oversight

Superfund Program: Current Status and Future Fiscal Challenges

Published by the Government Accountability Office on 2003-07-31.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

a

                 United States General Accounting Office

    GAO          Report to the Chairman, Subcommittee
                 on Oversight of Government
                 Management, the Federal Workforce, and
                 the District of Columbia, Committee on
                 Governmental Affairs, U.S. Senate
    July 2003
                 SUPERFUND
                 PROGRAM
                 Current Status and
                 Future Fiscal
                 Challenges




    GAO-03-850
                 a
                                                July 2003


                                                SUPERFUND PROGRAM

                                                Current Status and Future Fiscal
Highlights of GAO-03-850, a report to the       Challenges
Chairman, Subcommittee on Oversight of
Government Management, the Federal
Workforce, and the District of Columbia,
Committee on Governmental Affairs,
U.S. Senate




Congress established the                        The balance of the Superfund trust fund available for future appropriations
Superfund program in 1980 to clean              has decreased significantly since 1996, while highly contaminated hazardous
up highly contaminated hazardous                waste sites continue to be added to the National Priorities List (NPL), EPA’s
waste sites. Among other things,                list of the nation’s most contaminated sites. A decline in revenues to the
the law established a trust fund to             trust fund has led the Superfund program to rely increasingly on
help the Environmental Protection               appropriations from the general fund. In EPA’s fiscal year 2004 budget
Agency (EPA) pay for cleanups and               request for the Superfund program, the general fund appropriation would
related program activities. The                 make up about 80 percent of the program’s total appropriation.
trust fund was financed primarily
by three dedicated taxes until 1995,
when the taxing authority expired.
                                                At the end of fiscal year 2002, the NPL had 1,233 sites in various stages of
EPA continues to discover sites                 cleanup. EPA considers many factors in selecting from the sites that are
eligible for cleanup under the                  eligible to be listed, the most prominent of which are the availability of
Superfund program.                              alternative federal or state programs that could be used to clean up the site,
                                                the status of responsible parties associated with the sites, and the cost and
GAO was asked to examine the                    complexity of the cleanup required.
current status of the Superfund
program, the factors guiding EPA’s              As the Superfund program continues to add sites to the NPL and funding
selection of sites to be placed on its          sources shift toward general fund appropriations, the effect of EPA’s actions
National Priorities List, and the               to address future program challenges remains uncertain. Because Superfund
program’s future outlook.                       lacks indicators to fully measure the outcomes of the program’s cleanup
                                                efforts, EPA has asked an advisory council to develop criteria by which to
                                                measure the program’s progress. However, it is unclear whether the advisory
                                                council will reach consensus on its recommendations, and its findings are
In considering changes to the                   not expected until December 2003, at the earliest. Performance indicators
program to address future                       could help EPA and the Congress make the difficult funding, policy, and
challenges associated with the                  program decisions that the current budget environment demands.
Superfund program’s fiscal
uncertainty, GAO recommends that                Total Appropriations to the Superfund Program, Fiscal Years 1993 through 2002
the Administrator, EPA, develop
indicators that can be used to
measure program performance.

EPA generally agreed with this
report’s findings and
recommendation but provided a
number of comments, which we
incorporated in this report as
appropriate.




www.gao.gov/cgi-bin/getrpt?GAO-03-850.

To view the full product, including the scope   Note: These appropriations do not include spending authority for offsetting collections.
and methodology, click on the link above.
For more information, contact John B.
Stephenson at (202) 512-3841 or
stephensonj@gao.gov.
Contents



Letter                                                                                                1
                            Results in Brief                                                          3
                            Background                                                                5
                            The Superfund Program’s Historical Revenue Source Is Dwindling
                              While EPA Continues to Add Sites to the NPL                             7
                            EPA Considers Many Factors in Selecting Sites for the NPL                18
                            The Superfund Program Faces Numerous Future Fiscal
                              Challenges                                                             23
                            Conclusions                                                              31
                            Recommendation for Executive Action                                      32
                            Agency Comments                                                          32


Appendixes
             Appendix I:    Objectives, Scope, and Methodology                                       34
             Appendix II:   Comments from the Environmental Protection Agency                        37
                            GAO Comments                                                             39


Tables                      Table 1: Revenue into the Superfund Trust Fund, Fiscal Years 1993
                                     through 2002                                                    10
                            Table 2: Cleanup Status of Proposed, Final, and Deleted NPL Sites
                                     at the End of Fiscal Year 2002                                  14
                            Table 3: Percentage of Ongoing Actions at NPL Sites Led by Various
                                     Entities, Fiscal Year 2002                                      17
                            Table 4: Projected Balance of the Superfund Trust Fund Available
                                     for Future Appropriations, Fiscal Year 2003                     26


Figures                     Figure 1: Stages of the Remedial Process at NPL Sites                     7
                            Figure 2: The Balance of the Superfund Trust Fund Available for
                                      Future Appropriations, Fiscal Years 1993 through 2002           9
                            Figure 3: Total Appropriations to the Superfund Program, Fiscal
                                      Years 1993 through 2002                                        11
                            Figure 4: EPA’s Superfund Program Expenditures, Fiscal Years
                                      1993 through 2002                                              12
                            Figure 5: EPA’s Superfund Program Expenditures, Fiscal Year
                                      2002                                                           13
                            Figure 6: Cleanup Status of Proposed, Final, and Deleted NPL
                                      Sites, Fiscal Years 1993 through 2002                          16




                            Page i                                          GAO-03-850 Superfund Program
Contents




Abbreviations

ATSDR   Agency for Toxic Substances and Disease Registry
CERCLA  Comprehensive Environmental Response, Compensation, and
        Liability Act
CERCLIS Comprehensive Environmental Response, Compensation, and
        Liability Information System
EPA     Environmental Protection Agency
FTE     Full time equivalent
NIEHS   National Institute for Environmental Health Science
NPL     National Priorities List
ORD     Office of Research and Development
OSWER Office of Solid Waste and Emergency Response
RCRA    Resource Conservation and Recovery Act


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 other material, permission from the copyright holder may be necessary if you wish to
 reproduce this material separately.




Page ii                                                    GAO-03-850 Superfund Program
A
United States General Accounting Office
Washington, D.C. 20548



                                    July 31, 2003                                                                  Leter




                                    The Honorable George V. Voinovich
                                    Chairman
                                    Subcommittee on Oversight of Government Management,
                                     the Federal Workforce, and the District of Columbia
                                    Committee on Governmental Affairs
                                    United States Senate

                                    Dear Mr. Chairman:

                                    The Environmental Protection Agency (EPA) estimates that one in four
                                    Americans lives within 4 miles of a hazardous waste site. Congress
                                    established the Superfund program in 1980 to address the threats that these
                                    sites pose to human health and the environment. Among the hazardous
                                    waste sites that the Superfund program addresses are manufacturing
                                    facilities where hazardous waste has been spilled or disposed of on site,
                                    waste disposal facilities where soil or groundwater has been contaminated,
                                    or sites where toxic materials have been disposed of improperly and
                                    abandoned. EPA, which administers the Superfund program, has identified
                                    44,000 potentially hazardous waste sites and continues to discover about
                                    500 additional sites each year. EPA places the nation’s most seriously
                                    contaminated sites, which typically are expensive and can take many years
                                    to cleanup, on its National Priorities List (NPL). At the end of fiscal year
                                    2002, there were 1,233 sites on the NPL.

                                    The Comprehensive Environmental Response, Compensation, and Liability
                                    Act (CERCLA) of 1980 established the Superfund program to clean up
                                    highly contaminated hazardous waste sites. CERCLA authorizes EPA to
                                    compel the parties responsible for the contamination to clean up the sites;
                                    allows EPA to pay for cleanups, then seek reimbursement from the
                                    responsible parties; and establishes a trust fund to help EPA pay for
                                    cleanups and related program activities. The law also authorizes states to
                                    participate in the cleanup process, provides for public participation in the
                                    cleanup decisions, and provides that responsible parties are liable for
                                    damage to injured natural resources. In addition, the law establishes a
                                    process for cleaning up hazardous waste at federal facilities, although the
                                    Superfund trust fund is generally not available to fund these federal
                                    cleanups, which are funded from federal agency appropriations.

                                    States and responsible parties play a significant role in the cleanup of
                                    hazardous waste sites. Most states have established their own programs to



                                    Page 1                                            GAO-03-850 Superfund Program
clean up hazardous waste sites independently of the federal Superfund
program. However many of these state programs have limited capacity to
address costly and complex sites that do not have responsible parties to
pay for the cleanup. Within the Superfund program, states may enter into
agreements with EPA to perform certain program actions, such as initial
site assessments; EPA also consults with states on cleanup decisions
throughout the cleanup process. Parties responsible for the contamination,
such as current or former owners or operators of a site or the generators
and transporters of the hazardous substances, often pay for and sometimes
even perform the cleanup under agreements with EPA or the state. In some
cases, parties responsible for the contamination cannot be identified or do
not have sufficient resources to perform the cleanup.

To fund the Superfund program, CERCLA established a trust fund that can
be used to conduct removal and remedial actions, to administer and
manage the program, and to identify and oversee responsible parties. Until
1995, the trust fund was financed primarily by a tax on crude oil and certain
chemicals and an environmental tax on corporations. The authority for
these taxes expired in December 1995 and has not been reauthorized;
however, the trust fund continues to receive revenue from interest accrued
on the unexpended invested balance, recoveries of cleanup costs from
responsible parties, and collections of fines and penalties. The trust fund
has also received revenue from annual general fund appropriations that,
along with its other revenues, have been used to fund the Superfund
program’s operations. As the general fund appropriations grow, the debate
continues on whether to reinstate the taxes to support the Superfund
program.

