[Senate Hearing 105-315] [From the U.S. Government Publishing Office] S. Hrg. 105-315 SUPERFUND REFORM AND REAUTHORIZATION ======================================================================= HEARING BEFORE THE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS UNITED STATES SENATE ONE HUNDRED FIFTH CONGRESS FIRST SESSION on S. 8 SUPERFUND CLEANUP ACCELERATION ACT OF 1997, AS AMENDED BY THE PROPOSED SUBSTITUTE AMENDMENT, DATED AUGUST 27, 1997, SPONSORED BY SENATORS CHAFEE AND SMITH OF NEW HAMPSHIRE __________ SEPTEMBER 4, 1997 __________ Printed for the use of the Committee on Environment and Public WorksU.S. GOVERNMENT PRINTING OFFICE 45-227 cc WASHINGTON : 1998 _______________________________________________________________________ For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS ONE HUNDRED FIFTH CONGRESS JOHN H. CHAFEE, Rhode Island, Chairman JOHN W. WARNER, Virginia MAX BAUCUS, Montana ROBERT SMITH, New Hampshire DANIEL PATRICK MOYNIHAN, New York DIRK KEMPTHORNE, Idaho FRANK R. LAUTENBERG, New Jersey JAMES M. INHOFE, Oklahoma HARRY REID, Nevada CRAIG THOMAS, Wyoming BOB GRAHAM, Florida CHRISTOPHER S. BOND, Missouri JOSEPH I. LIEBERMAN, Connecticut TIM HUTCHINSON, Arkansas BARBARA BOXER, California WAYNE ALLARD, Colorado RON WYDEN, Oregon JEFF SESSIONS, Alabama Jimmie Powell, Staff Director J. Thomas Sliter, Minority Staff Director (ii) C O N T E N T S ---------- Page SEPTEMBER 4, 1997 OPENING STATEMENTS Allard, Hon. Wayne, U.S. Senator from the State of Colorado...... 9 Baucus, Hon. Max, U.S. Senator from the State of Montana......... 13 Bond, Hon. Christopher S., U.S. Senator from the State of Missouri....................................................... 8 Boxer, Hon. Barbara, U.S. Senator from the State of California... 10 Chafee, Hon. John H., U.S. Senator from the State of Rhode Island 1 Graham, Hon. Bob, U.S. Senator from the State of Florida......... 18 Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 16 Kempthorne, Hon. Dirk, U.S. Senator from the State of Idaho...... 4 Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey......................................................... 6 Reid, Hon. Harry, U.S. Senator from the State of Nevada.......... 18 Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 17 Smith, Hon. Robert, U.S. Senator from the State of New Hampshire. 3 Thomas, Hon. Craig, U.S. Senator from the State of Wyoming....... 8 Wyden, Hon. Ron, U.S. Senator from the State of Oregon........... 19 WITNESSES Browner Hon. Carol, Administrator, Environmental Protection Agency......................................................... 20 Article, Love Canal Superfund at Work........................ 44 Fact sheet, Love Canal, New York State Department of Health.. 48 Letters, Superfund issues.................................... 37 Prepared statement........................................... 69 Responses to additional questions from: Senator Allard........................................... 37, 92................................................. Senator Boxer............................................ 87 Senator Graham........................................... 91 Senator Moynihan......................................... 42, 89................................................. Burt, Robert N., chairman and chief executive officer, FMC Corporation on behalf of the Business Roundtable............... 148 Eckerly, Susan, director for Federal Government relations, National Federation of Independent Business.................... 146 Response to additional question from Senator Inhofe.......... 148 Florini, Karen, senior attorney, Environmental Defense Fund; accompanied by Jacqueline Hamilton, senior project attorney, National Resources Defense Council............................. 153 Johnson, Gordon, J., Deputy Bureau Chief, Environmental Protection Bureau, New York State Attorney General's Office, on behalf of the National Association of Attorneys General........ 61 Article, Federal Sovereign Immunity and CERCLA, Journal of Natural Resources and Environmental Law.................... 134 Letters: Responding to questions from Senator Moynihan............ 68 Re: Waiver of sovereign immunity by the Federal Government on certain environmental laws, several State Attorneys General...................................... 128 Prepared statement........................................... 116 Resolution, National Association of Attorneys General, adopted summer meeting, June 22-26, 1997, Jackson Hole, WY. 123 Responses to additional questions from: Senator Moynihan......................................... 125 Senator Wyden............................................ 126 Mannina, George J., Jr., executive director, Coalition for NRD Reform......................................................... 163 Responses to additional questions from Senator Moynihan...... 166 Nelson, E. Benjamin, Governor, State of Nebraska, on behalf of the National Governors' Association............................ 52 Prepared statement........................................... 104 Responses to additional questions from: Senator Chafee........................................... 108 Senator Moynihan......................................... 108 Senator Wyden............................................ 107 Perron, James P., Mayor, Elkhart, IN., on behalf of the U.S. Conference of Mayors........................................... 55 Prepared statement........................................... 108 Responses to additional questions from Senator Inhofe........ 112 Subra, Wilma, president, Subra Company, New Iberia, LA........... 59 Prepared statement........................................... 114 ADDITIONAL MATERIAL Amendment to S. 8, draft substitute bill (Chairman's mark), sponsored by Senators Chafee and Smith of New Hampshire, dated August 27, 1997, Superfund Cleanup Acceleration Act of 1997.... 232 Articles: Federal Sovereign Immunity and CERCLA, Journal of Natural Resources and Environmental Law............................ 134 Hazardous Waste: Human Health Effects, Barry Johnson, Toxicology and Industrial Health........................... 191 Letters: Advocates for Professional Judgment in Geoprofessional Practice................................................... 228 CSX Transportation........................................... 94 State Attorneys General...................................... 128 Report, Superfund: Summary of the Chairman's Mark of S. 8, Amendment to the Superfund Cleanup Acceleration Act of 1997, Congressional Research Service................................. 168 Statements: American Petroleum Institute................................. 180 American Public Health Association and the National Association of County and City Health Officials............ 184 American Water Works Association............................. 186 Association of Metropolitan Water Agencies................... 188 Hazardous Waste Coalition.................................... 214 National Association of Manufacturers........................ 230 National Oceanic and Atmospheric Administration, Department of Commerce, submitted by Terry D. Garcia, Acting Assistant Secretary for Oceans and Atmosphere,....................... 97 SUPERFUND REFORM AND REAUTHORIZATION ---------- THURSDAY, SEPTEMBER 4, 1997 U.S. Senate, Committee on Environment and Public Works, Washington, DC. The committee met, pursuant to notice, at 2 p.m. in room 406, Senate Dirksen Building, Hon. John H. Chafee (chairman of the committee) presiding. Present: Senators Chafee, Smith, Kempthorne, Bond, Thomas, Allard, Inhofe, Sessions, Baucus, Boxer, Lautenberg, Reid, Graham, Wyden, and Moynihan. OPENING STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE STATE OF RHODE ISLAND Senator Chafee. I want to welcome everyone here this afternoon. This hearing before the full Committee on Environment and Public Works is to consider Superfund legislation. We are under somewhat of a time constraint today. There have been objections posed by the Democratic leader to our meeting beyond--I believe it's 4:30. So we have a host of excellent witnesses. I want to urge everybody to make their statements crisp and their questions to the point, and the answers, similarly. Now, Senator Baucus has to introduce a constituent of his State before the Foreign Relations Committee, and he will not be here for a few minutes. I know that Senator Lautenberg had a press conference over in the Cannon Building at 1:45, so he will be a few minutes late. So I will make a brief opening statement, and then ask Senator Smith if he chooses to make a statement, and Senator Kempthorne and others who might be here, and we'll go right to the witnesses. First I want to thank our witnesses, some of whom have come a considerable distance, and I appreciate that. I am delighted that each of you have lent your energies to these efforts. And, of course, we want to welcome the Administrator of EPA, Administrator Browner, here, once again. From the beginning of this Congress I have believed that the Senate could pass legislation to reauthorize Superfund this year. By ``this year,'' I mean this calendar year. I still believe it. Today is another important step toward fixing a program which every person in this room has found fault with at one time or another. Our goal is to keep the process moving. We will be hearing from witnesses today about the revisions to S. 8, which was the bill that Senator Smith and I introduced last January. The draft changes were released last week. These changes were made in response to testimony we received in hearings, and then we had a series of 11 stakeholder meetings, and subsequent to that negotiations have taken place. This has all occurred over the past 6 months, so it has been a very industrious effort. What we need to do now, it seems to me, is to keep at it. The President, Administrator Browner, the Senators here today from both sides of the aisle, and our counterparts in the House have all indicated support for reforming the program. Now the players in this, the Senate, the majority, the minority members, and the Administrator must join together to finish the task in the Senate. That's what I'm concentrating on, the Senate; what happens in the House is out of our jurisdiction, clearly, but we can provide leadership in the Senate. Substantial efforts have been made in past Congresses to do this. All of this work has led us to being, I believe, very close to a finished product. I would like to thank everyone who has participated in our process during the past 6 months--Senator Smith, who spent so much time on it; Senator Baucus; Senator Lautenberg; Administrator Browner. All your staffs have worked hard with one another and with me and my staff, likewise, so I thank you. I appreciate the time and energy of everyone who has participated in the stakeholder meetings. Those were very well- attended and, I thought, fruitful. I want to talk briefly about the process we have been through. As I mentioned, since March we have had more than 220 hours of discussion and negotiation that touched on every title of S. 8. After the stakeholder process, we began to negotiate changes to the bill. On some issues, the gaps were narrowed considerably. Those areas where the discussions were most productive are reflected by many of the changes in the new draft. On other sections, clearly, less progress was made. We still need to address many elements of the bill. I will continue to work toward a bill that most Senators in this committee can support. I will continue to work with Senators to find the best way to keep the process moving. I want to stress the need to keep going. The first session is nearly over, and although we've done a lot, we still have a long way to go to pass a bill. I want to note briefly some of the areas that, to my mind, underscore the progress that we've made. The remedy selection title of the bill now says more plainly what I believe was always intended, that remedies must always protect human health and the environment. There's no argument with that. It accounts for future land use in deciding ``how clean is clean'' and will result in faster cleanups. The bill has been made more flexible regarding the Federal- State relationship. States can assume various degrees of responsibility for site cleanups, and the Federal Government can step in if the Governor asks for help, or if the remedies used by the State are not sufficiently protective. Each of these issues was raised in testimony and discussions about the bill. We have made a great effort to resolve them. It is in that cooperative and productive spirit that I ask my colleagues not to let the hard work of past months go to waste. It is time to finish the bill. I want to thank you. Senator Chafee. Now, Senator Smith. OPENING STATEMENT OF HON. ROBERT SMITH, U.S. SENATOR FROM THE STATE OF NEW HAMPSHIRE Senator Smith. Thank you very much, Mr. Chairman, and good afternoon, Administrator Browner. It's nice to see you here. Let me just make a couple of brief remarks and submit a statement for the record in the interest of time. This, I believe, is the tenth hearing we have had on this issue over the past 3 years, and hopefully this will be the final one before we finally get some action. Cleaning up toxic waste sites is not an issue for talk; it is one for action I think, as you can see by the interest in the audience here today, as well as those watching--there is a great amount of interest in getting this program fixed. The American people deserve no less. We've talked long enough. I sincerely hope that as a result of the hearing and discussions between now and the time that we go to markup, that we will be able to resolve our differences. There have been 200 hours of formally-scheduled discussions with the minority alone this year, either at the Member level of at the staff level, and that's just this year. We've been talking for the past three Congresses, and there is unanimous agreement, I believe, that at the minimum the program should be fixed, and certainly overhauled, and I don't think there's any better time to do it than now. One of the interesting numbers that we hear in the debate about Superfund is that one out of four Americans lives near one of these toxic waste sites. This is unacceptable. I think there isn't anyone who would disagree with that. The interesting thing, as far as I am concerned, is that not only is it unacceptable, it is unnecessary. There is no need to have this situation there. We have the technology and the resources to do one of two things: either clean it up, or contain it so that it is not a human health threat. We have the technology and the resources; let me repeat that. But what we have not done is prioritized those resources or applied that technology, for a vast array of reasons. We have to make sure that the valuable and somewhat limited resources that we have are not wasted on bureaucracy and lawyers and other items that really are not contributing to the cleanup. And that's been the focus of our program reform. It's been the focus of the discussions that we've had. I believe it is the focus of S. 8. We have spent over $50 billion on this program over the last 17 years. Some would argue about how many sites we've cleaned up, but at the most it's one-third, and that's not good enough. We can do better; we should do better; we must do better. And this bill, although not perfect, will make better, safer, and faster cleanups possible. We move the ball forward. You will find, as you find in many issues, that everyone is not going to get everything they want. But we have tried very hard--all the individuals that represent every aspect, pro and con, on this issue that I know of, we've had a dialog with. I want to thank those who have participated in that dialog, especially Ms. Browner, with whom we've had a great working relationship over the past 3 years. Even where we disagree, we do it respectfully of each other. Senator Chafee and I have tried very hard to incorporate a number of the concerns that you have raised, Administrator Browner, and others, into the bill. This, as you know, is not the original S. 8 as introduced; this is an amended S. 8. So we've tried to incorporate a lot of those reforms because we believe that's the way to get a bill and to improve the program. However, we also know that one of the positions that the Administration has taken, and specifically that Administrator Browner has taken, is that administratively they've made a lot of changes over there, and they have been positive. I have said that publicly and privately to Administrator Browner. We feel that many of the administrative changes that you've made have been positive. However, there is some dispute as to how effective some of these changes are, whether they are being executed or carried out in every community. But be that as it may, our goal here is to try to reach consensus on a bill that moves the ball down the field. Those of you who have followed the progress of the debate realize how far we've come. We've come a long way since the so-called ``Earth Program'' of 3 years ago. This bill, where we are now, is the result of hundreds of hours of discussions among staff, stakeholders, and constituents. We have included the concerns of many; some, we have not been able to agree on. But I hope that perhaps between now and the time we mark up, Mr. Chairman, we will be able to reach some accommodation. Let me just close on this point. If we can't agree on every single specific item--whether it's liability or remedy--I would just make an appeal to my colleagues on the other side of the aisle to let the process work. Let the bill go to the Senate floor and let the Senate work its will. I think that is better and fairer than to kill a bill by not allowing it to go forward to the Senate floor. If it dies because the President vetoes it or because the Senate rejects it, so be it; but let's not let it die simply because we refused to bring it to the floor. We've all worked too hard and too long to see that happen. Thank you, Mr. Chairman. Senator Chafee. Thank you very much, Senator Smith. Senator Kempthorne. OPENING STATEMENT OF HON. DIRK KEMPTHORNE, U.S. SENATOR FROM THE STATE OF IDAHO Senator Kempthorne. Mr. Chairman, thank you very much. I want to commend you for holding this hearing. This is critical; it's time for the Nation to deal with Superfund. It is time for the Nation to have results with regard to the Superfund sites. I want to commend you, and I also want to commend Senator Smith. I don't know of a Senator who is more dedicated to getting this resolved than Senator Smith of New Hampshire, who has worked diligently to try to make this a reality. I also appreciate that Administrator Browner is here, and I look forward to her comments, as I also do. May I also acknowledge James Perron, who is the mayor of Elkhart, IN. James and I were mayors together; I appreciate seeing, you, Jim. And also Ben Nelson, who is the Governor of Nebraska, who is very helpful in our efforts to stop these unfunded Federal mandates. I believe he will be testifying today, also. Mr. Chairman, I would just note that I will be leaving shortly, unfortunately, because I will be chairing with the House--we have a conference going on in the Armed Services Committee on personnel matters, so I will be leaving. I hope to come back so that I can discuss the natural resource damages issue. I think that's a critical one that has a key role to play in this whole legislation. I am pleased that the bill generally recognizes the need to reform and improve the NRD program, but we need to get to the heart of the fundamental problems with the program. In my opinion, the problem with the current program is that it isn't being used to restore resources, as it was intended to, but instead has become more like a second cleanup program and a second litigation opportunity, and one that can be very expensive and very time-consuming. The State of Idaho now has the largest natural resource damages lawsuit in the country. Together, the Federal Government and the Coeur d'Alene Tribe are asking for over $2 billion. Only half of that is to actually restore natural resources. The rest is for so-called ``compensation for nonuse or lost use'' damages. These compensatory damages have nothing to do with the actual restoration of the Coeur d'Alene Basin. Instead, they are used to inflate lawsuit claims, and ultimately drive up the cost of settling a lawsuit. Litigation on natural resource damages is just beginning, but if we don't do something now, we run the risk of merely shifting the costly litigation and delay from the cleanup program to the natural resource damages program. That's a risk that we simply cannot afford to make if we want to restore damaged natural resources in a timely manner, and that ought to be the goal. Let's restore the resources. For that reason I strongly support meaningful reform to the natural resource damages program. I want to work with the chairman and the committee to include that reform in this bill. Thank you, Mr. Chairman. Senator Chafee. Thank you. In order of arrival, while Senator Lautenberg is getting organized--he's the chairman of the subcommittee--do you want to go now, Frank? Senator Lautenberg. That's the nicest thing you've said to me. [Laughter.] Senator Lautenberg. You just made me chairman of the subcommittee---- [Laughter.] Senator Chafee. All right. Don't get used to it. [Laughter.] Senator Lautenberg. I like it. I like it. [Laughter.] Senator Chafee. I'll try not to make it a habit. OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR FROM THE STATE OF NEW JERSEY Senator Lautenberg. John is really bipartisan, I must say. Mr. Chairman, before the summer recess there was a new mood in Congress, one of cooperation. The best example of that spirit was our negotiation on the budget, on the bill where we had daily Member input, worked together in a way of consensus that showed respect for the views of all of our colleagues. By working cooperatively we forged an historic agreement that both balanced the budget and gave tax relief, and that's the way the American people wanted to see us work. That's the way we started this Superfund reauthorization process. Our negotiations during the first part of this year, I thought, yielded positive benefits. And I think we should continue down that same road, Senator Chafee, that you and I traveled together during the budget negotiations when we worked out a bipartisan bill. Today I offer my personal commitment to work hard and to cooperate with my Republican colleagues to reach a bipartisan Superfund reform. Unfortunately, with what I see here---- Senator Chafee. We always have these nice statements, but then there follows ``but'' or the dropping of the other shoe. You do that so well. [Laughter.] Senator Lautenberg. One was a reflection of the past, and the other is a contemplation of the present. And I hope that the future will hold out more hope. Unfortunately, Mr. Chairman, with the partisan markup, it seems to me we're moving toward a different kind of atmosphere. I hope that that will not doom Superfund reform once again. We can't forget the importance of the legislation. Superfund is, first and foremost, a matter of public health. That issue at times seems to have gotten lost in the swirl of litigation and controversy that surrounds Superfund. For instance, data from the Agency for Toxic Substances and Disease Registry shows troubling trends in my home State of New Jersey. The data show that in all but one of 21 counties, cancer rates in areas around hazardous waste sites exceed the national average. Studies from other parts of the country--Idaho, Illinois, Kansas, Missouri, Pennsylvania, California--also suggest that those living near toxic waste sites, particularly children, suffer disproportionately from serious health problems, and the health of our families cannot be a partisan issue. I hope that we don't lose site of that. I oppose a quick hearing and markup. I reviewed the mark laid down before the committee last Thursday, and while I note that there are some changes and improvements over S. 8, overall I am still disappointed. The mark sets us back substantially. On cleanups, by codifying a cancer risk range without a point of departure, the mark would let Superfund cleanups satisfy the law but be 100 times weaker than they are today. By giving only lip service to a preference for treatment, the mark shifts this program from one where poisons are treated to one where poisons are merely fenced off. On liability, the so-called ``co-disposal carve-out'' really offer a bail-out for shady polluters, but soaks the taxpayer. Where is the fairness in a scheme that rewards Fortune 100 companies who poison the neighborhood landfill or, worse yet, own the landfill but leaves responsible corporate citizens--who paid more to send their waste to hazardous waste landfills--still on the hook? On States, I am entirely in favor of dividing the labor between EPA and qualified States, but the mark hands off Federal responsibility. It actually prevents the Feds from stepping in in a way that is unheard of in any other environmental statute in this country, and does not adequately protect the public. On natural resources damage, by precluding recovery of nonuse of damages, the mark deprives the public of complete compensation for natural resource damages. My colleagues from New York and California and Oregon out to be particularly outraged that the mark seems to undermine their years of litigation efforts. On small businesses and cities, the mark actually hurts small business and other sympathetic parties who can't survive the costs of Superfund litigation. By making relief prospective only, and only for NPL sites, the mark does nothing for the municipalities and small businesses who need help right now, those who have been sued by Fortune 100 companies. Mr. Chairman, all of these problems are solvable, I believe, if we reopen bipartisan negotiations on this crucial legislation. I want to do that; honestly, I do. The American people want us to work together, and it struck me as rather unusual that one of the things that they like best about the budget bill that we finally put to rest was that we worked together. Even some who didn't like the bill complimented us on the fact that we worked together to get something done. The health of our families is at stake. I don't have to remind everyone here that I think we're duty-bound to honor the wishes of the American people, and I hope we will be able to do that. [The prepared statement of Senator Lautenberg follows:] Statement of Senator Frank Lautenberg, a U.S. Senator from the State of New Jersey As you all know, I was opposed to this quick hearing and markup because I thought we were making significant strides that would have lead to a bi-partisan bill. After reviewing the draft bill of Senators Chafee and Smith, I must say I am very disappointed. Provisions in this bill weaken our commitment to clean up some of these poisoned sites and put us in the business of warehousing toxic waste. This won't make sense to most Americans. What we're saying is that while we can't find money to help rebuild our Nation's schools, we will spend millions to create environmentally-dangerous museums to our polluting past. Other problems in the Chafee/Smith bill--. In 1993 and 1994, we agreed to give communities greater input in cleanup decisions and greater access to critical health information. This bill weakens those provisions. In addition, sites that took household garbage and toxic wastes are now Federal responsibilities. That lets corporate polluters off the hook and sticks the taxpayer with the bill. For instance, in a site in my home State of New Jersey, called Lipari Landfill, corporate polluters who would have been forced to pay millions of dollars in clean up costs because they mixed their cafeteria garbage with industrial wastes. Some will have argue that this change is fair because these sites were poisoned by so many entities--from large corporate polluters to single individuals--that it is impossible to assign blame and cost. This bill does give some needed relief to small business, municipal and county governments and certain small polluters. And I agree that we should give relief to some of the small fish who did the least of the damage. But ultimately the parties helped the most by this bill are the large polluters who caused the most damage. Why are we letting them off the hook? In fact, I think the relief for small business, for instance, in the bill seems very inadequate. Their relief is only for what they do in the future. They are still liable for past damages. Mr. Chairman, as the public tells us it wants greater environmental protection, what does S. 8 provide? It provides less. It provides for fewer cleanups. It makes it easier for polluters to saddle the taxpayer with the bill. It will leave pollution onsite and call the cleanup complete. If the goal is to draft a bill that will become law, I would urge the reopening of bipartisan negotiations that will lead to a signing ceremony in the Rose Garden and a victory for our environment. Let's fight for more. Not less. Senator Chafee. Thank you. I'm not sure I will agree with the characterization of any markup as being a ``partisan markup.'' Certainly no markup I've ever run around here has ever been a partisan markup. Senator Lautenberg. I don't know, Mr. Chairman, since you've mentioned it, whether there's been any real Democratic input on this. Senator Chafee. We haven't gotten to the markup yet. Senator Bond. Senator Smith. Incredible. Unbelievable. OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, U.S. SENATOR FROM THE STATE OF MISSOURI Senator Bond. Mr. Chairman, based on your request that we get on with the hearing and let people have comments from the witness table on the mark rather than arguing about something that hasn't even come up before a markup, let me just say that the current law is broken. I commend you and Senator Smith for putting forward a draft. I look forward to hearing the comments and criticisms and praises on it, and I am hopeful that consensus can be reached on a reauthorization that will result in real reform which will, No. 2, lead to more money for Superfund, and No. 3, provide speedier cleanups, lest costly approaches, incentives for redevelopment, and an eventual end to the program. Senator Chafee. Thank you, Senator. We appreciate the interest you have shown as a member of the Appropriations Committee in connection with this program. Senator Thomas. Senator Thomas. I got your note, Mr. Chairman. Senator Chafee. Thank you. Thank you very much. [Laughter.] OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM THE STATE OF WYOMING Senator Thomas. I composed a little poem for you. ``There was a young man from the West/who tried to make his statement the best/but he failed at that sport/because his time was too short.'' [Laughter.] Senator Chafee. You go to the head of the class. [Laughter.] Senator Chafee. Senator Allard, from the West. OPENING STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR FROM THE STATE OF COLORADO Senator Allard. Mr. Chairman, I want to thank you for holding today's hearing and I look forward to moving forward with the Superfund legislation. I want to see it move forward. I know that you and Senator Smith have both shown a lot of perseverance in trying to work with all the parties. You know, I happen to be of the feeling that we could move a lot further, a lot quicker, if we could make Federal agencies live under the same laws as local officials. We're going to have some local officials to hear from, as well as private entities. We've got some examples in the State of Colorado, for example, where the Environmental Protection Agency is actually a party to a Superfund site, along with a private entity, and yet the Environmental Protection Agency is held to a different standard than that private party. That's not only happened once; it has happened three other times, and I think it's important that we make sure that Federal agencies have to comply with the same rules as local governments and private parties. My colleague over there from New Jersey mentioned the ``shady polluter.'' Well, if you look at a report from the National Governors' Association, as well as the State Attorneys General Association, that ``shady polluter'' is the Federal Government. They are characterized as the largest polluter in this country. So I think that we need to look very seriously, to make sure that if we really want to clean up the environment and we really want to make this a cleaner and better place for our children and grandchildren, we make the Federal Government an equal partner in resolving Superfund problems. Thank you, Mr. Chairman. [The prepared statement of Senator Allard follows:] Opening Statement of Senator Wayne Allard, a U.S. Senator from the State of Colorado Mr. Chairman, thank you for holding today's hearing to examine the latest Superfund reform legislation. I know this has been a long process for many and I admire Mr. Smith's and your perseverance. One of these days, perhaps, you will receive some cooperation from the executive branch and we can bring this saga to a close. However, as long as this Administration refuses to play by the same rules they enforce against private entities, I have no reason to believe they are serious about Superfund reform. Specifically, I am speaking about how they handle clean up of Federal facilities. In Colorado we have several examples of lengthy enforcement delay, inaction, or different cleanup standards for Federal agencies. Take for example, a Superfund site located in Leadville, CO. At the site the EPA is one PRP and a mining company another. There is no difference in the actions they are taking, but there is significant difference in the cost of cleanup. While the private party is forced to have a water treatment facility that is clearly overdesigned, the EPA's water treatment facility is built at much lower spec's despite the fact it is performing the same function. Judging by the different standards applied, I can only guess that the EPA forgot an important caveat when they were touting their philosophy of ``polluter pays''--``polluter pays unless it is the Federal Government'' is clearly what they meant. Obviously, one of two things need to happen, this Administration needs to hold themselves to the same standard they hold private parties, or they should show more common sense and flexibility in dealing with reform legislation. There are other examples that point out the difference in the executive branch's treatment of Federal entities and private entities. At the Federal Center in Colorado contamination caused by the Federal Highway Administration was migrating into a residential area. It took too long for cleanup to begin because the State had to negotiate with the Federal Government and the EPA simply didn't act. Had this been a private entity, no negotiation would have occurred, cleanup would have begun as soon as the problem was discovered. Judging by the Administration's Superfund reform principle that states, ``The Administration does not support legislative amendments specifically for Federal facilities'', they have no desire to fix this problem. In conclusion Mr. Chairman, this Administration either needs to determine they are going to live by the rules that everyone else has to live by, or they should recognize that the Superfund law they find too difficult to comply with causes the same problems for private parties. However, we should make clear that their philosophy of, ``do as I say not as I do'' is unacceptable. In order to achieve that end, I will be introducing legislation to ensure that if the Federal Government won't hold themselves environmentally accountable, other levels of government will. Thank you Mr. Chairman, I look forward to the rest of the hearing. Senator Chafee. Thank you, Senator. Senator Boxer. OPENING STATMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE STATE OF CALIFORNIA Senator Boxer. Thank you, Mr. Chairman. I also received your note, and I can't top what Senator Thomas did and therefore I will not abide by what he did. [Laughter.] Senator Boxer. But I will only speak for about 3 minutes. We do have 97 Superfund sites in our State of California, the fourth highest after New York, New Jersey, and Pennsylvania, so we have major concerns. And because a lot of my concerns were not included in the bill, I think it is important that I lay them out. Having said that, I want to perhaps do the same type of ``good news, bad news'' approach, but I do so enjoy working with the full committee chairman and very much with the subcommittee chair, and I really do hope I'll have that chance, more than I've had, because I think that the concerns that I will lay out here are important to the people of the country. So let me try to lay them out briefly. I ask unanimous consent that my full statement be made part of the record. I think there are three principles we must adhere to in any bill, whether it is a Democratic bill, a Republican bill, or, hopefully, a bipartisan bill. First, Superfund must include appropriate and carefully crafted guidelines that will guarantee that the public health is protected, now and in the future. Second, parties responsible for polluting a site must be held responsible for site cleanup and restoration. Third, Superfund must ensure expeditious and efficient cleanups. Mr. Chairman, there are key areas in the draft proposal before us today that do not meet these principles, in my view, and let me quickly explain some of these concerns. First, I am concerned with the fact that there is no explicit requirement in the bill that cleanup standards be set at levels that protect the health of children, the elderly, and other vulnerable subpopulations. Now, I am very proud to say that this committee, when we drafted the Safe Drinking Water Act and we worked so closely together, did accept an amendment that would set the standards to our most vulnerable populations. I think we should do no less. As a matter of fact, I think we should do that in all of our environmental laws. I have authored the Children's Environmental Protection Act, and I hope that we can incorporate that into this bill. We did it in Safe Drinking Water. I think it is very appropriate. If we're going to allow a lower cleanup standard, we should only do so if we can assure that it will protect children, and we haven't done it. Second, I am concerned with provisions in the draft bill concerning ``hot spots'' and how these provisions could short- circuit ongoing ``hot spot'' cleanup efforts. For example, in the San Gabriel Valley in California, the San Gabriel Water Quality Authority, together with a few potentially responsible parties, are working on the treatment of three local ``hot spots.'' This bill, as it is drafted, could jeopardize ``hot spot'' treatment projects in the San Gabriel Valley because it removes the preference for treatment in favor of containment of contamination, and I think that this is another very important point. Mr. Chairman, 92 percent of the National Priority List sites in California involve groundwater contamination. Over 3.2 million people get their drinking water from aquifers below which a site is located. Half-assurances are not adequate for my constituents. Third, I am concerned that the natural resource damages-- NRD--title in the bill, which provides for restoring natural resources that have been damaged by a polluter, is not strong enough. In southern California we have an NRD site called Montrose. The Montrose site involves the discharge of tons of DDT off the coast of Palos Verdes, near Los Angeles, which nearly decimated the area's bald eagles, peregrine falcons, brown pelicans, and other birds, and caused many species of fish to become unfit for human consumption. Strong NRD provisions will ensure the restoration of these resources for future generations. Fourth, I am concerned about provisions in the bill that would exempt hazardous waste generators and transporters from any liability at co-disposal sites. This would exempt every large polluter from liability at these sites, and clearly goes against the ``polluter pays'' principle. Mr. Chairman, I have other areas of concern, including the role that communities have in developing cleanup plans; the expanded role that States will have in administering cleanups at National Priority List sites; and the general limits of public participation in decisionmaking. Again, I just have to say I do enjoy working with my colleagues who are in charge of this whole venture of rewriting this law. Absolutely, we need to do better here, but I really believe that the points I have made are significantly disturbing because I think it goes against what we really need to do with Superfund, which is to make sure that we can restore these sites to protect the most vulnerable populations. Thank you very much. [The prepared statement of Senator Boxer follows:] Statement by Senator Barbara Boxer, a U.S. Senator from the State of California Mr. Chairman, as you know Superfund reauthorization is of critical importance to the people of California. My State has 97 Superfund sites--the fourth highest after New York, New Jersey and Pennsylvania. Superfund activities to clean our water, restore our soils, and eliminate potential exposure to hazardous materials affect the majority of the citizens of my State. Californian's want and deserve a strong Superfund. When considering reauthorization of Superfund, there are three principles that we must adhere to. First, Superfund must include appropriate and carefully crafted guidelines that will guarantee that the public health is protected now and in the future. Second, parties responsible for polluting a site must be held responsible for site cleanup and restoration. Third, Superfund must ensure expeditious and efficient cleanups. Mr. Chairman, there are key areas in the draft proposal before us today that do not meet these principles. Let me explain what some of my concerns are. First, I am concerned with the fact that there is no explicit requirement in the bill that cleanup standards be set at levels that protect the health of children, the elderly, and other vulnerable subpopulations. By lowering remediation standards from 10-6 (Ten to the minus six) to a range of between 10-6 and 10-4, this bill specifically endorses a lower standard which may not protect children. If we are going to allow a lower cleanup standard, we should only do so if we can ensure that it will protect children and other vulnerable subpopulations. Second, I am concerned with provisions in the draft bill concerning ``hot spots,'' and how these provisions could short circuit ongoing ``hot spot'' cleanup efforts. For example, in the San Gabriel Valley in California, the San Gabriel Water Quality Authority, together with a few Potentially Responsible Parties (PRP's) are working on the treatment of three local ``hot spots.'' This bill could jeopardize ``hot spot'' treatment projects at South El Monte, because it removes the preference for treatment in favor of containment of contamination. It is not enough to say that treatment will be the preferred method of cleanup only when ``contaminants cannot be reliably contained . . . and present substantial risk . . . because of high toxicity . . . and there is a reasonable probability of actual exposure . . .'' . Mr. Chairman, 92 percent of the National Priority List