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1 1 (February 14, 2025)

handle is hein.crs/govesmk0001 and id is 1 raw text is: Congres&onal Research Se Informing legi I live d MI ~ in o 914 Updated February 14, 2025 The Hazardous Substance Superfund Trust Fund Decades of industrial and commercial activities involving various chemicals resulted in environmental contamination at thousands of sites in the United States, including federal facilities that served national defense and other purposes. Some of this contamination occurred prior to environmental regulation. Allocation of financial responsibility for remediating environmental contamination has been a long- standing issue. At the federal level, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA; P.L. 96-510) established the liability of certain categories of potentially responsible parties (PRPs) for the costs of remediating hazardous substances released into the environment, natural resource damages, and related federal public health studies. CERCLA authorized the Hazardous Substance Superfund Trust Fund to finance the remediation of sites without financially viable PRPs to fulfill their liability. The U.S. Environmental Protection Agency (EPA) administers and oversees the remediation of sites prioritized for federal involvement under the Superfund program, in coordination with the states in which the sites are located. Other federal laws apply to oil spills and petroleum contamination from underground tanks not covered under CERCLA. States also have established environmental remediation programs under their own laws. Under CERCLA and subsequent law, Congress established a three-part tax system to finance the Superfund Trust Fund: (1) an excise tax on crude oil and imported petroleum products, (2) an excise tax on certain domestic chemical feedstocks and imported chemical derivatives, and (3) a special environmental tax on corporate income. These taxes accounted for most of the receipts for the Superfund Trust Fund until the taxing authority expired at the end of 1995. Since the taxes expired, the Superfund Trust Fund was primarily financed with transfers from the General Fund of the U.S. Treasury until Congress reauthorized two of the taxes in the 117th Congress. Enacted November 15, 2021, Section 80201 of Title II of Division H of the Infrastructure Investment and Jobs Act (P.L. 117-58) reauthorized the Superfund chemicals excise tax through December 31, 2031, at double the rates that were in effect in 1995. Additionally, Section 13601 in Part 6 of Subtitle D of Title I of P.L. 117-169, known as the Inflation Reduction Act, permanently reauthorized the Superfund petroleum excise tax, increased the rate, and provided for annual inflation adjustments. The effective dates for these tax provisions are July 1, 2022, and January 1, 2023, for P.L. 117-58 and P.L. 117-169, respectively. Superfund Tax H story As enacted in 1980, CERCLA authorized Superfund excise taxes on crude oil, imported petroleum products, and domestic chemical feedstocks. Congress chose 42 feedstocks from which many other chemicals were made, as a matter of efficiency to tax chemical production. The Superfund Amendments and Reauthorization Act of 1986 (P.L. 99-499) expanded the Superfund chemicals excise tax to include imported chemical derivatives and added the special environmental tax on corporate income. Congress based the excise taxes on the premise that petrochemicals from crude oil, and other commercial chemicals, were common sources of contamination. The tax on corporate income applied to any corporation that met the income threshold regardless of whether its activities involved hazardous substances. Subsequent laws through the 101st Congress reauthorized Superfund taxes until the end of 1995. Prior to expiration, Superfund taxes were an excise tax on crude oil and imported petroleum products at a rate of 9.7 cents per barrel paid by U.S. refineries receiving crude oil and importers of petroleum products for consumption, use, or warehousing; an excise tax on 42 chemical feedstocks paid by the manufacturers, and imported chemical derivatives paid by the importers, at a rate that varied from $0.22 per ton to $4.87 per ton depending on the substance; and a special environmental tax on corporate income at the rate of 0.12% of alternative minimum taxable income in excess of $2 million annually. Superfund tax receipts were fully expended by the end of FY2003. General Fund transfers have since financed most of the annual appropriations from the Superfund Trust Fund. In addition to these transfers, the Superfund Trust Fund receives revenue from cost recoveries from PRPs, fines and penalties for violations of CERCLA, and interest on the balance of the trust fund. The Tax Increase Prevention Act of 2014 (P.L. 113-295) repealed the expired Superfund special environmental tax on corporate income. Eligible Uses of Receipts Taxes and other receipts in the Superfund Trust Fund have been subject to annual appropriations prior to expenditure. Section 111 of CERCLA authorizes eligible uses of appropriated receipts from the Superfund Trust Fund to remediate contaminated sites. Section 111 excludes federal facilities from eligible uses of receipts because Congress funds their remediation with separate appropriations. The Internal Revenue Code (26 U.S.C. §9507) excludes natural resource damages from eligible uses of receipts to focus appropriations on remediation, but these damages remain subject to liability under CERCLA. The expenditure of Superfund appropriations for CERCLA remedial actions is limited to National Priorities List (NPL) sites on nonfederal land, subject to cost-sharing with the state in which the site is located. Less extensive removal actions may be fully funded with Superfund appropriations at NPL or non-NPL sites. Monies that EPA collects from PRPs under CERCLA settlements are held in site-specific

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