As agreed with your office, we examined (1) the current status of the
Superfund program, (2) the factors guiding EPA’s selection of sites to be
placed on the NPL, and (3) the program’s future outlook. To address these
objectives, we discussed the Superfund program with officials in EPA
headquarters, the 10 EPA regions, 10 states, associations that represent
states, industry groups, and environmental groups.1 To assess the
program’s status, we reviewed the status of the 1,560 hazardous waste sites
that have been proposed and/or listed on the NPL since the beginning of the


1
 We interviewed officials of the five states that have had the most sites proposed to the NPL
in the last 5 years (California, Florida, New Jersey, New York, and Texas) and of the five
states that have not had any sites proposed in the past 10 years (Arizona, Delaware, North
Dakota, Nevada, and Wyoming).




Page 2                                                       GAO-03-850 Superfund Program
                   program, program funding and expenditure data, and EPA’s use of human
                   capital resources to administer the Superfund program. In this report, we
                   present all program funding and expenditure data in constant 2002 dollars.
                   In our review of cleanup actions, we focused on remedial actions, which
                   are generally costly and can take a long time to complete. To assess the
                   NPL listing process, we evaluated EPA’s minimum eligibility criteria,
                   policies, guidance, and recent practices; we also assessed the extent of
                   EPA’s coordination with states. We analyzed available data on state
                   hazardous waste cleanup programs, focusing on the coordination between
                   federal and state programs to address current and future Superfund sites.
                   To assess the program’s future fiscal outlook, we examined the effect of the
                   expiration of the taxing authority for the trust fund, identified and reviewed
                   estimates of future funding requirements and workload projections, and
                   examined EPA’s current efforts to address future program needs. We did
                   not examine future challenges associated with benefits, health risks, or
                   cleanup standards. Appendix I provides detailed information on our scope
                   and methodology.



Results in Brief   The balance of the Superfund trust fund available for future appropriations
                   has decreased significantly since 1996, while additional hazardous waste
                   sites continue to be placed on the NPL. The Superfund trust fund revenues
                   from taxes, cost recoveries, interest, fines, and penalties have decreased
                   from more than $2 billion in fiscal year 1995, the year the taxing authority
                   expired, to less than $370 million in fiscal year 2002 when presented in
                   constant 2002 dollars. The decline in these revenues has led the Superfund
                   program to rely increasingly on appropriations from the general fund to
                   supplement its trust fund, with general fund supplements growing
                   overall—in constant 2002 dollars—from $283 million in fiscal year 1995 to
                   $676 million in fiscal year 2002. While the program’s funding sources have
                   changed, annual program expenditures, in constant 2002 dollars, have
                   remained between $1.3 and $1.7 billion. As the balance of the trust fund
                   available for future appropriations declines, EPA continues to place
                   hazardous waste sites on the NPL. EPA added 283 sites to the NPL from
                   fiscal years 1993 through 2002; the NPL contained 1,233 sites by the end of
                   fiscal year 2002. Of these 1,233 NPL sites, 21 percent were in the study and
                   design stage, 31 percent had construction activities under way, and 47
                   percent had completed the construction of any required cleanup facility at
                   the site. After construction of the facility is completed, a site can remain on
                   the NPL for many years while the actual cleanup takes place.




                   Page 3                                              GAO-03-850 Superfund Program
EPA uses its Hazard Ranking System, a numerical scoring system that
assesses the hazards a site poses to human health and the environment, as
the principal mechanism for determining which sites are eligible for
placement on the NPL. After a site’s eligibility is established, EPA regions
then consider many other factors in selecting the sites to submit to EPA
headquarters for proposal to the NPL. The most prominent of these factors
are the availability of alternative federal or state programs that could be
used to clean up the site, the status of responsible parties associated with
the sites, and the cost and complexity of the cleanup. State cleanup
programs serve as an alternative to the Superfund program and are the
approach preferred by most of the state officials that we interviewed, many
of whom believed state cleanups are faster. However, because of resource
limitations, state cleanup programs generally present a viable alternative
only when a party responsible for the contamination can be identified and
is ready, willing, and able to fund and perform the cleanup.

The Superfund program’s need for federal cleanup funds to address sites
that lack alternative sources of cleanup funds may grow in the future, while
the program’s funding from sources other than general fund appropriations
dwindles. A 2001 study by an environmental research group estimated that
the cost of implementing the program under then-current law would
average $1.5 billion annually through fiscal year 2009. The number of sites
whose cleanup cannot be funded by responsible parties or states could
increase because an increase in bankruptcies would lead to more sites
without viable responsible parties, and states face budget problems that
will curtail their already limited ability to pay for cleanups at sites that lack
viable responsible parties. Without responsible parties to fund remediation
costs at hazardous waste sites and with states’ capacity curtailed, federal
funding would likely be sought to perform any cleanup that EPA may
propose to do. However, according to EPA, the balance of the Superfund
trust fund available for future appropriations will be depleted at the end of
fiscal year 2003. EPA has recently asked the National Advisory Council for
Environmental Policy and Technology for guidance on several issues
affecting the Superfund program’s future. For example, because Superfund
lacks indicators to fully measure the outcomes of the program’s cleanup
efforts, EPA has asked the advisory council to develop criteria by which to
measure the program’s progress. However, it is unclear whether the
advisory council will reach consensus on its recommendations, and its
findings are not expected until December 2003, at the earliest. In light of
the uncertainty about whether the advisory council will develop outcome
measures for EPA’s consideration, this report makes a recommendation
that EPA develop indicators that can be used to measure program



Page 4                                               GAO-03-850 Superfund Program
             performance so that changes to the program to address future challenges
             associated with the Superfund program’s fiscal uncertainty can be more
             fully considered.

             We provided EPA with a draft of this report for review and comment. While
             EPA generally agreed with this report’s findings and recommendation, it
             provided a number of comments and clarifications, which we have
             incorporated into this report as appropriate. EPA pointed out that it is
             actively working on indicators to fully measure program performance
             concurrent with the National Advisory Council for Environmental Policy
             and Technology process. We acknowledge that EPA is actively working in
             this area concurrent with the advisory council process, and we have
             revised this report to include the agency’s recent implementation of two
             new environmental indicators.



Background   The Superfund cleanup process begins with site discovery or notification to
             EPA of possible releases of hazardous substances posing a threat to human
             health or the environment. Sites are discovered by various parties,
             including citizens, state agencies, and EPA regional offices. Once
             discovered, sites are entered into the Comprehensive Environmental
             Response, Compensation, and Liability Information System, EPA’s
             computerized inventory of potential hazardous substance release sites.
             EPA then evaluates the potential for a release of hazardous substances
             from the site to determine and implement the appropriate response to the
             threats posed by the releases of hazardous substances.

             The Superfund program addresses two basic types of cleanups: (1)
             remedial actions—generally long-term cleanup actions at NPL sites—and
             (2) removal actions—generally cleanups needed to mitigate more
             immediate threats at both NPL and non-NPL sites. Remedial actions are
             generally designed to provide a permanent remedy and thus can take a
             considerable amount of time and money, depending on the nature of the
             contamination. EPA’s regulations provide that a site must be on the NPL to
             receive Superfund trust fund financing for the remedial action. Cleanups at
             NPL sites progress through several steps: investigation and study, remedy
             selection and design, and the remedial action. Often the construction of
             cleanup remedies also requires subsequent operation and maintenance
             activities to ensure that the remedy continues to protect human health and
             the environment. In addition, the Superfund program conducts removal
             actions, which are usually short-term cleanups for sites that pose
             immediate threats to human health or the environment. Examples of



             Page 5                                           GAO-03-850 Superfund Program
removal actions include excavating contaminated soil, erecting a security
fence, stabilizing a dike or impoundment, or taking abandoned drums to a
proper disposal facility to prevent the release of hazardous substances into
the environment. Typically, removals are limited to a 1-year effort and $2
million in expenditures. While EPA expended an average of about $220
million on removal actions in each of the past 10 fiscal years—in constant
2002 dollars—it generally spent at least twice this amount on remedial
actions, which constitute the largest portion of annual Superfund program
expenditures.

The NPL is EPA’s list of the nation’s most contaminated sites. EPA regions
use a ranking system to assess the potential of sites to pose a threat to
human health or the environment, then choose from the sites that qualify
for the NPL which sites to submit to EPA headquarters for proposal to the
NPL. Once approved by the EPA Assistant Administrator for Solid Waste
and Emergency Response, the sites are proposed for listing in the Federal
Register. After a comment period, most proposed sites are finalized on the
NPL. A majority of sites on the NPL at the end of fiscal year 2002 were
manufacturing or waste management sites, while other types of sites listed
included recycling, mining, and contaminated sediment sites.

The first stages of the remedial process are the remedial investigation and
feasibility study phases, during which the site is investigated further and
remedial options are studied. The culmination of these initial phases is a
record of decision, which identifies EPA’s selected remedy for addressing
the site’s contamination. The selected remedy is then designed in the
remedial design phase and implemented in the remedial action phase,
when actual cleanup of the site begins. When physical construction of all
cleanup actions is complete, all immediate threats have been addressed,
and all long-term threats are under control, a site is generally deemed to be
“construction complete.” Most sites then enter into the operation and
maintenance phase, when the responsible party or the state ensures that
the remedy continues to be protective of human health and the
environment. Eventually, when EPA and the state determine that no further
remedial activities at the site are appropriate, EPA deletes the site from the
NPL.




Page 6                                             GAO-03-850 Superfund Program
Figure 1: Stages of the Remedial Process at NPL Sites

Remedial
                                    Remedial                         Remedial                        Operation and
investigation
                                    design                           action                          maintenance
and study

                        Record of                     Construction              Construction                         Site deleted
                        decision                      start                     complete                             from NPL
                                               Remedial                                        Remedial action
                                               action start                                    complete

Source: GAO analysis based upon EPA data.