sites in California involve groundwater contamination. Over 3.2 million people get their drinking water from aquifers over which a site is located. Half assurances are not adequate for my constituents. We must ensure that highly toxic and mobile contaminated groundwater be treated to avoid migration and further groundwater contamination. Third, I am concerned that the Natural Resources Damages (NRD) Title in the bill, which provides for restoring natural resources that have been damaged by a polluter, is not strong enough. In southern California we have an NRD site called Montrose. The Montrose site involves the discharge of tons of DDT off the coast of Palos Verde near Los Angeles, which nearly decimated the area's bald eagles, peregrine falcons, brown pelicans, and other birds, and caused many species of fish to become unfit for human and wildlife consumption. Strong NRD provisions will ensure the restoration of these resources, for future generations. Fourth, I am concerned about provisions in the bill that would exempt hazardous waste generators and transporters from any liability at ``co-disposal'' sites (where hazardous waste was disposed together with municipal waste). This would exempt every large polluter from liability at these sites and clearly goes against the polluter pay principle. Mr. Chairman, I have other areas of concern including the role that communities have in developing cleanup plans, the expanded role that States will have in administering cleanup at National Priority List sites, and the general limits of public participation in decisionmaking. Mr. Chairman, because of the scope and importance of this bill, I hope that following this hearing we will work together to shape a bill all of us can support and that is worthy of the people we serve. Senator Chafee. Next will be the ranking member of the full committee. After that, I just have to restrict all statements to no more than 2 minutes. We have nine witnesses here; we're restricted to 4:30, and these witnesses have come a long way. So, Senator Baucus, you are on your own, but after that it will be 2 minutes. OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE STATE OF MONTANA Senator Baucus. Thank you, Mr. Chairman. I also apologize for my delay. The President has nominated Mr. Peter Scher to a new position, to be Ambassador for Agriculture. It's a very important position. Chairman Helms is holding his confirmation hearing at this moment, and that's the reason for my delay. I might say that Mr. Scher is my former chief of staff. Senator Chafee. Is Will's name on that list? Senator Baucus. Mr. Scher is taking a different tack. [Laughter.] Senator Baucus. Mr. Chairman, I don't know about everybody else, but when I return to Washington, I always have trouble adjusting to remembering all those odd Superfund acronyms that were being tossed about so frequently before the August recess, like RODS and RAPS, ROARS and RACS and TAGS and CAGS--I mean, there's just no end to this stuff. But I do want to tell you what I did hear when I was on the recess break in Montana this last August, and that is that people want us to go on with the Nation's work. They are basically quite proud of us in putting together a bipartisan budget agreement; that makes a big difference to the vast bulk of the American people. And I think that's how they want us to approach our work. Essentially, do what's right: ``We sent you people back there to get the job done. Be fair. Don't stray too far off in one direction or the other, but just do the right thing and get it done.'' I think that's basically what the American people want. It's basic American common sense, that's what it is, not going too far to one extreme or the other. I think that the Superfund mark before us is a good step in that direction. It's not all the way there yet. I must say, Mr. Chairman, that I am very proud of the efforts that you and Senator Smith have made to help reach bipartisan agreement here because, in my judgment, there will be no Superfund reauthorization unless it is done on a bipartisan basis. That means both of us, Republicans and Democrats, have to think a little more deeply, a little more creatively; not dig in our heels quite so much, but rather work in the people's interest. I know that you, Mr. Chairman, very much want a bill. I can say for all of us on our side that we, too, very much want a bill to progress, and I compliment you for the efforts that you and Senator Smith have made. We are close. Let me give an example of some of the areas where I think we've made a lot of progress. One is that we're pretty close to an agreement in giving local citizens a greater role in Superfund cleanup decisions. We're getting there; we're close. We are also making progress in making it easier to return land to productive use as so-called ``brownfields.'' That's progress, and also to improve Superfund cleanup standards. That's the good news. But all the news is not good. From my perspective, Mr. Chairman, I still think there are some areas where we have to do some more work. Some provisions of the proposal would, regrettably, weaken the protection of public health and the environment rather than strengthening the protection of the public health and environment. Some would generate more litigation and delay, not less, and I think some provisions of the bill would let some responsible parties off the hook without good justification. Let me be a bit more specific. The first is whether we should prefer cleanup plans that treat hazardous waste rather than just covering it up and leaving it there. Current law requires treatment in some cases where it doesn't really make sense; I agree with that, and I think the Administrator would very much agree with that as well, so we ought to fix that. This bill attempts to move in that direction. In Superfund lingo, we should narrow the preference for treatment. But in some other cases, there are very good reasons to prefer treatment in order to protect public health fully. The mark before us contains a preference for treatment in certain situations; that is an improvement, but I am concerned that the preference is too narrow. Another case where the bill would weaken protection is natural resource damages. Again, the mark makes some improvements, but among other things there is still the questions of how to take the inherent or intrinsic value of a resource into account. It's a very important issue. If we preclude the consideration of what the bill calls ``nonuse value,'' you will undermine the whole point of Superfund's provision for restoring natural resources. Take a remote wilderness area that has been damaged by pollution for many years. It can be restored. We can remove the waste, revegetate hillsides, and replant streambanks. It takes time and money, but it can be done. However, if we are only allowed to consider the uses that the wilderness actually provides specifically to humans, we do much less. Maybe we've just put in some hiking trails near town, or expanded the parking lots near some fishing holes. After all, that would replace the lost human uses of hiking and the fishing base. But if we take that approach, we completely overlook the intrinsic value of a remote mountain wilderness area. The same would be true of a damaged river or of a seacoast, and the public, including future generations, will be badly shortchanged. After all, this is an ethics issue; it is a morality issue; we should leave this place in at least as good a condition as we--our generation--has found it and has used it. The third issue relates to the so-called ``co-disposal sites,'' the large landfills that handle both household garbage and industrial waste, and that may involve hundreds of potentially liable parties. We all agree that the pizza parlors and the Boy Scout troops and similar groups should be eliminated from the Superfund system. That's clear. But I am not convinced that, having done that, we also need to eliminate the liability of financially viable companies that generated large amounts of hazardous waste. I just don't understand why taxpayers should pick up their tab--or, alternatively, why we should shift money away from cleanups in order to provide relief for these companies. There are other issues, like reopening settled cleanup decisions, and how we create an appropriate State-Federal partnership. I hope we can address those issues at this hearing, Mr. Chairman. But let me say again, you've made a lot of progress; I compliment you for that, but we still have a way to go. My hope is that we can resume our bipartisan negotiations in order to resolve our remaining differences. I continue to believe that this approach is the one that is most likely to produce a bill that is good for the economy and good for the environment. That's what we did in the last Congress when we wrote a bipartisan bill reforming the Safe Drinking Water Act, and that bill passed the Senate by a vote of 99 to 0. I am very confident that under your leadership, Mr. Chairman, we can do that here. [The prepared statement of Senator Baucus follows:] Statement by Senator Max Baucus, U.S. Senator from the State of Montana Thank you, Mr. Chairman. I don't know about everybody else. But I'm having a little trouble adjusting to Washington after the long recess. For one thing, I've been struggling to remember all of those odd Superfund acronyms. Believe it or not, when I was in Bozeman, and up at Flathead Lake, I didn't hear a single thing about RODs, RAPs, RARs, or RACS. Not even TAGs or CAGs. I'll tell you what I did here, again and again. People want us to get on with the Nation's work. To shift from confrontation to cooperation. To listen to each other's point of view, and strive for bipartisan agreements that reflect common-sense balance. The budget agreement is a great example. This committee can provide another great example, by writing a solid, bipartisan Superfund bill. The Democratic members of the committee want a Superfund reform bill. And we know that you, Mr. Chairman, and our subcommittee chairman want a bipartisan bill. We've made progress. The draft chairman's mark makes significant improvements, in part reflecting the bipartisan negotiations that occurred in June and July. We are pretty close to an agreement on several important sections of the bill, including provisions: to give local citizens a greater voice in Superfund cleanup decisions, to make it easier to return land to productive use at so- called ``brownfields,'' and to improve Superfund cleanup standards. That's good news. But the news is not all good. From my perspective, the chairman's mark still falls short, in several important respects. Some provisions of the proposal would weaken the protection of public health and the environment, generate more litigation and delay, and let some responsible parties off the hook without good justification. Let me be more specific, about a few important issues. The first is whether we should prefer cleanup plans that treat hazardous waste, rather than just covering it up and leaving it there. Current law requires treatment in some cases where it doesn't really make sense. We ought to fix that. In Superfund lingo, we should narrow the preference for treatment. But in some other cases, there are very good reasons to prefer treatment, in order to fully protect public health. The chairman's mark contains a preference for treatment in certain situations. That's an improvement. But I am concerned that the preference is too narrow. Another case where the bill would weaken protection is natural resource damages. Again, the chairman's mark makes some improvements. But, among other things, there is still the question of how to take the inherent, or intrinsic, value of a resource into account. It's an important issue. If we preclude the consideration what the bill calls ``non-use value,'' we will undermine the whole point of Superfund's provision for restoring natural resources. Take a remote wilderness area that's been damaged by pollution over many years. It can be restored. We can remove the waste, revegatate hillsides, and replant stream banks. It takes some time and money. But it can be done. However, if we're only allowed to consider the uses that the wilderness provided, to humans, we'd do much less. Maybe we'd just put in some hiking trails near town, or expand the parking lots near some fishing holes. After all, would replace the lost human uses--the hiking and fishing days. But if we take that approach, we completely overlook the intrinsic value of a remote mountain wilderness area. The same would be true of a damaged river or seacoast. And the public, including future generations, would be badly shortchanged. The third issue relates to the so-called ``codisposal'' sites, the large landfills that handled both household garbage and industrial hazardous waste and that may involve hundreds of potentially liable parties. We all agree that the pizza parlors, boy scout troops, and similar entities should be eliminated from the Superfund system. But I'm not convinced that, having done that, we also need to eliminate the liability of financially viable companies that generated large amounts of hazardous waste. I just don't understand why taxpayers should pick up their tab. Or, alternatively, why we should shift money away from cleanups in order to provide relief for these companies. There other issues, like reopening settled cleanup decisions, and how we create an appropriate State/Federal partnership. I hope we can address those issues in the hearing. Let me say again: we've made a lot of progress. But we still have a long way to go. My hope is that we can resume our bipartisan negotiations in order to resolve our remaining differences. I continue to believe that this approach is most likely to produce a bill that's good for the economy and good for the environment. That's what we did last Congress, when we wrote a bipartisan bill reforming the Safe Drinking Water Act that the Senate passed by a vote of 99-0. I remain confident that, under our chairman's leadership, we can do it again. Senator Chafee. Thank you very much. Senator Inhofe. OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE OF OKLAHOMA Senator Inhofe. Thank you, Mr. Chairman. I will adhere to your time schedule and be very, very brief. I would only want to say one thing in regard to something that Senator Lautenberg said. I know through my staff, Senator Lautenberg, that Senator Smith has worked some 200 hours with your staff, with our staff--I would call in and get reports quite often; I wouldn't want anyone within listening range to think that he was being partisan during the development of the starting point that we're addressing here today. There are a lot of things in this bill that I was going to address in an opening statement. Instead of that, of course, I will submit my statement for the record. But I do believe that we've made some progress in joint and several liability; not, in retroactive liability, in my opinion. I agree with Senator Kempthorne in terms of the NRD. I believe that we have a lot more to do. But one thing that I would like to bring out that hasn't really been addressed is that we need to be considerate of the oil and gas industry during the course of these deliberations. Right now we are more than 50 percent dependent on foreign oil for our ability to fight a war. I serve on this committee, as well as the Intelligence Committee and the Armed Services Committee; I consider this to be something very, very serious. Right now, the oil and gas industry pays over 50 percent of the taxes that go into this, and I think this needs to be addressed during these discussions. Thank you, Mr. Chairman. [The prepared statement of Senator Inhofe follows:] Prepared Statement of Jim Inhofe, U.S. Senator from the State of Oklahoma Mr. Chairman, thank you for holding today's hearing on S. 8, the Superfund Bill. I would like to commend both you and Senator Smith for moving the Superfund process forward. You both deserve a lot of credit for getting us to the point we are today. This committee has been working through the Superfund mess for years, including the last 2\1/2\ years under your leadership. After months and even years of negotiations I am happy that we are finally moving forward. I know that members on the other side of the aisle are not happy with all parts of the chairman's draft, to them I would say that this is not what we will be voting on next week. There will be amendments from both sides and I hope when all is said and done we can come together and report out a bipartisan Superfund Bill. Personally I am disappointed with several areas of the Bill, and I hope to work with my colleagues over the next week to improve the legislation. I would like to outline a few of my concerns. First on the liability section, while the bill goes a long way in addressing the joint and several liability problem innocent parties are still responsible for unattributable waste, which would best be left to the orphan share. In addition, last Congress I raised several specific cases during the Superfund hearings, I would like to remind my colleagues of two of those. The first involved the auto dealers in Oklahoma City who sent their used oil to a registered dealer and were held liable even though they did nothing wrong. The second case involved the Mill Creek Lumber Company who sent their used crank case oil to a licensed recycling and disposal center. In both of these cases we have innocent parties who did nothing wrong, the problems occurred later in the process. Unfortunately under the liability provisions of the Bill they would still be liable. They don't fall under the small business exclusion or the recyclers provision. I think both provisions need to be amended. The small business provision needs to use the same definitions of other Federal programs and the recycling provision should include the generation and transportation of oil and solvents. Under Natural Resource Damages, the bill makes many improvements over current law but I believe some areas need to be clarified and amended. We have to be sure that non-use and lost-use damages are not collected, no matter what they might be called. In addition, we need to be careful how we treat record review. We must ensure that all important information will be considered in a judicial hearing. Finally, I am concerned how the oil and gas industry are affected by Superfund. Our country now imports more oil than we produce. This is a national security issue. As a subcommittee chairman on Armed Services and a member of the Intelligence Committee, I know first hand how important our oil supply is to our national defense and our Nation's economy. I want to make sure we are not creating problems in this committee that will need to be solved in my other committees. Every time the Federal Government imposes more regulations on the oil industry, we start importing more oil and producing less. Superfund already hits the oil industry the hardest through the taxes. They pay over 50 percent of the Superfund taxes. This Bill does not address their recycling or waste issues, even though their wastes have low toxicity. I hope to join my colleagues in addressing these concerns. I thank the chairman for calling today's hearing and I look forward to the witnesses' testimony. Senator Chafee. Thank you very much, Senator. Senator Sessions. OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR FROM THE STATE OF ALABAMA Senator Sessions. Mr. Chairman, I would just say that I recall that at the first hearing we had, Senator Baucus said that he could think of no other area in which we could do more for cleanup and save money at the same time than maybe reforming the Superfund laws. I have a lot of complaints about it. I think we have already reached bipartisan agreement that a number of things need to be changed. The brownfields changes are important. We need to continue to work on the liability provisions and the remedy requirements. I think we are making progress, but I feel very strongly that it is our duty, our responsibility, to see that we get the most cleanup for the taxpayers' dollar and the citizens' dollar, and I think we need to make sure that our legislation further cleanup rather than excessive and unnecessary costs. Senator Chafee. Thank you, Senator. Senator Reid. OPENING STATEMENT OF HON. HARRY REID, U.S. SENATOR FROM THE STATE OF NEVADA Senator Reid. Mr. Chairman, when I first got here there was a lot of talk about a note going around. I never got one. Finally when I got one, it was unsigned. [Laughter.] Senator Reid. So I figured---- Senator Chafee. It was from me. Senator Reid. Oh, I see. Mr. Chairman, I have worked with Senator Smith on the Ethics Committee. He and I are the two ranking, Democrat and Republican, on that committee, and I have worked well with him. But I also want to say a word for my friend from New Jersey. Senator Lautenberg is one of the reasons we were able to get a bipartisan budget bill. But for his ability to cross party lines and work with both Democrats and Republicans, we would not have gotten a budget bill. We looked to Senator Lautenberg for leadership in that. I have to say, Mr. Chairman, I am looking to Senator Lautenberg for leadership in this issue, also. He has had a lot of experience in working with Superfund. He has spent his entire life in the Senate working on that one issue. We need to have him as a player in this legislation, and I am confident and hopeful that that would come to be. I would also say that I have worked with a lot of people on the Federal level over the years, but I have found no one who has worked better with me and has been any better for the country than Administrator Browner. She is always available. She works with the most difficult issues, and Superfund is an example. If there is a bad law, you can't take care of it through administrative reform. We all acknowledge that Superfund has some problems, and she and her office are getting a lot of the complaints that aren't her fault. It's simply that she is following the law as best she can. She has tried administratively on a number of occasions to do things, but you can only carry the administrative aspect of the law so far, and I think she's done a good job on that. I look forward to this hearing. I look forward to our coming up with a bill. I hope we can do that. It's not going to be easy. Senator Chafee. Thank you. Senator Graham. OPENING STATEMENT OF HON. BOB GRAHAM, U.S. SENATOR FROM THE STATE OF FLORIDA Senator Graham. Thank you, Mr. Chairman. Mr. Chairman, I wish to echo the comments that have just been made by my friend and colleague, Senator Reid, about both Senator Lautenberg and about my fellow Floridian, Carol Browner. They both bring a great deal of commitment and experience to this issue, and I know they will be extremely helpful to each of us individually and collectively on this committee in analyzing the proposal that is before us, and hopefully moving us toward the bipartisan consensus that, as Senator Baucus has said, will be critical in order to actually accomplish reform of this program--a program which, in my opinion, very much needs that reform in order to achieve its intended public purpose. Senator Chafee. Thank you, Senator. Senator Wyden. OPENING STATEMENT OF HON. RON WYDEN, U.S. SENATOR FROM THE STATE OF OREGON Senator Wyden. Thank you, Mr. Chairman. I, too, will be very brief. I think it is possible to have real reform of the Superfund program and real cleanup of Superfund sites. I don't think it has to be one or the other. There are two areas that I am especially interested in tackling on a bipartisan basis. The first is ensuring the protection of all beneficial uses of water. This should include drinking water, agricultural uses, industrial uses. My sense is that we are going to have water shortages all across this country. I am very much looking forward to working with my colleagues on a bipartisan basis to addressing the water issue in this debate. The second area that I hope we will focus on is the issue of preventing innocent parties from becoming ensnared in the Superfund net, without letting responsible parties off scot- free. I know a number of my colleagues have mentioned that, as well. I think we are making some progress in this regard. We have a ways to go. Finally, Mr. Chairman, my home State of Oregon offers a possible roadmap for bipartisan reform. In 1995, a Republican- controlled legislature passed an important bill, signed by a Democratic Governor, which contains a number of the principles that I think this committee is looking at. So I think that not only is it important to have bipartisan reform, but my home State shows that it can be done and it can be done expeditiously. I yield back, Mr. Chairman. Senator Chafee. Thank you, Senator. Now, I think, Administrator Browner, let me just say that the interest in this subject shown by 18 members of this committee--14 have been here today--so we are all very, very concerned about this program. You have heard the statements from both sides. We're very glad you came here today, and we want to welcome you, Administrator Browner, so if you would proceed, we would appreciate it. Thank you. STATEMENT OF HON. CAROL BROWNER, ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY Administrator Browner. Thank you, Mr. Chairman, for the opportunity to appear here today. I think this is the second time this year that I have testified before the Environment and Public Works Committee on Superfund reform legislation, and I will say to you, Mr. Chairman, and all the members of this committee, I will gladly come back here a third, fourth, fifth time, whatever it takes to get a Superfund bill that we all can agree on, a bill that will build on the progress that the Clinton Administration has made through a series of administrative reforms to make the Superfund program work faster, fairer, and more efficiently. Mr. Chairman, I want to be very, very clear about the Clinton Administration's position. We are strongly committed to working with this committee, with other Members of Congress, to enact responsible Superfund reform legislation this year. And as you said, by ``this year,'' we would hope that that is this calendar year. Mr. Chairman, I have to say that the recent trade press reports notwithstanding, I think you and I both know that we have made progress toward common ground, that we have actually narrowed some of the gaps that have existed, that we can continue to narrow those gaps. In the end, I believe we will deliver on our shared responsibility to protect public health and the environment by ridding America's neighborhoods of toxic waste dumps. I am optimistic that, working together, we can achieve our common goal of a Superfund program that cleans up more toxic waste sites faster, protects the health of our citizens, and returns land to communities for productive use. At the same time, we must be careful not to undermine the significant progress we have already achieved in changing and improving the program. We undertook a series of administrative reforms over the last 5 years that have resulted in a program that today provides significantly faster cleanups at a lower cost than it did several years ago. On average, we have cut more than 2 years off the time it takes to clean up a Superfund site, and we are well on our way to achieving our goal of saving even more time. We are making historic progress on a major goal of this Administration and this committee: reducing litigation and transaction costs; working more cooperatively with responsible parties; increasing the fairness of the liability system; getting the little guys out of the litigation web that surrounds many hazardous waste sites. The Clinton Administration has acted to remove more than 9,000--9,000-- small parties from Superfund litigation over the past 4 years. That is within the context of a law that we all agree needs to be rewritten. We are doing it administratively, and we are expanding that effort. Thanks to our administrative reforms, the Superfund program is faster, fairer, and more efficient than it used to be. We have completed construction of a total of 292 Superfund cleanups over the past 4 years, more than in the previous 12 years combined. More than 80 percent of all Superfund sites are construction either complete or are in the midst of cleanup construction. Eighty percent were either done or we're in the process of completing the cleanup. We recognize that resources are an important part of how we go about giving these communities back these sites. The President has committed to doubling the current pace of cleanup by cleaning up 900 toxic waste sites through the year 2000. This was a subject of discussion during the budget negotiations, and obviously we all need to work together to ensure that the funds are supplied so that we can meet this goal of 900 sites by the year 2000. We have been achieving all of this progress while keeping faith with the original promise of the Superfund law: protecting public health and the environment first, and ensuring that wherever and whenever possible, those responsible for polluting a site--and not the taxpayers--are held responsible for the cost of cleaning up that site. We believe that Superfund reform legislation can and should build on this progress. Mr. Chairman, the bill that is now before us does show considerable improvements over earlier drafts. It would require cleanups to meet certain Federal and State standards. It would provide increased opportunity for the public to participate in the cleanup of toxic waste sites. It would require that groundwater around Superfund sites be cleaned up under the same standards used for drinking water. And it would provide a settlement process for those parties that contribute small amounts of hazardous waste to Superfund sites. These are some of the improvements. This is real progress. It is real progress toward consensus. Provisions in the bill about which we continue to have significant concerns include, for example, failure to provide for adequate treatment of highly toxic or highly mobile hazardous waste. We are concerned that the bill would not ensure the containment and reduction of these sources of groundwater contamination. It would relieve large polluters from liability at landfills, even where they are a major contributor of hazardous waste. It would allow States to assume complex cleanup responsibilities without guarantees of public review or public comment, and without ensuring adequate legal authority to protect public health and the environment. And it would fail to ensure that public natural resources are restored as part of the Superfund process. Mr. Chairman, I think what has happened is that in those areas where our staffs have engaged in lengthy discussion-- perhaps discussions that we would all hope could go more quickly--we have, in fact, made progress. We have narrowed our differences; in some instances we have found common ground. In the areas where we have not had that kind of opportunity for dialog, for in-depth discussion, we need to. We have differences; they may not be insurmountable, but until we begin the task, until we direct our staffs, until we take the time to talk through those differences, it will be hard to find the kind of consensus we all are striving for. Mr. Chairman, in closing, I want to be very clear. This Administration wants to see Superfund reform passed into law. We want to see the program further strengthened along the principles we have previously submitted to this committee: protect human health and the environment; promote cost- effectiveness; foster the return of contaminated sites to productive use by their communities; hold polluters responsible, while at the same time allowing parties to resolve their liability as efficiently and as fairly as possible; encourage and support citizens in their efforts to participate in the cleanup decisions that affect their lives; and support a continued working relationship among all levels of Government in cleaning up the toxic waste sites. The bottom line, Mr. Chairman, is that we want to fulfill our responsibility to find better, more effective ways to clean up the Nation's worst sites, to work with affected communities, and to give them hope for the future. We know that is your goal, too. Can we work together on this? Can we get back to the table and hammer out a bill that all of us can support? Can we do what is necessary to make Superfund reform happen in this Congress? I believe we can; I hope that we will. Senator Chafee. Well, Madam Administrator, I want to thank you for that statement. That was a very fine statement, and there is little in it that I can disagree with in what you said. As you said, we have narrowed our differences. There is an opportunity there for further discussion, and we would invite you to--and we certainly will be present at such a gathering as soon as we can set it up. I know Senator Smith feels that way. I do; I'm sure that you heard Senator Baucus' statements, and Senator Lautenberg's, likewise. Obviously, to have this succeed, all of us have to give some ground. I'm not saying that what we've submitted here in the revisions is in concrete, but we certainly hope those on the other side come to the table recognizing that they have to make some concessions, likewise. One of the problems that we always get into here--and you and I discussed this the last time you were here--is, who gets excused? As you know, we all agree that the de minimis contributors should indeed be excused. But then, pretty soon the rhetoric comes up that what we're proposing, or what somebody is proposing, is letting polluters off the hook. And that, of course, is an expression that could be used for anybody, the de minimis contributors. As you know, in our bill we made special provisions for co- disposal sites where, at the time that the disposal was made in that site, it was legal. It was not illegal. I know that you are opposed to that provision. I wonder if you could say a few words on that? Administrator Browner. Mr. Chairman, I think we have long articulated---- Senator Chafee. If I might add one thing, the objective being to get on with it. The belief that, yes, we could bicker over these things, but there comes a point where it's really worthwhile to just get it done with. And maybe somebody on the sidelines can harp that we're letting a polluter off the hook; obviously that's not our intention, but the principal objective is to get the thing done with. Administrator Browner. First of all, we don't disagree with the need to get the thing done with. We also don't disagree with the need and the appropriateness of taking certain parties out of the liability net. I think all of us would agree that when Superfund was originally passed, no one who voted for it and no one who sought to develop the rules implementing it ever believed these small parties would find themselves trapped in the way in which they have. Where we have, I think, had some disagreement is how to best do that. And what we have continually said is, let's do it by party, not by site type. Let's make a public policy decision that if a party fits a particular definition--there have been various definitions offered over the last several years in terms of small business--we are more than happy to have that discussion. I think we have tremendous flexibility on what that definition should be. But let's do it by party, not by site. We thought it might be helpful, Mr. Chairman, to just show you one of these co-disposal sites where we think discussions could take place, and where lines might appropriately be drawn. We're not saying we're wedded to this; we're saying it's something that needs to be discussed. Oh, we're not allowed to put up the chart? I apologize. Senator Chafee. Sure. Go ahead. Administrator Browner. We do have handouts. Senator Chafee. What's the problem? Administrator Browner. I thought we had cleared it. Senator Chafee. Well, how many do you have here? Administrator Browner. We do have handouts for all of the members. We only want to put up one chart. Senator Chafee. That's all right. Put your chart up. We haven't received these in advance, so I'm not sure we can respond to them very well, but if it's part of your presentation, go ahead. Administrator Browner. Well, it is an example of a co- disposal site. It's one that has received some amount of attention, the Keystone site. And I think it's helpful to understand the three groupings of parties at these sites. First are the large owner-operators, major industrial generators. Those are the ones that EPA went to and asked for them to contribute to the cleanup costs. There were 11 at this site. Those 11, unfortunately, did turn around and seek contribution for cleanup costs from 168 other parties; those other 168 turned around and sought contribution from 589. EPA did not do this; we want to be very clear about this, EPA sought contribution for the cleanup costs from the 11 parties where we had documentation that the lion's share of the hazardous waste at this site had come. And I think within this chart you see here, deciding which parties are in and out makes absolute sense, and we will be more than happy to work with you on where to draw those lines. Our only objection is saying that all sites of this nature are automatically out of the requirement that any of the parties to that site pay their fair share. That is our only objection. Beyond that, we are more than happy to talk to you about how to divide out the parties and how to define the parties so that everyone knows up front that you may be part of an allocation system, you may have a responsibility, or you absolutely have no responsibility. Senator Chafee. OK. My time is up, but there will be further discussion, perhaps, on this same subject. Senator Baucus. Senator Baucus. Yes. That's a good point, Mr. Chairman. Let's stay on this subject for a while because I think it's one of the key points of this bill--that is, co-disposal. I wonder, Administrator Browner, if I might echo the points that other Senators have made. I also know how hard you have worked, and particularly what progress you have made in administratively coming up with reforms to Superfund despite a statute which in some ways is very helpful, but in other ways very much gets in the way. Could you just briefly State your concerns about the co- disposal provisions in the mark, and then give us some suggestions on how we might resolve some of that? Some of the concerns that I have, frankly, are that it's not fair to those companies that did not use municipal landfills, for example, but there are other thoughts that I'm sure you are going to have, too. Can you just tell me the Administration's concerns, and then list some suggested solutions as to how we might bridge this gap? Senator Chafee. What does this apply to, though? What are we---- Senator Baucus. The co-disposal provisions of the bill, the municipal landfills which received a lot of hazardous waste from PRPs. Senator Chafee. The assumption being that all this took place--it was not done illegally? Senator Baucus. Well, your concerns about that, Madam Administrator, as well as your suggestions. Administrator Browner. Just for background information, there are approximately 250 of these type sites of which we are currently aware. There may be more. They are generally referred to as landfills; you had a lot of different things going there. In the case of this one, you had 11 companies sending a very large amount of hazardous and toxic waste, and you had others sending garbage, municipal solid waste. Senator Baucus, our concerns are, No. 1, the cost to the fund. If you take this site as an example and say, ``Nobody pays anything to cover the cleanup costs, nobody pays their fair share, including the very large contributors of hazardous waste, and that cost comes to the taxpayers,'' it is quite significant. It could shift approximately $200 million to $300 million in cleanup costs annually to the fund. These are costs that are currently being covered by the responsible parties. If you carve all of these sites out rather than saying that certain parties are taken out and other parties remain in, responsible for their fair share, then you have a large cost to the program. Senator Baucus. We're talking about parties that deposited hazardous and toxic wastes---- Administrator Browner. Yes. Senator Baucus [continuing]. At municipal landfills, is what we're talking about here? Administrator Browner. Yes. I don't think any of us disagree that someone who sent their garbage should just be clearly taken out of the program. I don't think any of us disagree that small businesses that sent relatively small amounts should be taken out, should not be subject to any of this. But for parties sending large amounts---- Senator Baucus. So one concern is the cost. Administrator Browner. The second concern would be increased litigation. Everybody is going to want to get their site called a co-disposal site because it means they don't have any responsibility, so we would envision increased litigation over which sites are co-disposal and which sites are not, which sites are covered by the carve-out and which---- Senator Baucus. Is that a legitimate concern? Administrator Browner. Yes. Senator Baucus. Because that's not easily determined. Administrator Browner. We actually spent a lot of time over the last couple of years trying to understand how you might craft a definition, and have been unable to our---- Senator Baucus. So litigation is the second concern. My time is running out. Administrator Browner. OK. The third one is the one that you raised, and it is a fairness issue. It is an issue of, ``So if I sent my waste to one type of site, I am responsible for cleanup costs, but if I was fortunate to have chosen another type of site''--same waste, identical waste--``I am not responsible for costs.'' Senator Baucus. So if I am a big company, say, and I deposit my hazardous waste at my own site, then I'm not off the hook---- Administrator Browner. Right. Senator Baucus [continuing]. But if I am another company and I put it in a municipal landfill, then I am off the hook? Administrator Browner. Exactly. One of the companies in the 11 here is CSX, a very large operation. They were sending large volumes of hazardous waste to this landfill. They would be off the hook, as you say, for any cleanup costs at this landfill under a carve-out disposal. If they had sent it to their own site, if they had kept it on their property and that had created a Superfund site, they would be responsible for the cleanup cost. Senator Baucus. Well, my time has expired. We haven't gotten to solutions yet, although you've certainly touched on a few. Mr. Chairman, we'll get that on the next round, I guess. Senator Chafee. All right. Senator Smith will give us the solution. [Laughter.] Senator Smith. Don't I wish. Thank you, Mr. Chairman. Ms. Browner, I felt that your comments as stated here were much more amicable in terms of reaching out here, trying to reach an accord, than perhaps your written statement was, so I appreciate that. I just want to say that I think that based on the negotiations that we've had over the past several months and years, frankly, as I look down the nine titles of the bill, I don't think it's insurmountable. Without getting into a lot of detail in the short amount of time that I have, I think that if you look at five sections of the bill--community