Date: 1990-10-26
Speaker: THOMAS A. LUKEN (democrat)
Chamber: H

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker. currently. there are over 1.000 Superfund sites listed on the Environmental Protection Agencys national priorities list pursuant to the Comprehensive Environmental Response. Compensation. and Liability Act of 1980 [CERCLA]. yet only 29 sites have been cleaned up. Although the slow pace of these cleanups is attributable to more than one or two factors. It has become clear that a very likely contributing factor is the inability of Superfund response action contractors to obtain a surety bond where applicable Federal law so requires. Testimony received during hearings in the other body on S. 3187. the companion bill to which I recently introduced as H.R. 5827. indicated that only one surety company is currently writing bonds for Superfund contractors and that only two contracting firms have been able to obtain the necessary bonding. With over 1.000 sites nearing or at the stage where cleanup activities should proceed. it is clear that we will need more than two contracting firms to do the job in a timely manner. Moreover. the lack of competition created by the current situation threatens to drive up the costs of already expensive cleanup projects. There are two immediate problems perceived by surety companies. environmental groups. contractors. and unions which underlie the unavailability of surety bonds. First. is the lack of clarity in CERCLA section 119 regardIng the scope of Superfunds indemnification provision where the surety must undertake the completion of a cleanup project for a response action contractor. S. 3187 makes it clear that where a surety providing bonds steps into the shoes of a response action contractor and begins activities to meet its obligations under Its bond. the suretys Superfund liabilities and access to Superfund indemnification should be identical to those provided to the response action contractor under CERCLA. Second. sureties have expressed great fear and unwillingness to be held liable under CERCLA for personal or property damage caused by a response action contractor who doesnt have standard liability insurance should the surety have to step in to complete a cleanup project for the contractor. A new section 119(g) also provided for by S. 3187 makes it clear that unless otherwise provided for. a suretys liability on a performance bond shall be only for the cost of completion of the contract work in accordance with the plans and specifications less the balance of funds remaining to be paid under the contract. up to the sum of the bond. The section further clarifies that a surety may not be liable to the Government for loss or liability arising from personal injury or property damage whether or not caused by the breach of the bonded contract. This bill specifically does not preempt State laws or requirements and would not affect Superfund cleanup projects that are State run as opposed to federally run. S. 3187 passed the Senate on October 18. 1990. by unanimous consent. and is supported by the Sierra Club. the Environmental Defense Fund. the Laborers International Union of the AFLCIO. the National Constructors Associations. the Associated General Contractors of America. and the American Insurance Association. In other words. the cleanup contractors. the insurers. and the environmental groups all support this legislationa rare and not to be missed opportunity. Mr. Speaker. I would also like to submit for the RECORD letters from three companies. CIGNA. F&D Companies. and Seaboard Surety Co. which all indicate that passage of this legislation will help to resolve the stumbling blocks that have prevented sureties from issuing bonds to Superfund contractors in the past. Although I regret the inclusion of a Senate amendment by Senator MErzENBAUM which will limit the effective date of this legislation to 2 years. it is my hope that the Members involved with the reauthorization of CERCLA will make the provisions of this bill permanent. I would like to thank my colleague