                                                   The Superfund program has over 3,000 full time equivalent staff (FTE). In
                                                   fiscal year 2002, EPA used about 2,500 FTEs for program staff in its regional
                                                   offices, and used the remaining 644 FTEs in its headquarters. The
                                                   headquarters’ FTEs are spread across numerous offices, the majority in the
                                                   Office of Solid Waste and Emergency Response (OSWER), the Office of
                                                   Enforcement and Compliance Assurance, and the Office of Administration
                                                   and Resources Management. OSWER provides policy, guidance, and
                                                   direction for the Superfund program; the Office of Enforcement and
                                                   Compliance Assurance assists with enforcement aspects of the Superfund
                                                   program; and the Office of Administration and Resources Management
                                                   assists in many aspects of managing the Superfund program, such as
                                                   human resources and grants and contract management.



The Superfund                                      The balance of the Superfund trust fund available for future appropriations
                                                   has decreased significantly since 1996, while EPA has continued to add
Program’s Historical                               sites to the NPL. The Superfund trust fund revenues from taxes, cost
Revenue Source Is                                  recoveries, interest, fines, and penalties have decreased from over $2
                                                   billion in fiscal year 1995 to less than $370 million in fiscal year 2002, when
Dwindling While EPA                                presented in constant 2002 dollars. Since fiscal year 2000, the Superfund
Continues to Add Sites                             program has increasingly relied on revenue from the general fund
to the NPL                                         appropriations to supplement its trust fund, with general fund supplements
                                                   generally growing in constant 2002 dollars from $283 million in fiscal year
                                                   1995 to $676 million in fiscal year 2002. Annual program expenditures,
                                                   expressed in constant 2002 dollars, have remained between $1.3 and $1.7
                                                   billion from fiscal years 1993 to 2002. From these expenditures, remedial
                                                   actions at sites on the NPL have consistently received the largest share.
                                                   EPA continues to place hazardous waste sites on the NPL, adding 283 sites
                                                   to the NPL from fiscal years 1993 through 2002. At the end of fiscal year
                                                   2002, there were 1,233 sites on the NPL, 265 sites had been deleted, and 62



                                                   Page 7                                                                   GAO-03-850 Superfund Program
                             sites were proposed to the NPL. Of the 1,233 sites on the NPL, 21 percent
                             were in the preconstruction stage, which is primarily study and design, 31
                             percent had construction activities under way, and 47 percent had
                             completed the construction of the cleanup facility at the site. After
                             construction of the facility is completed, a site can remain on the NPL for
                             many years while the actual cleanup takes place. In fiscal year 2002, EPA
                             funded more investigations and studies at NPL sites than responsible
                             parties, while responsible parties paid for, and sometimes also performed,
                             about half of actions related to the sites’ cleanup design, construction, and
                             maintenance of remedies.



The Balance of the           The balance of the Superfund trust fund available for future appropriations
Superfund Trust Fund         has significantly decreased since fiscal year 1996 and at the end of fiscal
                             year 2002 stood at $564 million. Further, revenues into the Superfund trust
Available for Future
                             fund from taxes, cost recoveries, fines, penalties, and interest have steadily
Appropriations Has           decreased, from over $2 billion in fiscal year 1995 to less than $370 million
Decreased Significantly in   in fiscal year 2002, when presented in constant 2002 dollars. The Superfund
Recent Years                 program’s total annual appropriations from the trust fund, in constant 2002
                             dollars, have decreased overall from almost $1.9 billion in fiscal year 1993
                             to about $1.3 billion in fiscal year 2002. Since fiscal year 2000, the
                             Superfund program has increasingly relied on the revenues from general
                             fund appropriations to supplement the Superfund trust fund, with general
                             fund supplements growing overall—in constant 2002 dollars—from $283
                             million in fiscal year 1995 to $676 million in fiscal year 2002. In addition to
                             appropriations from the trust fund, EPA uses moneys collected from other
                             sources to help pay for cleanups, such as funds collected in advance from
                             responsible parties for cleanups at designated sites.

                             The balance of the Superfund trust fund available for future appropriations,
                             presented in constant 2002 dollars, has decreased significantly from a high
                             of $4.2 billion in fiscal year 1996 to $564 million in fiscal year 2002. Figure 2
                             shows the decline in this balance.




                             Page 8                                               GAO-03-850 Superfund Program
Figure 2: The Balance of the Superfund Trust Fund Available for Future
Appropriations, Fiscal Years 1993 through 2002

Constant 2002 dollars in millions
4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

  500

     0

            1993        1994        1995        1996        1997           1998   1999   2000   2001   2002
            Fiscal years

Source: The President's Budget Appendix, Fiscal Years 1995 through 2004.




As discussed above, before 1995, the Superfund trust fund was largely
funded by certain taxes, including excise taxes on crude oil and petroleum
products and sales of certain chemicals, and an environmental tax on
corporations. The trust fund continues to receive revenue from other
sources, including cost recoveries, interest from investments, fines, and
penalties. Table 1 shows the Superfund trust fund revenue sources,
excluding general fund appropriations, from fiscal years 1993 through 2002.




Page 9                                                                            GAO-03-850 Superfund Program
Table 1: Revenue into the Superfund Trust Fund, Fiscal Years 1993 through 2002

Constant 2002 dollars in millions
                                                                                           Fiscal year
Revenue source                                  1993       1994        1995        1996      1997      1998       1999        2000        2001        2002
Taxes                                          $2,019    $1,685      $1,672        $705       $82        $85       $22           $5          $6          $7
Cost recoveries                                  214        231         285         276       341        343       338         239         205          248
Interest on unexpended                           165        202         359         388       359        313       233         245         223          111
balance
Fines and penalties                                4           3           3           4         3         5          4           1           2           1
Total                                          $2,403    $2,121      $2,318      $1,372      $785      $745       $597        $490        $437        $368
Source: EPA and U.S. Department of Treasury.

                                                        Notes: Table does not include revenues from general fund appropriations. Revenues reflected are
                                                        presented on an accrual basis and may differ from the numbers presented in the President’s Budget
                                                        Appendix, which presents revenues on a cash basis. Totals presented in this table do not add up due
                                                        to rounding.


                                                        While revenues from the taxes provided the majority of resources through
                                                        fiscal year 1996, revenues from cost recoveries and interest have provided
                                                        the greatest portion of the income to the Superfund trust fund since that
                                                        time, excluding revenues from general fund appropriations. Cost
                                                        recoveries represent amounts that EPA recovered through legal
                                                        settlements with responsible parties for site cleanup costs it incurred.
                                                        Interest revenues stem from the investment of the unexpended balance of
                                                        the Superfund trust fund, which stood at $3.4 billion at the end of fiscal
                                                        year 2002. As shown in table 1, the trust fund continues to receive a small
                                                        amount of revenue from the excise and corporate taxes that expired in
                                                        1995 as the Internal Revenue Service processes amended tax returns or
                                                        settles litigation with private companies.

                                                        Each year EPA receives appropriations from the Superfund trust fund,
                                                        which is supplemented by appropriations from the general fund. Until
                                                        fiscal year 2000, the balance of the Superfund trust fund available for
                                                        appropriations and annual revenues from taxes, cost recoveries, interest,
                                                        fines, and penalties remained the primary source of appropriations for the
                                                        Superfund program. Since fiscal year 2000, appropriations from the general
                                                        fund have been about equal to the amount from the program’s historical
                                                        primary source of appropriations. Overall, general fund appropriations—in
                                                        constant 2002 dollars—generally grew from $283 million in fiscal year 1995
                                                        to $676 million in fiscal year 2002. (See fig. 3.)




                                                        Page 10                                                           GAO-03-850 Superfund Program
Figure 3: Total Appropriations to the Superfund Program, Fiscal Years 1993 through
2002
Constant 2002 dollars in millions
2,000




1,500




1,000




  500




    0

           1993        1994        1995       1996        1997        1998   1999    2000   2001   2002
           Fiscal year


                      Available balance and other revenues of Superfund trust fund
                      General fund


Source: The President's Budget Appendix, Fiscal Years 1995 through 2004.


Note: These appropriations do not include spending authority for offsetting collections.


Apart from the annual appropriation from the Superfund trust fund, EPA
collects funds from other sources to pay for the activities of the Superfund
program. These funds, called offsetting collections, are deposited into the
trust fund but are not subject to the annual appropriation process. The
largest source of these collections is payments by responsible parties as
part of settlement agreements to fund response actions at specific sites.
These responsible parties typically are unable or unwilling to perform the
response action. EPA uses these funds to help finance site cleanups in
accordance with the terms of the settlement agreements. In fiscal year
2002, EPA collected about $130 million from this source. Other sources of
offsetting collections include states, which pay a small portion of the
cleanup costs at sites, and other federal agencies, which pay for services
provided by EPA. The total amount collected from these additional sources
in fiscal year 2002 was about $40 million.



Page 11                                                                      GAO-03-850 Superfund Program
Actions at NPL Sites        During fiscal years 1993 through 2002, in constant 2002 dollars, EPA’s
Consume the Largest Share   annual program expenditures remained between $1.3 and $1.7 billion.2
                            However, EPA’s Superfund program expenditures steadily decreased by
of Program Expenditures     $255 million from fiscal years 1999 through 2002. In responding to this
                            report, EPA noted that this decrease followed a $100 million reduction to
                            the Superfund enacted appropriation during fiscal year 2000 and
                            subsequent years.



                            Figure 4: EPA’s Superfund Program Expenditures, Fiscal Years 1993 through 2002
                            Constant 2002 dollars in millions
                            2,000




                            1,500




                            1,000




                              500




                                0

                                       1993      1994    1995   1996   1997   1998   1999    2000     2001    2002
                                       Fiscal year


                            Source: EPA data.