participation, State role, brownfields, Federal facilities, and funding, a part which we agree with, and then there is a miscellaneous thing in there on NPL caps--I think that even though we don't have 100 percent agreement on those areas, I don't think there's any reason why we can't reach accommodation on those areas. However, the other three, and they are a big three--NRD, liability allocation, and remedy are big, and Senator Baucus just got into it. Let me propose, Mr. Chairman, and it's your decision since you're the chairman, but I would be willing, if you feel in the interest of getting some type of agreement that it would be reasonable, to have a series of meetings, postpone the markup for another week, and sit down with you and Senator Baucus and Senator Lautenberg and myself and Administrator Browner in a series of meetings, however many we need to have at whatever time you want to have them, and try to work out an agreement. So I would certainly put that on the table for the chairman's consideration. Senator Chafee. Well, I think that's an excellent idea, and I'm certainly willing to do it and spend the time on it. We've got a lot going on here with ISTEA, but I think we can work it in, if it is agreeable with the Administrator and Senator Baucus. Senator Baucus. Mr. Chairman, I would echo your thoughts. I think if we're going to get a bill, we're going to have to work on a bipartisan basis, and I very much appreciate that. Senator Chafee. Thank you. Senator Smith. Well, I don't want to argue the ``more bipartisan basis.'' I feel that we've worked on a bipartisan basis, but I'm not going to argue it because I don't want to take the time to do it. I don't know what more we could do. Let me just pick up on what Senator Baucus was just questioning you on, on this issue of liability. What is wrong with keeping private owners liable for cleanup, but at the same time giving them a clearly-defined statutory share? You don't have that problem for public owners and operators; why do you have the problem with private owners and operators? You're willing to exempt municipalities and not hold them to that standard, and I support that. But I'm now trying to reach to the second level, which is the private owners and operators, in the sense that--you keep saying, well, we'll have this party aspect to it, and you say that litigation is going to increase, and so forth. The litigation that is going to take place here is when you try to allocate, which is what the last proposal you sent to us on this proposed; I know this is the first time we've been talking publicly about what we proposed, and I apologize for that. But in essence your position is, as you present that you present this material, these parties should be responsible for--well, let me go back. I'm trying to synthesize this down. Your position is that the statutory share for a public owner and operator is OK, but it's not OK for the private individual. Now, if you look at the private individual, when you say to that private individual, ``OK, 3 percent of this is nontoxic, and 97 percent is solid waste,'' or vice-versa, how are you going to make that determination? Are we going to be going through all that garbage? You talk about lawsuits, those are huge lawsuits--or certainly, if not lawsuits, some attempt at allocation. And I just don't see how you would do it. I mean, if it's a fairness issue, the fairness issue is that it wasn't against the law to do what they did. And we're not talking about people who deliberately polluted beyond what was legal at the time. I'm trying to understand your position. I have been trying to understand it for months here, to try to get to some accommodation. I don't know how you do it. Administrator Browner. Well, let me make a distinction within the co-disposal universe, the 250 landfill sites. Some of them were owned and operated by municipalities, and others were owned and operated by private companies who were making money off of picking up and disposing of garbage, sometimes hazardous waste---- Senator Smith. But it was legal. Administrator Browner. I'm not getting into the question of what was legal or not legal here. I'm just making a distinction between a municipality that might have owned a landfill, and a private company seeking to make a profit. I would just submit to the committee that that is a reasonable distinction to say, for a municipality who had to provide a service to the businesses, who had to provide a service to their constituents of picking up garbage, capping their liability is not unreasonable public policy. For the private company who was making profit on picking up garbage and disposing of it--and well-informed on what they were doing-- asking them to cover the fair share cost of cleanup, as does any other company who was engaged in the production of hazardous waste, that strikes me as a reasonable place to make a distinction. It is a public policy call, without a doubt, and we frequently say in our laws to cities of certain sizes, to municipalities who perform certain services, ``We're going to treat you a little bit differently than, perhaps, the for- profit company out there doing the same thing,'' and that's all we've proposed, is to recognize that a municipality may not have had a choice, and therefore to treat them somewhat differently. But then to say to the private company--Fortune 500, in some instances--``Because you had what was called a landfill as opposed to a hazardous waste disposal site, you now get treated differently than your competitor, who ran a hazardous waste disposal site,'' that is troubling for us. Senator Smith. Mr. Chairman, I know my time is probably up, but could I just take 30 seconds for a response? I apologize. We do, though. I mean, owners and operators, we have a 10 percent cap of 100,000--in the municipalities, 10 percent on less than 100,000. We have a 20 percent cap on over 100,000, and for private owners and operators, we have a 40 percent cap. So we do, and I don't know how you identify--maybe you could explain to us what criteria you are going to use for this so- called ``party'' that you are defining. What is the criteria? They have millions of dollars? They have no money? I don't know what the criteria is. Administrator Browner. One that we have suggested previously--and we would be more than happy to talk about it, and there may be changes to this, something that we can all agree on--is a small business definition: 20 or fewer employees; $2 million in revenues; 30 or fewer employees--I mean, I don't know what the right definition is of a party, but I can tell you, if you give us a definition, if we can all agree in a bipartisan manner on a definition, we can take a site like this--do you know what's happening at this site today? EPA did not go after the 168. We did not go after the 589. But they are caught in this, and we are doing our level best to settle the matter, of a dollar a person. It is time- consuming. They are unhappy; we are unhappy; you are unhappy; everyone is unhappy. Why not look at this? This is one where we can give you the information on 250, if you want, and say, ``OK, fine. The 11, we think they should pay their fair share. Of the 168, draw the line here. The 589, draw the line there.'' We can come to an agreement on that and we can be done with these sites in a responsible and fair manner. Senator Chafee. All right, fine. Thank you. Now, Senator Kempthorne, Senator Bond, Senator Thomas, Senator Allard. Senator Allard. Senator Allard. Do you believe that the Federal Government has contributed any to the problems as far as some Superfund sites are concerned? Administrator Browner. The Federal Government? Absolutely. I mean, as you well know, in your own State---- Senator Allard. Well, we agree on that. Administrator Browner. We agree. Senator Allard. But yet I can point to situations in my own State where the Federal agency is treated differently than the local government or the private parties. For example, in a community we call Leadville, actually, EPA is a responsible party, as is the local government. It is agreed that they are a responsible party. They both are required to put in treatment plants, and they're doing that; but the treatment plant that is required of the local government is much, much more expensive than the Environmental Protection Agency right in your own back yard is doing. It seems to me that there needs to be some fairness. I don't think you should judge liability based on whether they made a profit or not; I mean, some of these guys may be bankrupt, as far as I know. But I think we have to look at who is responsible, and I think the Federal Government is a major partner. Would you agree with the National Governors' Association assessment, as well as the State Attorneys General Association assessment, that the Federal Government is a major polluter, if not the largest polluter in this country? Administrator Browner. I am not familiar with either of those assessments. As I said before, I certainly agree--and your State is, unfortunately, an example, of where Federal agencies, not EPA at the larger sites, but certainly other Federal agencies are the principal parties responsible for some very, very large sites. Senator Allard. And do you feel they should be held equally responsible for that? Administrator Browner. In terms of the cleanups? Senator Allard. Yes. Administrator Browner. We have always maintained that the Federal facilities should be responsible for the problems they have caused. Senator Allard. So you would agree that everybody else would be a responsible party---- Administrator Browner. I'm not familiar, if you're asking me just about the Leadville site. I don't think we're a PRP at that site. I don't think EPA is named a potentially responsible party. But I am more than happy to look at that. Senator Allard. Well, let me bring up an example of where you are named a potentially responsible party. It's at the School of Mines in Golden, and this is State land that was managed by a research institute through the School of Mines. There was the Department of Defense, the Environmental Protection Agency, the Department of Energy and the Bureau of Mines that all had research facilities on this piece of land, as well as some private companies, as well as the State of Colorado through the School of Mines with some of their programs. Everybody is forced to clean that up, except for the Federal agencies, which is the Department of Defense and the Department of Energy and your own agency, the Environmental Protection Agency, and the Bureau of Mines. In fact, the State of Colorado and the private parties are the only ones that have put up any money at all, and the Environmental Protection Agency refuses to do that. It seems to me that in these situations where we have a hazardous waste problem, that the Federal agencies ought to be willing to do their fair share. Now, you can stand up here and say, ``Well, let's take care of the children,'' and you are nodding your head, and ``Let's take care of all the vulnerable people out here,'' but yet in your own back yard you have a problem and you're not doing your job. Administrator Browner. Well, if we are a responsible party, and we have been a responsible party at sites--in fact, at the Leadville site we are not a responsible party, but we are paying some money. We run labs, we do generate waste, and we have been involved in some of these sites, and we agree with you that we have a responsibility, as does any other party to those sites, to address the problem that we created. And we are doing that. If there is a particular problem at this site, I am more than happy to work with you on it to resolve it. Senator Allard. I have been informed by my staff that you just refused to admit that you are a responsible party at the School of Mines, even though there was research and lab equipment that was done there. We all know that in laboratories, there is a lot of hazardous material involved with a laboratory. But it seems to me that at least the Federal agencies ought to be doing their fair share to clean this up, and I really do believe that the Federal Government is a major polluter in this country. You have directed all your comments just to one sector of our economy, and I think that we all have to take equal responsibility if we really want to see the environment cleaned up. I want to see a better environment for my kids and my grandchildren; I don't want to see my State polluted, and consequently I think the Federal Government ought to do its fair share, including your department, your agency. Administrator Browner. We don't disagree with the fact that we are responsible parties---- Senator Chafee. We've got to move on to the next questioner. Thank you. Senator Kempthorne. Senator Kempthorne. Mr. Chairman, thank you very much. Madam Administrator, I recognize that EPA is not a trustee under the NRD program, but I would like to ask you about the relationship between the remediation program and the NRD program. Would you agree that the NRD program should not duplicate the cleanup side of the program? Administrator Browner. I apologize, Mr. Chairman, I meant to ask for your leave at the beginning, if there were questions of the trustees, since EPA is not a trustee, if we could have the trustees--we do have a representative here from the trustees to answer questions relevant to the trustees. We are not trustees; that is the way the law is structured, and we do have the Acting Deputy Director of NOAA, Terry Garcia, here with us to answer any trustee questions. Senator Kempthorne. I appreciate that. That's why I led off by saying that I recognize that EPA is not a trustee. Administrator Browner. Right. Senator Kempthorne. So EPA is not a trustee. So because of my respect for you and the role that you're going to play in this, I'd like to ask you the question, and let me repeat it. I'd like to ask you about the relationship, Madam Administrator, between the remediation program and the NRD program. Wouldn't you agree that the NRD program should not duplicate the cleanup side of the program? Administrator Browner. They have to work together, yes. We would agree to that, they have to work together. Senator Kempthorne. All right, so you agree with that. Wouldn't you agree that a company shouldn't be told that it must do additional cleanup from a site under an NRD claim after EPA has signed off on a cleanup action that protects human health and the environment? Administrator Browner. That is not a yes-or-no question. The reason is that if you do the right kind of work on the front end in terms of both the cleanup and the NRD concerns-- and the trustees are part of the process on the front end--then you shouldn't have any problems on the back end. I think, unfortunately, there have been sites where that has not occurred, and there are also sites where the NRD problem may be different than the traditional cleanup problem which is the focus of EPA. So to simply say you shouldn't be able to come in ``after the fact,'' after a cleanup plan has been agreed to on NRD, I don't think is something we can agree with you on. I think there is a way the process has to be structured, and in some instances the two are really quite separate and you have to allow for that. Senator Kempthorne. When you reference a process, do you fell that that's right, to say to a company, ``These are now the requirements to clean up this site,'' that company now cleans up that site, and the EPA signs off, ``You've done a good job,'' you've stated that 80 percent of the sites are cleaned up, should they now be subject to go another round of cleaning up the site based on NRD requirements? Administrator Browner. The cleanup is focused on the hazardous materials. It is focused on ensuring that the problem doesn't get worse. Natural Resource Damages are focused on the restoration of the natural resources, the lost use, and it may well be--and we can certainly find out for you examples of where companies have felt like they first just wanted to get out and deal with their cleanup responsibilities; for a variety of reasons that made sense to them, and they wanted to delay agreement and whatever discussions needed to take place on their NRD responsibilities. But it is not always going to be the case that by simply cleaning up the hazardous wastes, you have spoken to the NRD concerns. They may be two separate issues. So there is a second round; in some instances, that may be what the parties choose. In other instances, you may be able to do them together. I think what you want to avoid, and this is something that I think is true throughout Superfund, is sort of a ``one-size- fits-all'' type approach. It's similar to what we talked about a lot on drinking water. None of these things are going to be identical, and you need to allow for some flexibility to take into account the differences. Senator Kempthorne. All right. My time has expired. Thank you very much. Senator Chafee. Thank you. Senator Bond, Senator Thomas, Senator Boxer, Senator Inhofe, Senator Sessions--Senator Inhofe. Senator Inhofe. Thank you. Madam Administrator, I'm going to try to be kind of specific in my questions because of the severe time limitations under which we're operating. In your testimony you criticize the chairman's draft regarding brownfields, and at the same time you say that you want to encourage economic redevelopment of abandoned and contaminated properties. I recognize that since I am chairman of the Clean Air Subcommittee and we're going through this ambient air thing, that I don't want to drag that subject into it, but we can't really operate in a vacuum. What we do in Superfund is going to have an effect on what we do with ambient air standard changes that are totally separate issues. We had testimony from the chairman of the Black Chamber of Commerce and the Mayor of Benton Harbor, MI, who testified that the new air regulations would stop any new industrial development. They specifically cited brownfields, saying that they would never be able to attract new businesses to brownfields areas because of the air regulations. What would be your response to that? Administrator Browner. We are extremely proud of our brownfields work. We think it has been a tremendous success in addressing the lightly contaminated, frequently urban sites, and in no way do we think that providing public health protections under the Clean Air Act will interfere with our brownfields program. We are working--in fact, I spoke yesterday to a mayor at the U.S. Conference of Mayors about how to ensure that the mayors have the kind of information that they think would be helpful to answering those kinds of questions, but we don't see a problem between public health protections promised under the Clean Air Act and the redevelopment of brownfields. Senator Inhofe. Well, Madam Administrator, you may have talked to one of the mayors, but the U.S. Conference of Mayors is on record on what they feel the results are going to be, and you did say in your testimony that you wanted to encourage economic redevelopment of abandoned and contaminated properties. Again, I would say that in light of what they said very specifically in their testimony, would you say that they are wrong? Administrator Browner. That somehow or another---- Senator Inhofe. They specifically cited brownfields, saying that they will never be able to attract new business to brownfields areas because of the air regulations. Are they wrong? Administrator Browner. We absolutely disagree with that. Senator Inhofe. So are you going to issue waivers? Administrator Browner. They're not necessary. There is a way to have both redevelopment and cleaner air, and we are more than happy to work with the committee to make sure that the members understand that. I will say, within S. 8, the brownfields provision included in S. 8 is something that we think is a demonstration of how the gaps can be closed and how consensus-based progress can be made. I think there were some technical changes we would like, but we think it is an example of what happens when we all work together to talk through how best to solve a problem. We think the provisions are good. Senator Inhofe. OK. In your testimony you criticize this bill--and I'm going to read--for offering a ``confusing array of opportunities for States to implement the Superfund program, including authorization delegation and limited delegation.'' Governor Nelson, who is here today and will be testifying before us in a few minutes, is going to say, according to his written testimony, ``We appreciate the inclusion of options for expedited authorization delegation and limited delegation.'' It seems as though we've made the Governors happy and the EPA unhappy. Is that so? Who is right and who is wrong in this case? Administrator Browner. We have no disagreement. In fact, we worked very closely with virtually every State in terms of their accepting responsibility on a site-by-site basis, on a variety of sites. I mean, I think it's been very successful in terms of saying who can best address a particular problem. We also have instances where a State that is quite sophisticated has come to us--New Jersey is one example--and said, ``We can't handle this particular site. Will EPA''---- Senator Inhofe. Is Oklahoma sophisticated? Administrator Browner. We've had some very positive working relationships with Oklahoma in terms of---- Senator Inhofe. Who is not sophisticated, then? Administrator Browner. You have some States that don't have legislation. You have some States that have not provided funding for programs, and that is our concern. We have no disagreement with States doing everything they possibly can. Our disagreement with S. 8 as currently written, No. 1, is the fact that a State can apply to EPA to take over even the most complex sites within their State, with no public comment, with no public review. We think that's a real problem. We think the people of a State should have the right to participate in their State's decision to take control of sites that perhaps we had been managing. Senator Inhofe. But your statement said, again, ``the confusing array.'' You specifically said that we're not really addressing this properly in terms of how we are allowing the States to handle some of these problems, while the witness that will be testifying on behalf of all the Governors says that they think it's done a pretty good job. So one of you is right and one of you is wrong, and I'm just saying, who is wrong? Administrator Browner. I don't think it's a question of who is right or wrong. What we would suggest in terms of States is that we be allowed and they be allowed the flexibility to determine, on a State-by-State basis, and in some instances on a site-by-site basis, who can best do the job of managing a cleanup. There will be times when New Jersey wants us to take a site. There will be times when Oklahoma asks us to take a site, as there have been. There will be other times when, quite frankly, they are far better suited to deal with it than we are. Allow us the flexibility to resolve that. Senator Chafee. Thank you very much. Senator Lautenberg. Senator Lautenberg. Thanks very much, Mr. Chairman. First I want to clarify something that apparently was misunderstood. I don't retract the principle of what I said, but our colleague from Oklahoma asserted that Senator Smith and Senator Chafee had done a lot of work, and there is no question about that. I wasn't impugning their schedules or their interests or otherwise. My statement was really relevant to the fact that we were suddenly going to see a markup upon which there was no agreement that included Democrats, and to me that suggests that it's partisan. But, listen, I work very closely with Bob Smith and with Senator Chafee and I consider them friends. We share an agreement once in a while; that's how close we are. [Laughter.] Senator Lautenberg. So I meant no impugning of character, interest, or effort, I assure you. In terms of the brownfields development, I can tell you of some smashing successes, one in New Jersey that was turned into retail space where people are employed. This field lay fallow for such a long time in the middle of a community that really needs developing. It now has a very significant retail establishment with about 400 people working there in Hackensack, NJ. Thousands of customers weekly come there. They bring income into the community. They have uplifted the life around there. I think it's a very positive program, and I believe there may be some misunderstanding about definitions, and I respect what the Senator from Oklahoma said about a disagreement. But there is no right and no wrong. So I think we have to take it on kind of a case-by-case basis. I know that the work I have done on brownfields has been one of the more satisfying aspects of my focus on environmental issues, and has had a lot of development, a lot of support. I would ask you this, Ms. Browner. One of the things that I think we disagreed with is carve-outs. What do we do if there is co-disposal? There was an allocation discussion and resolution at Old Southington in Connecticut; are you familiar with that? My understanding is that it worked very well, and in very short order the parties settled the liability and moved on with their lives; indeed, the settlement was fair to the municipalities and the homeowners. So wouldn't it seem that S. 8's exemption for sites like this is kind of an overkill? We can use the process, and that is what we wanted to do together, and that is to provide another method for resolving these disputes. Has it worked well at other places? Administrator Browner. We certainly agree that an allocation system is an important tool. Under the existing law we have piloted about a dozen allocation efforts to see what might make sense. The one short piece of information I would leave you with is that at some sites it works well, and at other sites the parties want to do it themselves. Just make sure that if you do anything on allocation in legislation, to allow for flexibility. I think we would be concerned that we are mandated at every single site. There are just times, as you can well imagine, getting four people in a room and being done with it in an afternoon is how it can go, and there are other times where you have to bring in an outside party and wade through a couple of months. So our experience on allocation is that it's a great tool; it should be part of Superfund. We are piloting it, but let's not turn around and say that every single site should have an allocator, because that may create its own problems. Senator Lautenberg. Thanks. Thanks, Mr. Chairman. Senator Chafee. Thank you. Senator Reid. Senator Reid. Mr. Chairman, we continually hear all the bad stories about Superfund. We in Nevada have had a great experience with Superfund involving a thing called the Helms Pit, which was a big gravel pit that started collecting water. I'm not going to go into a lot of detail, but there was an emergency Superfund site declared in Sparks, and it led to the resolvement of issues very quickly. And had the EPA not come in there with the expedited powers that they have under the act, it could have destroyed the entire water supply of Reno and everything downstream including Fallon and Fernley and the Indian reservation at Pyramid Lake. So there are examples that could be cited, if we would take the time, where this law--as bad as it is--has worked quite well. That pit now is going to be used as a recreational site. At one time there was an estimated 14 million gallons of fuel in the ground at Sparks; it's determined that it's probably only about 2 million gallons, but it still is very volatile and very dangerous. I would like to go back to what Senator Baucus talked about, and maybe one of the other members here. How do we handle these large landfills, as an example, where people year after year put stuff in that, and it wasn't illegal at the time? How do we handle a situation like that? Administrator Browner. What we would like to do is have a discussion with members about which parties to those sites should be automatically taken out in the statute. A homeowner who sent municipal waste is an obvious example of someone who I think we would all agree---- Senator Reid. But, Madam Administrator, let's talk about businesses. Businesses who in good faith go out and dump their stuff in a landfill--there was nothing illegal about it. People watched them do it. They thought they were doing the right thing. And now, 15 years later, they come back and because of the legal costs alone, businesses are destroyed. Administrator Browner. Regardless of where you draw the line in terms of parties, you should certainly use--if the parties agree--an allocator to get you away from all the legal costs, to get you away from all the delays. We would absolutely agree with that, and these are the kinds of sites, I think quite frankly, where an allocator is going to be more helpful than not. We would absolutely agree with the need to try to expedite resolution of who is responsible for what share. We also agree, and there has been much discussion about this, that there should be an orphan share fund that we should be able to put on the table, dollars from the fund to cover that part of the cleanup cost for which there is--perhaps we are exempting some parties, perhaps some parties have gone bankrupt. But that's an appropriate use of the fund because it contributes to an expedited settlement in terms of who pays what, and in ultimately getting the cleanup done. Senator Reid. Mr. Chairman, let me just close by saying that I think that the suggestion that Senator Smith had during his time of questioning is very appropriate. We have had, I think, a good discussion here today. There is going to be more before the day is out, and I think it would be extremely appropriate for the whole committee if there could be a little more work done on this so that the next time we get together, maybe there is more input, as Senator Smith has suggested. Senator Chafee. Thank you very much. I agree with you. Senator Sessions. Senator Sessions. Mr. Chairman, I yield my time. Thank you, Ms. Browner, for being here and for your testimony. Administrator Browner. Thank you. Senator Sessions. I yield my time. Senator Chafee. Aren't you nice? And Senator Moynihan will be very pleased. Senator Moynihan. Senator Moynihan. Just to start at the beginning, if I may, Ms. Browner, it was just 18 years ago that news came over the wire, as it were, about the Love Canal situation in the Niagara County, NY landfill, and a great alarm, such that the Congress enacted the Superfund bill in a post-election session. And it is two decades. The site is still not cleaned up, and I was wondering if the EPA has ever been interested enough to find out, what is the evidence of any health problems arising from the Love Canal? Are there any epidemiological studies? Administrator Browner. There were ATSDR studies on the Love Canal. Yes, there are studies done by the Agency for Toxics and Disease Registry--I may have that backwards--and we would be more than happy to provide them to you and for the record. [Information to be supplied follows:] [GRAPHIC] [TIFF OMITTED] T6587.001 [GRAPHIC] [TIFF OMITTED] T6587.002 [GRAPHIC] [TIFF OMITTED] T6587.003 [GRAPHIC] [TIFF OMITTED] T6587.004 [GRAPHIC] [TIFF OMITTED] T6587.005 [GRAPHIC] [TIFF OMITTED] T6587.006 [GRAPHIC] [TIFF OMITTED] T6587.007 [GRAPHIC] [TIFF OMITTED] T6587.008 [GRAPHIC] [TIFF OMITTED] T6587.009 [GRAPHIC] [TIFF OMITTED] T6587.010 [GRAPHIC] [TIFF OMITTED] T6587.011 [GRAPHIC] [TIFF OMITTED] T6587.012 [GRAPHIC] [TIFF OMITTED] T6587.013 Senator Moynihan. What's the agency? Administrator Browner. ATSDR, Agency for Toxic Substances Disease Registry. They are the people who are responsible at sites for evaluating the health consequences---- Senator Moynihan. What have they found? You've got a lot of people behind you that you can ask. [Laughter.] Administrator Browner. At Love Canal there were studies that monitored birth weights after cleanup, and we'd be more than happy to provide those to you. I think there were other studies. Senator Moynihan. What have they found? Administrator Browner. I think they did find--I'm doing this from memory now---- Senator Moynihan. What about all those fellows back there? Administrator Browner. Well, I don't know that any of them are Love Canal experts, or ATSDR--maybe there is someone here from ATSDR and I'm not aware. I don't think there is. Senator Moynihan. Might I suggest, quite seriously, that from the outset there has been an appalling absence of controlled inquiry. If ever you had a natural experiment in toxic waste, it was the Love Canal, built on a grid, in which you have persons who lived 100 yards away, 200 yards away, 300 yards away, for 40 years, and 30 years, and 50 years, and all that. And to my knowledge, Mr. Chairman, we have not learned a thing. Administrator Browner. With all due respect, Senator, I think there are studies that showed that there were low-birth weights---- Senator Moynihan. You think there were? Administrator Browner. We would be more than happy to provide them to you. I do know that the State of New York-- there are studies on low-birth weights. The State of New York has also been involved, and we would be more than happy to get this for you, in conducting a long-term study of the health effects and following the children who are now adults, in many instances, the people who lived at this site, in terms of the long-term health consequences. Senator Moynihan. Could I suggest that it would be no harm for the EPA to know this subject? This is where this legislation begins. Administrator Browner. Well, we are very familiar with the health effects associated with exposure. You had asked about a particular site and I wanted to make sure that I had spoken to the types of scientific studies that may have been done at that site. When you look at toxic waste sites across the country and you look at the studies--and there are many, many, many studies that have been done--unfortunately, what the studies show is that there have been very real health effects for people in those communities, very real---- Senator Moynihan. Is it unfortunate to have learned that? Administrator Browner. I wasn't suggesting that it was unfortunate to learn that. I was suggesting that it was unfortunate for the people in the communities. Senator Moynihan. You have another note by your left hand. [Laughter.] Administrator Browner. I've already given you this. I knew this. [Laughter.] Senator Moynihan. All right. Let's hear from you, if we may. Administrator Browner. Yes, certainly, and we will also contact the State of New York about their long-term study. Senator Moynihan. Fine. Thank you. Senator Baucus. Mr. Chairman, quickly, if I might, I do join my colleague from New York in urging EPA to look into it, as discussed. But maybe even with all the good work that the EPA has done in my State of Montana, this is the ``Golf Journal,'' a major golf magazine, and this is a golf course. Montana is the largest Superfund---- Senator Moynihan. If that's a golf course, where's the President? [Laughter.] Senator Baucus. Senator, I must say that that's a very fair question, because this golf course is--actually, it sits on top of a former Superfund site in Montana, and I want to thank Administrator Browner for working very creatively to figure out a way to allow this course. It was designed by Jack Nicklaus, and I asked the President to come out to play when Jack Nicklaus, and I might say it's one of the finer courses in the country, a former Superfund site. The President did not accept my invitation to play. [Laughter.] Administrator Browner. A mining site, I might add, which is one of the most difficult. Senator Chafee. All right. Madam Administrator, we thank you very much and we appreciate your coming. Now I'm going to do something totally arbitrary. If Governor Nelson and Mayor Perron would please come up, we would have both of those witnesses. I would ask Ms. Wilma Subra, who is here from Louisiana, if she also would come up. And Mr. Gordon Johnson from New York. Now, it may well be--it is my belief that the rest of the witnesses are here locally, and if we can, we'll schedule another hearing, but it just does not appear that we will be able to get everybody on. I see Ms. Florini here, and I think you are available, are you not? And Ms. Eckerly. Now, we have to take seats quickly, please, because we are operating under a deadline. Is Ms. Subra here? If you would sit down. You have come from Louisiana, right? Ms. Subra. Yes, sir. Senator Chafee. Well, we're going to give you a hearing. Ms. Subra. Thank you. Senator Chafee. And Mr. Johnson from New York. Now, am I correct? Mr. Fields, have you come from Chicago? [Voice, ``He left the room.''] Senator Chafee. All right. We lost him. All right. Now we are going to proceed with Governor Nelson. Governor, if you could keep your statement--what we are really interested in is what you propose, what your suggestions are for us, what you think we ought to do. And we appreciate your coming, and I know there's some back-and-forth and you made particular arrangements to come here, so we appreciate it. STATEMENT OF HON. E. BENJAMIN NELSON, GOVERNOR, STATE OF NEBRASKA, ON BEHALF OF THE NATIONAL GOVERNORS' ASSOCIATION Governor Nelson. Thank you very much, Mr. Chairman, members of the committee. As Senator Chafee mentioned, my name is Ben Nelson and I am Governor of the State of Nebraska and chair of the National Governors' Association's Committee on Natural Resources. I have submitted to you a lengthier statement for the record, and I will try to summarize my remarks as briefly as I can. It is important to point out that my testimony is presented on behalf of the National Governors' Association. It has also been developed in close consultation with the Environmental Council of States and the Association of State and Territorial Solid Waste Management Officials, which represents State officials who manage the Superfund program on a daily basis. The States have a strong interest in this Superfund reform, and I believe that a variety of changes are needed to improve the Superfund program's ability to clean up the Nation's worst hazardous waste sites quickly and efficiently. So we commend Environmental Protection Agency Administrator Carol Browner for many of the administrative reforms that she has developed for this program. But we still believe that legislation is required, and if I leave you with one message today, let it be our hope that the agreement to work together in a bipartisan basis will continue and that you have the support of the Governors on a bipartisan basis to commit to do everything that we can to assist in this effort so that we can continue to work cooperatively, both with the majority and the minority parties, to develop a final bill that enjoys both bipartisan support and Presidential signature. I want to commend you for developing a very good starting point for the kind of bipartisan negotiations that are going to be required here. I know that there are some important differences that remain, but we hope that the chairman's mark is a significant step toward resolving those concerns. Given the discussion and the statement by Administrator Browner, I remain confident that we will be able to work through these differences. The overall assessment by the National Governors' Association really just suggests a few areas where we think that some improvements could be made. As you know, one of our major concerns has to do with the cleanup of the so-called brownfields sites. The Governors believe that brownfields revitalization is critical to the successful redevelopment of many contaminated former industrial properties, and if we could all be as successful as Senator Baucus in Montana has been in conjunction with that golf course, we would all be very, very happy. We commend the committee for including brownfields language in the bill. We cannot overemphasize the importance of State voluntary cleanup programs in contributing to the Nation's hazardous waste cleanup goals. States are responsible for cleanup at the tens of thousands of sites that are not listed on the National Priority List. In order to address these sites, many States have already developed highly successful voluntary cleanup programs that have enabled sites to be remediated quickly, and with minimal Government involvement. It is important that the legislation support and encourage these successful programs by providing clear incentives and the much talked-about flexibility. Frankly, we feel an increased need for congressional direction because the guidance on State voluntary programs that EPA is about to finalize doesn't seem to afford us the necessary and appropriate flexibility. We intend to talk to Administrator Browner further on this to see if there is an area where we can come to agreement. We also strongly support the provisions in your mark that encourage potentially responsible parties and prospective purchasers to voluntarily clean up sites and to reuse and redevelop contaminated properties. Among the most important incentives is a release from Federal liability at a site that has been addressed by the State. Your chairman's mark takes an important step in that direction. I would note, however, that while the draft would preclude Federal enforcement for sites in a State voluntary cleanup program, it does not provide a release from Federal liability. We believe that this would leave the PRPs, the potentially responsible parties, vulnerable to third-party suits, and we ask that, to the extent possible, you clearly waive Federal liability for a site addressed under a State program. And with respect to the State role title, the Governors strongly support the efforts to provide us with options to enhance the role of States in this program. We appreciate the inclusion of options for authorization, expedited authorization, delegation, and limited delegation by agreement in the draft. We feel that this allows for maximum flexibility to meet State needs and objectives. We especially support the authorization provisions that allow States to operate their own programs in lieu of the Federal program. Where States are authorized to operate programs in lieu of the Federal programs, States should receive adequate Federal financial support at no less than EPA would be supported for those efforts. But the States cannot support provisions allowing the EPA to withdraw delegation on a site-by-site basis. EPA should periodically review State performance instead of involving itself in site-by-site oversight. In other words, evaluate the program being adopted and the overall performance by a State with respect to all the sites rather than picking and choosing on a site-by-site basis for oversight. With respect to the selection of remedy, we support changes that result in what we think will be more cost-effective cleanups, a simpler, more streamlined process for selecting remedies and a more results-oriented approach. The bill moves significantly in this direction. Many of these reforms seem to us to be codifications and improvements of EPA's previous administrative reforms, and we applaud that. One of the most important issues in selecting a cleanup remedy is allowing State-applicable standards to apply at Federal cleanups, as they do at State sites. We greatly appreciate and strongly support the provisions of the bill