Administration to Ask Reform of Superfund : Environment: Proposal would speed cleanups of toxic sites and trim lawsuits. It would also apportion liability among potential polluters.

The Clinton Administration, in an effort to reform the $15.2-billion Superfund program, today will send Congress a proposal designed to make the process of cleaning the nation’s most polluted places fairer and faster.

Included are taxes on the insurance industry, a scheme to apportion liability among polluters and powerful incentives for polluters to accept their responsibility and proceed with costly cleanups.

While the prospect of these reforms has raised fear and suspicion among the nation’s insurers and manufacturers, community leaders are expected to find much in the Administration’s reform plan to cheer.

The Administration has sought to preserve a principle dear to the hearts of environmentalists and communities--that polluters should pay to clean up the messes they create--and to strengthen the communities’ hands in the cleanup process.

Before cleanups begin, communities would negotiate with the Environmental Protection Agency over how clean the Superfund site should be made and what its future use should be.

And to the relief of virtually all parties to the debate, the Administration will seek to control the lawsuits that now swirl around Superfund cleanups. With roughly one Superfund dollar in four going toward legal fees, the program has been a boon for attorneys but a bane for those wishing that more of the $500 million in annual legal costs were going to cleanup operations.

President Clinton last May called Superfund “a disaster” and directed the EPA to overhaul the 1980 act that established a legal framework for the cleanup of thousands of abandoned landfills, manufacturing sites, mines and federal facilities.

By last April, 1,286 polluted sites, 96 of them in California, had been put on the Superfund’s “national priority list,” while another 11,500 potential sites awaited further consideration. But after government expenditures of roughly $1.5 billion yearly--and far more by private industry--only 217 sites have officially been declared clean.

In a speech at a Superfund site in Cleveland last November, EPA Administrator Carol Browner told community leaders: “This is our last chance. If we care about cleaning up these toxic sites, if we care about giving industry a strong incentive to be mindful of our environment, if we care about rebuilding our cities, then we have to seize this opportunity and fix Superfund.”

The fixes proposed by the Administration, while baffling in their technical and legal complexity, are simple in their concept. They would make cleanups faster and lawsuits fewer by establishing a system in which EPA-approved arbitrators, called “private allocators,” would apportion liability among potential polluters.

If those found liable accepted the judgments and conducted cleanups, they would receive two substantial benefits. The federal government, and not the surviving polluters, would pick up the tab for polluters who had disappeared or gone out of business. And the government would reimburse those found liable for 20% to 60% of the money they spent on cleanups.

To raise these funds, the Administration will ask Congress to approve between $500 million and $800 million a year in “fees and assessments” on the property and casualty insurance industry.

Under the current Superfund law, liable parties get stuck with the cleanup bill for many “orphan companies” that have gone out of business or disappeared. Rather than foot the bill for all of the cleanup, the existing polluters have sought to spread the expense by suing their insurance companies as well as smaller firms that may have contributed to the pollution.

The result, experts said, has been a flurry of lawsuits that divert funds and energy away from cleanups. The EPA officials estimated that the reform would induce 80% to 95% of the liable parties to settle and proceed with cleaning up fouled sites rather than suing.

Manufacturers are skeptical of the new “private allocators” and the insurance industry has expressed concern about the new taxes.