                            2
                             Program expenditures do not include transfers to the Agency for Toxic Substances and
                            Disease Registry (ATSDR), the National Institute for Environmental Health Science
                            (NIEHS), and EPA’s Inspector General and Office of Research and Development (ORD). In
                            fiscal year 2002, ATSDR, an agency of the Department of Health and Human Services,
                            received $85 million to assist in assessments or consultations at hazardous waste sites.
                            NIEHS has not received an allocation from the Superfund program since fiscal year 2000.
                            EPA transferred approximately $49 million to the Inspector General and ORD combined in
                            fiscal year 2002.




                            Page 12                                                   GAO-03-850 Superfund Program
During fiscal years 1993 through 2002, remedial actions consumed the
largest share of program expenditures. Remedial actions are generally
costly, long-term projects that are designed to provide a permanent remedy
at a complex and highly contaminated site. Management and
administration expenditures consumed the second largest share of
program expenditures. Figure 5 shows the percentages of EPA’s Superfund
program expenditures in fiscal year 2002.



Figure 5: EPA’s Superfund Program Expenditures, Fiscal Year 2002

                                                                       Remedial

                                                                       Response support
                                7%
                                         10%                           Other
          31%

                                                                       Enforcement
                                                15%



                                                                       Removal
                 22%                   15%



                                                                       Management and
                                                                       administration

Source: GAO, based upon EPA's analysis of program expenditure data.


Notes: EPA’s total program expenditures were $1.34 billion in fiscal year 2002. EPA determined which
activities to include under each expenditure category. “Remedial” expenditures include related
activities such as investigations, remedy design, community involvement, construction, post-
construction, and oversight of responsible parties. “Removal” expenditures include costs relating to
removal assessments, investigations, removal construction, and oversight. “Response support”
expenditures include site-specific costs related to technical assistance, technology innovation,
contracts management, records management, and general support, as well as costs provided to other
organizations through grants, interagency or cooperative agreements. “Management and
administration” expenditures include non-site-specific costs, such as program management and
budget, policy development and implementation, emergency preparedness activity, contract and
information management, training, and general support. “Enforcement” expenditures include activities
such as searching for and negotiating agreements with responsible parties. “Other” includes site
assessment, federal facilities, and Brownfields expenditures. The Brownfields program is no longer
funded by the Superfund appropriation.




Page 13                                                               GAO-03-850 Superfund Program
More Than 1,200 NPL Sites                           Of the 1,233 sites on the NPL at the end of fiscal year 2002, 21 percent were
Require Further Cleanup                             in the preconstruction phase that largely consists of sites in study and
                                                    design, 31 percent had construction activities under way, and 47 percent
Activities                                          were in the “construction complete” stage.3 The number of construction
                                                    completions serves as the program’s key measure of progress for sites on
                                                    the NPL. EPA continues to add sites to the NPL, adding 283 new sites
                                                    during fiscal years 1993 through 2002. During that same time frame, EPA
                                                    deleted 221 sites from the NPL because no further cleanup response was
                                                    necessary. In fiscal year 2002, EPA funded more investigations and studies
                                                    at NPL sites than responsible parties, while responsible parties paid for,
                                                    and sometimes also performed, about half of the actions related to the
                                                    sites’ cleanup design, construction, and maintenance of remedies.

                                                    As shown in table 2, at the end of fiscal year 2002, there were 1,233 sites on
                                                    the NPL, 265 sites had been deleted, and 62 sites were proposed to the NPL.



Table 2: Cleanup Status of Proposed, Final, and Deleted NPL Sites at the End of Fiscal Year 2002

                                     Study and design phase
                                          Study                                                                          Deferred to
                           Awaiting       under     Remedy      Design           Construction         Construction          another
NPL status                   study          way     selected under way             under way            completed          authority     Total
Proposed                            14       30               6                             11                                      1       62
Final                               19      155           29           58                  387                  585                      1,233
Deleted                                                                                                         261                 4      265
Total                               33      185           35           58                  398                  846                 5    1,560
Source: GAO analysis of EPA data.


                                                    Of the total 1,233 NPL sites at the end of fiscal year 2002, 158 were federal
                                                    facilities, sites owned or operated by a federal agency. Through fiscal year
                                                    2002, 265 NPL sites had been deleted because no further cleanup response
                                                    is appropriate. According to EPA regional officials, about one fourth of the
                                                    62 sites proposed for placement on the NPL were expected to become final,
                                                    while most of the cleanups at other sites continue under other authorities
                                                    or agreements.


                                                    3
                                                     EPA defines a construction complete site as a site where physical construction of all
                                                    cleanup actions is complete, all immediate threats have been addressed, and all long-term
                                                    threats are under control.




                                                    Page 14                                                    GAO-03-850 Superfund Program
A majority of NPL sites are in the construction complete phase. However,
depending on the remedy, work may continue at a site for many years after
a site is deemed construction complete. A common example of this is a
groundwater restoration project, where the treatment of the groundwater
begins after the facility is completed. For these cleanups at sites that are
financed by the Superfund program, EPA operates and maintains the
cleanup facility for up to 10 years, with the state paying 10 percent of the
cost, after which the site is turned over to the state to continue operation
and maintenance activities.4

EPA typically adds new sites to the NPL each year and finalized 283 new
sites from fiscal years 1993 through 2002. During this time period, EPA
deleted 221 sites when no further response was appropriate. Although
more sites have been finalized on the NPL than deleted throughout these
fiscal years, the overall number of sites on the NPL remained relatively
steady. While the number of sites reaching the construction complete phase
grew, and the number of sites in study and design decreased, the number of
sites in the construction underway phase remained relatively steady. At the
end of fiscal year 2002, approximately half of the NPL sites were still in
study and design or had construction under way. Figure 6 demonstrates the
overall growth in the NPL and the number of sites that have reached the
construction complete phase.




4
 For funding purposes, CERCLA classifies activities during this 10-year period, which EPA
calls “long-term response actions,” as part of the cleanup, not as operation and
maintenance.




Page 15                                                    GAO-03-850 Superfund Program
Figure 6: Cleanup Status of Proposed, Final, and Deleted NPL Sites, Fiscal Years
1993 through 2002
Number of sites
2,000




1,500




1,000




 500




    0
          1993        1994          1995   1996   1997    1998      1999      2000      2001      2002
          Fiscal year

                        Deleted

                        Construction complete

                        Construction under way

                        Study and design


Source: GAO analysis of EPA data.


Notes: We verified and corrected data only for fiscal year 2002. Deleted sites include sites deferred to
another authority. Study and design sites include sites that are awaiting study, have study under way,
have had a remedy selected, or have design under way.


In responding to this report, EPA noted that figure 6 does not reflect a
backlog of unfunded projects that are ready to begin construction. EPA
also responded that, in their opinion, projects currently in or about to enter
construction tend to be larger, more complex, and more expensive than
those of 5 to 10 years ago. According to EPA, these factors led to the
Administration’s decision to request a $150 million increase for Superfund
construction in the fiscal year 2004 President’s budget request.




Page 16                                                             GAO-03-850 Superfund Program
Although the law allows EPA to pay for the cleanup at a site and use
enforcement actions to recover the cleanup costs, responsible parties
frequently cooperate with EPA and conduct the cleanup under EPA
oversight. In such cases, the responsible party pays for all or part of the
cleanup. According to EPA, responsible party involvement in the program
remains strong, and the total value of responsible party commitments since
the inception of the program exceeds $20 billion.5 The actual dollar amount
that responsible parties expend for site cleanups is unknown because the
parties are not required to publicly report either the cleanup or any related
transaction costs they incur. However, EPA tracks the participant—EPA,
the responsible party, a federal agency, or in some limited cases, the state—
leading a cleanup action at a site and indicates whether the participant is
providing a majority of the funding for the action. For example, if a
remedial action is identified as a Superfund lead action, EPA uses annual
Superfund appropriations to conduct the work and pay for the remedial
action. Over the course of a cleanup, however, a variety of participants may
take the lead on different actions. Table 3 demonstrates the percentage of
actions led by EPA, a responsible party, or another participant.



Table 3: Percentage of Ongoing Actions at NPL Sites Led by Various Entities, Fiscal
Year 2002

                                                                                         Post-
                                     Preconstruction              Construction        construction
Entity                               Remedial                                             Operation
leading                      Site investigation Remedial                Remedial               and
action                 inspection    and study    design                  action       maintenancea
EPA -
Superfund                           100           27         36                 22                   18
Responsible
party                                 0           17         39                 45                   67
Other
federal
agency                                0           54         24                 31                   10
Other                                 0            2          0                   2                    5
Source: GAO analysis of EPA data.

Notes: This presentation of lead data includes all actions that were ongoing at some point during fiscal
year 2002. EPA typically presents lead data as a percentage of remedial actions that start in a



5
 Commitments include the value of cost recoveries and EPA’s estimate of the value of the
cleanup work that responsible parties have agreed to perform.




Page 17                                                             GAO-03-850 Superfund Program
                          designated fiscal year. In addition, EPA includes actions at Superfund alternative sites but does not
                          include actions at federal facility sites in the percentages.
                          a
                           Operation and maintenance activities protect the integrity of the selected remedy for a site. According
                          to an EPA official, all operation and maintenance should be led by the responsible party or state and
                          any operation and maintenance activity identified as led by EPA is most likely an error.


                          In fiscal year 2002, EPA took the lead on more actions than responsible
                          parties in the earlier stages of the cleanup process, whereas responsible
                          parties took the lead more often in the later stages of the cleanup,
                          specifically on remedial actions and during operation and maintenance.
                          However, EPA still pays for oversight of the responsible party’s cleanup
                          activities when the responsible party primarily finances an action; and in
                          some limited cases EPA reimburses the responsible party for some or all of
                          the cleanup work. Other lead participants include a responsible party
                          leading an action under a state program; EPA, a state, or tribe conducting a
                          cleanup using a responsible party’s funds; or a state with a state cleanup
                          program that does not use Superfund dollars.