that allow State-applicable standards and promulgated, relevant, and appropriate requirements to apply to all site cleanups, Federal and private as well. Another important remedy selection issue concerns the importance of considering different types of land uses when determining cleanup standards, so we applaud the inclusion of provisions in your bill that provide for State and local control in making determinations on foreseeable land uses. In addition, we would like to ensure that land use decisions are not second-guessed by EPA. I can't talk about remedy selection without mentioning groundwater, because in Nebraska groundwater provides the great majority of our drinking water supplies, about 90 percent, and we are blessed with very clean groundwater resources. We want to keep it that way, so we believe that groundwater is a critical resource that needs to be protected. The use of State- applicable standards and the opportunity for State and local authorities to determine which groundwater is actually suitable for drinking are essential during the remedy selection process. We do need to ensure that any groundwater provision are appropriately workable and flexible. Therefore, more State involvement is important. And finally, as you know, liability reform is one of the most difficult issues in the bill. The Governors recognize that the current liability system does some things very well and provides some important benefits, but it also carries some unfairness and contributes to unacceptably high transaction costs. In general, we support the elimination of liability for de minimis and de micromus parties, and believe the liability of municipalities also needs to be addressed. But we question broader releases of liability for other categories of responsible parties. In any case, we would like to see convincing analysis that any changes in the liability scheme will provide adequate assurance in funding so that sites will continue to be cleaned up and so that there will be no cost shifts to the States. The downloading of that cost onto the States is not going to be an adequate remedy, and we would certainly oppose that. We also oppose the apparent preemption of State liability laws when a facility has been released from Federal liability. Preemption of State liability laws at the NPL sites effectively creates an inequitable situation in States because it creates an inconsistency in an application of State law at sites throughout the States. We want to avoid creating a scenario where there is a demand by potentially responsible parties to be added to the NPL, the Priority List, because the Federal liability scheme is more favorable. We can see that that could happen. With respect to Federal facilities, the Governors urge and support that the legislation will ensure a strong State role in the oversight of Federal facility cleanups. The States appreciate the provisions in the chairman's mark allowing EPA to transfer responsibility for federally-owned facilities to States, and we question why this is more limited than the authority that States can exercise at private sites. We urge you to include a clear waiver of sovereign immunity for Federal Superfund sites, to ensure that State applicable standards apply to Federal sites, and that a double standard doesn't exist for Federal facilities, at a standard that could be substantially lower. We have enough concerns that have been raised about the States having a race to the bottom when it comes to dealing with these issues. We don't want to meet the Federal Government on the way to the bottom. [Laughter.] Governor Nelson. As you know, the natural resource damage provisions of Superfund are also controversial. Although some reform is warranted, the program's integrity needs to be maintained, and I want to thank the committee for including the provision that protects existing claims and lawsuits. I know it's extremely important to my colleague and the vice chair of our committee, Governor Marc Racicot of Montana, who serves as vice chair of our committee. I also want to mention how strongly we support the provision to require the concurrence of the Governor of the State in which a site is located before it may be added to the NPL. We fought long and hard to have this vitally important provision included in legislative proposals. We are also worried about the placing of an arbitrary cap on the number of sites that can be added to the NPL. We think that will not be an appropriate limitation that could be placed on new listings. Well, in conclusion let me say that I really appreciate this opportunity to be here, and I thank you for your hard work on this. I know, Mr. Chairman, that it is a difficult area on which to bring together general agreement, but I commend you for your efforts and offer to continue in any way we can to support your efforts to bridge the gap and to bring parties together in any way that we possibly can. Senator Chafee. Well, Governor, I want to thank you very much because you've been very specific in your recommendations here. You get into a lot of matters that are of concern to us. For instance, something that is not a burning issue, the so- called Record of Decisions, the RODs, you touch on that provision. Your statement has been very helpful. I didn't get a chance to apologize enough to those witnesses who came from, I believe, around in the Washington area that we weren't able to reach, and I want to thank you all. We're going to try to get all of you whom we missed back here again. Mr. Fields, I know that you very kindly suggested that you could come back from Philadelphia, if needed. Now we will hear from Mayor Perron from Elkhart, IN. We welcome you on behalf of the U.S. Conference of Mayors. STATEMENT OF HON. JAMES P. PERRON, MAYOR, ELKHART, IN., ON BEHALF OF THE U.S. CONFERENCE OF MAYORS Mayor Perron. Good afternoon, Mr. Chairman and members of the committee. I am Jim Perron, the mayor of Elkhart, IN. I am pleased to be here this afternoon, and thank you for your leadership in the development of S. 8 and in moving the legislative process forward with this hearing. Today I am testifying on behalf of the U.S. Conference of Mayors, which represents over 1,100 cities with populations of 30,000 or more. Being Mayor of Elkhart for nearly 15 years has allowed me the opportunity to deal directly with a variety of Superfund issues, ranging from brownfield redevelopment to remediation of a Superfund site that essentially covered our entire drinking water system. Mr. Chairman, the Nation's mayors believe that Superfund has been successful in meeting three national policy objectives: a dramatic reduction in the use of hazardous materials by industry; the ability of our Nation to respond to emergency spills and contamination; and the creation of a much safer national hazardous waste management system. These are major accomplishments of the Superfund program, and we want to acknowledge them from the outset. That's the best of Superfund. Alongside these tremendous public benefits are the unintended negative consequences of the Superfund program, the fact that the private sector will not invest in hundreds of thousands of non-NPL contaminated sites for fear of being caught in the Superfund liability web. These so-called brownfields were not caused by local governments or the citizens who now must live with the consequences of lost jobs and an eroded tax base in abandoned or underutilized properties that denigrate communities. In a Conference of Mayors survey, we found in only 39 cities, the loss of local tax revenues from local brownfields ranged from $121 million to $386 million annually. Finally, brownfields lead to additional negative environmental effects by encouraging urban sprawl in eating up prime farmland, forest, and open spaces. I would like to mention here, Mr. Chairman, that the State of Indiana has moved forward through a legislative committee--a task force to which I was just recently appointed by Governor O'Bannon--which is an Indiana Farmlands Preservation Task Force, to try to address this issue, and I do believe the brownfields issue is one area that we will be discussing. I should say that in addition, the Superfund program has made the cleanup of National Priority List sites expensive, bureaucratic, time-consuming, and litigious. We want to commend the Administrator and the agency for the administrative reforms to improve the Superfund program, but we believe these will not be enough to structurally reform the program and put it on a sound footing for the future. Turning specifically to the proposals that we were asked to address for today's hearing, I would like to start by saying that it is extremely important for Title I on brownfields to provide local governments the greatest flexibility possible in the use of brownfield site assessment, characterization, and cleanup funds. The definition of brownfields should not require the site to currently have an abandoned, idle, or underused facility. Many former industrial and commercial sites have been razed, but still contain contamination that should qualify this site as a brownfield. Likewise, the list of exclusions in the definition of brownfields should be significantly eliminated so that local governments have the flexibility to submit brownfield sites that are local priorities. For example, the current list of exclusions would disqualify sites where an emergency response action has been taken. Many emergency response actions remove the immediate emergency but do not leave the property in a condition that would allow the private sector to invest in it. Local governments should have the flexibility to include them. A similar rationale holds for other exclusions. On the issue of funding, we believe that the Superfund program which helped to create brownfields should devote at least 10 percent of its funding annually to the brownfield cleanup program. We ask the committee to include annual authorization levels in S. 8 to reflect such a level. We have outlined in our written remarks why this funding level is justified. We are also extremely pleased that, with the Administration's support, the House and Senate have devoted increased funding for fiscal year 1998 to EPA's brownfields program. We want to thank Senator Bond for his leadership in that arena. Mr. Chairman, the policy which the mayors adopted in San Francisco at our annual meeting this year calls for Superfund reauthorization to include provisions that expedite the cleanup of co-disposal landfill sites by providing liability protections for generators, transporters, and arrangers of municipal solid waste. The provisions of S. 8 clearly begin that process and go a long way toward that end. We are concerned, however, that the bill does not provide generators and transporters of municipal solid waste protection from third-party contribution lawsuits, for cleanup costs incurred prior to date of enactment at co-disposal sites. Because we believe that Congress never intended municipal solid waste and sewage sludge to be considered hazardous under CERCLA, we believe that some form of liability relief should also be extended to pre-enactment costs. We want to remind the committee that numerous studies have indicated that municipal solid waste contains less than \1/2\ of 1 percent of toxic materials. Mr. Chairman, we also want to acknowledge and commend the Administrator and the agency for the recent announcement of administrative reforms governing municipal liability for co- disposal sites. The most important principle set forth in EPA's policy is that municipal solid waste has virtually never been the cause of listing co-disposal sites under this proposal. Finally, we agree with the chairman's mark, which reflects the view that the toxicity of municipal solid waste is so low that the transaction costs of collecting funds for response costs incurred after the date of enactment warrant a transfer of liability from individual parties to orphan share. Mr. Chairman, I am also very pleased to note that on Tuesday of this week President Clinton nominated one of our colleagues, Mayor Cardell Cooper of East Orange, NJ, to be the Assistant Administrator of EPA for Solid Waste and Emergency Response. I am aware that this committee has the formal responsibility to advise and consent on this nomination, as does the full Senate. Mayor Cooper has been one of the great leaders among the mayors in this country on a very broad range of issues, including those concerning Superfund, brownfields, and environmental cleanup. He will do an outstanding job in moving these programs forward and in strengthening the partnership among the cities, the Congress, the Administration, and the private sector, to bring about the achievement that we need in these areas. I hope that you will give swift approval to this nomination at the appropriate time. Mr. Chairman, it is almost impossible to talk about brownfields and Superfund reform in 5 minutes. Our written comments cover many other points. Let me add that Mayor Helmke of Fort Wayne--he is the president of the U.S. Conference of Mayors--is meeting as we speak in Rhode Island with the co-chairs of our Brownfields Task Force, and will undoubtedly have further input into our comments on S. 8. We encourage the Senate to move forward with Superfund reform and reach a bipartisan agreement on a bill. We believe that S. 8 is a good starting point for those discussions, and we stand ready to be of any assistance. I would be pleased to answer any questions that you may have at the appropriate time. Senator Chafee. Mayor, thank you very much. It has come to my attention that some here don't understand why we are under the gun at having to stop at 4:30. That's not something the committee wishes to do. I would stay here and hear every witness. This came about because the Democratic leadership is invoking the Senate rules which permit them to say that no committee can meet after 2 o'clock when the Senate is in session. The majority leader, in order to give us time here to get on with what we could, put the Senate into recess from, I presume, 2 o'clock until 4:30, but when 4:30 comes, it will then be obviously after 2 o'clock, and so this committee cannot remain in session. So again I want to apologize. We will take all the statements of those whom we were not able to reach, and any of the witnesses who had something further to add can submit further statements for the record, and we will keep the record open for 1 week. Senator Baucus. Mr. Chairman, if I might add, it is regrettable that we cannot continue to meet, but I think it would be unfair to characterize it as the Democrats that are holding us up. The fact of the matter is that this is an internal Senate matter having to do with still another matter which we have to resolve, and this is regrettable, but that's why we are not able to meet longer. It's a bipartisan problem that has caused this delay. [Laughter.] Senator Chafee. No one will argue with my bipartisan credentials---- [Laughter.] Senator Chafee [continuing]. But this is not a bipartisan issue. The committee is not able to meet because the Democratic leader invoked the rules. Senator Baucus. Well, we all know why he invoked them. Senator Chafee. Well, that's a separate subject. [Laughter.] Senator Chafee. Let's not explore that any more. Now, we are delighted to have Ms. Subra here, who has come from New Iberia, LA. We are delighted to have you here, and if you could present your statement in some 5 minutes, then we will have Mr. Johnson, who is here from New York on behalf of the National Association of Attorneys General, and then we'll have questions of the entire panel. Can you stay, Governor? Governor Nelson. Yes. Senator Chafee. OK. Ms. Subra. STATEMENT OF WILMA SUBRA, PRESIDENT, SUBRA COMPANY, NEW IBERIA, LA Ms. Subra. Thank you. I would like to thank the committee for giving us this opportunity to testify. I have been involved in Superfund issues since Superfund began, working with citizens who live around these hazardous waste sites. I have also served as the technical advisor on the National Commission on Superfund, and I provide technical assistance to citizens' groups at eight Superfund sites through the TAG process. Karen Florini will present a lot of the issues that we have concerns about. We didn't want to duplicate, so I just want to say that I am in support of the issues that she will present to you at a later time. I would like to tell you why I have a problem with State delegation and give you an example. The transfer of authority to States in order to perform Superfund programs may be appropriate for a few States, but the wholesale transfer of Superfund programs to a large number of States will have a negative impact on the overall program. An example of a State that should not be granted Superfund authority is the State of Louisiana. The State lacks the financial resources, personnel, and political will to even implement their own State program. The majority of the NPL sites in the State of Louisiana were submitted by citizens' groups, not by the State. The State didn't want the stigma of having hazardous waste sites being on the Federal list. In 1995, the State Legislature removed almost all the funding and personnel from the State program. The current State program only has sufficient financial resources to, No. 1, perform small emergency removal actions when a midnight dumper drops barrels along the side of the road, and No. 2, to provide oversight at the 14 Superfund sites in the State. There are little or no resources to evaluate the more than 500 potential sites, or to perform remedial activities at confirmed sites. During the past 2 fiscal years, 57 confirmed hazardous waste sites sit waiting for cleanup when and if resources become available. When sites pose an imminent and substantial threat, the EPA has to step in to perform financial and emergency removal actions for the State. The most recent example of the need for Federal resources and manpower was the Broussard Chemical Company site in Vermilion Parish. The EPA has spent more than $2.5 million in investigating, removing, and disposing at six separate locations operated by Broussard Chemical. A number of additional sites operated by the same person are currently being investigated further by EPA because of lack of resources on the part of the State. If it were not for the EPA and the financial resources of the potentially responsible parties, little progress would be made in the State of Louisiana in addressing hazardous waste issues. At PRP-funded sites, the State is still responsible for oversight. The lack of personnel resources has a major impact on that process. In Louisiana, the lack of sufficient technical resources has resulted in the State missing critical technical issues on the Shell-Bayou Trepagnier site. One of the issues missed involved the diluting of the contaminant levels by the PRP by including the control samples in both the site samples and the control samples, thus lower contaminant concentrations were evaluated for that site. The State of Louisiana and many other States that lack financial and personnel resources should not even be given the opportunity to request State delegation or feel pushed by Congress into having to accept the delegation of the Superfund program. In the treatment of hot spots, the preference for permanence in Superfund remedies has been modified to only treatment of hot spots. Attempts are made to justify the appropriateness of only treating these hot spots by including containment for the other hazardous substances. Reliance on containment is not a permanent remedy and merely puts off addressing the hazardous contamination until a future date. During that period when containment fails, public health and the environment will be impacted. The community members in the area of the site will once again be exposed to the hazardous substances and bear the burden of health impacts. The preference for permanence should be expanded to include a larger portion of the hazardous contaminants than just the hot spots. A containment remedy is being proposed for the Agriculture Street Landfill Superfund site in New Orleans. The landfill was operated by the city of New Orleans from 1909 to 1965. The city then developed 47 acres of the 95-acre site on top of the landfill---- Senator Chafee. Ms. Subra, I tell you, this is kind of a specific thing which we have in our record. Maybe you could move on to your next principal point. I want to make sure we can reach Mr. Johnson. Ms. Subra. OK. On the delisting, you are doing it too early. The initiation of a delisting process after construction completion, rather than after remedy implementation, is totally inappropriate. We have a site in Vermilion Parish where the remedy is being implemented. It was solidification after biotreatment. As it turned out, the Portland cement was contaminated with chromium, and when they solidified the waste, the chromium leached, and now you have a larger expanse. There are needs to go back in and look at the remedy. If you have delisted the site, you have cut the public out of the process, you have removed the TAG grant. After construction is much too early in the process. In the State concurrence, in the State of Louisiana the Governor has only concurred at one site. That site was going to be an add-on to one that already had an incinerator, already had local contractors. He did the concurrence because he wanted the contractors to keep working. At the other sites, in fact, contamination of the fish and the organisms that live in the estuaries resulted because he did not concur and nothing is happening at those sites. The limit on new sites will merely put the burden back on the States, which don't have enough money to address the sites. The limit on the number of new sites has to be increased dramatically or removed entirely. We would be happy to continue this process of talking and dialoging about the things that we have a problem with. I would like to thank you for the opportunity to provide this input. Senator Chafee. Well, thank you very much, and again we want to thank you for coming all the way. I am curious as to what Governor Nelson will have to say when we get to the questions. Mr. Johnson from the State of New York. If you will go through it, and if you could summarize your statement, we have your regular statement for the record because we want to be able to get in a few questions. STATEMENT OF GORDON J. JOHNSON, DEPUTY BUREAU CHIEF, ENVIRONMENTAL PROTECTION BUREAU, NEW YORK STATE ATTORNEY GENERAL'S OFFICE, ON BEHALF OF THE NATIONAL ASSOCIATION OF ATTORNEYS GENERAL Mr. Johnson. Thank you very much, Senator Chafee. I am the Deputy Bureau Chief of the Environmental Protection Bureau in the office of New York Attorney General Dennis Vacco. I very much appreciate the opportunity to appear before the committee, and I thank you, Senator Chafee and Senator Baucus, as well as Senator Moynihan from New York, for giving me time to present comments with respect to the natural resource damage provisions of the bill. I am appearing today on behalf of my office and on behalf of the National Association of Attorneys General, NAAG. My office has handled or is now counsel in more than 25 major natural resource damage cases arising from the release of hazardous substances or petroleum products. At its summer meeting in late June of this year, the sole resolution adopted by NAAG addressed Superfund reauthorization. A copy is attached to my written testimony. The resolution also addresses directly the natural resource damage issues which are the subject of this panel. My Attorney General Vacco was among the group of bipartisan sponsors of that resolution. The resolution arose from the recognition by the State Attorneys General of the critical importance of the Superfund program in ensuring protection of public health and the environment from releases of hazardous substances at thousands of sites across the country. They also know firsthand the problems with the statutory scheme, and the need to limit transaction costs and streamline certain processes required by Superfund today. In particular, the Attorneys General want to make the task of assessing natural resource damages and restoring injured or destroyed resources less complicated, and reduce the amount of litigation that may result when trying to accomplish those goals. In my brief oral remarks today I will address some of the more significant issues. First, judicial review. NAAG urges Congress to clarify that in any legal proceeding, the restoration decisions of a trustee should be reviewed on the administrative record, and be upheld unless arbitrary and capricious. S. 8, as introduced, contained provisions in section 702 regarding the administrative record that appeared to accomplish that goal. The chairman's mark retained the provision regarding the establishment of the administrative record, but removed language in the public participation section providing that judicial review of the trustee's restoration plan would be on the record. S. 8 also removed the rebuttable presumption provided in current law to a trustee who adheres to the regulations. The deletion of the judicial review provision is unfortunate and unwise, and likely will lead to greater litigation, increased expense, and secretive and duplicative assessments. Unless the selection of a plan and the assessment which led to that selection is entitled to the usual administrative presumption of correctness, no trustee could afford to conduct an assessment and select a plan on an open record with full public input, knowing that responsible parties would not be bound in any fashion by that determination. Senator Chafee. Then you have some suggestions of language there. Why don't you move to your statute of limitations now, could you? Mr. Johnson. Fine. The Attorneys General also ask that CERCLA be amended to provide that claims for natural resource damages be brought within 3 years of the completion of a damage assessment. Currently, CERCLA has a very complicated, two-prong statute of limitations. These provisions often put often put a trustee in a difficult position and result in much unnecessary litigation. The trustee may have to bring suit before he or she has sufficient information to determine the scope of the injury or to quantify damages, often even before an RI/FS is completed. We urge Congress to adopt a statute similar to that governing cases arising from the release of petroleum products under the Oil Pollution Act of 1990. The third issue I would address is the availability of Superfund moneys for assessment. When CERCLA was amended in 1986, Congress provided that the trust fund could be used by State and Federal trustees to conduct damage assessments, recognizing in particular that many State trustees lacked the funds to pay for the assessments themselves. In conference, that language was effectively removed through amendments to the IRS Code. NAAG has long asked that the conflict between the IRS Code and CERCLA be eliminated so that State trustees can draw on the fund to conduct assessments, which they presently can do to conduct RI/FSs. This will also promote the integration of the NRD program with the cleanup program and lead to greater efficiencies and better cleanups. Use of reliable assessment methodologies is another aspect addressed in the resolution. Just as Congress does not direct EPA to use only certain scientific methodologies in the changing and developing area of remedial science, NAAG believes that Congress should retain the ability of trustees to recover damages based on any reliable methodology. S. 8, however, provides that assessments may be conducted only in accordance with regulations not yet promulgated by the President, and forbids the use of one methodology, the admittedly controversial ``contingent valuation'' methodology, in the assessment process. Senator Chafee. Why don't you move to the liability cap and the recovery of costs? Mr. Johnson. We are pleased with respect to the liability cap---- Senator Chafee. That's what I wanted you to hear. [Laughter.] Senator Chafee. That's very good. Now go to the next one. [Laughter.] Mr. Johnson. Recovery of enforcement and oversight costs, to summarize that, S. 8 is silent on whether enforcement costs and oversight costs by State trustees can be collected from responsible parties as part of the process of conducting an assessment and implementing it. We believe they should. The NAAG resolution is consistent with the general and uncontroversial policy that persons responsible for the release of hazardous substances have an obligation to make the public whole in the event there is an injury to our natural resources. Well over 100 years ago, in cases on the abatement of nuisances and the public trust doctrine, the courts made clear several bedrock principles. The States and the Federal Government are trustees for the people, and their trust corpus includes this Nation's glorious natural resources. Senator Chafee. OK. Let's see what else we have here. All right. I would be interested in your ``injury before 1980,'' how you handle that one. Mr. Johnson. The language of S. 8, as originally introduced, substituted language in current CERCLA law, substituting the word ``injury'' for the word ``damages.'' Under current law, if damages continued after 1980 and the public was harmed after 1980, a natural resource damage case may be brought. S. 8 substituted for that word ``damage,'' ``injury,'' and a number of courts have held that the injury occurs at the moment of release. This would mean, under the revisions provided for under S. 8, that if a release of hazardous substance occurred before 1980, there could no longer be a natural resource damage case about that, even though there are damages being incurred now, and the public was suffering as a result of that release back before 1980. We don't believe that that is appropriate and we ask that the committee return to the original language of the statute. Senator Chafee. All right, thank you very much. I would commend the non-use values to our members here, to read that portion over, and I am sorry to cut you off a little bit. We're going to have a few questions before the witching hour comes. Governor Nelson, what do you say about what Ms. Subra had to say? I thought that she had some pretty good points. Governor Nelson. Well, I wouldn't discount her points, but I would say that---- Senator Chafee. I mean, what do we do if a State won't step up to the mark? Governor Nelson. First of all, if they're going to step up to the mark and have either a delegation or an authorization, they're going to have to have a plan that passes the test of competence and demonstrate their ability to perform to the EPA in order to get it. If they don't demonstrate it, then they don't get it. That's why we said that they shouldn't be on a site-by-site basis; it ought to be on their overall performance in dealing with the sites. The second thing is that I don't think Federal legislation ought to solve every local problem that can be solved at the local level. If the State of Louisiana, in the minds of its people, is not doing an adequate job in dealing with the non- Priority List sites, then that ought to be a determination made, if there is a majority of the people in Louisiana who feel that way, they can make their wishes known. That's what the elective process is about. Senator Moynihan. Governor, that's why we're having to stop at 4:30. Would you kind of avoid that subject? [Laughter.] Governor Nelson. I think I understand, Senator. Fewer elections create fewer problems. Senator Chafee. All right. Senator Baucus. Ms. Subra. Could I respond to his concerns briefly? Senator Chafee. Yes, but I've cut the leave time for everybody. Thirty seconds. Ms. Subra. OK. One of the things is the default provision in the mark bill, and it says that if you don't do an action from EPA on a State delegation, it is automatically delegated. So if EPA gets overburdened and States apply, whether or not they are adequate, whether they have the rules, whether they have the finances, under default they are going to get the program. Senator Chafee. I see. All right, Senator Baucus. Senator Baucus. Thank you, Mr. Chairman. Ms. Subra, your views on the remedy selection provisions in S. 8? Ms. Subra. They don't go far enough. Senator Baucus. Why? Ms. Subra. They are not protective of human health and the environment. There is too much emphasis on the hot spots, too much on containment. You are leaving the waste there to future impact the citizens. In locations where we have tried containment, the containment has started to fail, especially in Louisiana where we get 60 inches of rainfall. Senator Baucus. Would you agree that in the current law there is too much of a preference for treatment? Ms. Subra. I think there may be too much preferential treatment at some locations, not all of them. But what we're doing is moving toward treating the part that exceeds the criteria, and not treating the other part. In fact, that's what we were doing at the one site, and in fact we found out that we were contaminating it more when we solidified with the Portland cement. Senator Baucus. But you do say that the current provisions--in S. 8, anyway--are too lenient with respect to the treatment? Ms. Subra. Yes. Senator Baucus. Mr. Johnson, with respect to non-use values, there has been a lot of debate to what degree we should address natural resource damage claims; do we address inherent value, intrinsic value, etc.? Do you think we should? Mr. Johnson. Yes, I believe that we should. Senator Baucus. Why? Mr. Johnson. There are several reasons for that. Natural resources have values much beyond their value as simply being used for certain things, and there are numerous natural resources that have no use value whatsoever. The piping plover and endangered species--they have no real uses, but we as a society spend a considerable amount of money to protect those species from harm because we value them, because they just are. If we are to eliminate non-use values from the calculus of determining when to restore natural resources, when to seek damages, when to replace them of that, we will be ignoring all of those values and we will be ignoring those resources. Senator Baucus. OK. I appreciate that. I see my yellow light is about to turn red. Governor, I understand that the Governors also support including recovery of resources at intrinsic value. Governor Nelson. That's correct. I should say that our goal would be toward restoration, but we do support that. Senator Baucus. OK. Mr. Chairman, I might say that there is some suggestion that the western position is in favor of dramatically limiting natural resource damages. I would like to include in the record a letter from the western Attorneys General who say expressly, ``We write to express our continuing concern about the potential impact of S. 8's natural resource damage positions, especially on western States.'' I would like that included in the record, please. Senator Chafee. Senator Smith. Senator Smith. Thank you, Mr. Chairman. I just want to say, in the very brief period of time that we have, to thank you, Governor Nelson and Mayor Perron, especially for coming today and your cooperation on behalf of your respective organizations for the input that you have provided us over the months--years, I guess--as we have tried to put this legislation together. You've been very helpful. I would just say in response to what the Governor said in response to his questions, and what Ms. Subra said, we make four very clear points in the legislation regarding the State role. In order for the State to receive this, it has to have adequate legal authority, financial and personnel resources; the State cleanup program must be protective of human health and the environment; and the State has procedures to ensure public notice and, as appropriate, an opportunity for comment on remedial action plans. And the State must agree to exercise its enforcement authority to require that persons that are potentially liable should, wherever practical, pay for the response action. So it's not a case where a State would have this dumped on it without the resources. So if there is a State, as was indicated by you, Governor, that is not capable, then they're not going to get the program. So I think it's important to clarify that, because that's been misrepresented. Thank you, Mr. Chairman. Senator Chafee. Thank you. Senator Moynihan. Senator Moynihan. I believe Mr. Sessions is next. Senator Chafee. All right, Senator Sessions. Senator Sessions. Well, I won't take but a minute. Maybe I'll just---- Senator Chafee. You can take 2 minutes, and Senator Moynihan is going to have his time, and even if we all go to jail, we're going to get the time that we need. [Laughter.] Senator Sessions. OK. Senator Moynihan can talk to the Democratic leader, maybe, about that. Let me say this. I will just ask briefly--you have the Mayors represented, and the Governors, and the Attorneys General. Is it the consensus of you three governmental officials that the Superfund bill as now written is in severe need of reform? Do you all agree to that? Governor Nelson. Yes. Mayor Perron. Yes. Senator Sessions. Do you think there is any minority opinion about that among your associations, or is that pretty universal among your membership? Mayor Perron. Bipartisanly. Governor Nelson. A bipartisan decision that needs to be reformed. Mr. Johnson. I think the Attorneys General's position is that the present statute needs to be sharpened and streamlined, but its basic, fundamental principles need to be preserved. Senator Sessions. Governor, you are talking about a Federal release from liability. What you are saying is that once a site has been completed, that land or property can be almost valueless unless someone will certify that they are not going to be subject to additional liability claims? Governor Nelson. That's exactly right, Senator. I think the State can be in a position to bring about a change for the use of the land and get a restoration of the land for an appropriate use, but if there is a question about second- guessing and/or continuing Federal liability, it's going to be very difficult to do some of these projects that I think you could do otherwise. Senator Sessions. Could be available for industrial development, but could not be done because of that? Governor Nelson. That's right. Senator Sessions. Well, I think that's all. Senator Moynihan, I'll defer to you, or to you, Mr. Chairman. I yield my time, what little I have left. Senator Chafee. Senator Moynihan. Senator Moynihan. Yes, sir. I would simply want to thank the witnesses, especially Governor Nelson and Mayor Perron. I think there is a problem you were speaking of, Mr. Johnson; if you served a long time on this committee, you would become aware of it. In 1978, sir, it was discovered that the General Electric Company had dumped a very large amount of PCBs into the Hudson River at Fort Edward--the Last of the Mohicans, Fort Edward. This committee enacted legislation which appropriated money, $20 million, to clean up those PCBs. And, sir, they are still there. Twenty years have gone by, and your department has done nothing; the Department of Environmental Conservation--I'm sorry, the Department of Environmental Conversation---- [Laughter.] Senator Moynihan [continuing]. Has done nothing. And yet it doesn't seem to trouble people. You around, putting into place extraordinary proposals. I have a friend in Columbia County who happened to have a lake that was a millpond at one point; he wanted to restore the lake, and the department said, ``Well, you could do it for about a million and a half dollars.'' This litigation pattern has become entropic and it defeats its purposes. Would you go back and ask the Attorney General whatever happened to that money that this committee provided to get rid of those PCBs? Mr. Johnson. I would be happy to go back. Just for clarification, I am with the Attorney General's Office. The Department of Environmental Conservation is a separate State agency. Senator Moynihan. We have more than a few State agencies, I assure you. We invented them. [Laughter.] Mr. Johnson. I can tell you that the Department of Environmental Conservation and the New York State Attorney General's Office have, in the past 5 years, issued a number of violations to the General Electric Company with respect to the discharge and the failure to clean up aspects of PCB contamination. As a result of those actions, GE has spent in excess of $50 million in the last several years to address that contamination. Senator Moynihan. As a result of those actions, GE is leaving New York State. I'm quite serious. From the beginning of the Love Canal to the PCB leaks, there is a lot of entropy in this system. Mr. Chairman, we congratulate you on your statute. Ms. Subra, I thank you, too. Senator Chafee. Does anybody have a question for these fine witnesses who have come so far? [No response.] Senator Chafee. Well, we want to thank all of you very much for coming. I know that each of you came a long distance and-- -- Senator Baucus. Mr. Chairman, if I might--I'm sorry to interrupt you. Senator Chafee [continuing]. We have your testimony, and it was very constructive and helpful. We are going to go ahead as Senator Smith has suggested. We will be meeting with Administrator Browner as soon as reasonably possible, Senator Baucus, Senator Lautenberg, and myself. Your testimony has been very constructive. Senator Moynihan. Can we submit questions? Senator Chafee. Certainly, you can. Well, why don't you ask it now? Senator Moynihan. No, sir, they are questions that I think the Governor would like to have some time for. Senator Chafee. All right. [The questions and the answers thereto follow:] Office of the Attorney General, New York, NY, September 9, 1997. Hon. John H. Chafee, Chairman, Committee on Environment and Public Works, U.S. Senate Washington, DC. re: Committee Hearing of September 4, 1997. Dear Chairman Chafee: At the September 4, 1997, hearing on your revised version of S. 8, Senator Moynihan asked me the fate of $20,000,000 that had been appropriated for the use of the New York State Department of Environmental Conservation (``NYSDEC'') for a Hudson River demonstration project addressing PCB contamination. I request that this letter responding to that question be included in the hearing record. In Public Law 96-483, Sec. 10 (October 21, 1980), Congress provided that up to $20,000,000 may be obligated by the United States Environmental Protection Agency (``EPA'') Administrator for a Hudson River PCB Reclamation Demonstration Project. The funds would be available to the extent that, as determined by the EPA Administrator, there were not other funds available from ``a comprehensive hazardous substance response and clean up fund.'' Federal Water Pollution Control Act, Sec. 116(b), 42 U.S.C. Sec. 1266. In early 1981, EPA granted New York $1.72 million of the Section 116 funds to begin preparation of the project. By October 1982, NYSDEC had completed and EPA had reviewed the necessary scientific studies and environmental reviews to select a location known as Site 10 in Washington County, NY, as the site for an encapsulation facility, a secure landfill, to hold sediments to be dredged from the Hudson River. However, on December 30, 1982, former EPA Administrator Ann Gorsuch issued a decision denying release of the remaining Section 116 funds