[CPEO-MEF] GAO, Property Transfer, and Cleanup Cost Recovery

[Lenny Siegel <lsiegel@cpeo.org>]

Environmental Cleanup: Transfer of Contaminated Federal Property and 
Recovery of Cleanup Costs

Government Accountability Office
GAO-05-1011R
September 16, 2005
To download the entire report, go to
http://www.gao.gov/cgi-bin/getrpt?GAO-05-1011R

Abstract

Ammonium perchlorate (perchlorate) is a primary ingredient in solid 
rocket propellant and has been used for decades by the Department of 
Defense (DOD), the National Aeronautics and Space Administration, and 
the defense industry in the manufacturing, testing, and firing of 
rockets and missiles. Perchlorate has been found in the drinking water, 
groundwater, surface water, or soil in 35 states, the District of 
Columbia, and 2 commonwealths of the United States. Exposure to 
perchlorate affects the human thyroid, and certain levels of exposure 
may result in hyperthyroidism in adults and developmental delays in 
children. Although there is no specific federal requirement to clean up 
perchlorate, the Environmental Protection Agency (EPA) and state 
regulatory agencies have used various environmental laws and regulations 
to require cleanup of perchlorate by responsible parties. Between 1942 
and 1945, new military uses for perchlorate led to an increase in the 
production of perchlorate in the United States. Between 1945 and 1967, 
the U.S. Navy, Western Electrochemical Company, and the American Potash 
and Chemical Company manufactured perchlorate at a facility in 
Henderson, Nevada. The United States owned part of the facility from 
1953 to 1962. In 1967, the Kerr-McGee Corporation acquired the facility 
and continued to manufacture perchlorate until 1998, when it ceased 
production after the chemical was found in nearby groundwater. 
Kerr-McGee is presently cleaning up perchlorate contamination under a 
consent order with the Nevada state environmental agency. The American 
Pacific Corporation also manufactured perchlorate near Henderson from 
1958 until 1988, when its facility was destroyed in an explosion. 
American Pacific relocated its perchlorate production to Utah and is 
currently the sole manufacturer of perchlorate in the United States. In 
a recent letter to GAO, Congress asked us to report on the costs, 
liability and financial responsibility related to perchlorate cleanup. 
The issue of liability for perchlorate cleanup is currently the subject 
of litigation between the Kerr-McGee Corporation and the United States. 
In 2000, Kerr-McGee initiated litigation against the United States, 
seeking reimbursement for cleanup costs. The case is still in the 
pretrial stage. The information requested above is among the issues 
being addressed as part of the pending court case. It is a longstanding 
GAO policy to refrain from taking a position on or addressing matters 
that are pending in litigation. During a June 2005 meeting with 
Congressional staff, we agreed to document why we could not undertake 
the study originally requested, and we also agreed to report on general 
issues relating to the federal government's responsibility for 
environmental cleanup on land that it transfers or sells to other 
parties. This report discusses (1) laws governing the transfer of 
contaminated federal property to private parties, both before and after 
the enactment of a 1986 amendment to the Comprehensive Environmental 
Response, Compensation, and Liability Act of 1980 (CERCLA) that 
specifically governs such transfers, and (2) the degree to which private 
parties not subject to civil actions under CERCLA may seek environmental 
cleanup costs from other responsible parties in the wake of the recent 
Supreme Court decision in Cooper Industries v. Aviall Services, and 
subsequent cases.

While there are numerous laws that have some impact on the transfer of 
contaminated federal property to private parties, the following three 
federal statutes (and associated regulations) specifically require some 
combination of cleanup actions, notice of contamination, and retained 
federal cleanup responsibility following transfer of the property: (1) 
Federal Property and Administrative Services Act of 1949 (Federal 
Property Act), (2) Comprehensive Environmental Response, Compensation, 
and Liability Act of 1980 (CERCLA), and (3) Superfund Amendments and 
Reauthorization Act of 1986 (SARA). Under the Federal Property Act, each 
federal agency has a continuing responsibility to identify property that 
has become excess--no longer needed by the agency to carry out its 
programs or activities. The agency must report such property to the 
General Services Administration (GSA). GSA then must determine if any 
other federal agency, mixed-ownership government corporations, or the 
District of Columbia has a need for the property. If no other agency 
needs the property, GSA declares it unneeded by the government and 
identifies it as surplus. Generally, surplus property must be disposed 
of after publicly advertising for bids. Courts have interpreted the 
liability of responsible parties under CERCLA to be joint and several. 
Under joint and several liability, when the harm done is indivisible, 
one party can be held responsible for the full cost of the cleanup, even 
though that party may be responsible for only a portion of the hazardous 
substances at the site. Such a party may then seek to recover a portion 
of its cleanup costs from other responsible parties. However, a recent 
Supreme Court decision has limited the ability of responsible parties 
who voluntarily clean up their property to recover costs from other 
responsible parties under CERCLA.

--
Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
http://www.cpeo.org


_______________________________________________
Military mailing list
Military@list.cpeo.org
http://www.cpeo.org/mailman/listinfo/military