EPA Considers Many        EPA uses its Hazard Ranking System to assess the hazards that a site poses
                          to human health and the environment to determine a site’s eligibility for
Factors in Selecting      placement on the NPL. After a site’s eligibility is determined, EPA regions
Sites for the NPL         then consider many other factors in selecting the sites to submit to EPA
                          headquarters for proposal to the NPL. The more prominent of these factors
                          considered are the availability of alternative federal or state programs that
                          could be used to clean up the site, the status of responsible parties
                          associated with the sites, and the cost and complexity of the cleanup. State
                          cleanup programs serve as an alternative to the Superfund program and are
                          the approach preferred by most of the state officials that we interviewed,
                          many of whom believed state cleanups are faster. However, state cleanup
                          programs generally present a feasible alternative only when a viable and
                          cooperative responsible party has been identified to fund and perform the
                          cleanup. According to EPA regional officials, at least 42 of the 54 sites
                          proposed to the NPL in fiscal years 2001 and 2002 either did not have a
                          viable and cooperative responsible party or were too costly or complex for
                          states to address.



EPA Uses Its Hazard       EPA uses the Hazard Ranking System as its principal mechanism for
Ranking System as the     determining the eligibility of sites for placement on the NPL, accounting for
                          1,506 of the 1,560 sites that were proposed or finalized on the NPL through
Principal Mechanism for
                          fiscal year 2002. The ranking system is a numerically based screening
Listing Sites             system that uses information from initial, limited investigations to assess


                          Page 18                                                             GAO-03-850 Superfund Program
                               the relative potential of sites to pose a threat to human health or the
                               environment. Using a structured analysis approach to scoring sites, the
                               ranking system assigns numerical values to factors that relate to risk-based
                               conditions at the site. The factors considered are grouped into three
                               categories: (1) the likelihood that a site has released or has the potential to
                               release hazardous substances into the environment; (2) the characteristics
                               of the waste; and (3) the people or sensitive environments affected by the
                               release. The site inspection provides the data necessary to score the site
                               according to the Hazard Ranking System. Sites that score at least 28.5 on
                               the ranking system are eligible for listing on the NPL. Because the ranking
                               system scores are based on initial, limited investigations, they are only used
                               to determine the eligibility of sites for listing on the NPL. Scores are not
                               used to prioritize among sites that qualify for the NPL and do not determine
                               priority in funding cleanup actions. More detailed studies, following the
                               listing, are needed to determine the extent of the contamination and the
                               appropriate response for particular sites.

                               Hazardous waste sites can also qualify for the NPL by means of state or
                               territorial designation or by meeting a set of three criteria. Each state and
                               U.S. territory is permitted a one-time opportunity to designate a site for
                               placement on the NPL. Through fiscal year 2002, 37 states and four
                               territories had designated sites for addition to the NPL. A site may also be
                               added to the NPL when it meets three criteria: (1) the Department of Health
                               and Human Services’ Agency for Toxic Substances and Disease Registry
                               has issued a health advisory that recommends individuals leave the area of
                               the site, (2) EPA determines the site poses a significant threat to public
                               health, and (3) EPA anticipates that using its remedial authority will be
                               more cost-effective than using its removal authority. Only 13 sites have
                               been added to the NPL through this mechanism.



EPA Considers Alternative      Achieving the minimum hazard ranking score of 28.5 to qualify for the NPL
Programs, Availability of      does not guarantee a site placement on the list. EPA regions consider many
                               factors before deciding to submit a site to EPA headquarters for proposal to
Responsible Parties, and the
                               the NPL. EPA and state officials told us that they consider a variety of
Cost and Complexity of the     additional factors, the most common of which are determinations of
Sites                          whether (1) other federal or state programs are available to cleanup the
                               site, (2) a viable responsible party has been identified to clean up the site,
                               and (3) the cost or complexity of the cleanup effort is likely to require
                               federal assistance through the Superfund program.




                               Page 19                                            GAO-03-850 Superfund Program
Many of the EPA regional and state officials we interviewed considered the
NPL a “last resort” for sites that cannot be addressed under other state or
federal programs. Officials of one EPA region told us, for example, that
programs other than Superfund are covering about 98 percent of the
hazardous waste sites discovered in that region. In response to this report,
EPA headquarters officials stated that the NPL is one of a number of
options for cleaning up sites and that the regions should evaluate all
reasonable options and select the one that best meets the objectives for the
site. EPA defers NPL listing for sites that can be cleaned up under other
federal programs or authorities. For example,

• The Resource Conservation and Recovery Act (RCRA), Subtitle C,
  which regulates hazardous waste management. Under this program,
  EPA requires RCRA-regulated facilities to investigate and clean up
  releases of hazardous waste to the environment; and

• EPA’s Brownfields program, which is designed to assist in the
  assessment and cleanup of abandoned, idled, or underused industrial
  and commercial facilities where expansion of redevelopment is
  complicated by real or perceived environmental contamination.

Two EPA policies also defer NPL listing for sites that can be cleaned up
under state programs. EPA’s state deferral policy establishes formal
agreements between EPA and states through which EPA defers
consideration of NPL listing of sites, while the state compels and oversees
responsible parties’ response actions. Under this policy, response actions
should be substantially similar to a response required under CERCLA.
EPA’s voluntary cleanup program policy establishes agreements with states
that, for sites that are cleaned up under state programs, EPA will generally
assume that state activities are sufficient and the agency will not take
separate removal or remedial action at sites in the state program. Both of
these policies allow states to handle the cleanup of sites that may
otherwise be proposed to the NPL. Hazardous waste cleanup officials in 6
of the 10 states that we interviewed indicated a preference for cleaning up
hazardous waste sites under their state programs.

EPA has also established the Superfund alternative sites policy within the
Superfund program that provides a framework for the agency to suspend
the NPL listing process for sites that might otherwise be listed on the NPL.
This policy gives the responsible parties an opportunity to enter into an
agreement that commits them to clean up the site in the same manner as if
it were listed on the NPL. Because less time is spent on the site-listing



Page 20                                           GAO-03-850 Superfund Program
process, according to EPA, this policy helps to expedite the process of
entering into settlements with responsible parties and the eventual
cleanup.

In addition to performing cleanups under their own state programs, states
play an important role in the cleanup of hazardous waste sites through their
agreements with EPA. Many states are involved in the early phases of the
cleanup process, such as preliminary assessment and site investigation.
Many of these states have entered into cooperative agreements with EPA to
perform this work. Appropriations laws for fiscal years 1995 and 1996
required the concurrence of the governor of the applicable state before
EPA could propose a site for inclusion on the NPL. Although no longer
required by appropriations language, as a matter of policy, EPA continues
to request state support on the listing of sites onto the NPL. According to
EPA, since 1995 EPA has proposed 203 sites to the NPL; among them, only
one site was proposed over state opposition.6

EPA regional officials stated that the lack of cooperation by the party
responsible for a site was a factor in 36 of the 54 sites proposed to the NPL
in the last 2 fiscal years. The burden on states of funding the cleanup effort
when they are unable to obtain responsible party cooperation often drives
state support for listing such sites on the NPL. In some cases, site cleanup
responsibility cannot be assigned to a specific party because the party is no
longer in existence or is unable to pay. Cleaning up such “orphan” sites
would require government funding; these cleanups may be too expensive
for states to perform. In other cases, responsible parties may have been
identified, but they are uncooperative or unwilling to fund the cleanup.
While all states have some form of enforcement authority to compel
responsible parties to fund cleanups, EPA’s enforcement powers are
sometimes more compelling or applicable to the situation. For example,
officials in several states stated that they had experienced difficulty when
pursuing enforcement actions at sites with numerous responsible parties.
Some sites, such as hazardous waste dumps, may have hundreds or even
thousands of responsible parties because CERCLA defines responsible
parties as the generators and transporters of hazardous waste, in addition
to the owners and operators of the site.




6
 The Fox River site in Wisconsin was proposed to the NPL in July 1998 but has not been
finalized.




Page 21                                                   GAO-03-850 Superfund Program
Officials in most of the regions and states pointed to the strength of EPA’s
enforcement powers to compel responsible parties to cooperate with state
authorities. Several officials told us that they had used the threat of NPL
listing to persuade responsible parties to cooperate earlier in the process.
EPA’s enforcement powers include the ability to seek financial penalties
against responsible parties for noncompliance, the ability to issue formal
orders to the responsible parties to perform cleanups, and the liability
scheme by which EPA can force one responsible party to fund the entire
cleanup at a site, even if it is unclear how much of the contamination it
caused. EPA’s enforcement powers are sometimes referred to as a “gorilla
in the closet”—states can threaten to unleash the EPA “gorilla” on
recalcitrant responsible parties. A few states pointed to the value of
maintaining strong EPA enforcement powers because they encourage
responsible parties to cooperate with states.

Officials in many of the regions told us that the complexity and cost of sites
were factors that helped them determine whether sites should be
submitted to EPA headquarters for proposal to the NPL. Of the 54 sites
proposed in the last 2 fiscal years, regional officials described 25 percent of
them as either complex or costly, or both. Officials in one region described
a site where contamination had leaked about 500 feet out into a major river
and spread through approximately 15 feet of sediment, making cleanup of
the site complex. According to a recent study, while 48 states and Puerto
Rico have funds that can be used for the cleanup of hazardous waste sites,
31 of the 41 states that provided data had relatively small fund balances
(under $25 million), making it difficult for states to clean up expensive
sites.7 In addition, the study found that states’ cleanup fund balances have
been declining since 1990. Without adequate funding to cleanup the more
expensive sites, state cleanup programs generally present a feasible
alternative to NPL listing only when a viable and cooperative responsible
party has been identified to fund or perform the cleanup.




7
 Environmental Law Institute, An Analysis of State Superfund Programs: 50-State Study,
2001 Update, (Washington, D.C.: 2002). Data is current as of the end of the state’s 2000 fiscal
year (June 30, 2000, for most states).