on the ground that Superfund monies were available. The State of New York, together with a number of environmental organizations and others, filed suit against EPA in 1983 regarding Administrator Gorsuch's determination. In May 1984, after a decision by then EPA Administrator William Ruckelshaus to reconsider the availability of Section 116 funds, the lawsuit was settled. EPA agreed to grant New York the remainder of the Section 116 funds, approximately $18.2 million, provided that additional scientific work was performed and that New York identify an appropriate encapsulation site for the dredged sediments and obtain the necessary permits to allow use of the site by 1988. However, local opposition to the use of Site 10 resulted in a decision in March 1985 by the New York Court of Appeals invalidating the site's selection on the ground that the State did not have the authority to overrule local zoning provisions that would prohibit such facilities. Washington County CEASE, Inc. v. Persico, 64 N.Y.2d 923 (1985). NYSDEC resumed efforts to identify an appropriate disposal site for the dredged materials that met legal requirements, but was unable to do so before the expiration in 1989 of the funding authority. Consequently, the remainder of the Section 116 funds was utilized for publicly-owned treatment plant construction as permitted by the statute. That same year, EPA began its Superfund reassessment remedial investigation and feasibility study of the Hudson River to determine whether additional remedial measures should be taken to address the continuing PCB contamination of the river. EPA is scheduled to reach a decision by December 1999. While measures have been taken to reduce the flow of PCBs to the Hudson River, the river remains contaminated by large quantities of contaminated sediments that have affected river biota and its uses, both ecological and human, and have reduced the value of this natural resource. The changes proposed to CERCLA's natural resource damage provisions in S. 8 would radically alter the State's ability to insure restoration of the river and its environs. We urge that substantial modifications be made to S. 8 to preserve a central principle of Superfund for our children: making the public whole when chemical contamination degrades our resources. In closing, I again thank you and the committee for the opportunity to testify. Yours truly, Gordon J. Johnson, Deputy Bureau Chief. Senator Chafee. We also have the testimony that has been submitted by the other witnesses, which we will review if we don't get a chance to get back to those witnesses. Senator Chafee. Senator Baucus. Senator Baucus. Mr. Chairman, I want to compliment you for the way you have conducted this hearing, and also compliment very much the witnesses, who I think have given very good testimony. It will help us in the deliberation and help us to follow up on your suggestion as well, which originally came from Senator Smith, that we get back on track, sit down and work this out so that we come up with a resolution. Senator Chafee. Thank you. Thank you all again. [Whereupon, at 4:35 p.m., the committee was adjourned, to reconvene at the call of the chair.] [Additional statements submitted for the record follow:] Prepared Statement of Carol M. Browner, Administrator, Environmental Protection Agency introduction Good afternoon, Mr. Chairman, and members of the committee. I am pleased to have this opportunity to appear before you to discuss the Superfund program and the progress of legislative reform of Superfund in the 105th Congress. With all the attention on how to fix Superfund, it is easy to forget what Superfund is all about. Superfund is an important, and above all, a necessary program, dedicated to cleaning up our nation's hazardous waste sites. EPA has worked closely with the Agency for Toxic Substances and Disease Registry (ATSDR) in evaluating the impacts of these sites on public health. Superfund site impacts are real. ATSDR studies show a variety of health effects that are associated with some Superfund sites, including birth defects, cardiac disorders, changes in pulmonary function, impacts on the immune system (the body's natural defense system from disease and sickness), infertility, and increases in chronic lymphocytic leukemia. EPA also works with other Federal agencies to assess the impacts of hazardous material releases on natural resources and the environment. Together, the efforts of these agencies, working with EPA, provide the basis for targeting cleanups to protect public health and the environment, and show the need for Superfund. The Clinton Administration remains committed to responsible, Superfund legislative reform. Earlier this year, in March, I gave you my commitment to participate in a bipartisan process to build consensus on Superfund legislation. While original expectations for consensus reform were high, I am disappointed that our shared goal of enacting responsible Superfund reform legislation this year may not be realized. I am afraid that the markup of the chairman's mark of S. 8 scheduled for next week will not produce a bill that enjoys the support of the Administration, Senate Democrats, or a broad range of Superfund stakeholders. Without this consensus, a Superfund bill cannot become law. In order to enact such a consensus bill, we must reflect the current, fundamentally different Superfund program. In March, I stressed the need to evaluate statutory reform from the perspective of the Superfund program of today, not on the basis of out of date problems now resolved. As implementation of the Administrative Reforms progresses, we continue to appreciate the advantageous flexibility this administrative approach affords us to make adjustments as experience is gained, and juggle our workload. A good example is the Remedy Update Administrative Reform, which focuses on adjusting remedies to changing science and technology. Because of administrative flexibility, in our implementation of this reform we have seized opportunities to make other remedy improvements, and have been able to pace our updates, so as not to slow down overall cleanup progress. Building on the progress of the Administrative Reforms, on May 7, 1997, the Clinton Administration provided you with its Superfund Legislative Reform Principles. These Principles reflect the Administration's vision for the future of Superfund--a future that builds upon our progress over the past 4 years. In that time, we have worked to make Superfund a fundamentally different program, and these Principles reflect this change. The current Superfund program is faster, fairer and more efficient in protecting the nearly 70 million Americans, including 10 million children, who live within four miles of a toxic waste site. These Principles were shared so that you and the many stakeholders affected by these cleanups can understand our vision for the future and for the legislative reforms that will help shape that future. The Administration's goals for Superfund reauthorization continue to be to: protect human health and the environment; maximize participation by responsible parties in the performance of cleanups; ensure effective State, Tribal and community involvement in decisionmaking; and promote economic redevelopment or other beneficial reuse of sites. The Administration further believes that all of these goals should be undertaken in a manner that: increases the pace of cleanups; improves program efficiency and decreases litigation and transaction costs; and does not disrupt or delay ongoing progress. I am encouraged to see some changes to S. 8 have been negotiated since I last testified. Unfortunately, the majority of the bill's provisions do not reflect the current state of the program and the Administration's Principles, and are still troubling. The Administration began this process ready to work with you to craft Superfund reform legislation that could attract broad consensus support. We continue to support a consensus based legislative process, and if such a process can be reinstated, we believe we can craft a proposal that meets our goals and delivers on our commitment to achieve Superfund reform in the 105th Congress. My purpose today is threefold: (1) to update you on the continued accomplishments EPA has achieved over the past few years, not only maintaining, but accelerating the pace of cleanup through three rounds of Administrative Reforms; (2) to discuss the Administration's Superfund Legislative Reform Principles, which are based on the current accomplishments of the Superfund program; and (3) to discuss our concerns with the chairman's mark of S. 8, which continues to fail to meet our Administration's Principles for responsible legislative reform. Finally, the Administration remains concerned over the expiration of the authority to replenish the Superfund Trust Fund. It has been 2 years since the tax expired, leaving industry with a windfall while the Trust Fund diminishes. The Congressional Budget Office has projected that the Trust Fund will, at the end of the next fiscal year, have less remaining than will be needed to keep the program operating, to keep site cleanups underway, in the following fiscal year. In addition to the expiration of the tax, we are disappointed with the recent denial of-the President's request for additional appropriated funds to address the backlog of Superfund sites that are currently awaiting cleanup. Without the availability of these additional funds, many communities will simply have to wait for cleanups in their neighborhoods, even though the studies are done, and the only thing preventing us from starting cleanup is a lack of funds. a fundamentally better superfund program Before discussing Superfund legislation, I'd like to provide an update to my testimony given in March on the current status of the Superfund program. To reiterate, proof of a faster, fairer, more efficient Superfund program can be found in several simple indicators. We have completed cleanup at 447 sites on the National Priorities List, and 500 more are in construction. We have reduced by more than a year the average duration of the long-term cleanup process, with much faster cleanups;at sites using presumptive remedies. The President's budget request for Fiscal Year 1998 would have allowed us to double our cleanup goals over the next few years and have 900 sites completed by the end of the year 2000. Our most recent analysis make us optimistic that we can continue to accelerate the pace of cleanups and achieve our goal of a 20 percent reduction, or 2 years, in the total cleanup process time. Additionally, responsible parties are performing or funding approximately 70 percent of Superfund long-term cleanups, saving taxpayers more than $12 billion. Meanwhile, EPA has succeeded in removing over 14,000 small contributors from the liability system, 66 percent of these in the last 4 years. We offered orphan share compensation of over $57 million last year to responsible parties willing to negotiate long-term cleanup settlements, and continued the process this year at every eligible site. Finally, costs of cleanups are decreasing because of a number of factors, including: the use of reasonably anticipated future land use determinations, which allow cleanups to be tailored to specific sites; the use of a phased approach to defining objectives and methods for groundwater cleanups; and EPA's 15-plus years of implementing the program providing greater efficiencies and lower costs when selecting cleanup options. Through the commitment of EPA, State, and Tribal site managers, and other Federal agencies, EPA has achieved real results protecting public health and the environment while experimenting with and instituting changes to our cleanup process through its Administrative Reforms. EPA is committed to further administrative and regulatory improvements in the Superfund program in the years ahead. Our objectives for administrative reform have been to: Protect public health and the environment over the long- term, while lowering the cost of cleanups Increase the pace of cleanups Preserve the principle that parties responsible for contamination should be responsible for cleaning it up, while promoting fairness in the liability scheme, and reducing transaction costs and litigation Involve local communities, States, and Tribes in decisionmaking Promote economic redevelopment at Superfund sites The success of the Administrative reforms has been demonstrable. In a December 1996 report, the Superfund Settlements Project (SSP), a private organization comprised of industry representatives, acknowledged EPA's ``substantial'' track record ``since EPA began implementing the October 2, 1995 administrative reforms . . . especially in light of the severe obstacles that EPA encountered during fiscal year 1996 as it began implementation of these reforms.'' Since the March hearing, the Administrative Reforms have continued to be evaluated by parties outside the Agency, such as the Chemical Manufacturer's Association (CMA) and the United Stated General Accounting Office (GAO). In their April 1997 report, CMA, a non-profit trade association whose member companies account for more than 90 percent of the productive capacity for basic industrial chemicals in the United States, stated that ``at sites where the reforms have been fully applied so far, EPA's reforms have produced benefits that otherwise would not have occurred.'' GAO, the investigative arm of Congress charged with examining all matters related to the receipt and disbursement of public funds, found that ``while EPA has not evaluated the overall effects of the reforms, the Agency has reported quantifiable accomplishments resulting from the implementation of 6 of the 45 reforms.'' The GAO report, however, did not attempt to measure the innumerable unquantifiable benefits of the Administrative Reforms, such as the experience and knowledge gained from pilot projects, or even the lawsuits not filed as a result of liability reforms for small parties. For a detailed discussion of the Administrative Reforms, please refer to my testimony before this committee in March. Before discussing the Administration's Legislative Reform Principles, however, I'd like to provide you with an update on some of the many successes we have achieved since my last appearance before this body. Providing Protective Cleanups at Lower Costs EPA is continuing a number of administrative reforms which promote cleanups that are technologically and scientifically sound, cost- effective and appropriately consistent nationally. These reforms will lower cleanup costs, while assuring long-term protection of human health and the environment. EPA's National Remedy Review Board is continuing its targeted review of complex and high-cost cleanup plans, prior to final remedy selection without delaying the overall pace of cleanup. Since the Board's inception in October 1995, it has reviewed 19 cleanup decisions at 18 sites, resulting in estimated cost savings of approximately $23- $38 million. In addition, EPA has achieved great success in updating cleanup decisions made in the early years of the Superfund program. After 2 years of implementation, more than $500 million in future cost reductions are predicted as a result of the Agency's review and update of remedies at more than 90 sites. It is important to stress, however, that these future cost reductions can be achieved while still preserving appropriate levels of protection, and the current pace of the program. Increasing the Pace of Cleanups The completion of 447 Superfund toxic waste site cleanups (as of August 29, 1997) is a significant measure of the improved pace of cleanups. Currently, over 85 percent of the sites on the National Priorities List (almost 1,200 of 1,347) are either undergoing cleanup construction (remedial or removal), or have been completed. EPA is continuing the use of its Superfund Accelerated Cleanup Model (SACM) to spark early cleanup action, and standardized or ``presumptive'' remedies, as well as other reforms, to maintain and increase this pace. Promoting Fairness in Enforcement EPA's ``Enforcement First'' strategy has resulted in responsible parties performing or pay for approximately 75 percent of long-term cleanups, thereby conserving the Superfund trust fund for sites for which there are no viable or liable responsible parties. Through Administrative Reforms, EPA has addressed the concerns of stakeholders regarding the fairness of the liability system. EPA has continued implementation of its 1996 ``orphan share compensation'' policy, under which EPA offers to ``forgive'' a portion of its past costs and projected future oversight costs during every settlement negotiation for long-term cleanup or non-time critical removal, to cover some or all of the orphan share at the site. The orphan share policy has encouraged settlement, rather than litigation, and enhances the fairness and equity of settlements. Last year, the Agency offered over $57 million in orphan share compensation to potential settling parties across the United States, and continued that practice this year at every eligible negotiation. In addition, EPA continues to use its settlement authority to remove small volume waste contributors from the liability system, responding to the burden third-party litigation can place on parties that made a very limited contribution to the pollution at a site. To date, the Federal Government has completed settlements with over 14,000 small volume contributors at hundreds of Superfund sites, protecting these parties from expensive private contribution suits. In addition, EPA continues to step in to prevent the big polluters from dragging untold numbers of the smallest ``de micromis'' contributors of waste into contribution litigation by publicly offering to any such party $0 (i.e., no-cost) settlements that would prevent lawsuits by other PRPs. The real success of this approach is to be measured by the untold number of potential lawsuits that we have discouraged. Finally, EPA is continuing the successful use of site-specific special accounts to direct settlement funds toward cleanups (over $220 million in principal, and $35 million interest generated from more than 70 accounts), and is continuing implementation of its many pilot projects, such as the allocation pilot project, as well as other reforms to the liability system. Involving Communities and States in Decision Making The Agency supports the principle that communities must be offered opportunities for involvement in the cleanup process as early as possible and continue to be involved to the time the site is cleaned up. Our ``consensus-based'' approach to the remedy selection process continues to empower local citizens and other stakeholders to be involved in the remedy selection process that ultimately results in EPA choosing common sense remedies that meet statutory and regulatory requirements. In addition, our Regional Ombudsmen continue to serve as a direct point of contact for stakeholders to address their concerns at Superfund sites, and our electronic lines of communication and our Internet pages continue to provide information to our varied stakeholders on issues related to both cleanup and enforcement. Additionally, EPA continues to acknowledge the successes that States are achieving conducting thousands of hazardous waste site cleanups under State and Federal Superfund programs. Most of these sites are short-term, relatively inexpensive actions that address immediate hazards, and a growing number are conducted pursuant to State voluntary cleanup programs, as discussed below. EPA is continuing to increase the number of sites where States and Tribes are taking a lead role in assessment and cleanup using the appropriate mechanisms under the current law. Agreements such as those with the State of Minnesota and the State of Washington are excellent examples of these efforts, which build upon a foundation of demonstrated State readiness, and provide clear State decisionmaking authority with support from, but minimal overlap with EPA. States are developing voluntary cleanup programs to speed up the cleanup non-NPL sites, which, generally speaking, pose a lower risk than those sites listed the NPL. These voluntary cleanup programs pose an alternative to the conventions CERCLA or State Superfund-like enforcement approach to cleaning up contaminate sites. Through State voluntary cleanup programs, site owners and developers identify and cleanup sites by using less extensive administrative procedures. The site owners and developers may then obtain some relief from future State liability for past contamination. This approach encourages cleanup of sites, such as Brownfields, that might otherwise not be cleaned up because of limited Federal and State resources. In addition, financial and real estate sectors are sometimes reluctant to support the redevelopment of brownfields and lower risk sites because they are concerned about potential Superfund liability. Some developers have also expressed concern the uncertainty arising from potentially overlapping Federal/State cleanup authority can become a disincentive to clean up and redevelopment of these sites. EPA is addressing this concern by clarifying EPA and State roles and responsibilities, which helps reduce such uncertainty and promotes the cleanup and redevelopment of lower risk sites, such as Brownfields. To encourage partnerships with States and Tribes, EPA recently announced issuance of draft guidance that promotes State voluntary cleanup programs, and encourages States to create such programs. The draft guidance sets out baseline criteria that EPA will use to evaluate State voluntary cleanup programs. This evaluation will be part of the negotiation of a Memorandum of Agreement (MOA), or planning document providing roles and responsibilities between EPA and the State the cleanup of lower risk sites. For those sites included within the scope of the MOA, EPA will not exercise cost recovery authority and does not generally anticipate taking CERCLA removal or remedial actions at sites except under limited circumstances. In addition, this draft guidance includes a draft site designation or screening process and proposes that this new process be used in conjunction with the guidance to designate sites as either Tier II (lower risk sites that are eligible for inclusion with the scope of an MOA concerning a State voluntary cleanup program) or Tier I (high risk sites of the type that historically have been listed on the National Priorities List Tier I sites are not eligible for inclusion within the scope of an MOA concerning a State voluntary cleanup program. The Agency believes this is a unique and valuable feature of the guidance because it will enable developers and other parties to use the process outlined to make Tier I and Tier II designations. Understanding the potential for Superfund involvement enables stakeholders to make more informed property cleanup, transfer and redevelopment decisions. The guidance has been published in the Federal Register for review and comment. In conjunction with the Brownfields Initiative, EPA also authorized financial assistance to such voluntary cleanup programs. EPA is providing $10 million, earmarked in fiscal year 1997 appropriations, to encourage the development or enhancement of State programs that encourage private parties to voluntarily undertake early protective cleanups of less seriously contaminated sites, thus accelerating their cleanup and their redevelopment. Promoting Economic Redevelopment EPA is continuing to promote redevelopment of abandoned and contaminated properties across the country that were once used for industrial and commercial purposes (``brownfields''). Brownfields sites exist in this country, affecting virtually every community in the Nation. The Administration believes strongly that environmental protection, public health, and economic progress are inextricably linked. Rather than separate the challenges facing these communities, our brownfields initiative seeks to bring all parties to the table--and to provide a framework for them to seek common ground on the whole range of challenges: environmental, economic, legal and financial. The EPA brownfields pilot grants are forming the basis for new and more effective partnerships. In many cases, city government environmental specialists are sitting down together with the city's economic development experts for the first time. Others are joining in-- businesses, local residents, community activists. EPA's efforts have been accomplished through the Brownfields Action Agenda--an outline of specific actions the Agency is conducting. The initial Brownfields Action Agenda outlined four key areas of action for returning brownfields to productive reuse: (1) awarding Brownfields Assessment Demonstration Pilots; (2) building partnerships to all Brownfields stakeholders; (3) clarifying liability and cleanup issues; and (4) fostering local workforce development and job training initiatives. A new Action Agenda for fiscal years 1997 and 1998 is designed to further identify, strengthen, and improve the commitments EPA and its colleagues can make to brownfields. The Brownfields Assessment Pilots form a major component of the Brownfields Action Agenda. EPA has committed to fund 115 assessment pilots to date at up to $200,000 each. We are also preparing to award a second stage of brownfields pilots this year: The Brownfields Revolving Loan Fund (BRLF) Pilots are designed to enable eligible States, cities, towns and counties, Territories, and Indian Tribes to capitalize revolving loan funds to safely cleanup and sustainably reuse brownfields. EPA's goal is to select BRLF pilots that will serve as models for other communities across the Nation. In the 1997 fiscal year, EPA's budget for brownfields includes $10 million to capitalize BRLFs. Only entities that have been awarded National or Regional Brownfields Assessment Demonstration Pilots by September 30, 1995, will be eligible to apply to EPA's BRLF pilot program. Therefore, up to 29 BRLF pilots may be awarded in fiscal year 1997. Fiscal year 1997 BRLF pilots will be funded at up to $350,000. The BRLF will be awarded through an evaluation process. Eligible entities will be required to demonstrate evidence of a need for cleanup funds, ability to manage a revolving loan fund, ability to ensure adequate cleanups, and a commitment to creative leveraging of EPA funds with public-private partnerships and matching funds/in-kind services. Another facet of the Brownfields initiative is also scheduled for implementation this year. The Brownfields Showcase Communities project is an attempt to focus Federal Government attention on selected communities across the United States. Those communities selected through an application process will receive special technical, financial and targeted Federal assistance to address issues of contaminated urban and rural properties. EPA and 15 other Federal agencies are sponsoring the Brownfields Showcase Communities project. Through a multi-agency panel, applications will be reviewed and 10 Showcase Communities will be selected in 1997. These communities will be models for Federal coordination and cooperation. Finally, our recent work-together to enact the Brownfields Tax Incentive fully demonstrates our shared commitment to responsible legislation on these issues. This is a 3-year tax incentive plan that will reduce the cost of cleaning up thousands of contaminated, abandoned sites in economically distressed areas. It is anticipated that this $1.5 billion tax incentive will leverage more than $6 billion in private funded cleanups at an estimated 14,000 brownfields. superfund legislative reform principles The Agency continues to implement the improvements to Superfund that have been made through Administrative Reforms. Throughout the course of the reauthorization process, we have heard stakeholders express their concerns and have taken the opportunity to address those concerns. We recognize, however, that there are areas of the law that could benefit from legislative provisions. Therefore, the Administration based its goals for Superfund legislative reform on the status of the current, reformed program. Legislative reform must build upon the successes of the current Superfund program and the lessons learned through three rounds of Administrative Reform. We believe legislative reform must be targeted to address critical issues in need of a legislative solution. Our goals for legislative reform continue to be to: protect human health and the environment; maximize participation by responsible parties in the performance of cleanups; ensure effective State, Tribal and community involvement in decisionmaking; and promote economic redevelopment or other beneficial reuse of sites, all in a manner that increases the pace of cleanups, improves program efficiency and decreases litigation and transaction costs, and which does not disrupt or delay ongoing progress. Protection of Human Health, Welfare and the Environment Any legislative changes addressing cleanup decisions must, as a baseline, continue to ensure that cleanups are protective of human health and the environment over the long term. Cleanups should also be cost-effective, and foster productive reuse of contaminated property, and restore groundwater to beneficial uses, wherever practicable. In order to facilitate these goals, the Administration supports treatment for those wastes that are highly toxic or highly mobile, in light of the continuing challenges in ensuring the long-term reliability of engineering and institutional controls, as well as the limitations that containment and institutional controls place on productive reuse or redevelopment of property. The Administration supports modifying the current mandate for permanence to emphasize long-term protection and reliability. The Agency continues to believe that treatment of highly toxic or highly mobile waste offers advantages over containment or other measures. As a result, we are currently striving to implement these goals today, using treatment where necessary, at. such sites as the Bayou Bonfuoca Site in Louisiana. At this site, EPA determined that incineration was necessary to treat creosote waste, including Benzo(a)pyrene, that had leaked into a bayou. The creosote mixture was so potent, that divers received second degree chemical burns from contact with the contaminated sediments. The contamination appeared to have killed all life in the bayou. Treatment was necessary at this site to permanently eliminate the threat from these materials. Additionally, legislation should not alter our goal of restoring groundwater to beneficial uses, wherever practicable. Over half of this nation's population relies on groundwater at its source of drinking water. Superfund has raised consciousness about the need to prevent contamination of this resource by demonstrating the consequences-- financial, technological, and practical--of contamination that threatens real people now and future generations. As a result, we believe that Maximum Contaminant Levels under the Safe Drinking Water Act or more stringent applicable State standards should be established as the cleanup standards for groundwater whose beneficial use is, or is anticipated, to be a drinking water source, unless technically impracticable. Under the current program, EPA is using ``smart'' groundwater remediation to provide appropriate levels of protection at lower cost. In the early days of the program, we relied solely on extraction and treatment of groundwater to achieve cleanup objectives. In 1995, 60 percent of our groundwater cleanup decisions reflect extraction and treatment being used in conjunction with other techniques, such as bioremediation, underground treatment walls, or monitored natural attenuation, which is often used to reduce low levels of contaminants. In 1995, about 25 percent of Superfund groundwater remedies included monitored natural attenuation of contamination. It is worth noting that our success in developing groundwater cleanup policy is consistent and concurrent with ongoing developments in science and technology and it uses the flexibility afforded under current law. This flexibility conserves resources and should be retained in any future legislation. Another important principle supported by the Administration requires the continued consideration of reasonably anticipated future land uses, based on consultation with the affected community, site owners, and others, in the process of selecting cleanup options. By involving the community in this manner, we can structure cleanups that not only protect human health and the environment, but also meet the needs of the local community. Additionally, the Administration believes that cleanups should comply with the applicable substantive requirements of other Federal environmental laws and State environmental or facility siting laws applicable to clean up activities. It is important to continue to protect theme strong State and Federal interests, especially where these requirements directly relate to the cleanup activities being considered. However, the Administration does support some flexibility regarding requirements that have been traditionally referred to as ``relevant and appropriate.'' As a result, the Administration supports removing the statutory requirement to comply with these requirements. Finally, there are many components of Superfund cleanup provisions proposed by various parties that the Administration would strongly oppose. Chiefly among them are provisions that would mandate reopening of cleanup decisions; provisions that would fail to discourage contamination of currently uncontaminated land, groundwater, or natural resources; provisions which would require prescriptive cost or risk assessment requirements; and most importantly, provisions which would delay cleanups or result in cleanups that are inadequately protective of human health, welfare, and environmental and natural resources. Fairness and Reduced Transaction Costs In discussing any proposed legislative changes to the Superfund liability scheme, it is imperative to retain the fundamental principle that those responsible for the contamination must pay for the cleanup. This has been the cornerstone of our ability to obtain as many cleanups as we have, and has left the Superfund trust fund available for truly abandoned sites and public health and environmental emergencies. Within this bedrock principle, however, the Administration supports clearly defined exemptions or limitations on liability which reflect EPA's experience with Administrative Reforms. As a result, the Administration would support liability reform for certain generators or transporters of municipal solid waste, and for parties who sent less than 110 gallons or 200 pounds of hazardous waste. The government does not currently bring these parties into the system, but they have occasionally been pulled in by other parties, with expensive and unfortunate results. EPA has continued its Administrative Reform policy of offering compensation for the ``orphan share'' (the contribution for responsibility attributable to insolvent and defunct parties) during every negotiation for long term cleanup and non-time-critical removal. The work we have done with orphan share compensation has significantly enhanced the fairness of the Superfund program. Although EPA does not need statutory authority to offer orphan share compensation, EPA supports legislation creating a separate mandatory spending account for orphan share, consistent with the President's Fiscal Year 1998 budget request, so that funds for orphan share do not compete with cleanup dollars or reduce the funding available for response actions. One of the major benefits of our Administrative Reforms was the ability to experiment administratively with provisions of proposed Superfund laws through ``pilots.'' Specifically, the consensus bill in the 103d Congress provided for an allocation process used to assess liability and distribute orphan share funding. While the Administration originally supported these provisions, and continues to support a process to help resolve issues related to settling liability, EPA's experience with several allocation pilot projects has informed our position and demonstrated some of the serious drawbacks with a rigid and prescriptive process. As a result, the Administration currently supports the use of a flexible, non-prescriptive process that makes effective use of available orphan share funding to reduce transaction costs by promoting settlements and encouraging allocation of costs among settling parties. We also support statutorily addressing the liability of generators and transporters of municipal solid waste. EPA and the Justice Department recently issued a new municipal liability policy. Preliminary comments are extremely favorable toward the policy, which provides the opportunity for expedited final settlements for municipal owners, and generators and transporters of municipal solid waste. The Administration would support statutory changes which are consistent with this new policy. In addition, we believe that we should address the issue of bona fide prospective purchasers in our efforts to make sure that we can cleanup and reuse brownfield properties. Finally, I reiterate that any changes to the liability and enforcement provisions of Superfund must ensure that those who created the problems be held responsible for cleanup. Further, changes in the law must not compromise the availability of cleanup dollars or endanger the speed or thoroughness of site cleanups and our ability to accomplish the President's goal of completing 900 additional cleanups through the year 2000. Any exemptions or limitations on liability--or use of Trust Fund money--must be considered against the backdrop of these principles. Therefore, the Administration has consistently opposed, and continues to oppose site-based ``carve outs'' that relieve viable, responsible parties of their obligation to clean up sites. Meaningful Community Involvement Through years of implementation of the program, EPA has determined that early and meaningful community involvement can increase the overall pace of cleanups. Though enhanced community involvement may add steps in the early portions of the cleanup process, this investment generally accelerates later cleanup stages, as all parties are informed and have had time to work through their concerns. EPA has learned the hard way that a decision process that alienates the people our cleanups are supposed to protect results in constant revisiting of decisions, not quicker cleanups. We have also learned that we need a variety of tools and resources, and the flexibility to tailor the application of those tools and resources, to meet the particular needs of citizens at different sites. No two sites or communities are exactly alike. In some communities, citizens are disinterested in some large-scale NPL cleanups, and in other communities, citizens are keenly interested at some smaller scale cleanups. As a result, the Administration supports continued efforts to enhance community involvement and development and provision of information to communities, including the opportunity for formally established community advisory groups at Superfund sites. Consistent with our experience, we support making Technical Assistance Grants (TAGs) available to citizens at non-NPL sites, in addition to NPL sites. Additionally, the Administration would like to continue to ensure direct input from citizens into the development of assumptions regarding reasonably anticipated land uses upon which cleanups are based. While we support processes which build consensus within communities, the achievement of consensus should never be the price of admission into the decisionmaking process. We must always listen to the diversity of views among citizens affected by hazardous waste sites. Given the importance of public health information, we also support the continued protection of the health of people in communities impacted by Superfund sites through efforts of public health assessments, health effects studies, and other public health activities prescribed by law. In addition, the Administration also supports ensuring that communities have access to information about releases of hazardous substances and other toxics. Finally, the Administration is strongly opposed to any provisions in a new law that would impair meaningful community input and involvement, or would disrupt existing citizen advisory groups or use inappropriate, prescriptive membership requirements for such groups. Enhanced State and Tribal Efforts In addition to the many changes and accomplishments of the Superfund program over the last 4 years, the context in which the program exists is also dramatically different. We recognize and support the continued growth of the State and Tribal regulated and voluntary programs; they have greatly expanded the number of hazardous waste sites cleaned up to protect human health and the environment. We fully support better coordination between Federal agencies and the States and Tribes. As a result, the Administration supports Superfund legislation that provides greater opportunities for States and Tribes to address a full range of hazardous waste sites for which they have the necessary response capacity. EPA will provide the financial and technical support needed to further improve existing programs. In order to do this, we support the use of flexible ``partnership agreements'' between EPA and States and Tribes, based upon demonstrated resources and capabilities, to enable all parties to work together to determine which sites should proceed under what authorities, and under whose lead, so that governmental resources are complementary, not duplicative. Over the last 4 years, States, Tribes, and EPA have been implementing this process at many sites, and the results are encouraging. In general, States and Tribes have the primary role in the process of discovering new sites and making screening decisions about which sites warrant action. In comparison to just a few years ago, States now exert substantial control over not only which sites will be included on the National Priorities List, but also on the CERCLIS inventory. However, the more interesting story here is the tremendous variety of arrangements EPA and States and Tribes have worked out to address waste sites. Because of the widely divergent status of Superfund programs at the State level, flexibility, as opposed to a ``one-size-fits-all'' approach, is crucial. We have seen the success of partnership agreements with such States as Minnesota and Washington, which have entered into Superfund program partnerships with EPA's Regional offices. As stated previously, these partnerships build upon a foundation of demonstrated State readiness, and provide clear State decisionmaking authority with, support, but minimal redundancy, from the Regions. Similar successes have been achieved in agreements with Federal Facilities, such as the agreement between EPA, the Department of Energy, and the State of Colorado at the Rocky Flats Superfund site. When it comes to the role of States and Tribes, Superfund legislative reform must consider comprehensively the scope of the hazardous waste contamination problem Federal, State and Tribal programs are trying to address across this country and how we are succeeding today in our efforts to organize our collective