Neither Front Royal nor Warren County, which fund operations of the Economic Development Authority, would be exposed to liability if the authority is found to have Superfund responsibility for nine acres it owns at the defunct Avtex Fibers plant, County Attorney Douglas P. Napier says.

Members of the authority learned last week that nine acres surrounding the waste water treatment plant in a polluted section of the plant was deeded to the authority in 1973 as collateral for a bond issued by the authority. The plant closed in 1989 after more than 2,000 violations of environmental laws and is now a Superfund site controlled by the Environmental Protection Agency.

Officials say the EPA is unlikely to seek cleanup funds from the authority because it has no money.

The authority plans to ask 10th District Rep. Frank R. Wolf to introduce legislation relieving it from any liability.

Napier cites a December 1994 opinion from state Attorney General James S. Gilmore III in saying the town and county "have no liability through the authority."

"An Industrial Development Authority is not the alter ego of the city (county)" that created it, Gilmore says in the opinion. "Industrial Development Authorities are separate and distinct legal entities established to perform the public purposes designated by the legislature. It is independent of the city (county) in its operations, its incurment of

debt and its ownership of property."

Tom Greco, an attorney with the American Bankers Association who is working on legislation that would lift Superfund liability from lenders, said the authority may be protected by exemptions for entities that hold Superfund lands only as collateral for loans, even though the authority didn't directly lend the money in the bond.

The FMC Corp., which owned the plant before selling it to Avtex, received a $6.6 million bond through the authority in 1973 to pay for upgrading the water treatment plant and other pollution control measures.

Greco cited a 1990 U.S. Court of Appeals ruling in which the court found that the St. Helens Port Authority had no liability for a Superfund site. That authority had taken title to a lead recycling plant as collateral for a bond.

But Greco said he doesn't believe Congress will approve lender liability legislation this year. Bankers are seeking the legislation because an EPA rule giving lenders an exemption was thrown out in a 1994 federal court ruling.

"The only time you get fundamental Superfund reform is in a presidential year," he said. Such reforms were approved in 1980 and 1984, he said. "Maybe in 1996."

The Warren County Redevelopment Corporation, which is working to have unpolluted portions of the Avtex plant released for reuse, is counting on amendments included in Superfund reform bills now before Congress to ensure that it would have no future liability if it takes ownership of those portions.