Page 22                                                       GAO-03-850 Superfund Program
The Superfund                 The need for federal cleanup funds to address sites without alternative
                              funding sources may grow in coming years, even as EPA predicts the
Program Faces                 program’s historical source of funding will be depleted at the end of fiscal
Numerous Future               year 2003. A 2001 study estimated that the cost of implementing the
                              program under then-current law would total $15 billion for the 10 years
Fiscal Challenges             ending in fiscal year 2009. The number of sites whose cleanup cannot be
                              funded by responsible parties or states could increase because an increase
                              in bankruptcies would lead to more sites without viable responsible parties
                              and states face budget problems that will curtail their already limited
                              ability to pay for cleanups at sites that lack viable responsible parties.
                              Without responsible parties to fund remediation costs at hazardous waste
                              sites and with states’ capacity curtailed, federal funding would likely be
                              sought to perform any cleanup that EPA proposed to do. However, EPA
                              officials expect that the balance of the Superfund trust fund available for
                              future appropriations will be depleted at the end of fiscal year 2003. EPA
                              has recently asked an advisory council for guidance on several issues
                              affecting the Superfund program’s future. Because Superfund lacks
                              indicators to fully measure the outcomes of the program’s cleanup efforts,
                              EPA has asked the advisory council to develop criteria by which to
                              measure the program’s progress. However, it is unclear whether the
                              advisory council will reach consensus on its recommendations; and its
                              findings are not expected until December 2003, at the earliest.



The Number of Sites           The number of sites that have no identifiable nonfederal source to fund
Without Responsible Parties   their cleanup is growing, and several factors indicate the potential for
                              additional growth in the future. Responsible parties and EPA lead most
or States to Fund Their
                              actions at NPL sites. According to EPA, responsible parties have funded
Cleanup Is Expected to Rise   about 70 percent of the remedial actions begun at sites other than federal
                              facilities in the last 3 fiscal years.8 Officials in 7 of the 10 EPA regions,
                              however, have either observed an increase in the number of sites without
                              viable responsible parties, or expect such an increase in the future.
                              Officials in one region, for example, told us that the proportion of
                              responsible party-led remedial actions in their region had decreased over
                              the last 10 years, from about 70 percent to about 50 percent currently.
                              Officials in all regions pointed out factors that could lead to an increase in


                              8
                               EPA tracks lead statistics based on new starts of remedial actions at sites other than federal
                              facilities by fiscal year. Federal facilities, sites whose cleanup is led by federal agencies,
                              make up about 13 percent of NPL sites.




                              Page 23                                                       GAO-03-850 Superfund Program
sites in the coming years whose cleanup cannot be funded by responsible
parties or states, including (1) the states’ preference to work directly with
viable responsible parties, which leaves fewer sites with viable responsible
parties eligible for proposal to the NPL; (2) an increase in sites that lack
viable responsible parties due to bankruptcies; and (3) fiscal constraints on
states’ capacity to clean up sites on their own. For example, officials in one
region mentioned that difficult economic times would likely contribute to
an increase in bankrupt facilities at the same time that states are
experiencing budget shortfalls. Without responsible parties to fund
remediation costs at hazardous waste sites and with states’ capacity
curtailed, any cleanup at these sites would have to be funded with federal
funds.

The states’ preference to work directly with responsible parties makes sites
with viable and cooperative responsible parties less likely to be listed on
the NPL, increasing the potential need for federal funds if any of the
remaining sites that are added to the NPL are to be cleaned up, since these
sites may lack viable responsible parties. When Congress enacted the
federal Superfund program in 1980 at least 21 states did not have cleanup
statutes that provided them with enforcement authorities. As of 2001, all
states had laws that provide them with some form of enforcement
authority, and 48 states had statutory authority for conducting voluntary
cleanup programs, according to a study by the Environmental Law
Institute—an environmental research group.9 Officials in most of the 10
states we contacted agreed that they preferred to work with viable and
cooperative responsible parties under their state program, rather than turn
the sites over to the EPA for NPL listing. They provided a variety of reasons
for not supporting a site’s listing on the NPL, including the state’s ability to
perform the cleanup faster, community or political opposition to listing,
and a belief that the federal process leads to more expensive cleanups. For
example, one state’s officials believed the state could perform a site’s
cleanup more quickly than EPA because, in their opinion, EPA spent too
much time in the inspection and design phases. Although states may
sometimes need EPA’s enforcement capacity to compel responsible parties
to clean up sites, states prefer working with responsible parties under their
own authority whenever the parties are available, viable, and cooperative.
As a result, some sites that would have been led by the responsible party
under the Superfund program are addressed using state enforcement. This


9
 Environmental Law Institute, An Analysis of State Superfund Programs: 50-State Study,
2001 Update, (Washington, D.C.: 2002).




Page 24                                                  GAO-03-850 Superfund Program
has the potential to increase cleanup costs to the Superfund program for
any of the remaining sites that are added to the NPL, since these sites may
not have viable responsible parties.

The reported increase in sites without viable responsible parties could, if
EPA proposes to address the cleanup of these sites, lead to EPA requesting
an increased appropriation because states cannot handle many of these
orphan sites on their own. Officials in 8 of the 10 EPA regions told us that
they expect more responsible parties to declare bankruptcy in the future.
Officials in one region, for example, believed that more of the small,
marginal industries might go bankrupt because of difficult economic times.
States, however, cannot pay to clean up more expensive orphan sites on
their own. According to the recent study by the Environmental Law
Institute, 48 states have established cleanup funds or provided a
mechanism for the state agency to pay for one or more types of cleanup
activities at non-NPL sites. Among the most common sources for these
state cleanup funds are appropriations from the legislature, fees charged
for hazardous waste or other activities, taxes, and cost recoveries.
However, most of the states that have funds to pay for orphan sites can
only afford to clean up sites with lower cleanup costs. Only 13 of the states
with cleanup funds spent more than $10 million on cleanups in fiscal year
2000, according to the report.10 Even in a state that was among those that
spent the most on cleanups in fiscal year 2000, the state usually funds the
cleanup at sites where the overall cleanup costs less than $5 million,
leaving sites that cost over $10 million to federal authorities, according to
state officials.

The potential for current state budget shortfalls to affect states’ capacity to
clean up orphan sites is another factor that could result in EPA increasing
its request for federal cleanup funds, if EPA proposes to address the clean
up of these sites. The National Governor’s Association estimated in
February 2003 that states’ budget shortfalls were mounting—$30 billion for
2003 and about $82 billion in 2004. Officials in 6 of the 10 EPA regions
agreed that states in their region faced fiscal problems and anticipated that
shortfalls could cause problems with states’ future cleanup capabilities.
According to the National Governor’s Association, states must reduce
spending or increase taxes to offset these shortfalls in the short run. Any
reductions in the budgets of state cleanup programs might decrease the


10
 Only 38 states reported expenditures for the Environmental Law Institute’s report; in
addition, several states did not disaggregate the amounts spent on NPL and non-NPL sites.




Page 25                                                    GAO-03-850 Superfund Program
                               states’ ability to fund further cleanups, raising the question of whether
                               federal funds would be provided for any potential cleanup of affected
                               orphan sites. Officials in one region, for example, suspected the region
                               might be asked to fund cleanup at more sites as a result of state financial
                               problems because two of its states were implementing across-the-board
                               percentage cuts to all state programs, including their cleanup programs.



EPA Officials Expect The       At the same time that many EPA regional officials expect the need for
Program’s Primary Funding      federal cleanup funds to address sites without alternative funding sources
                               to grow, the balance of the Superfund trust fund available for future
Source To Be Depleted by
                               appropriations—historically the program’s principal source of funding—is
the End of Fiscal Year 2003,   nearly exhausted. In previous years, funds remained in this balance to carry
Increasing the Need for        over into the next year. However, the balance has fallen consistently since
Alternative Funding Sources    fiscal year 1996. According to EPA officials, unless EPA receives additional
                               funds from revenue sources such as cost recoveries, the balance of the
                               trust fund available for future appropriations will be negative at the end of
                               fiscal year 2003, as shown in table 4.



                               Table 4: Projected Balance of the Superfund Trust Fund Available for Future
                               Appropriations, Fiscal Year 2003

                                                                                                        Fiscal year 2003 amount
                               Source                                                                                 (in millions)
                               Fiscal year 2002 (actual balance)                                                               $564.0
                               Revenues into the trust fund:
                                   Environmental taxes                                                                               0.0
                                   Cost recoveries                                                                                 175.0
                                   Interest                                                                                         67.0
                                   Fines and penalties                                                                               3.0
                                   Tax adjustments                                                                             (99.4)a
                                   Transfer from general fund                                                                      636.4
                               Total projected annual revenues                                                                     782.0
                               Total (balance and revenues)                                                                   1,346.0
                               Fiscal year 2003 budget authority                                                             1,350.3b
                               End of fiscal year 2003 (estimated balance)                                                         ($4.3)
                               Source: GAO analysis of EPA data.
                               a
                                According to an Internal Revenue Service official, companies regularly file adjustments to their
                               corporate income taxes; according to EPA officials, however, the size of this adjustment was
                               unexpectedly large.




                               Page 26                                                             GAO-03-850 Superfund Program
b
Includes a $77.4 million transfer to the Agency for Toxic Substances and Disease Registry (ATSDR).


If the balance of the trust fund available for future appropriations dwindles
as EPA projects, no funds would be left to carry over into fiscal year 2004.
Annual revenues from sources other than general fund appropriations,
such as cost recoveries and interest, will be insufficient to cover cleanup
costs in fiscal year 2004. To offset this decline in funds, EPA is seeking a 73
percent increase in its fiscal year 2004 budget request for general
revenues—from $632 million in fiscal year 2003 to $1.1 billion. If the budget
request is approved, for the first time in the program’s history the general
fund would provide a vast majority—nearly 80 percent—of the Superfund
program’s funding.