resources to achieve more protective cleanups. Within this context, we must recognize that the retention of strong cleanup standards, enforcement authorities, and sufficient resources at the Federal level provides States and Tribes with resources critical to the effectiveness of their own programs. It is particularly vital, for example, that the Federal emergency prevention, preparedness, and response capabilities, which are looked to as a model, and for support the world over, remain vital and effective. Within the context of the flexible partnership, there are, however, several State-related concepts that the Administration strongly opposes, including: limitations on the Federal ability to provide response or to enforce a response; preemption of State and Tribal cleanup standards; State and Tribal waivers of Federal authority; a transfer of responsibilities to States or Tribes in a manner that would disrupt or delay cleanups or that would result in less protective cleanups; or default approvals of State or Tribal programs. Finally, the Administration strongly opposes limitations on EPA's authority to list sites on the National Priorities List, including a cap on further listings on the NPL or premature or ``default'' deletion of sites from the NPL. Economic Redevelopment The Brownfields Economic Redevelopment Initiative has continued to achieve much success. The continuing value of the Brownfields Initiative is its evolution and promise for the future. To build upon these successful first steps and launch others we must not lose sight of our overall goal to revitalize communities. Future efforts under the Brownfields Economic Redevelopment Initiative must be viewed as an important component of any Superfund legislative reform strategy. With the breadth and variety of activities and stakeholders converging on the brownfields issue, we have tried to establish a framework that articulates a complete and comprehensive brownfields program. It is against this framework that we will measure proposals regarding the brownfields. Brownfields legislative reforms should continue the progress made under EPA's administrative reforms and address the full range of Brownfield issues including: technical assistance funding for brownfields identification, assessment, and reuse planning; cooperative agreement funding to capitalize revolving loan funds for brownfields cleanup; support for State development of voluntary cleanup programs; liability protection for bona fide prospective purchasers and innocent landowners of contaminated property; support for mechanisms for partnering with Federal, State, local and tribal governments, and other non-governmental entities to address Brownfields; and support and long- term planning for fostering training and workforce development. In summary, the above discussion represents the Administration's position regarding issues facing the current Superfund program. These Principles highlight some of the major elements we believe should be addressed in order to achieve consensus based, responsible Superfund legislative reform. Other issues addressed in the Administration's Legislative Reform Principles include Natural Resource Damages issues and Federal Facility Issues. I hope that we will once again work together toward crafting a Superfund bill that embraces these principles so that we might give the American people a Superfund law that is fully protective and delivers on our commitment to achieve Superfund reform in the 105th Congress. the superfund cleanup acceleration act of 1997 The Administration has evaluated the chairman's mark of S. 8, the Superfund Cleanup Acceleration Act of 1997, against the same criteria which have guided the Administration's Superfund Legislative Reform Principles. I was pleased to see that since the early introduction of S. 8, several changes have been made which fall within our Principles. However, the Clinton Administration strongly opposes the chairman's mark of S. 8 in its current form. Given the short amount of time we have had to review the most recent draft, I have tried to identify the most important concerns below. The Administration's most serious concerns are that: (1) the bill may fail to ensure long-term protection of human health and the environment; (2) it will slow down cleanups; (3) it lets polluters off the hook and shifts costs to taxpayers and consumers; and (4) it provides incomplete support for communities, States, and Tribes, and economic redevelopment. But perhaps more fundamentally, the chairman's mark of S. 8 does not embody the Administration's Superfund Legislative Reform Principles, nor does it fully reflect the current status of the Superfund program. Inadequate Protection Remedies under the chairman's mark of S. 8 would not assure protection of human health and the environment over the long term because highly toxic, highly mobile waste would probably not be treated, sources of groundwater contamination would not be required to be contained and reduced, and levels necessary for protection might be waived on the basis of cost. No Effective Treatment to Ensure Long-Term Reliability While the chairman's mark reflects bipartisan agreements with respect to a number of issues, and significant movement on others, the bill still lacks, what we believe to be, the provisions necessary to ensure that remedies will result in long-term protection of human health and the environment. While the chairman's mark contains a new preference for treatment, a substantial burden of proof must be met before the preference can even be applied: a site-specific analysis must demonstrate that the material (1) cannot be reliably contained, and (2) is highly toxic, and (3) is highly mobile, and (4) that there is a reasonable probability that actual exposure will occur. In addition, the bill exempts landfills and mining sites from the preference. While bills in the 103d Congress contained similar provisions, they were exceptions to a requirement to treat hot spots. As reflected in the chairman's mark, treatment would probably never even be considered for many sites, that present a multitude of problems, some of which are amenable to treatment. Finally, the preference is neutralized by a conflicting provision, which states that institutional controls and engineering controls are to be considered on an equal basis to all other remedial actions, regardless of the hazard of the material in question. As you know, the Administration's legislative reform principles support the idea of eliminating the mandate to utilize permanent solutions and treatment to the maximum extent practicable, in exchange for a new emphasis on long-term reliability, and retention of the preference for treatment of highly toxic or highly mobile waste. We believe such changes would eliminate the potential for ``treatment for treatment's sake,'' but retain an appropriate presumption that materials posing the ``principal threats'' at sites due to the intrinsic hazards poked by their toxicity or mobility should be treated, unless impracticable. Treatment of highly toxic or highly mobile wastes helps ensure that any materials managed onsite over the long-term would not pose a serious threat to human health and the environment. And obviously, the more contaminated material that remains onsite and the higher the potential risks it poses, the less likely productive reuse of that property, or significant portions of that property. Groundwater Not Adequately Protected The groundwater provisions of the chairman's mark reflects substantial movement from S. 8 as proposed. I am pleased to see that restoration of contaminated groundwater to beneficial uses, unless technically impracticable, has been embraced, as called for by the Administration's principles. I am concerned, however, that two critical provisions necessary to ensure protection in the case where complete restoration is technically impracticable are notably missing--a requirement to contain and reduce sources of pollution that cannot be eliminated entirely and may continue to release pollutants to ground or surface water, and a requirement to contain the dissolved plume. One issue on which there a high degree of consensus is that restoration of an aquifer or part of an aquifer cannot occur unless new contamination is prevented from entering the groundwater. Given that a five-gallon bucket of the commonly used solvent trichloroethylene (TCE) can contaminate 800 million gallons of water at levels above drinking water standards, leading to enormous cleanup costs, it is imperative to control and minimize such sources. That is why the groundwater policies the Agency has issued under its Administrative Reform efforts have called for early control of both surface and subsurface-sources as critical to successful groundwater remediation efforts. Surface sources include lagoons or landfills which may be leaching contaminants into groundwater. Effective control of such sources is one of the components critical to making monitored natural attenuation a viable cleanup option for some groundwaters. Dense and light non-aqueous phases liquids, (DNAPLs and LNAPLs) are good examples of subsurface sources which can pose a greater threat to groundwater over time because of the potential for the contaminants to migrate and accumulate in less accessible zones. The diverse panel of experts the National Research Council drew together to write ``Alternatives for Groundwater Cleanup'' in 1994 advocated that ``measures to remove contaminants from zones where the release occurred and to contain contaminants that cannot be.removed should be-taken as soon as possible after the contamination occurs.'' Requirements for such measures have appeared in numerous bills in the past. The absence of a minimum requirement in the chairman's mark to control and reduce sources in cases where full restoration is technically impracticable, and to contain the plume, removes an assurance citizens have come to expect and will cause needless debate over what should be codified as a best practice. Waiver from Protection? Of continuing concern are conflicting provisions in the chairman's mark which seem to expand the ``technical impracticability'' waiver from current law to permit not only applicable requirements of other laws to be waived on the basis of cost, among other factors, but also cleanup levels established as necessary-to protect human health and the environment at a site where applicable requirements are not This standards are waived, the President shall select a ``technically practicable'' remedial action that ``protects human health'' and most closely achieves the protectiveness goals. The conflict in the language is confusing. We cannot afford any confusion over the fact that protection of human health and the environment is a fundamental mandate that must be met in all cases without exception. In addition, by prescribing numeric risk goals, the bill would lock the Agency into current methods of expressing and measuring risk, which are in transition as the science is changing. Under the Agency's new cancer guidelines, there will be decreasing reliance on linear models which underlie the ``risk range'' Superfund currently uses for managing risks, and new units of measures, including ``margin of exposure'' will begin to be used. Protectiveness goals are best dealt with qualitatively, or left.to the Agency to address in regulations or guidance. The bill unnecessarily codifies current practice regarding how determinations of protectiveness are made, and leaves out the ``point of departure'' used to establish ``safe'' levels of carcinogens risks within the risk range of 10-6 and 10-4, by not explicitly addressing sensitive sub-populations, and by inappropriately linking the hazard index to threshold carcinogens, which we only use for noncarcinogens. The Chairman's Mark Would Delay Cleanup One issue upon which I think we would all agree is that the pace of cleanups should not be derailed. We are currently showing tremendous progress in addressing the current sites on the NPL, and strongly oppose any provisions that could negatively affect that progress. Mandated ROD Reviews I appreciate that the chairman's mark attempts to capture the ``spirit'' and features of the Agency's ``Remedy Update'' Administrative Reform, than did the extremely onerous remedy review provisions in the original S. 8. Under current law, remedy updates have yielded impressive results, however I remain concerned that the regimented mandate the chairman's mark contains will still result in delays and disruptions to the program that are at odds with the Administration's commitment to speed the pace of cleanup. The artificial deadlines on petition submission and Agency review, the mandated role of the remedy review board, and the implied comment process all promise to transform the current administrative process that is yielding $340 million in cost savings in fiscal year 1996 and another $280 million estimated to date for fiscal year 1997 into a resource-intensive diversion from cleanup. While the remedy review provisions initially appear to provide discretion to the Agency in its reviews, this language is illusory. The chairman's mark requires the Agency to prioritize petitions, which in turn requires an evaluation of each petition against eight factors. As a result, the discretion provided in one portion of the provisions is effectively negated in another. Based on our experience with the Remedy Update Reform and the National Remedy Review Board, our preliminary analysis indicates that the task of implementing the 180 day petition review and prioritization process could consume approximately 70 percent of our workforce of remedial project managers and policy experts for over a year, diverting attention from moving projects to completion. Keep in mind that remedy changes can precipitate changes in consent decrees and interagency agreements, which will also take time and divert attention away from cleanup--increasing, not reducing, transaction costs. I agree that appropriate remedy changes should be made, but I urge retention of the flexibility the current administrative process affords the Agency to balance ``rework'' of old decisions with forward progress at sites. Prescriptive Remedy Review Board The Remedy Review Board would certainly have a dramatically expanded workload under the chairman's mark. In addition to its role in reviewing past decisions, the Board would continue its efforts begun under the Administrative Reforms to review proposed remedial action decisions. Again, I am pleased with the endorsement of the Remedy Review Board reflected in its codification in the chairman's mark, but- am concerned that some unhelpful prescription has been picked up in the translation. Specifically, The chairman's mark requires that fully one- third of all draft decisions the Board should be reviewed in any given year, a dramatic increase in workload from the approximately 10 percent of decisions the Board plans to review under its current criteria. The chairman's mark also adds a notice and comment process relating to the Board's recommendations to the opportunity to comment on the official Proposed Plan the public already has under current law, adding significant delay. Overly Prescriptive Risk Assessments The chairman's mark retains some troublesome features of S. 8's risk assessment provisions. Most notably, the over broad requirement for site-specific chemical data simply makes no sense. Toxicity, the primary type of chemical-specific information used in risk assessment, does not generally change from site to site. In addition, toxicity studies cost hundreds of thousands of dollars, and several years to conduct. Peer-reviewed Agency toxicity criteria should be used along with site-specific exposure information. Also, the requirement for ``central. upper-bound and lower bound estimates'' of risk for each facility are inappropriate for site-specific risk assessments, but rather apply to chemical-specific risk assessments like those found in IRIS or to be performed under the Safe Drinking Water Act. Site-specific risk assessment in Superfund use Agency toxicity criteria along with site-specific measures of exposure. Superfund relies on a high-end estimate of exposure (between a central and upper- bound estimate) that neither minimizes nor exaggerates risks posed by contaminants at the site. This estimate, along with consideration of sensitive sub-populations, forms the basis.for making cleanup decisions that will ensure protection of human health. Finally, the requirement for risk assessment to specify ``each uncertainty identified in the process . . . and research that would assist in resolving the uncertainty'' would lead to paralysis by analysis. Only significant uncertainties need to be identified to better inform the risk management decision. The Chairman's Mark has Broad Liability Exemptions While we are encouraged by the limited focus on parties whose liability we believe should be addressed, such as generators of municipal solid waste, de micromis generators, recyclers, and municipal owners of co-disposal landfills, the Administration continues to have several major concerns regarding many of the liability provisions of the chairman's mark of S. 8. The revised legislation continues to exempt or limit the liability of parties that are viable and liable and should remain responsible for cleanup of their sites. As an example, the chairman's mark exempts generators and transporters of any waste, whether municipal solid waste (MSW) or extremely hazardous waste, found at a ``co-disposal'' site. This provision exempts parties regardless of the hazard associated with their waste or the impact that waste may have on the cleanup. At the Delaware Sand and Gravel Site, for example, the chairman's mark likely would-exempt major industrial generators of hazardous substances merely because they chose to dispose of their hazardous waste at a site which accepted MSW. The chairman's mark also continues to limit the liability of private owners and operators of ``co-disposal'' sites--a position EPA has never endorsed. Under the terms of the chairman's mark, major waste management companies that are liable, viable and understand the costs of this business, would be relieved of their liability. At many sites, this could mean that cleanup costs will be shifted to the Fund through the revised S. 8's orphan share funding provisions. In fact, as the chairman's mark is currently written, the collective ``co-disposal'' provisions result in a de facto co-disposal carve out, which we believe is inconsistent with good public policy. The co-disposal provisions raise other issues of concern. Under the chairman's mark, a ``co-disposal'' landfill is one which contains ``predominantly'' municipal solid waste. The term ``predominantly'' is not defined. The absence of a definition is certain to encourage litigation. Further, where a site continues to receive municipal solid waste, its status may change over time. These new and vague terms are fertile ground for litigation. The small business exemption found in the chairman's mark is another example of an exemption that is broader than is needed to address the intended parties of concern. This provision, probably intended to exempt only those very small contributors of waste which we all agree should not be forced to incur the transaction costs associated with Superfund liability, goes well beyond exempting these contributors. Instead of blanketly exempting these parties, without regard to their contribution or company-specific circumstances, we support the use of other tools to address the liability of these parties, including a litigation moratorium on small businesses with an ability-to-pay problem; and exemption for small businesses who are generators or transporters of municipal solid waste; and penalties to discourage frivolous lawsuits against small businesses. Further troubling aspects of the liability exemptions and limitations in the chairman's mark include the problem that they apply prospectively--effectively eliminating the incentive for sound waste management practices. Also, the liability provisions apply only to sites on the NPL, ignoring certain parties such as residential homeowners and small volume contributors at non-NPL sites that would still be liable for their wastes. Finally, the liability provisions do not eliminate contribution litigation against the parties most in need of such protection, such as the residential homeowners and small volume contributors described above. This violates the Administration's Principles, which seek to reduce litigation and transaction costs. In addition, the liability exemptions and limitations in the chairman's mark, when read together with the Orphan Share Funding provisions, would-create an enormous obligation for the Trust Fund and could divert funds from cleanups. Because orphan share funding is not provided from a source separate from cleanup dollars, cleanups will be competing for the same dollars as the Orphan Share claimants. To make matters worse, the chairman's mark provides that orphan share funding is an entitlement. As such, claims for orphan share funding would be legally superior to other claims against the Fund, including the costs of cleanups. The chairman's mark also requires EPA to reimburse responsible parties for costs that exceed their allocated share--this includes in many cases, costs and work that parties have already agreed to perform. These provisions for ``Fund Contribution'' present several problems. First, they require EPA to repay recalcitrant parties working under an order in the same manner we would repay a cooperative party working under a consent decree. This would be a windfall to the recalcitrant parties. Second, these provisions require EPA to pay costs within 1 year. If large numbers of applications are received at once, this could cause funding shortfalls and resource drains resulting in major cleanup delays. Third, final settlements will be reopened and parties who have previously incurred the costs of negotiations will have to proceed through an allocation to determine their share of liability for the purpose of reimbursement. Such reconsideration of liability effectively duplicates transaction costs previously incurred. Narrow and Unworkable ``Illegal Activity'' Exception The chairman's mark attempts to prevent a person from claiming a liability exemption where a court determines, within the applicable statute of limitations, that the person violated a Federal or State law relating to the hazardous substances at issue. Because Superfund addresses the results of acts that frequently took place many decades before cleanup, and at a time when applicable laws may have been unclear, proof of illegal or culpable behavior would be impossible at most sites, because the bill's language requires court action at the time of the activity. The Allocation Process is Too Broad and Prescriptive Though the chairman's mark simplified the allocations procedures and made clear that EPA can require a potentially responsible party to perform work at a site, the Administration continues to have a number of concerns with the allocations provisions. First, the large number of sites subject to a mandatory allocation will result in extraordinary allocation costs, will increase transaction costs, and will slow the settlement process. The chairman's mark requires formal and prescriptive allocations at all multi-party sites on the NPL where post-enactment costs are outstanding (over 1,200 sites), even where the parties are exempt from liability under the revised S. 8. In addition, under the chairman's mark, the allocator alone makes the determination as to which parties not already settled out are to be considered exempt or liable. These provisions preclude EPA from protecting small volume contributors or parties with an inability to pay, and thus from protecting them from the transaction costs associated with an allocation. Finally, the revised S. 8 allows no means for the allocation process to be set aside if some parties wish to settle, rather than proceed with the allocation. This allows just one party who is responsible for 5 percent of the costs to hold other parties hostage, even in cases where a settlement could be easily reached. In 1994, as part of Administrative Reforms, EPA implemented an allocations pilot project at 12 Superfund sites. Although the pilots are not yet complete, much has been learned about the strengths and weaknesses of the allocations process. Based on this experience, EPA cannot support a mandatory allocations process at every multi-party site. For example, some responsible parties do not want to use an allocation process, even where EPA has offered orphan share compensation. Based on our experience with allocating and our allocation pilot projects, we believe that legislation should reduce transaction costs by promoting settlements and encouraging contribution allocation of costs among settling parties through a flexible, nonprescriptive process that makes effective use of available ``orphan share'' funding. Other Liability Concerns The chairman's mark of S. 8 precludes Federal or administrative enforcement action at any facility that is subject to a State remedial action plan. The revised S. 8 further requires that where a facility is not subject to a State remedial action plan, that is, in cases where the State is not taking the lead, all CERCLA section 106 orders issued by the U.S. relating to that facility cease to have effect after 90 days if the State does not affirmatively concur on the order. This would put a huge burden on the States, creates a duplicative system, and could disrupt cleanups. Each of these provisions inappropriately impose restrictions on the ability of the U.S. to enforce Federal law, and to act to protect public health and the environment. Finally, we remain concerned with the very broad exemptions, and few limitations, placed on the liability of cleanup contractors. The Chairman's Mark Provides General Support for Communities The Administration supports many of the changes made to the Community Participation Title of the chairman's mark of S. 8, which generally improves public participation in the Superfund decisionmaking process. However, the Administration is concerned with several omissions from the Title. Lack of Public Health Support The chairman's mark of S. 8 fails to provide adequate support for public health concerns. The Administration supports the continued protection of human health of communities effected by Superfund sites through efforts of public health assessments, health effects studies, and other public health activities prescribed by law. Prior legislative proposals have provided transparency to the public regarding many of the Agency for Toxic Substances and Diseases Registry's (ATSDR's) responsibilities at Superfund sites. The Chairman's Mark Provides Incomplete Support for States and Tribes One area in which we seem to agree is our desire to provide greater involvement for States and Tribes in the Superfund program. While we support enhanced flexibility in accomplishing this goal, the previsions in the chairman's mark fail to ensure that authorities are transferred in a responsible manner. We do, however support the new provisions which allow States to request removal of sites from the NPL, with an appropriate role for EPA in responding to such a request. Problematic State Delegation and Authorization Processes The chairman's mark of S. 8 provides a confusing array of opportunities for States to implement the Superfund program, including authorization, expedited authorization, delegation, and limited delegation. The chairman's mark may also make all of these opportunities unnecessary, because of provisions in the voluntary cleanup portion of the bill that seem to circumvent most requirements at Superfund sites, as discussed below. We believe that any transfer of responsibility should be accomplished in a responsible manner, taking into account individual State program characteristics, and should provide appropriate reviewable criteria as part of the transfer process. While the Administrator may review appropriate criteria as a part of the authorization process, we are extremely troubled by the criteria relating to expedited authorization. Instead of relying on criteria which relate to the capability of a State to undertake Superfund cleanups, the limited criteria for expedited cleanups provide for self-certification and relate primarily to cosmetic aspects of State programs, such as whether the total number of employees in the State program exceeds 100, whether the length of time the State program has been in effect exceeds 10 years, or whether the number of response actions taken by the State program exceeds 200. While these criteria may provide some insight into the State program, they do not justify the conclusive presumption of capability in the chairman's mark. For example, these facts provide no information about the capabilities of the State to conduct large scale Superfund site cleanups, the types of cleanups that have been performed, or even whether those cleanups were successful and to what degree. Given the ease of meeting the criteria required to receive expedited authorization, it is unlikely that a State would ever pursue more meaningful delegation or full authorization agreements with EPA. We continue to believe, consistent with our Principles, that the best manner in which to transfer responsibility to the States is through a process which identifies a workable division of labor between States and EPA. Through this process, we can ensure protective cleanups for all Americans by allowing State and Federal programs to utilize their strengths where needed, without resorting to a hasty transfer of responsibilities or a cookie-cutter, one-size-fits-all approach. Transfer of Responsibility is Approved by Default and Limits Citizen Access Additionally, we remain concerned with the default approval process set out in the chairman's mark. With regard to delegations, the chairman's mark provides automatic approval of a State application if the Administrator does not approve or disapprove the application in a specified timeframe. Similar short timeframes also apply to applications for expedited authorization, resulting in permanent approvals without regard to ability, and with little accountability after the decision or lack of a decision. As a result, the Administrator, and any other person, lose all opportunity to challenge the certification in a judicial or administrative proceeding. Even with the limited exceptions or extensions, the default approvals of State programs could have unintended consequences, and could even lead to a lack of protection of public health and the environment in cases where a State is automatically approved to take over a site because of the default provisions, but does not currently have the resources available to devote to the particular site. Finally, the chairman's mark provides for no public notice or comment on a proposed approval or disapproval of a State application to take over the program. In the case of the chairman's mark, where the decision as to the lead regulatory agency is made on a site-specific basis, this is very troubling. In many cases, the public has very strong views about which agency is best suited to oversee the cleanup. The public is also barred from taking civil action against any person for any matter that has been transferred. Limiting Ability to Respond to Emergency Removals The chairman's mark requires EPA to give a State 48 hours notice before EPA can take action to perform emergency removal actions at non- Federal listed facilities, unless EPA determines that a public health or environmental emergency exists, or EPA determines that the State has failed to act within a reasonable period of time. Without regard to the vague terminology of the exceptions, even in situations that arguably might not meet the definitions of public health or environmental emergencies, 48 hours in the life of an emergency removal action can sometimes be an eternity. Within that timeframe, contamination can easily spread, causing increased cleanup costs and durations. Though the provisions allow EPA to act in circumstances where EPA determines that the State has unreasonably delayed its response, any such delay can result in disrupted cleanups. These provisions, in concert with unrealistic delegation timeframes, could severely limit the emergency response system which has been so successful in responding to chemical spills, fires, and other emergencies. Other State Issues Besides the issues listed above, there are other potential problems with the provisions of the chairman's mark. For example, the new State cost share requirements appear to add significant costs to the Trust Fund by Limiting a State's responsibility for operation and maintenance costs to, at most, 10 percent. Finally, the chairman's mark provides overly generous incentives for State-managed cost recoveries, which may not adequately recognize the need to utilize recovered moneys to replenish the Superfund Trust Fund. The Chairman's Mark Fails to Adequately Promote and Enhance Economic Redevelopment One of the most important aspects of any Superfund legislation is its ability to promote and enhance economic redevelopment at Superfund sites. Because of this, EPA is very encouraged to see the inclusion of Brownfields provisions, as well as voluntary cleanup program provisions, within the chairman's mark. However, in reviewing the revisions to these provisions, concerns remain. Brownfields Grants are Limited Although the chairman's mark would establish grant programs for both brownfields site characterization and assessment and to capitalize revolving loan funds for brownfields site response actions, the funding authorization levels do not reflect the President's Fiscal Year 1998 budget request. As such, these new grant programs will be substantially under funded and fail to provide the opportunity for many communities to benefit from brownfields assessment and cleanup. Among the other elements of the draft which work against communities, is the limitation on funding per year. This provision will restrict and inhibit grant recipients from efficiently managing and benefiting from the grant itself. The revised bill also retains onerous criteria for grant approval and grant application ranking that will prove difficult, in not impossible, to implement. These requirements will also work to the detriment of communities. In many cases, the information requested as part of the application process may not be available until after the brownfields processes of site investigation and assessment are completed? Similarly, ranking criteria requests call for information that simply cannot be forecast until cleanup at a brownfield site is completed. In addition, the bill excludes States from the list of eligible recipients for brownfields characterization grants. EPA's experience with the Brownfields Pilot Program has taught us that in the case of smaller communities, it may make more sense and be more efficient to provide the grants directly to States. Voluntary Cleanup Program Concerns The Administration is opposed to provisions in the chairman's mark regarding voluntary cleanup. Title I of the bill clearly undermines the need for States to pursue program authorization or delegation under Title II. The voluntary cleanup program is not designed to be, nor should it become; the primary vehicle for hazardous waste site cleanup in the United States. Under the Title I provisions, the elements of a qualifying State voluntary response program are only required if assistance is being sought. The bill should make clear that the Agency determines the adequacy of a State voluntary cleanup program. A State voluntary cleanup program, as envisioned by the Agency, is one that serves as an alternative to conventional CERCLA or State Superfund-like enforcement approaches for cleaning up those sites which generally pose lower risk. It should not include higher risk sites of the type that historically have been listed on the NPL. The chairman's mark explicitly includes such sites as eligible for cleanup under voluntary programs and provides those and other sites a shield against Federal enforcement and many other current statutory requirements. Title I allows States to use ``remedial action plans'' as a shield against Federal and citizen enforcement. There is no link between a ``remedial action plan'' and a ``qualifying'' State voluntary cleanup program. It should be clear that progress toward the development and enhancement of State voluntary programs is a condition of funding under this program. Without such a requirement, the 5-year authorization for voluntary programs, which under the revised S. 8, allows States to receive over one million dollars during this period, may be treated as an entitlement program by States. The Administration remains opposed to the provisions in the chairman's mark that would severely limit EPA authority to exercise enforcement where there is a release of hazardous substances, whenever a State remedial action plan has been prepared, whether under a voluntary response program, or any other State program. Under the chairman's mark, the mere existence of such a cleanup plan eliminates any Federal enforcement authority--even where there may be an-imminent and substantial endangerment to human health and the environment. This compromise of public protection is alarming. Moreover, the new notification requirements with 48-hour time limitations seriously compromise EPA's ability to protect public health, welfare and the environment. These notification requirements will require the Agency to focus time and resources on administrative determinations, rather than on protecting public health and the environment in emergency situations. While EPA is burdened with these administrative requirements, the public may be unnecessarily exposed to substantial threats. Finally, the level of community involvement provided by the chairman's mark is inadequate. The revised bill limits site specific community involvement to an ``adequate opportunity.'' Unlike the current practices of EPA, DOD, DOE, and some States, this does not guarantee participation in all levels of the cleanup process, nor does it guarantee participation in determinations regarding end uses of the property. Coupled with the preclusion of citizen suits at all sites subject to a State remedial action plan, this limitation could result in shutting out citizens from decisions that affect their health and environment. Other Concerns The problems discussed above are not a complete list of problems in the chairman's mark of S. 8. The revised bill significantly restricts restoration of natural resources injured as a result of hazardous waste contamination. Further, the revised bill prematurely limits Federal involvement in the effort to clean up hazardous waste sites by mandating that only a limited number of sites may be added to the National Priorities List (NPL) over the next several years. EPA estimates that hundreds of sites currently meet the eligibility criteria for NPL. Without adequate Federal involvement, these sites would become the responsibility of State and local governments that may not have the resources to address them. conclusion In light of the aforementioned concerns, the Clinton Administration strongly opposes the chairman's mark of S. 8 in its current form. However, we look forward to returning to a bipartisan process of legislative negotiations in which to resolve the Administration's concerns as quickly as possible so that responsible Superfund reform legislation can be enacted in the 105th Congress. Mr. Chairman, thank you for this opportunity to address the committee. Now will be happy to answer any questions you or the other members may have. [GRAPHIC] [TIFF OMITTED] T6587.014 Responses of Carol Browner to Questions from Senator Boxer Question 1. I am concerned about the lack of an explicit requirement that cleanup standards be protective of children, the elderly, and other vulnerable subpopulations. What are your views on this and how do you think the bill's lowering of remediation standards will affect the protections given our children? Response. EPA believes that sensitive subpopulations need to be explicitly protected in the statute. This protection will address those individuals who are particularly sensitive to the toxic effects of certain chemicals, or experience much higher exposures than the general population, such as children. Sensitive subpopulations are not limited, however, to children. Other examples of sensitive subpopulations could include subsistence fishermen, exposed to large amounts of contaminated fish, such as Vietnamese fishermen at the Lavaca Bay Superfund site in Texas; or individuals exposed to multiple sources of contamination. Because the chairman's mark of S. 8 does not specifically address sensitive subpopulations, it does not ensure the more stringent protective measures needed for these at-risk individuals. Question 2. I am concerned that the ``hot spot'' language in this bill favoring the containment of hazardous contamination over the treatment and cleanup of contamination will jeopardize treatment efforts at sites in California. Do you agree? Response. EPA believes that the chairman's mark of S. 8 will jeopardize treatment efforts at all Superfund sites, including those in California. EPA supports a statutory preference for treatment at all sites where the waste is highly toxic or highly mobile. Treatment of highly toxic or highly mobile waste offers advantages over containment or other measures; it helps ensure that any materials managed on-site over the long-term would not pose a serious threat to human health and the environment. And obviously, the more contaminated material that remains on-site and the higher the potential risks it poses, the less likely that productive reuse of that property, or significant portions of that property, will occur. As a result, we are currently striving to implement these goals today, using treatment where necessary, at such sites as the Bayou Bonfuooca Site in Louisiana. At this site, EPA determined that incineration was necessary to treat creosote waste, including Benzo(a)pyrene, that had leaked into a bayou. The creosote mixture was so potent, that divers received second degree chemical burns from contact with the contaminated sediments. The contamination appeared to have killed all life in the bayou. Treatment was necessary at this site to permanently eliminate the threat from these materials. While the chairman's mark of S. 8 does include a limited preference for treatment, it is so restrictive as to provide virtually no preference. Specifically, a substantial burden of proof must be met before the preference can even be applied: a site-specific analysis must demonstrate that the material (1) cannot be reliably contained, and, (2) is highly toxic, and (3) is highly mobile, and, (4) that there is a reasonable probability that actual exposure will occur. In addition, the bill exempts landfills and mining sites from the preference. While bills in the 103d Congress contained similar provisions, they were exceptions to a requirement to treat hot spots. As reflected in the chairman's mark, treatment would probably never even be considered for many sites that present a multitude of problems, some of which are