERCLA;

WHEREAS, to avoid unnecessary litigation and transaction costs over the interpretation of new terms and new provisions, amendments to CERCLA should be simple, straightforward, and concise;

WHEREAS, the National Association of Attorneys General has adopted resolutions in March 1987, July 1993, and March 1994 on the amendment of CERCLA;

STATE ROLE

WHEREAS, many state cleanup programs have proven effective in achieving cleanup, yet the CERCLA program fails to use state resources effectively;

WHEREAS, state programs to encourage the cleanup and redevelopment of underutilized "brownfields" are making important strides in improving the health, environment, and economic prospects of communities by providing streamlined cleanup and resolution of liability issues for new owners, developers, and lenders;

FEDERAL FACILITIES

WHEREAS, federal agencies should be subject to the same liability and cleanup standards as private parties, yet federal agencies often fail to comply with state and federal law;

LIABILITY

WHEREAS, the core liability provisions of CERCLA, and analogous liability laws which have been enacted by the majority of the states, are an essential part of a successful cleanup program, by providing incentives for early cleanup settlements, and promoting pollution prevention, improved management of hazardous wastes, and voluntary cleanups incident to property transfer and redevelopment;

WHEREAS, the current CERCLA liability scheme has in some instances produced expensive litigation, excessive transaction costs, and unfair imposition of liability;

REMEDY SELECTION

WHEREAS, constructive amendments to CERCLA are appropriate to streamline the process of selecting remedial actions and to reduce litigation over remedy decisions;

NATURAL RESOURCE DAMAGES

WHEREAS, constructive amendments to CERCLA are appropriate to make it less complicated for natural resource trustees to assess damages and to restore injured natural resources, and to reduce the amount of litigation that may result in implementing the natural resource damage program.

NOW, THEREFORE, BE IT RESOLVED THAT THE NATIONAL ASSOCIATION OF ATTORNEYS GENERAL urges Congress to enact CERCLA reauthorization legislation that:

A. State Role

1. Provides for delegation of the CERCLA program to qualified states, and for EPA authorization of qualified state programs, with maximum flexibility;

2. Reaffirms that CERCLA does not preempt state law;

3 Ensures that states are not assigned a burdensome proportion of the cost of operation and maintenance of remedial actions and in no event to exceed 10 percent;

4. Clarifies that in any legal action under CERCLA, response actions selected by a State shall be reviewed on the administrative record and shall be upheld unless found to be arbitrary and capricious or otherwise not in accordance with law;

B. Federal Facilities

5. Provides for state oversight of response actions at federal facilities, including removal actions.

6. Provides a clear and unambiguous waiver of federal sovereign immunity from actions under state or federal law;

C. Liability

7. Provides a liability system that: a) includes the core provisions of the current CERCLA liability system that are essential to assure the effectiveness of the cleanup program; b) provides incentives for prompt and efficient cleanups, early cleanup settlements, pollution prevention, and responsible waste management; c) addresses the need to encourage more settlements, discourage excessive litigation, reduce transaction costs, and apply cleanup liability more fairly and equitably, especially where small contributors and municipal waste landfills are involved; and d) assures adequate funding for cleanup and avoids unfunded state mandates;

8. Provides reasonable limitations on liability for disposal of municipal solid waste;

9. Provides an exemption from liability for "de micromis" parties that sent truly minuscule quantities of waste to a site;

10. Encourages early settlements with de minimis parties that sent minimal quantities of waste to a site;

D. Remedy Selection

11. Provides for the consideration of future land use in selecting remedial actions, provided that future land use is not the controlling factor, and provided that remedial actions based on future land use are conditioned on appropriate, enforceable institutional controls;

12. Retains the requirement that remedial actions attain, at a minimum, applicable state and federal standards;

13. Retains the prohibition on pre-enforcement review of remedy decisions;

14. Provides that cost-effectiveness should be considered, among other factors, in remedy selection;

15. Allows EPA or the state agency to determine whether to reopen final records of decision for remedial actions, as under current law;

E. Natural Resource Damages

16. Clarifies that in any legal action, restoration decisions of a natural resource trustee shall be reviewed on the administrative record and shall be upheld unless found to be arbitrary and capricious or otherwise not in accordance with law, without precluding record review on other issues;

17. Provides that claims for damages for injuries to natural resources must be brought within three years of that completion of a damage assessment;

18. Allows Superfund monies to be used for assessments of damages resulting from injures to natural resources and for efforts to restore injured natural resources;

19. Retains the ability of trustees to recover damages based on any reliable assessment methodology;

20. Does not revise the cap on liability for natural resource damages so as to reduce potential damage recoveries;

21. Clarifies that trustees are entitled to recover legal, enforcement, and oversight costs;

F. Brownfields

22. Strengthens state voluntary cleanup and brownfields redevelopment programs by providing technical and financial assistance to those programs, and by giving appropriate legal finality to cleanup decisions of qualified state voluntary cleanup programs and brownfield redevelopment programs;

G. Miscellaneous

23. Allows EPA to continue to list new sites on the National Priorities List based upon threats to health and the environment, with the concurrence of the state in which the site is located.

BE IT FURTHER RESOLVED that the CERCLA Work Group, in consultation with and with approval of the Environmental Legislative Subcommittee of the Environment Committee, and in consultation with NAAG'S officers is authorized to develop specific positions related to the reauthorization of CERCLA consistent with this resolution; and the Environmental Legislative Subcommittee, or their designees, with the assistance of the NAAG staff and the CERCLA Work Group, are further authorized to represent NAAG's position before Congress and to federal agencies involved in reauthorization decisions consistent with this resolution and to provide responses to requests from federal agencies and Congressional members and staff for information, technical assistance, and comments deriving from the experience of the state Attorneys General with environmental cleanup programs in their states.

BE IT FURTHER RESOLVED that NAAG directs its Executive Director and General Counsel to send this resolution to the appropriate Congressional Committees and Subcommittees, and to the appropriate federal agencies.

ABSTAIN: Attorney General Don Stenberg