As part of a fiscal year 2000 appropriations bill, Congress asked Resources
for the Future, an environmental research group, to conduct an
independent study to estimate how much money EPA would need to
implement the Superfund program from fiscal year 2000 to fiscal year 2009.
Specifically, Congress wanted researchers to examine the costs of cleaning
up sites already on the NPL, cleaning up sites that would be added to the
NPL through fiscal year 2009, conducting removal actions, performing 5-
year reviews, implementing long-term response actions, and the various
activities associated with administering the program. In its 2001 report,
Resources for the Future estimated the future costs of implementing the
program under then-current law.11 Researchers estimated that annual
program costs would most likely remain above the fiscal year 1999 level
until fiscal year 2006, and would decrease 14 percent by fiscal year 2009.
Resources for the Future concluded that the Superfund program would
cost about $15 billion over the 10 years ending in fiscal year 2009,
according to the authors’ best estimate of the likely future cost of the
program under then-current law and policies, and would likely not
experience a dramatic decrease in its annual costs.




11
 Probst, Katherine N. and Konisky, David M., Superfund’s Future: What Will It Cost? A
report to Congress, Resources for the Future (Washington, D.C.: 2001). This study focused
on costs and did not explicitly discuss cost-effectiveness or benefit considerations.




Page 27                                                         GAO-03-850 Superfund Program
EPA Is Taking Steps to   EPA has taken steps to address several uncertainties surrounding the
Address Program          program’s future viability. EPA has asked the National Advisory Council for
                         Environmental Policy and Technology12 to set up a subcommittee to
Challenges               address several Superfund programwide issues, including some that will
                         affect the program’s future. EPA charged the subcommittee, first convened
                         in June 2002, with addressing questions related to the role of the NPL, the
                         role of Superfund at so-called “mega sites,”13 and measurements of program
                         progress. According to the subcommittee’s charge, the overall intent of this
                         effort is to assist in identifying the future direction of the Superfund
                         program in the context of other federal and state waste- and site-cleanup
                         programs. EPA officials have stated that the results of the subcommittee’s
                         work will be important in setting the future course of the program. The
                         subcommittee is scheduled to report its findings to the full advisory council
                         for its consideration in December 2003, before issuing the report to EPA.
                         While the subcommittee’s findings are still uncertain, some of its members
                         and EPA officials have stated that the subcommittee may not reach a
                         consensus on specific recommendations, in which case it would present a
                         discussion of the different opinions of subcommittee members.

                         EPA underscored the limitations of its current means of measuring
                         program performance when it asked the National Advisory Council for
                         Environmental Policy and Technology subcommittee to address measures
                         of the Superfund program’s progress. Since 1995, EPA has used
                         construction completions as the program’s key measure of progress for
                         sites on the NPL. As EPA pointed out to the subcommittee, however,
                         construction completions suffer from several shortcomings. Construction
                         completions neither measure nor characterize the impacts of cleanup
                         efforts on human health and the environment. In addition, construction
                         completions do not correlate as milestones for non-NPL cleanups or with
                         efforts at other hazardous waste cleanups. EPA implemented two new


                         12
                           EPA established the National Advisory Council for Environmental Policy and Technology
                         in 1988 to provide independent advice to the EPA Administrator on a broad range of
                         environmental policy, technology, and management issues. Council members include senior
                         leaders and experts who represent academia, business and industry, community and
                         environmental advocacy groups, environmental justice organizations, professional
                         organizations, and state, local, and tribal governments.
                         13
                          Defined by the Resources for the Future study as sites whose cleanup costs exceed $50
                         million. The National Advisory Council for Environmental Policy and Technology
                         subcommittee has broadened the definition of mega sites to include large, complex, and
                         other types of sites.




                         Page 28                                                   GAO-03-850 Superfund Program
environmental indicators in fiscal year 2003 to measure human exposures
under control and migration of contaminated ground water under control
at NPL sites. However, EPA acknowledges that there are still few cross-
program metrics to capture comprehensive program outcomes. As EPA
states, this shortcoming prevents the agency from communicating the
outcomes of its work at hazardous waste sites to the public, Congress,
states, and the regulated community.

In 2002, EPA implemented a new process related to the addition of sites to
the NPL designed to maintain a stable level of costs to the program by
considering the costs, risk, urgency, and other aspects of new NPL listings.
EPA’s new process provided an additional layer of review to select among
sites submitted for proposal to the NPL by EPA regions. As part of this
process, EPA officials used two criteria—risk and urgency—to divide the
30 sites submitted for proposal by regions into five tiers. EPA also, for the
first time at this stage in the listing process, considered the costs to clean
up the sites and the timing of those costs, according to EPA officials.
Officials used the regions’ estimates of site costs to evaluate the overall
costs of listing different groups of sites, with an understanding that these
preliminary estimates are highly uncertain. In addition, EPA considered
information on state, tribal, community, and congressional delegation
support for listing the site; whether cleanup of the site was likely to be
federally funded or funded by the responsible party; and whether any
environmental justice or tribal issues were associated with the site. EPA
staff also considered enforcement concerns in deciding which sites to
recommend to the Assistant Administrator for Solid Waste and Emergency
Response for proposal. Whereas EPA approved almost all sites that the
regions submitted for proposed placement on the NPL in the past, the April
30, 2003, proposed rule included only 14 of the 30 sites submitted.14
According to EPA, this new process was at least in part a response to
concerns that EPA was listing sites without foreseeable funding to start the
cleanup. EPA officials also told us that the program has carried a backlog
of unfunded construction projects since fiscal year 2001. The process used
to select this round of proposals has not yet been formalized and thus is
subject to change before the next round of proposals expected in
September 2003, according to EPA.




14
 EPA officials emphasized that no final decision had been made on the 16 sites not
proposed in this round.




Page 29                                                    GAO-03-850 Superfund Program
In 2002, EPA had also issued a draft directive to consider, among other
things, the costs of sites before listing them, but decided not to formalize
this guidance. Representatives of the Association of State and Territorial
Solid Waste Management Officials objected to EPA’s draft directive stating
their belief that, if warranted, sites should be listed on the NPL regardless
of the program’s available funding. They further noted that listing only
those sites that could be funded gave the false impression that all necessary
site cleanups were under way. Although the process that EPA used in the
most recent round of listings was driven by the same concerns as the draft
directive, an EPA official told us that the process was not necessarily an
outgrowth of the draft directive.

EPA officials are also concerned about two aspects of the long-term
stewardship of sites: the burden that the operation and maintenance of
sites has on states and the monitoring and enforcement of institutional
controls. According to several EPA and state officials, states are
increasingly concerned about the turnover of sites with federally funded
remedial actions to the states for operation and maintenance. Current
budget problems exacerbate these concerns, according to EPA. EPA
regional officials reported that almost all states had met their obligations
for the operation and maintenance of sites in the past. EPA regions
predicted that 28 sites that have been in federally funded, long-term
response action could be transferred to states for operation and
maintenance by the end of 2005. Median annual costs for the operation and
maintenance of these sites could reach $172,500 per site, according to EPA
regional officials’ estimates. To address the issue of operation and
maintenance, EPA is conducting an initiative to optimize the performance
of federally funded groundwater treatment facilities at sites across the
country. The goal of the initiative is to ensure that these treatment facilities
are working as effectively as possible before they are turned over to states
for operation and maintenance. The EPA Inspector General found that this
study has produced valuable information on the cost and performance of
these groundwater treatment facilities and has resulted in a number of
recommendations.

EPA is also concerned about the monitoring and enforcement of
institutional controls following a site’s cleanup. According to EPA,
institutional controls include administrative or legal controls to minimize
the potential for human exposure to contamination by limiting land or
resource use. For example, a local government could use a zoning
restriction to prohibit residential development in an area of contamination.
Other examples of institutional controls include easements, covenants,



Page 30                                             GAO-03-850 Superfund Program
              well-drilling prohibitions, and special building permit requirements.
              According to EPA, however, institutional controls have certain limitations.
              For example, the enforcement of institutional controls, such as local
              permits or groundwater use restrictions, depends on the willingness and
              capability of the local government entity to monitor compliance and take
              enforcement action. In addition, because institutional controls such as
              consent decrees are not binding on subsequent owners of sites, the transfer
              or sale of a site can lead to the erosion of these institutional controls. In
              response to concerns about maintaining institutional controls, EPA is
              developing an information network to centralize the tracking of
              institutional controls so that interested parties would be able to identify
              institutional controls at any site.



Conclusions   As the Superfund program continues to add sites to the NPL and funding
              sources shift toward general revenues, the effect of EPA’s actions to
              address future program challenges remains uncertain. While the Superfund
              program has implemented indicators to gauge the impacts of its efforts on
              human health and the environment, EPA has acknowledged the limitations
              of its current means of measuring program performance and agrees that
              this shortcoming prevents the agency from communicating the outcomes
              of its work at hazardous waste sites to the public, Congress, states, and the
              regulated community. Although the National Advisory Council for
              Environmental Policy and Technology subcommittee is expected to
              recommend various policy alternatives to EPA regarding the Superfund
              program, the subcommittee is unlikely to complete its final report until
              December 2003, at the earliest. The group’s findings, including how EPA
              should measure program performance, are as yet uncertain. Upon receipt
              of the advisory council’s report, EPA will then have to decide what actions
              to take to address future program challenges. Given the program's limited
              funding, EPA could use performance indicators to help evaluate, prioritize,
              and serve as the basis for making funding decisions. If successfully
              implemented for the Superfund program, establishing these measures
              would also help EPA and the Congress make the difficult funding, policy,
              and program decisions that the current budget environment demands. In
              doing so, EPA will have an opportunity to make fundamental changes to
              improve the management of the Superfund program.