amenable to treatment. Finally, the preference is neutralized by a conflicting provision, which states that institutional controls and engineering controls are to be considered on an equal basis to all other remedial actions, regardless of the hazard of the material in question. The Administration's legislative reform principles support the idea of eliminating the mandate to utilize permanent solutions and treatment to the maximum extent practicable, in exchange for a new emphasis on long-term reliability, and retention of the preference for treatment of highly toxic or highly mobile waste. We believe such changes would eliminate the potential for ``treatment for treatment's sake,'' but retain an appropriate presumption that materials posing the ``principal threats'' at sites due to the intrinsic hazards posed by their toxicity or mobility should be treated, unless impracticable. Question 3. I am concerned about the groundwater cleanup provisions in this bill because they do not include an affirmative requirement that we treat the source of the groundwater contamination. Could you please express your specific concerns and explain why this requirement is important? Response. EPA shares your concerns about the lack of an affirmative requirement to contain and reduce sources of pollution that cannot be eliminated entirely and may continue to release pollutants to ground or surface water. We also believe that the statute should contain a further requirement to contain the dissolved plume. One issue on which there is a high degree of consensus is that restoration of an aquifer or part of an aquifer cannot occur unless new contamination is prevented from entering the groundwater. Given that a five-gallon bucket of the commonly used solvent trichloroethylene (TCE) can contaminate 800 million gallons of water at levels above drinking water standards, leading to enormous cleanup costs, it is imperative to control and minimize such sources. That is why the groundwater policies the Agency has issued under its Administrative Reform efforts have called for early control of both surface and subsurface sources as critical to successful groundwater remediation efforts. Surface sources include lagoons or landfills which may be leaching contaminants into groundwater. Effective control of such sources is one of the components critical to making monitored natural attenuation a viable cleanup option for some groundwaters. Dense and light non-aqueous phases liquids, (DNAPLs and LNAPLs) are good examples of subsurface sources which can pose a greater threat to groundwater over time because of the potential for the contaminants to migrate and accumulate in less accessible zones. The diverse panel of experts the National Research Council drew together to write ``Alternatives for Groundwater Cleanup'' in 1994 advocated that ``measures to remove contaminants from zones where the release occurred and to contain contaminants that cannot be removed should be taken as soon as possible after the contamination occurs.'' Requirements for such measures have appeared in numerous bills in the past. The absence of a minimum requirement in the chairman's mark of S. 8 to control and reduce sources in cases where full restoration is technically impracticable, and to contain the plume, removes an assurance citizens have come to expect and will cause needless debate over what should be codified as a best practice. Question 4. I am concerned about the lack of flexibility in the bill regarding the delegation and authorization of States. EPA is not given the option of partial de-delegation or de-authorization. What are your thoughts on this? Response. Many aspects of the State role as established in Titles I and II in the chairman's mark of S. 8 are of concern to me. The legislation requires EPA to approve or disapprove a State's application without the ability to set conditions related to that approval. If, at any time, EPA finds that a State does not meet certain criteria, the Agency may withdraw the program after meeting certain mandatory requirements, including, providing written notice, a 90-day period for the State to correct deficiencies and public notice and comment. This process, which we believe would minimally take 6 months, provides the only way for EPA to take independent action, except to address an emergency situation. To repeat, except to address emergencies or to take enforcement action after making a finding that the State is unwilling or unable to act and obtaining a declaratory judgment, the Agency must formally withdraw a State's authority before taking action. These provisions establish a very confrontational procedure for dealing with disagreements. They also establish an ``all or nothing at all'' atmosphere that may work contrary to the interests of efficient site cleanups. EPA believes that the State role in Superfund should be enhanced, and that this should occur in a manner that meets each State's interest and capabilities. A partnership agreement should clearly define who is in the lead at which sites and what statutory authorities will be used. Periodic program reviews should be conducted so that the partnership agreement can be adjusted quickly based on any changed budgets, statutes, expertise and site problems that need to be addressed. The provisions of the chairman's mark of S. 8 would allow States, even those without EPA approved programs to use the existence of ``remedial action plans'' as a shield against Federal enforcement. Title I (Brownfields Revitalization) preempts CERCLA government judicial and administrative enforcement actions, as well as private cost recovery actions at sites (including NPL sites) subject to ``State plans'' or ``State remedial action plans.'' Moreover, the revised S. 8 does not define ``remedial action plans.'' In addition, it precludes EPA from taking enforcement action unless specified circumstances are met. In Title II (State Role) specifically, a State must request EPA assistance, or EPA must make ``a determination that the State is unwilling or unable to take action at a facility at which there is an imminent threat of actual exposure'' and EPA ``obtains a declaratory judgment in U.S. district court that the State has failed to make reasonable . . . progress at the facility.'' In addition, citizen suit actions are precluded at sites subject to State remedial action plan (Title I) or for which there has been a transfer of responsibility to the State (Title II). For releases at facilities not subject to a State plan, EPA must provide notice to the State 48 hours after issuing 106 orders. If the State fails to concur, the order will automatically cease to have force 90 days after issuance. These provisions remove the safety net that the Federal Government provides at these toxic waste sites, and when coupled with other authorization/delegation provisions, unnecessarily establishes confrontation that could jeopardize human health and the environment and progress in cleaning up uncontrolled hazardous waste sites. Question 5. I am concerned that the elimination of relevant and appropriate requirements or ``RARs'' could seriously hamper a State's ability to clean up contaminated aquifers. More specifically, in California, we have a quickly developing issue in perchlorate contamination of groundwater aquifers. No national standard exists for perchlorate, nor is there enough information to confidently determine risk. Without the current use of RAR's it is possible this contamination would go unaddressed. What effect would elimination of RAR's have upon the EPA and States ability to protect public health? Response. Under current law, EPA can establish protective cleanup levels where there are no standards (i.e., applicable or relevant and appropriate requirements) for a chemical, where the Agency determines that levels more stringent than available ARARs are necessary to protect human health and the environment. We envision this authority to continue under a revised statute. Practically speaking, elimination of relevant and appropriate requirements will put more emphasis on scientific, risk based approaches to support taking action at Superfund sites. However, there are mechanisms that can assist us in this approach. EPA has the ability to develop interim reference doses (i.e., evaluation of toxicity) for specific chemicals that may pose a problem at a site. These interim reference doses can then be used to provide a risk basis for taking an action. It is not necessary for EPA or the State to develop a RAR on which to base an action needed to protect human health and the environment. The perchlorate situation in California is an example of this. EPA initially developed a provisional reference dose in 1992. In 1995 EPA revised the reference dose based on new information. The State of California took EPA's toxicity assessment, among other pieces of information, and developed an interim action level for perchlorate in drinking water. This action level is not a cleanup level, per se, for Superfund, although it does give further regulatory support for cleanup based on the toxicity information and site-specific exposure information. However, the determination to clean up a site and to what level can be supported by the need to protect human health and the environment, independent of relevant and appropriate requirements. ______ Responses of Carol Browner to Questions from Senator Moynihan Question 1. Many people believe that the agency is using unreasonable assumptions in its risk assessments at Superfund sites. What have you done to ensure that the very best science is brought to bear in Superfund risk assessments? What is the role of peer review in the risk assessment process for Superfund? Response. Superfund has been criticized for ``compounding conservative assumptions'' in its risk assessments, when in fact, the assessments are based on average exposure concentrations and a mix of average and more conservative exposure values that target the ``high- end'' of the exposure distribution. Superfund risk assessments focus on ``high-end'' exposure estimates to ensure that the majority of the population on or near a site will be represented. Many critics would prefer that the Agency use ``best'' or ``central tendency'' estimates that address exposures to only half of the population, however, the Agency believes we should protect ``most'' individuals, and not just those with ``average'' exposures or less. In addition, the Agency seeks to protect ``sensitive subpopulations.'' The term ``sensitive subpopulation'' refers to a segment of the general population that is at greater risk, because the individuals are either particularly sensitive to the toxic effects of certain chemicals, or they experience higher exposures than the general population. Lead is an example where the Superfund program uses the Integrated Exposure Uptake Biokinetic Model (IEUBK model) to address both increased sensitivity and increased exposure among children. EPA supports the development of realistic risk assessments that address the exposure and risk to all segments of the community, not just the ``average'' individual. The focus should be on collecting the right site-specific data to tailor the risk assessment appropriately. After all, the true test of whether an assessment is ``realistic'' or not is the extent to which it addresses site-specific conditions and the concerns of the surrounding community. To that end, local communities are playing an ever increasing role in determining the future land use at sites, and shaping the exposure scenarios that are addressed in site-specific risk assessments. The Agency is also interested in using the best science available in developing the toxicity information used in our Superfund risk assessments. For this reason, EPA maintains the Integrated Risk Information System (IRIS), which provides the Agency's most current toxicity evaluations for hundreds of chemicals. To ensure IRIS remains of high quality, EPA is engaging in a systemic reevaluation of chemicals in the system. This reevaluation includes a widespread request for new data and internal and external peer review. Peer review is an important tool used in scientific disciplines to ensure that the best, most current thinking and information is used. However, it is not necessary, efficient, or appropriate to conduct peer review on every risk assessment at every Superfund site. A more efficient and appropriate use of peer review would be to review the guidance and practices of risk assessment for Superfund. It is for this reason that the current Superfund risk assessment guidance was submitted to the Science Advisory Board for review before it became final. The Soil Screening Guidance, developed for Superfund program use, was submitted to peer review as well as to the Scientific Advisory Board. These reviews resulted in useful changes to the guidance. EPA is also engaging a wide variety of stakeholders in the revision of the risk assessment guidances for Superfund. EPA has also made its revised cancer guidelines available for public comment, which gives scientific peers the opportunity to comment. All of these activities serve to ensure that the best science available will be used for Superfund risk assessments. Question 2. What changes, if any, are needed to improve the existing natural resource damage provisions? Response. The Administration strongly supports the NRD program administered by Federal, State, and Tribal trustees under CERCLA. Our experience with the program indicates that the public and its resources would benefit from a shift to a restoration-based approach which focuses the NRD program on restoration planning rather than litigation over monetized damage claims. To that end, the Administration believes there are two provisions that are essential to any responsible NRD legislation: (1) Clarification of the statute of limitations for bringing an NRD claim. As the Administration has stated in its proposal, the existing statute of limitations for non-NPL facilities should be changed to 3 years from the date of completion of an assessment in accordance with the damage assessment regulation or the completion of a restoration plan adopted after adequate public notice. The existing statute of limitations for non-NPL facilities is 3 years after the later of the date of the discovery of the loss and its connection with the release, or the date on which the natural resource damage assessment regulations are promulgated. This provision has engendered a great deal of confusion and litigation. In some cases, trustees have felt compelled to file premature claims, before the scope of the needed restoration is even known, in order to guard against the most extreme and unfavorable interpretation of the current limitations period. When claims are filed prematurely, the NRD decision becomes focused on monetized damage claims, which is inconsistent with a restoration-based approach. (2) An express provision for review of trustee restoration decisions on the basis of an administrative record. The Administration supports an open assessment process in which scientific and resources management decisions are made on the basis of the best information from all interested parties, including PRPs and the general public. Record review discourages tactical withholding of information by PRPs and dilatory litigation, and promotes the public's right to know. It should be made explicit that judicial review of assessments will be limited to the administrative record and that court's will uphold trustees selection of a restoration action unless it is arbitrary or capricious. Question 3. In your view, how would the chairman's mark affect ongoing natural resource damage restoration efforts, such as the Hudson River? Response. The chairman's mark would weaken the NRD program and make it difficult or impossible to protect and restore natural resources like the Hudson River. It would restrict damages for losses that occur from the time a hazardous substance release causes injury until the resource is restored. It would also eliminate consideration of nonuse values when determining restoration projects that compensate the public for the loss of natural resources. Failure to consider the total value of natural resources, not just their human use value, could result in the selection of restoration projects that significantly undercompensate the public, thus creating a perverse incentive for PRPs to take fewer precautions to prevent future spills in pristine areas, where direct human use is low, than in already degraded areas, where direct human use is higher. Finally, the chairman's mark would insure endless litigation over the scientific and resources management decisions of trustees. ______ Responses of Carol Browner to Questions from Senator Graham Question 1. A major concern about the Superfund program is the unfairness of imposing liability on municipalities, small businesses, individuals and companies for lawful waste disposal activity which occurred prior to the enactment of Superfund in November 1980. A related problem is requiring those entities which are viable today to pay for the large orphan share arising from PRPs which disposed of waste decades ago but are no longer in business or cannot be located. In light of these inequities, my general question is: Wouldn't we make Superfund fairer if we substantially reduced PRP liability for lawful disposal activities occurring prior to 1981, particularly if there is an acceptable funding mechanism to pay for this reform? Response. One of the core principles I believe we must adhere to in Superfund reform is that the parties who contributed to the contamination, not the taxpayer, should contribute to the cleanup. The proposal you suggest does not adhere to this principle. You suggest by your question that fairness would be improved by considering the legality of the behavior that resulted in contamination. I disagree. Under this construct, parties that undertook egregious behavior--that resulted in contamination serious enough to require a Superfund cleanup could escape Superfund liability and responsibility for cleanup. Proof of illegal or culpable behavior may be impossible at most sites. Since Superfund addresses the results of acts that frequently took place many decades ago, documentary evidence is typically scarce or non-existent. Witnesses are often unavailable or have poor recollection of the behavior that lead to the contamination. In most cases, it may not be clear what law would apply. Congress created Superfund in large part because existing laws were inadequate to address abandoned hazardous waste sites. In many cases, Superfund sites were created by poor waste management practices that were ``lawful'' at the time because of the lack of any laws governing hazardous waste disposal. Superfund liability is based upon responsibility. Parties are held responsible for contributing to the creation of hazardous waste sites that pose threats to human health and the environment. You also suggest that liability for activities occurring prior to 1981 could be treated differently than that liability associated with activities which occurred after that date. Nearly 70 percent of the activity that resulted in the contamination at Superfund sites occurred prior to 1981. A ``cutoff '' date of 1981, would result in substantial unfairness to parties that have accepted cleanup responsibility and reached settlement in good faith, by conferring a financial benefit to many parties that have avoided their cleanup responsibility through litigation. I share your concern about the potential impact of a large orphan share on settling responsible parties. To address that concern, absent reauthorizing legislation with sufficient orphan share funding, EPA has instituted an orphan share policy to compensate settling parties. Under our policy, in all remedial design/remedial action settlement negotiations, we offer to compensate settling parties by forgiving past costs and future oversight costs up to 25 percent of the orphan share. Although this is the extent to which we believe we can compensate parties without additional appropriations, we realize that this temporary measure does not go far enough. For this reason, we have proposed that legislation provide for a separate, mandatory spending account to fund the orphan share, i.e., the liability attributed to insolvent and defunct parties, and to fund the difference between the share of liability attributed to parties with an inability to pay their full share, and the amount these parties actually pay. Question 2. To achieve affordable liability reform, has any thought been given to a compromise solution where 50 percent of future PRP liability for lawful pre-1981 disposal is assigned to an ``orphan share'' which is paid for by the Superfund or other credible funding mechanism? Response. As discussed in question 1, we do not consider a proposal that eliminates or reduces liability based exclusively on a date, or the legality of disposal, to be fair or responsible. Such an approach would potentially result in an abandonment of the principle that the parties responsible for the contamination should be responsible for the cleanup. Question 3. To pay for liability reform, we have discussed a number of proposals in the past, including a modest supplemental insurance fund. One way of creating a ``win-win'' situation for PRPs and their insurers would be for PRPs, in exchange for obtaining a 50-percent reduction in pre-1981 liability at particular sites, to give up their insurance claims at those sites. Wouldn't this kind of proposal be worth exploring as a basis for creating a limited insurance fund to help achieve fair Superfund reform? Response. In the past, EPA has supported an insurance settlement fund to resolve the insurance coverage litigation that arose from the disposal of hazardous wastes prior to 1986. This proposal had been accepted by segments of the insurance industry. Although the idea has not been revisited since the 103d Congress, I would certainly not foreclose the discussion of such a fund. However, as I have indicated, I have serious concerns regarding the use of any ``cutoff'' date for the determination of Superfund liability. ______ Responses of Carol Browner to Questions from Senator Allard Question 1. What is the Administration's position on H.R. 1195, legislation which would explicitly waive the Federal Government's sovereign immunity under CERCLA and ensure that Federal facilities comply with State cleanup standards? Response. This response is undergoing OMB clearance. Question 2. Let me give you a situation in Colorado that highlights the need for Federal facility legislation. Several years ago the EPA issued an Emergency Removal Order for a 22,000 cubic feet of contamination material from a site on the Colorado School of Mines Campus where EPA, DoD, DOE, and Bureau of Mines had conducted research. Despite the fact that EPA, DoD and DOE contributed to the contamination of the material, their involvement was never investigated by EPA. Don't you think it's inappropriate for EPA to be the judge of whether they (the EPA) should be held financially responsible for cleanup of areas they contaminated? Isn't that why we should pass legislation similar to H.R. 1195? Response. EPA is aggressive in ensuring that Federal PRPs fully participate in all response actions and settlement discussions. It is EPA's policy to issue notice letters and administrative orders where appropriate to Federal agencies. (See, e.g., EPA's Interim CERCLA Settlement Policy, 50 Fed. Reg. At 5044, February 5, 1985.) This policy has been reiterated on several occasions, most recently in EPA's August 2, 1996 memorandum establishing procedures for the Superfund Reform designed to ensure equitable issuance of CERCLA 106 cleanup orders. In the case of the Colorado School of Mines Site, EPA sent notice letters to the Federal PRPs who may have contributed significantly to site conditions and worked with them on an almost daily basis to negotiate an administrative order on consent. For a variety of reasons, these negotiations failed and EPA issued unilateral administrative orders to the other parties. Under the applicable Executive Order signed by President Reagan that delegated CERCLA order authority, EPA must go through additional procedures when issuing non-consensual orders to Federal parties. Specifically, the Department of Justice must concur with any EPA proposal for the issuance of such orders. (See, e.g., ``Procedures and Criteria for Department of Justice Concurrence in EPA Administrative Orders to Federal Agencies,'' December 22, 1988.) In the School of Mines case, EPA staff spoke with DOJ concerning this procedure and the involvement of Federal PRPs at the site. EPA believed that the now- defunct Bureau of Mines (BOM) was the one non-de minimis Federal PRP that should receive a unilateral administrative order. DOJ indicated that rather than the issuance of an order, it would ensure that BOM would work closely with the private PRPs and fully participate in settlement negotiations. I believe you have not been given an accurate explanation of EPA's involvement in the settlement of this case. In cases where EPA finds no documented evidence of liability, EPA eliminates the party in question from further consideration as a PRP. Where EPA has evidence that a party sent hazardous substances to a site, but the amount could not be determined, EPA assigns a standard amount (50 pounds) to that waste shipment. In this case, EPA has received no special treatment as a PRP. In fact, assuming the School of Mines information did rise to the level of documentation considered adequate by EPA, which it frankly does not, EPA would be eligible for a de minimis settlement. In an attempt to resolve this matter expeditiously, EPA is shouldering a much greater proportion of liability than can reasonably be established by the available documentary evidence. EPA's settlement offer will benefit all PRPs, including the School of Mines and the State. While EPA is not privy to the details of the PRP settlement, it stands to reason that EPA's agreement to forego $185,000 of its response costs associated with site cleanup will reduce the total costs that are to be divided among all the PRPs. Question 3. In the situation, above the Bureau of Mines admitted responsibility for contamination of the 22,000 cubic feet. Yet when the emergency removal order went out it only went to 12 private parties, the State, and the School of Mines. Can you give any possible reason why EPA wouldn't serve another Federal agency? Response. EPA engaged in significant fact finding efforts to identify Federal and private PRPs at the site. EPA followed our standard procedure when investigating PRPs. This procedure required that EPA: (1) request all existing documentation relating to the Site from the owner/operator of the Site; (2) follow up on the information received from the Site by sending information requests to specific parties mentioned in that documentation who appear to have some liability; and (3) gather outside information relating to the Site or specific PRPs where available. It is not uncommon, when dealing with activities which occurred 10 to 15 years prior to the initiation of EPA's cleanup activities, to encounter difficulties in locating documentation in support of a case against a party. For the School of Mines case, only a small percentage of the non-Federal parties contacted by EPA were able to provide documentation regarding hazardous substances they sent to the site. Like the private PRPs, many of the Federal agencies had difficulty identifying any connection to the site. EPA and other Federal agencies have record retention requirements and procedures which provide for the destruction of certain documents, such as bid and grant proposals, after specified periods of time. Congress authorized the promulgation of these procedures in 44 U.S.C. Sec. 3303. Other documents which are considered permanent are eventually transferred to the Federal Records Center and then to the National Archives. Where EPA had specific information about projects performed by Federal agencies, the agencies were largely successful in locating additional records. Question 4. Isn't this an example that illustrates the Federal Government doesn't enforce against themselves, isn't it true that no matter how responsible another Federal agency is, EPA would not force them to comply with laws the private sector should comply with? Response. This response is undergoing OMB clearance. [GRAPHIC] [TIFF OMITTED] T6587.015 [GRAPHIC] [TIFF OMITTED] T6587.016 [GRAPHIC] [TIFF OMITTED] T6587.017 Prepared Statement of Terry D. Garcia, Acting Assistant Secretary for Oceans and Atmosphere, National Oceanic and Atmospheric Administration, Department of Commerce Mr. Chairman and members of the committee, I appreciate the opportunity to submit testimony for the record on behalf of the Federal natural resource trustees concerning the proposal recently circulated by the committee Staff (draft chairman's mark dated August 28, 1997) for reforming the natural resource damages (NRD) provisions of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund). I am Terry D. Garcia, Acting Assistant Secretary for Oceans and Atmosphere in the Department of Commerce, with responsibility for the National Oceanic and Atmospheric Administration (NOAA). I am presenting this testimony on behalf of the Federal agencies that act as trustees for natural resources under CERCLA. Carol M. Browner, Administrator of the Environmental Protection Agency (EPA), will present testimony on other aspects of the committee's proposal. introduction and summary At the outset, I and my Administration colleagues would like to express our gratitude to the chairman and to the committee for the constituent outreach process and the bipartisan process of negotiation that the Majority has undertaken with the Minority and the Administration to achieve a Superfund reform bill that has broad bipartisan support. We are disappointed that this process has been suspended, and we would urge that the committee resume that process at the earliest possible date following these proceedings. I am confident that the dialog that the committee has established with the Federal natural resource trustees will result in broadly supported, responsible provisions addressing NRD, and the Administration is committed to working with the committee and affected stakeholders to that end. The Administration would also like to commend the committee for the many improvements in this draft NRD title when compared to S. 8, the Superfund bill previously before the committee. The changes reflected in the current draft reflect a concerted effort by the committee to respond to some of the strong objections that the Administration and stakeholders have expressed concerning S. 8. For example, this draft includes much-improved provisions concerning consistency between natural resource restoration and response. Significant changes to the ``phased payment'' proposal make this provision compatible with current enforcement practice. The provision for a ``lead administrative trustee,'' in lieu of a lead decisionmaking trustee, responds to concerns raised by Federal, State, and Tribal trustees concerning recognition of their respective trust responsibilities. Most notably, this draft adopts the well-established ``cost-effective'' criterion in place of the vague, ill-considered, and onerous ``cost-reasonable'' criterion that S. 8 imposed on restoration decisions, which threatened to mire NRD cases in greater monetization of damages, at the expense of the Administration's restoration-based approach to NRD. We also have been heartened by the committee's continued effort to develop two provisions that are essential to any responsible NRD legislation: an appropriate clarification of the statute of limitations; and express provision for review of trustee restoration decisions (as distinct from issues of liability) on the basis of an administrative record. However, for reasons stated below, we believe that these two aspects of the current proposal remain seriously flawed. Indeed, one of the most salutary aspects of S. 8, the critical provision stating that judicial review of trustee decisions will be on the basis of the administrative record, has, quite inexplicably, been deleted. If this deletion was purposeful, it is one of the areas where this draft NRD title is moving decidedly in the wrong direction. Nonetheless, assuming that this deletion does not import a change in policy, we remain hopeful that our differences may center on issues of technical detail and implementation rather than on fundamental policy disagreements, and that we might readily reach consensus if negotiations resume. Despite the substantial progress that the proposal reflects, however, the Administration would have to oppose this proposal strongly if it were to be considered for mark-up in its current form, primarily for two reasons. First, this bill continues to include S. 8's most odious feature: unwarranted restrictions on the range of values that trustees may consider in deciding the appropriate steps to achieve full restoration of the losses that communities suffer when natural resources are injured, lost, or destroyed by a release of hazardous substances. Second, the failure to address clearly the Administration's concerns with respect to the statute of limitations and record review issues would defeat the Administration's effort to reform its NRD programs in a manner that focuses these programs on restoration, because it creates new incentives to use litigation as a means of delaying or avoiding restoration obligations. We would also note that the Administration was given an incredibly short space of time to review the draft; therefore, we have not had adequate time to consider its full implications. We are also concerned that the committee is not soliciting the views of Tribes. The Administration continues to advocate the adoption of the NRD legislative reform proposal transmitted to the committee on October 7, 1996. The Administration stands ready to resume discussions to develop legislation that builds on the progress reflected in the current committee draft and more frilly incorporates the essential features of the Administration's proposal. programmatic overview At this point, the committee is aware of the important role that NOAA and other natural resource trustees serve in restoring natural resources that have been injured or lost as a result of a release of hazardous substances. For convenience, I would refer the committee to my testimony for the record at the committee's previous hearing, which focused on S. 8 (testimony dated March 5, 1997, by Terry D. Garcia, on behalf of the Department of Commerce, the Department of the Interior, The Department of Agriculture, the Department of Energy, and the Department of Defense). The goal of the NRD program under CERCLA is to ensure that the nation's valuable public trust inheritance is passed on for the use and benefit of future generations. Under the statute, natural resource trustees include not only Federal agencies like NOAA, but also the States and Indian Tribes, all of whom act as stewards of natural resources on behalf of the public. In fulfilling their trust responsibilities to affected communities, the trustees typically seek both ``primary restoration'' (to return natural resources to the condition that would have existed but for the release of hazardous substances), and ``compensatory restoration'' (to restore the natural resource services and amenities that communities lose from the time of the release until the completion of primary restoration). CERCLA's provision for both primary and compensatory restoration reflects the significant role that natural resources play in many communities affected by releases of hazardous substances. Natural resources are essential to the hunting and fishing that sustain the economic life of many communities, and the quality of life in many others. Consequently, the NRD provisions of CERCLA are important to the future of many communities and particular industries. Commercial fishermen are depending on NOAA's restoration of sediment in the Montrose open-water DDT site off southern California, and fish habitat in Panther Creek at the Blackbird mine site in Idaho. Small businesses like charter boat operators in Tacoma, Washington, are depending on the Department of the Interior, the Department of Commerce, and the State of Washington to revitalize the commercial and recreational fishing industry in Commencement Bay. To date, only 5 percent of all sites listed on the National Priorities List (NPL) have required restoration in addition to remediation. However, in some cases, the future of entire regions may depend on the effectiveness of CERCLA's NRD provisions: Anaconda, Montana, whose State government is pursuing natural resource damage claims to restore natural resources in the Clark Fork River Basin, anxiously awaits restoration of natural resources that are essential to the future of its angling and tourist trades, knowing that their economic future hangs in the balance. Accordingly, the Administration strongly supports the NRD programs administered by Federal, State, and Tribal trustees under CERCLA. The Administration has strongly opposed proposals, like those seen in S. 8, that would undermine the trustees' efforts to replace or restore injured natural resources. Nonetheless, we agree that certain legislative reforms may be appropriate to strengthen the program. We have been pleased to participate in the committee's process of discussing the concerns of a range of stakeholders, and look forward to developing a bipartisan proposal on NRD that has broad support. We also believe that many of our administrative efforts to reform the NRD program can provide an appropriate template and point of reference for legislative change. For example, our shift to a ``restoration-based'' approach, in which the focus of the NRD program is on restoration planning rather than litigation over monetized damage claims, is reflected in both the Administration's proposal and, to some extent, in the committee's draft NRD title. The Administration is currently embarking on a broad effort to ensure greater coordination between trustees and response agencies, such as the EPA and the Coast Guard, so that response actions and natural resource restoration are frilly coordinated. In these and other efforts, we are seeking to incorporate the views of the committee as well as those of affected constituencies, including States and Tribes, environmental and community groups, and industry. We believe that our administrative reform efforts have advanced the legislative reform dialog, and we look forward to working with the committee as our administrative reform efforts continue. specific objections to the current draft nrd title 1. Restrictions on Interim Loss Compensation The inclusion in the current committee draft of numerous restrictions on the values that may be considered by trustees in determining the appropriate level of primary and compensatory restoration of natural resources plainly violates the Administration's principles for legislative reform of CERCLA, which were provided to this committee by Administrator Browner on May 7, 1997. As articulated in those principles, the Administration strongly opposes ``repeal of all or part of the current liability standards'' as well as any ``limitation on the type of values that may be considered in determining the scope or scale of restoration or damages.'' Under existing law, natural resource trustees are authorized to recover frill compensation for the public's interim loss of resource services from the date that a natural resource is injured by a hazardous substance release until the date the resource has frilly recovered. These recoveries compensate the public for real, and often significant, losses that are not addressed by restoring injured resources to baseline many years after the injury first occurred. A community that has lost its opportunity to fish a stream, hike a trail, or enjoy a spectacular and pristine vista because of a hazardous substance release is not made whole by the promise of primary restoration that may only occur years--or even decades--in the future. For example, at Lavaca Bay, Texas, a ban on harvesting crab, oyster, and finfish has been in place since 1988 due to mercury contamination. It is unacceptable to deny the affected community compensation--in the form of restoration, replacement, or acquisition of equivalent resources--for the loss of nearly a decade of fishery closure. Such long periods of interim loss can be devastating to local economies that depend on revenues generated by their natural resource base. Further, the longer it takes before baseline is restored, the greater the interim loss is for the affected community. The absence of frill compensation for this loss creates an incentive for potentially responsible parties (PRPs) to delay restoration and engage in tactical litigation to defer its restoration obligations, because the affected community is asked to bear the entire cost of the delay. Providing frill compensation for interim loss, by contrast, gives PRPs an effective incentive for initiating, implementing, and completing restoration measures in a timely manner. Restrictions on compensatory restoration also tend to distort the decisionmaking process for trustees in selecting primary restoration alternatives that satisfy their trust responsibilities. For example, there are many cases where the most appropriate primary restoration approach is to rely on natural recovery, due to the high cost and technical difficulty presented by other alternatives. This is the case with respect to the New Bedford harbor restoration, following extensive contamination of the harbor by PCBs. Reliance on natural recovery may indeed be the preferable alternative in such cases, but only if the trustees have authority to take appropriate steps to compensate for interim loss. In the absence of such authority, trustees may be discouraged from relying on natural recovery, because trustees cannot satisfy their trust responsibilities through the adoption of a natural recovery option that results in more protracted interim losses that cannot be frilly compensated. I would note that affected communities are unlikely to accept natural recovery options where provisions for interim loss compensation are inadequate. There are two provisions in the draft NRD title that could eliminate recovery for interim losses altogether. The title limits the measure of natural resource damages to ``the cost of restoration, replacement, or acquisition of the equivalent of a natural resource that suffers injury, destruction, or loss caused by a release'' (p. 230, lines 9-17). The title also states that ``[t]he goal of any restoration shall be to restore an injured, destroyed, or lost natural resource to the condition that the natural resource would have been in but for the release of a hazardous substance'' (p. 238, lines 21-25). These two provisions taken together could be construed as eliminating compensatory restoration, because such restoration is not intended to return injured resources to their baseline (but-for-the-release) condition. Instead, compensatory restoration is designed to provide affected communities with the natural resource services and amenities they would have enjoyed but for the release. 