WASHINGTON -- When Congress adjourns next month, it will leave behind a lot of unfinished business, probably including the Superfund bill.
Starting all over again on Superfund next year would not be a pleasant prospect for most of the Congress members, aides, and lobbyists involved. But for municipal bond issuers, it wouldn't be all bad.
That's a switch: Over the last few years, issuers have tended to be hurt by what Congress didn't get done. In 1992, for example, Congress ended its session without renewing the tax exemptions for mortgage revenue bonds and small-issue industrial development bonds, which expired in June of that year. It took until August 1993 for Congress to revisit the issue, when it voted to make them permanent.
But failing to enact the Superfund bill is a different story for two reasons. First, the House Ways and Means Committee version of the measure contains a tax on bond insurers. Second, the bill does not contain a proposal by Rep. Dan Rostenkowski, D-Ill., that would create a new type of tax-exempt bond for environmental cleanup.
The bill is needed to reauthorize the so-called Superfund law, which was passed in 1980 to provide for cleanup of thousands of sites around the country identified by the Environmental Protection Agency as having been contaminated by industrial waste.
The main portions of the bill were drafted earlier this year by the House Public Works Committee and the Senate Environment and Public Works Committee. The House Ways and Means and Senate Finance committees had to be involved because the measure contains tax provisions, but their preoccupation with health care reform and other issues delayed their work on Superfund until recently.
Ways and Means finally acted on Aug. 19. After it passed the bill, bond insurers discovered a provision that would tax not only their industry but a wide variety of insurance providers to finance a proposed Environmental Insurance Resolution Fund. The Treasury Department had proposed the fund as a way of helping to settle the huge number of disputed claims involving Superfund liability.
The Treasury Department must have beard their concerns, because on Sept. 15, the Treasury told the Senate Finance Committee during a hearing that it should exempt bond insurers when it writes its version of the Superfund legislation. Lobbyists have said they are hopeful the committee will follow that recommendation. The answer will come Wednesday, when panel members meet to draft their bill.
Assuming the Senate bill does exempt bond insurers, House-Senate conferees will have to make the final decision on accepting that plan or following the House version that taxes the bond insurers. While an exemption is likely to be enacted, it is by no means assured; exempting the bond insurers could raise the hackles of other types of insurance providers who did not receive an exemption.
Thus the risk still exists that bond insurance companies will be included in the final bill. If, however, the Superfund bill stalls before conferees have a chance to act, the bond insurance industry will have a new opportunity next year to make sure it is exempted in both the House and Senate bills.
The bond community's other opportunity in a possible 1995 Superfund bill would be a second chance for Rostenkowski to add his proposal for socalled environmental remediation bonds.
The proposal would create a new category of private-activity bond that could be issued in certain designated areas to help private firms buy and clean up contaminated industrial sites.
Rostenkowski, who was chairman of Ways and Means before being charged June 1 in a 17-count felony indictment, attempted to offer his proposal as an amendment to the Superfund hill during the committee's drafting session Aug. 19. But acting chairman Sam Gibbons, D-Fla., ruled Rostenkowski out of order, saying his bond proposal was not directly relevant to the tax portion of the der, saying his bond proposal was not directly relevant to the tax portion of the Superfund bill under consideration that day.
Rostenkowski, whose indictment related to the House Post Office scandal, could regain the Ways and Means chairmanship if he is cleared of the charges. Conventional wisdom says his trial will drag on for an extended period of time. But what might happen if he does get back in the chairman's chair next year? Would Rostenkowski attempt to add his environmental bond proposal in a 1995 Superfund bill? Under that scenario, there would be no acting chairman to stop him.
Superfund isn't yet dead for this year. As one lobbyist said last week, members of Congress "always have enough time if they really want to do something." But if it turns out they have to revisit Superfund next year, bond proponents may be able to breathe a temporary sigh of relief.