              Page 31                                           GAO-03-850 Superfund Program
Recommendation for   In considering changes to the program to address future challenges
                     associated with the Superfund program’s fiscal uncertainty, we recommend
Executive Action     that the Administrator, EPA, develop indicators that can be used to
                     measure program performance.



Agency Comments      We provided EPA with a draft of this report for review and comment. While
                     EPA generally agreed with this report’s findings and recommendation, it
                     provided a number of comments and clarifications, which we have
                     incorporated into this report as appropriate. EPA pointed out that it is
                     actively working on indicators to fully measure program performance
                     concurrent with the National Advisory Council for Environmental Policy
                     and Technology process. The agency specifically mentioned two new
                     Superfund environmental indicators implemented during fiscal year 2003:
                     human exposure under control and migration of contaminated ground
                     water under control. We acknowledge that the agency is actively working
                     in this area concurrent with the advisory council process, and we have
                     revised this report to include the agency’s recent implementation of these
                     environmental indicators. In responding to our draft, EPA also commented
                     that, to date, annual appropriations for the program have remained
                     relatively steady and have been largely independent of the trust fund
                     balance. This report does not infer any connection between the Superfund
                     trust fund balance and total annual appropriations for the program. EPA
                     provided written comments, which appear in appendix II.


                     As agreed with your office, unless you publicly announce the contents of
                     this report earlier, we plan no further distribution of it until 30 days from
                     the date of this letter. At that time, we will send copies of this report to the
                     appropriate congressional committees; the Administrator, EPA; and other
                     interested parties. We will also make copies available to others upon
                     request. In addition, the report will be available at no charge on the GAO
                     Web site at http://www.gao.gov.




                     Page 32                                             GAO-03-850 Superfund Program
If you or your staff have any questions, please call me at (202) 512-3841.
Key contributors to this report were Barbara Johnson, Richard Johnson,
Jerry Laudermilk, Jonathan S. McMurray, Judy Pagano, Peg Reese, Nico
Sloss, Anne Stevens, and Tatiana Winger.

Sincerely yours,




John B. Stephenson
Director, Natural Resources
  and Environment




Page 33                                           GAO-03-850 Superfund Program
Appendix I

Objectives, Scope, and Methodology                                                          AA
                                                                                             ppp
                                                                                               ep
                                                                                                ned
                                                                                                  n
                                                                                                  x
                                                                                                  id
                                                                                                   e
                                                                                                   x
                                                                                                   Iis




              The objectives of this review were to examine (1) the current status of the
              Superfund program, (2) the factors guiding the Environmental Protection
              Agency’s (EPA) selection of sites to be placed on the National Priorities List
              (NPL), and (3) the program’s future outlook. To address these objectives,
              we discussed the Superfund program with officials in EPA headquarters,
              the 10 EPA regions, and 10 states. In order to gain a balance of views from
              states, we selected a nonprobability sample of 10 states, consisting of the 5
              states that had the most sites proposed to the NPL in the last 5 years
              (California, Florida, New Jersey, New York, and Texas) and the 5 states that
              had no sites proposed in the past 10 years (Arizona, Delaware, North
              Dakota, Nevada, and Wyoming). The 5 states that have had the most sites
              proposed to the NPL over the last 5 years accounted for about 44 percent of
              the 164 sites proposed during that time. In addition to the states’ overall
              perspective on the Superfund program, we interviewed officials in states
              that had no sites proposed in 10 years to determine what issues, if any,
              states had with supporting the listing of sites on the NPL. We also discussed
              the Superfund program with officials in the Association of State and
              Territorial Solid Waste Management Officials, the American Chemistry
              Council, the American Petroleum Institute, Resources for the Future, and
              the Environmental Law Institute.

              To examine the status of the Superfund program, we reviewed the status of
              the 1,560 hazardous waste sites that have been proposed and/or listed on
              the NPL since 1980, the program’s historical funding and expenditure data,
              and EPA’s use of human capital resources to administer the Superfund
              program. We obtained actual dollar figures for fiscal years 1993 through
              2002 from EPA and the President’s Budget Appendixes for fiscal years 1995
              through 2004. All program funding and expenditure data are presented in
              constant 2002 dollars. In our review of cleanup actions, we focused on
              remedial actions, which are generally costly and can take a long time to
              complete.

              To identify the current cleanup status of NPL sites, we obtained data from
              EPA’s Comprehensive Environmental Response, Compensation, and
              Liability Information System (CERCLIS)—a computerized inventory of
              potential hazardous waste sites that contains national site assessment,
              removal, remedial, enforcement, and financial information for over 44,000
              sites. CERCLIS is a relational database system that uses client-server
              architecture (each computer or process on the network is either a client or
              server), installed on separate local area networks at EPA headquarters and
              all 10 regional Superfund program offices, and is used by more than 1,900
              EPA staff. A September 30, 2002, report issued by EPA Inspector General



              Page 34                                            GAO-03-850 Superfund Program
Appendix I
Objectives, Scope, and Methodology




found that over 40 percent of CERCLIS data they reviewed were inaccurate
or not adequately supported. The Inspector General’s review focused on
site actions, which it defined as activities that have taken place at a site,
such as site inspections, removals, studies, potentially responsible parties
searches, records of decisions, and remedial actions. As a result of its
review, the Inspector General concluded that CERCLIS could not be relied
upon to provide error-free data to system users.

For our review, we verified CERCLIS data related to NPL sites and their
overall cleanup status as of the end of fiscal year 2002, but did not verify
detailed site action data for all sites in CERCLIS. To address the reliability
of CERCLIS data used in our review, we met with Inspector General staff to
review the nature of the errors discussed in their report. According to
Inspector General staff, the reliability of CERCLIS data was more of a
concern at the action level rather than the site level. They indicated that
using data related only to NPL sites and their cleanup status would
decrease concerns about data reliability, especially if we confirmed the
data with EPA regions. As a result, we checked certain CERCLIS data fields
for all 1,560 proposed, final, or deleted NPL sites with staff in each region,
as appropriate, including the sites’ NPL status (whether the site was
currently proposed to the NPL, final on the NPL, or had been deleted) and
the status of cleanup at the site (whether the site was in the study and
design phase, construction was under way, or construction was complete).
Regions found no errors with sites’ NPL status, but found errors in the
status of cleanup for approximately 1 percent of NPL sites. We corrected
the CERCLIS site-level data that we used for our analysis to reflect regions’
changes. After taking these additional steps, we determined that the
CERCLIS site-level data were sufficiently reliable for the purposes of this
report. To present information regarding which participants were leading
cleanup actions at sites, we used action-level data provided by EPA without
further verification.

For our analysis of the historical cleanup status of sites on the NPL from
fiscal years 1993 to 2002, we relied on fiscal-year-end status data provided
by EPA. In addition, to identify construction complete sites that had been
deleted, we used data provided by EPA that showed the deletion dates for
NPL sites. We asked regions to verify the dates that sites transitioned to
deleted status to the extent possible. However, to minimize the burden on
EPA regional staff, we did not ask that they check each date against source
documents.




Page 35                                            GAO-03-850 Superfund Program
Appendix I
Objectives, Scope, and Methodology




To assess the NPL listing process, we reviewed EPA’s minimum eligibility
criteria, policies, guidance, and recent practices, and examined the extent
of EPA’s coordination with states. We analyzed available data on state
hazardous waste cleanup programs, focusing on the coordination between
federal and state programs to address current and future Superfund sites.
We also discussed the NPL listing process and factors guiding EPA’s
selection of sites to be placed on the NPL with officials in EPA
headquarters, EPA regions, and states.

To assess the program’s future fiscal outlook, we examined the effect of the
expiration of the taxing authority, identified and reviewed estimates of
future funding requirements and workload projections, and examined
EPA’s current efforts to address future program needs. In addition, we
discussed issues likely to affect the Superfund program in the near future,
such as program funding and NPL-listing trends, with officials from EPA,
states, industry associations, and environmental research groups. We did
not examine future challenges associated with benefits, health risks, or
cleanup standards.

We conducted our work between August 2002 and July 2003 in accordance
with generally accepted government auditing standards.




Page 36                                           GAO-03-850 Superfund Program
Appendix II

Comments from the Environmental
Protection Agency                                             Appendx
                                                                    Ii




Note: GAO comments
supplementing those in
the report text appear
at the end of this
appendix.




  See comment 1.




See comment 2.




See comment 3.




                         Page 37   GAO-03-850 Superfund Program
                 Appendix II
                 Comments from the Environmental
                 Protection Agency




Now on p. 16.

See comment 4.




Now on p. 20.

See comment 5.




Now on p. 23.

See comment 6.




                 Page 38                           GAO-03-850 Superfund Program
               Appendix II
               Comments from the Environmental
               Protection Agency




               The following are GAO’s comments on the EPA letter dated July 18, 2003.



GAO Comments   1. We revised this report to include the agency’s recent implementation of
                  environmental indicators.

               2. This report presents total appropriations to the program from fiscal
                  year 1993 to 2002 in constant 2002 dollars. This report draws no
                  conclusions about connections between the Superfund trust fund
                  balance and total annual appropriations.

               3. We revised this report to include the agency’s statement regarding the
                  value of responsible party commitments since the inception of the
                  program.

               4. We included the agency’s statements regarding the backlog of unfunded
                  projects, the changing nature of the projects under way, and the
                  increased request for Superfund construction funding in this report.

               5. We revised this report to reflect EPA headquarters’ position on the
                  proper use of the NPL.

               6. We acknowledge that EPA currently reports responsible party
                  participation in cleanups on a national rather than a regional basis. As
                  this report states, officials in 7 of the 10 EPA regions have either
                  observed an increase in the number of sites without viable responsible
                  parties or expect such an increase in the future. The comment indicated
                  by EPA functions as an example in this report.




(360263)       Page 39                                          GAO-03-850 Superfund Program
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