2. Provision for ``Temporary Replacement'' The draft title does make allowance for some interim loss compensation by authorizing recovery of the costs of ``temporary replacement of the services provided by the injured, destroyed, or lost natural resource'' (p. 230, lines 17-20, also p. 240, lines 13-17). However, if this provision is intended to provide redress for the interim losses that members of the public incur when their natural resources are despoiled, it is woefully inadequate, for at least three reasons. First, limiting compensatory restoration to temporary replacement of the services lost could be read as restricting trustees to addressing only those interim losses that can be offset prospectively. Such a reading would unfairly and arbitrarily bar the public due compensation for losses that accrued before trustees were able to determine whether particular natural resource injuries had in fact been caused by a particular release from a specific facility and to select appropriate restoration projects. Second, the draft title's reference to ``replacement of the lost services'' could eliminate needed flexibility to undertake compensatory restoration that provides services different than those lost. In some cases, trustees cannot replace the same services as those lost (e.g., a unique park has been closed). In others, it would not make sense for the trustees to do so (e.g., a fishing stream is closed, but enhancing access on a substitute stream would threaten populations in the other stream). In such cases, trustees should retain the ability to consider projects that enhance the level of resource services available to the public but do not replace the same services as those lost. Third, the draft title's reference to ``temporary'' replacement may prohibit trustees from considering worthwhile projects that are appropriately scaled and discounted to provide the same total quantity of services as those lost in the interim, yet result in a permanent improvement in resource services. For example, if 50 acres of wetland are lost for 10 years, trustees should not be restricted to the unrealistic option of acquiring or constructing 50 replacement acres for only 10 years. Instead trustees should have the flexibility to consider permanent acquisition of additional wetlands of less than 50 acres that provide services comparable to those that the 50 acres would have provided during that 10-year period. Reliable and valid methods exist for determining the appropriate scale of such projects, and trustees should be allowed to continue using them. 3. Ban on Consideration of Nonuse Values The draft title states that ``[t]here shall be no recovery under this Act for any impairment of nonuse values'' (p. 231, lines 1-3). This ban on compensation for nonuse losses is an unacceptable limitation on the type of values that may be considered in determining the scale of restoration. This provision could prevent adequate compensation for injuries to the unique or pristine natural resources we treasure the most. There is no debate over whether people derive value from natural resources beyond their utility for immediate and direct human use. This fact is demonstrated whenever individuals make charitable donations or support government regulation and spending for the protection of species and places they themselves do not see or visit. Some natural resources, such as Katmai Wilderness Area in Alaska, are valued by the public specifically because they have escaped human use. Other resources are heavily used but that use represents only a fraction of the benefits the public derives from them. Units of the National Park System, such as Yellowstone National Park, and State parks, such as Anza Borrego Desert in California, were established in explicit recognition of the value we receive from ensuring that our grandchildren and our grandchildren's children will be able to enjoy the same experience we do when we visit these special areas. We derive value from simply knowing that our public natural resources exist unimpaired, for the sake of future generations and the integrity of the global ecosystem. This fact was vividly illustrated following the EXXON VALDEZ oil spill in Prince William Sound, Alaska. Prince William Sound, with its pristine natural beauty, is a national treasure, but few would contend that its value (and the losses to the public) could be adequately measured by quantifying direct human use of the sound for recreation or commerce. The public response to that spill, and the insistence by the trustees and the public that there be frill compensatory restoration, reflects the public's very strong sense of values beyond those measured by actual human use of a resource. Whenever natural resources are injured by contamination, the public may experience a reduction in nonuse value. These reductions can be very significant when a unique resource has been injured, or when restoration is slow or will never return the resource to baseline. Under existing law, trustees may consider nonuse values when determining restoration projects that compensate for interim losses. Retention of this authority is crucial to ensuring that the public is made whole after a hazardous substance release. As mentioned above, the Administration supports codifying a restoration-based approach to compensating for interim loss. Under such an approach, if a trustee can provide the same services as those lost, the trustee need not explicitly determine whether and how much use or nonuse value was lost. The trustee simply selects a project that generates the same quantity of services as those lost over time and asserts a claim based on the cost of implementing the project. However, as also discussed above, sometimes trustees cannot create the same services as those lost. This situation arises whenever a unique resource is injured, which is also one of the situations in which nonuse losses are likely to be most significant. In these cases, trustees should be allowed to undertake compensatory restoration projects that improve the level of other resource services available to the public, but only if such improvements are commensurate with the losses resulting from the release. To ensure that such projects are appropriately scaled, trustees need to compare quantities of services lost to quantities of services gained, and economic valuation may, in some cases, be the best-method for making this comparison. In such cases, failure to consider the total value of the natural resources (use value plus nonuse value) could result in the selection of projects that significantly undercompensate the public, thus creating an incentive for PRPs to take fewer precautions to prevent future spills in pristine areas, where direct human use is low, than in already degraded areas, where direct human use is higher. The draft title's restriction on nonuse values may also prevent trustees from selecting appropriate primary restoration actions. While the Administration agrees that imposition of a rigid, quantitative cost-benefit test on restoration selection is inappropriate, trustees often need to make some evaluation of benefits for purposes of determining the cost-effectiveness of different alternatives. Barring any consideration of nonuse values in that evaluation may unfairly bias the restoration selection process away from active restoration, even if natural recovery takes decades and notwithstanding the very real and significant human and ecological losses incurred in the interim. Furthermore, the draft title may impose an unwarranted burden on trustees even when they are not attempting to explicitly address lost nonuse values. The ban on compensation for impairment of nonuse values could be read as requiring trustees to demonstrate that a restoration project compensates only for impairment of use values. Restoration projects designed to restore use values may incidentally restore some of the lost nonuse values. Therefore, it may be difficult to demonstrate that a restoration project only addresses lost use, particularly where the project is restoring services, such as habitat, that are not directly used by humans but are used by other resources. 4. Statute of Limitations As stated above, an essential component of any responsible NRD reform bill is an appropriate clarification of the statute of limitations. The existing statute of limitations for NRD claims at sites other than Federal facilities, facilities listed on the NPL, and facilities at which a remedial action is otherwise scheduled, is 3 years after the later of: (1) the date of the discovery of the loss and its connection with the release; or (2) the date on which the natural resource damage assessment regulations are promulgated. This provision has engendered a great deal of confusion and litigation. In some cases, trustees have felt compelled to file premature claims, before the scope of needed restoration is even known, in order to guard against the most extreme and unfavorable interpretation of the current limitations period. When claims are filed prematurely, the NRD action becomes focused on monetized damage claims, which is inconsistent with the restoration-based approach advocated by the Administration and reflected, in several respects, in the draft title. The draft title would revise the current statute of limitations ``[w]ith respect to a facility for which the trustees and the potentially responsible parties, after the date of enactment of the [Act] have entered into a cooperative agreement governing the conduct and scope of a natural resource damage assessment and allocating the costs of the assessment.'' The deadline for filing such claims would be the ``earlier of 6 years after the date of signing of the cooperative agreement, or 3 years after the completion of the damage assessment'' (p. 241, lines 9-25). Unfortunately, this revision to the statute of limitations does not appropriately address existing problems and could cause more. The draft title does not provide any clarification of the existing deadline. Instead, the draft provision would only apply where trustees and PRPs have entered a cooperative agreement; where there were no such agreements, the existing problematic deadline would still apply. Further, the draft provision creates a disincentive for PRPs to work cooperatively with trustees whenever one or more PRPs might benefit from the uncertainty associated with the current statute of limitations. As the Administration has stated in its proposal, the existing statute of limitations for non-NPL facilities should be changed to 3 years from the date of completion of an assessment in accordance with the damage assessment regulations or the completion of a restoration plan adopted after adequate public notice. 5. Record Review The draft title includes provisions authorizing trustees to establish an administrative record for an assessment (p. 235, lines 6- 20). However, the draft eliminates the language included in S. 8 that specified that judicial review was to be based on the administrative record. The Administration supports an open assessment process in which scientific and resource management decisions are made on the basis of the best information from all interested parties, including the PRPs and the general public. By authorizing creation of a record but failing to restrict judicial review to the material in that record, the draft title provides no incentive for PRPs to provide their data to the trustees while the record is being compiled and restoration decisions are being made. In fact, the provision will likely encourage tactical withholding of information by PRPs, promotes dilatory litigation, and contravenes public right-to-know. The draft should be modified to make explicit that judicial review of assessments will be limited to the administrative record and that the court will uphold trustees' selection of a restoration action unless it was arbitrary and capricious. 6. Limitation on Assessment Costs In addition, the draft title arbitrarily bars recovery of certain assessment costs. The draft title prohibits recovery of the cost of ``conducting any type of study relying on the use of contingent valuation methodology'' (p. 236, lines 14-17). Trustees should have the flexibility to use and recover the cost of any assessment procedure, so long as the procedure is valid and can be performed at a reasonable cost. The draft title already requires trustees to conduct assessments ``in accordance with . . . scientifically valid principles'' (p. 233, lines 15-18). The CERCLA natural resource damage assessment regulations contain a detailed definition of reasonable assessment costs that requires, among other things, that the cost of an assessment be less than the amount of damages being assessed (43 CFR 11. 14(ee)). The Administration believes these provisions adequately protect against unwarranted assessment costs. Furthermore, contingent valuation (CV) is a reliable and valid methodology when appropriately applied. CV has been used for years by industry for market research, and by governments for cost-benefit analyses of regulations and public works projects. CV is the only tool currently available for explicitly measuring lost nonuse values. It is also an important tool for measuring use values of natural resources. 7. Other Concerns The draft title contains several other problematic provisions and fails to include several important and beneficial amendments. A. Barring Restoration and Recovery Upon Return to Baseline. The draft title includes a provision that would bar recovery of all restoration costs ``if the natural resource returned to the baseline condition before the earlier of . . . the filing of a claim for natural resource damages; or . . . the incurrence of assessment or restoration costs by a trustee'' (p. 232, lines 10-24). The Administration has actively considered such a proposal while exploring ideas that might respond to concerns raised by the committee and by industry representatives. The Administration is concerned, however, about the possibility that such a provision could unfairly eliminate all public compensation where resources recovered naturally before trustees began their assessment work, notwithstanding the fact that the public may have incurred substantial interim losses. This could be especially problematic, particularly for State and Tribal trustees, where a trustee is proceeding as expeditiously as possible to assess the effects of known hazardous substance releases, but staff and funding constraints delay assessment and restoration. It may not be appropriate for the public to bear the cost of interim loss of resources in cases where trustees are simply unable to begin assessment work for this reason. In other cases, the public may have experienced clear losses, yet trustees may have had no reason to suspect that the losses were a result of a hazardous substance release until after natural recovery occurs. This provision also might create a disincentive for PRPs to provide timely notification of releases, since by delaying or failing to provide such notification, they might avoid liability for the public's loss altogether. For these reasons, the Administration believes that this particular provision warrants further discussion and consideration by Federal trustees and by potentially affected stakeholders. B. Modification of the ``Double Recovery'' Provision The draft title modifies the bar on double recoveries by providing that any ``person'' that recovers ``damages, response costs, assessment costs, or any other costs under this Act for the costs of restoring an injury to . . . a natural resource'' shall not be entitled to recovery under any law for the same injury (p. 233, lines 4-13). Throughout our discussion with committee staffs there has been no policy reason articulated for changing the existing double recovery provision. Furthermore, as drafted, this provision could be interpreted to preclude a recovery by the United States for natural resource damages (including interim losses) if the United States has previously recovered for ``any'' costs of a response action that in some respect affected, but did not frilly address, a natural resource injury, such as by enhancing recovery of an injured resource. Because CERCLA defines ``person'' to include the United States, rather than ``agencies of the United States,'' a response cost claim brought by EPA could be read to bar a subsequent NRD claim brought by a trustee. C. Encouragement of Trustee Conflicts The draft title requires that the natural resource damage assessment regulations include procedures under which ``all pending and potential trustees identify the injured natural resources within their respective trust responsibilities, and the authority under which such responsibilities are established, as soon as practicable after the date on which an assessment begins'' (p. 243, lines 16-22). The Administration agrees that it is appropriate to ensure that trustees pursue claims only for those resources that fall under their trusteeship and, thus, are public resources. However, this draft provision could be interpreted as requiring not only that trustees determine which resources are public but also that they delineate the overlapping jurisdictions of all the different trustees. If all trustees are working together resolving such inter-trustee jurisdictional issues is unnecessary. On the other hand, requiring trustees, as one of the first steps in the damage assessment, to address such potentially contentious issues could create conflicts where none currently exist and undermine the goals of inter-trustee coordination. D. Transition Rule The draft (MU) title includes a transition rule that selects among sites for application of the bill's provisions. The Administration has not had an opportunity to understand the particular rationale by which the committee developed this rule, but we are concerned that this transition rule may operate arbitrarily and unfairly in its selection of the sites to which the new provisions apply. E. Omissions There are numerous other aspects of the proposal that are of concern to the Administration. We are identifying a limited number of omissions for your consideration now, with the expectation that more technical issues can be resolved if staff negotiations resume. The draft title fails to authorize the recovery of enforcement costs, thus preventing the public from being made whole for the costs of the release. The draft title omits the clarification in the Administration's proposal that the government may split response claims and natural resource damage claims, and that natural resource damage claims are not compulsory counterclaims to claims against the government for recovery of response costs or performance of response action. The draft title fails to include provisions identified in the Administration's proposal explicitly requiring consultation with trustees before selection of a remedial action, and calling for new regulations governing coordination with trustees regarding listing of sites on the NPL, investigations of releases, and selection of response actions. The draft title fails to include provisions identified in the Administration's proposal adding references to notification of tribal trustees by response agencies. conclusion The Administration appreciates the opportunity to provide testimony on this draft proposal. In spite of the committee's concerted effort to modify or eliminate many of the most objectionable provisions of S. 8, the Administration strongly opposes this draft title in its current form and urges the committee instead to adopt the Administration's proposal or to incorporate more frilly the elements of that proposal in the committee's draft. NOAA and all of the other Federal natural resource trustees stand ready to resume negotiations with the committee so that, together, we can develop a broadly supported, bipartisan proposal on NRD that can move forward in this session of Congress. Thank you, Mr. Chairman. This concludes my statement. ______ Prepared Statement of the Honorable E. Benjamin Nelson, Governor of Nebraska introduction Good morning Mr. Chairman and members of the committee. My name is E. Benjamin Nelson. I am Governor of the State of Nebraska and chair of the National Governors' Association (NGA) Committee on Natural Resources. This testimony is presented on behalf of the National Governors' Association, but has been developed in close consultation with the Environmental Council of States (ECOS) and the Association of State and Territorial Solid Waste Management Officials (ASTSWMO), which represent State officials who manage the Superfund program on a daily basis. The States have a strong interest in Superfund reform and believe that a variety of changes are needed to improve the Superfund program's ability to clean up the nation's worst hazardous waste sites quickly and efficiently. We commend U.S. Environmental Protection Agency (EPA) Administrator Carol Browner for many of the administrative reforms she has developed for this program. However, we still believe that legislation is required. If I leave you with one message today, let it be our hope that Senators on both sides of the aisle will continue to work in a bipartisan fashion to craft a Superfund reform package that can be signed into law. The Governors are committed to doing everything within our power to assist in that effort and hope to continue working cooperatively with both the majority and the minority to develop a final bill that enjoys broad bipartisan support and can be signed by the President. Mr. Chairman, Senator Smith, I want to commend you for developing a very good starting point for the kind of bipartisan negotiations that are required to develop a bill the President can sign. I know that there remain important differences between Republicans and Democrats and between States and the Administration, but we see the chairman's mark as a significant step toward resolving the concerns that were expressed by both EPA and the States concerning the underlying bill. Important compromises have been made in the development of this legislation, and we hope the spirit of compromise will continue on a bipartisan basis. The States appreciate the opportunity to review and comment on the draft chairman's mark dated August 28, 1997. Today, I would like to address NGA's overall assessment of the bill and suggest a few areas where improvements could be made. brownfields revitalization and voluntary cleanup programs The Governors believe that brownfields revitalization is critical to the successful redevelopment of many contaminated former industrial properties, and we commend the committee for including brownfields language in the bill. The Governors would like to emphasize the importance of State voluntary cleanup programs in contributing to the nation's hazardous waste cleanup goals. States are responsible for cleanup at the tens of thousands of sites that are not on the National Priorities List (NPL). In order to address these sites, many States have developed highly successful voluntary cleanup programs that have enabled sites to be remediated quickly and with minimal governmental involvement. It is important that legislation support and encourage these successful programs by providing clear incentives and flexibility. Frankly, we feel an increased need for congressional direction because the guidance on State voluntary cleanup programs that EPA is about to finalize does not afford us the necessary and appropriate flexibility. It is the view of States that voluntary cleanup programs and brownfields redevelopment are currently hindered by the pervasive fear of Federal liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980. We strongly support the provisions in the chairman's mark that encourage potentially responsible parties and prospective purchasers to voluntarily cleanup sites and reuse and redevelop contaminated property. The draft achieves this goal by precluding subsequent Federal enforcement at sites where cleanup has occurred under State programs and by providing needed liability protections for prospective purchasers and owners of property contiguous to contaminated sites. However, in the event EPA discovers an imminent and substantial threat to human health and the environment at a site, NGA does support EPA's use of its emergency removal authority. We also believe that an important provision has been included that clarifies EPA's authority to take action at a site if a State requests the President to do so. Any assignment of liability, however, must be consistent with liability assigned under State cleanup laws. Finally, we would like to make the distinction that while the draft would preclude Federal enforcement for sites in a State voluntary cleanup program, you have not provided a release from Federal liability. We believe that this would leave potentially responsible parties vulnerable to third party suits and would effectively take much of the incentive out of entering a State voluntary cleanup program. We would like to work with the committee to address this provision. state role The impacts of hazardous waste sites are felt primarily at the State and local levels, so each State should have the option to take over and administer as much of the program as they can. The Governors support the efforts of Senators Chafee and Smith to provide us with options to enhance the role of States in this program. We appreciate the inclusion of options for authorization, expedited authorization, delegation, and limited delegation by agreement in the draft and feel that this allows for maximum flexibility to meet State needs and objectives. We especially support the authorization provisions that allow States to operate their programs in lieu of the Federal program. Where a State is authorized to operate a program in lieu of the Federal program, States should receive adequate Federal financial support. The creation of an expedited process to delist from the NPL a site for which a State has assumed responsibility will help provide a necessary finality to the Superfund process and will help prioritize time and money on remaining problems. However, the States cannot support allowing EPA to withdraw delegation on a site-by-site basis. EPA should periodically review State performance instead of involving itself in site-by-site oversight. If program deficiencies are found, a State should have an opportunity to resolve them before EPA proceeds to withdraw authorization or delegation. Withdrawal of delegation should be consistent with the criteria for approval or rejection of a State's application for delegation. The Governors strongly support a 10 percent State cost-share for both remedial actions and operations and maintenance and appreciate the retention of this provision in the chairman's mark. The Governors would like to ensure that the provision for States to petition the Office of Management and Budget (OMB) is a workable mechanism to deal with any cost-shifts resulting from changes in liability, and that reform does not result in a higher cost-share than States currently pay. selection of remedial actions Because of the complexity and importance of the title on ``Selection of Remedial Actions,'' I would like to respectfully request more time to provide detailed comments and have them included in the record after we have had time for more adequate review. Although we will undoubtedly have some comments with this title, there are several key improvements that I would like to touch on today. The Governors believe that changes in remedy selection should result in more cost-effective cleanups; a simpler, more streamlined process for selecting remedies; and a more results-oriented approach. We believe the bill moves significantly in this direction. Many of these reforms seem to us to be codifications and improvements of EPA's administrative reforms. As you know, allowing State-applicable standards to apply at both NPL and State sites is of great importance to the Governors. We greatly appreciate and strongly support measures to allow State applicable standards and promulgated relevant and appropriate requirements to apply to all site cleanups. The Governors agree with the importance of considering different types of land uses when determining cleanup standards and appreciate the inclusion of provisions in the bill that provide for State and local control in making determinations of foreseeable land uses. We would like to ensure that, when appropriate, feasible, and cost-effective, the cleanup standards chosen allow for unrestricted use of the site. In addition, we would like to ensure that land-use decisions are not second-guessed by EPA. The Governors believe groundwater is a critical resource that must be protected. The use of State applicable standards and the opportunity for State and local authorities to determine which groundwater is actually suitable for drinking are essential during the remedy selection process. While we believe that groundwater needs to be protected, we need to ensure that these provisions are workable and flexible. The Governors recognize that there are some records of decision (RODs) that should be reopened because of cost considerations or technical impracticability. However, we have been concerned about a flood of petitions to reopen, and we believe the Governor should have the final decision on whether to approve a petition to reopen a ROD in his or her State. We particularly appreciate the efforts of the committee to improve the draft by removing the provision in S. 8 that would allow a remedy review board to override a Governor's veto of a petition to reopen a ROD. NGA believes that this is a very important addition. We would also like to commend you on removing the provision in S. 8 that would preempt State liability laws at sites where EPA has released a potentially responsible party from Federal liability because the site has been cleaned up for unrestricted use. As you know, the Governors do not support preemptions of State law and are grateful to you for incorporating our recommendations in your draft. liability The liability scheme employed in any hazardous waste cleanup program is critical to the success of that program. The current CERCLA liability scheme serves some purposes well. It has proved effective at encouraging better waste management, and it has provided resources for site cleanups. However, the current system has a history of leading to expensive litigation and transaction costs. Therefore, the Governors are not averse to some changes in liability, though we are concerned with the resulting effects on the States. In general, we support the elimination of de minimis and de micromis parties and believe the liability of municipalities needs to be addressed. However, we question broader releases of liability for other categories of responsible parties. In any case, we would like to see convincing analysis that any changes in the liability scheme provide adequate assurance and funding so that sites will continue to be cleaned up and so that there will be no cost shifts to the States. Although it is clear that much effort has been focused on finding compromises and creating a more equitable system, the Governors are still concerned that the changes to the Federal liability scheme are not complementary to State liability programs. We are particularly opposed to the apparent preemption of all State liability laws when a facility has been released from Federal liability. Preemption of State liability laws at NPL sites effectively creates an inequitable situation in States because it creates an inconsistency in application of State law at sites throughout the State. We want to avoid creating a scenario where there is a demand by potentially responsible parties to be added to the NPL because the Federal liability scheme is more favorable. As I mentioned earlier, we fully support a release of Federal liability at non-NPL sites where a release of liability has been granted under State cleanup laws protective of human health and the environment. Much emphasis has been placed on modifying the language on liability, and we do not want to discount the obvious efforts at compromise that can be seen in this draft. However, we would like more time to review the provisions of this title and would like to work with the committee to create a system that has fewer adverse impacts on State programs. federal facilities The Governors support legislation that ensures a strong State role in the oversight of Federal facility cleanups. The double standard of separate rules applying to private citizens and the Federal Government has a detrimental effect on public confidence in government at all levels. Therefore, the Governors believe that Federal facilities should be held to the same process and standard of compliance as private parties. We would like to make sure that the intent of language in the draft allows State-applicable standards to be applied at Federal facility sites in the same manner that they apply at nonFederal facility sites. The States would like to commend the committee for including provisions in the chairman's mark allowing EPA to transfer responsibility for Federal facilities to States. However, we are unclear why the process is different and the provisions much more restrictive than the provisions in Title II for nonFederal sites on the NPL. One interpretation is that responsibility for Federal facilities may be transferred to States, but that States must at all times use the Federal remedy selection process. We do not understand the justification behind this language and would be greatly concerned if this precludes States from applying State applicable standards to Federal facilities if they are more stringent than the Federal standards. In addition, in virtually every other environmental statute, Congress has waived sovereign immunity and allowed States to enforce State environmental laws at Federal facilities. A clearer, more comprehensive sovereign immunity waiver should be developed that includes formerly used defense sites. natural resource damages The current natural resource damage provisions of CERCLA allow Federal, State, and tribal natural resource trustees to require the restoration of natural resources injured, lost, or destroyed as a result of a release of a hazardous substance into the environment. The Governors feel this is an important program that must be maintained. We commend the committee for emphasizing restoration as the primary goal of this program, extending the statute of limitations to 3 years from completion of a damage assessment, and creating an effective date to protect claims and lawsuits already filed. Protection of existing claims and lawsuits is a very important provision for all Governors, particularly Governor Marc Racicot of Montana who serves as vice chair of NGA's Committee on Natural Resources. We also suggest that the committee consider removing from the trust fund the prohibition on funding natural resource damage assessments and giving State trustees the right of first refusal to be lead decisionmaker at NPL sites with natural resource damages. We also support retention of nonuse damages. miscellaneous The States would like to applaud the inclusion in this draft of a provision to require the concurrence of the Governor of a State in which a site is located before a site may be added to the NPL. NGA has fought long and hard to have this vitally important provision included in legislative proposals. We have concerns about an annual ``cap'' or limit on NPL listings. We believe that by requiring a Governor's concurrence on any new listings, a sufficient and appropriate limitation is placed on new listings. Further limitations are unnecessary. Because of differences in capacities among States, the complexities and costs of some cleanups, the availability of responsible parties, enforcement considerations, and other factors, limitations on new listings could result in some sites not being cleaned up. We believe there should be a continuing Federal commitment to clean up sites under such circumstances, regardless of whether an arbitrary cap has been exceeded in any given year. The States are interested in working with the committee to resolve our concern. conclusion Mr. Chairman, I would like to thank you for your hard work on this important reform legislation and for providing me with the opportunity to communicate the views of State government on Superfund reform. Again, NGA, ECOS, and ASTSWMO are very encouraged by the direction you have taken with this legislation and are pleased that this draft reflects many important compromises that should enjoy bipartisan support. We hope that members of both parties will roll up their sleeves to pass Superfund reform legislation. I look forward to working with both the majority and minority to bridge any differences and craft legislation that can be signed into law. ______ Responses by Governor E. Benjamin Nelson to Questions from Senator Wyden Question 1. Isn't it true that private parties have to comply with all applicable environmental laws, both State and Federal, when they're conducting cleanups at Superfund sites and are subject to enforcement action if they fail to comply? Is it good public policy to allow a double standard for private versus Federal cleanups when it comes to complying with these laws? Response. It is true that private parties must comply with all applicable State and Federal laws during the course of remediation under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980. The requirements of State environmental laws and Federal laws, such as the Clean Water Act, the Clean Air Act, and the Resource Conservation and Recovery Act, are binding on remediating parties under all circumstances. As I stated in my testimony, the Governors believe that failure to hold the Federal Government to the same standards it imposes on private parties creates a double standard and allows it to elude its civic responsibilities. This double standard erodes the public's faith in all levels of government, precludes States from consistently enforcing the environmental standards that they have adopted as protective of human health and the environment, and shifts the costs of remediating Federal sites to State governments. The Governors strongly recommend that Congress include in CERCLA a clear requirement that Federal agencies comply with all procedural and substantive requirements of State and Federal environmental law. Question 2. Does the National Governors' Association support adding language to Superfund reform legislation to make it clear that Federal agencies must comply with applicable environmental laws during the course of Superfund cleanups at Federal facilities and/or clarify the authority of States to enforce these laws? Response. The Governors recommend that Congress include a clear waiver of sovereign immunity under CERCLA as it has under virtually every other Federal environmental statute. A waiver of sovereign immunity would hold the Federal Government to the same standards it has set for private parties and allow States to enforce environmental requirements against Federal facilities in the same manner and to the same extent they are enforced against private parties. ______ Response by Governor E. Benjamin Nelson to a Question from Senator Moynihan Question 1. The chairman's mark asks for a cap on the number of new NPL sites. How will this cap affect the ``cleanup'' of sites not yet on the NPL? Response. As I testified, NGA opposes an arbitrary limitation or ``cap'' on the National Priorities List (NPL) because it could preclude the Federal Government from addressing a contaminated site if the cap had been reached in a given year. The Governors recognize that sites may be discovered in the future that may require Federal attention and believe that the Federal Government should continue their commitment to cleaning up the most contaminated sites. We believe that requiring a Governor's concurrence on all NPL listings places a reasonable and appropriate limitation on new NPL listings while ensuring that the Federal Government maintains its necessary role. ______ Response by Governor E. Benjamin Nelson to a Question from Senator Chafee Response. Mr. Chairman, I would like to take this opportunity to respond more thoroughly to a question you asked me on September 4. You asked my opinion of a comment made by Ms. Wilma Subra, the community participation representative on my panel. She opposed a substantial State role in the Superfund program because of her lack of faith in her State government to protect the people. I believe very strongly in the concept of federalism and the role of State governments in the lives of people every day. Governors take pride in their jobs and take environmental protection very seriously. A substantial State role in this program is entirely appropriate and necessary and all Governors take offense at Ms. Subra's assertion that people need the Federal Government to protect them from their State government. The answer to this concern should continue to be the election process, not the administrator of the U.S. Environmental Protection Agency. The Governors commend you for including in your mark flexible opportunities for States to administer the Federal Superfund program and a provision that requires a Governor's concurrence for all new NPL listings. These provisions strike an appropriate balance between the roles of State and Federal Governments. I again thank you for the opportunity to testify and for the chance to respond to additional questions for the record. If I, or any of the Nation's Governors, can be of any assistance as you continue to develop a bipartisan Superfund reform package, please contact me directly. I look forward to working with you on these very important issues. ______ Prepared Statement of Mayor James P. Perron, Elkhart, IN, on behalf of The U.S. Conference of Mayors Good morning, Mr. Chairman and members of the committee. I am James Perron, Mayor of Elkhart, IN. I am pleased to be here this morning and thank you for your leadership in development of S. 8 and in moving the legislative process forward with this hearing. Today I am testifying on behalf of the United States Conference of Mayors, which represents over 1100 cities with populations of 30,000 or more. As Mayor of Elkhart for almost 15 years, I have dealt head-on with virtually every environmental problem and opportunity available to a modern city today, including: Superfund, groundwater contamination, recycling, closing a polluted landfill, riverfront redemption and many others. Our Environmental Center--built on the site of the old city dump--and our EnviroCorps program, funded by AmeriCorps--are award winning. We have an ongoing relationship with Notre Dame University aimed at environmental management innovations. I know that working together we can bring new success to Superfund and Brownfield initiatives. Mr. Chairman, I should note for the record that my experience with the Superfund program goes back almost to its beginning as well as the start of my mayoralty. Soon after taking office in 1984, we learned that our municipal drinking water supply was essentially a Superfund site. In the years that followed, working closely with EPA, our community worked its way out of this dilemma. Our water supply is now clean, and we have a Sole Source Aquifer Designation. Our experience with brownfields is very real and hands-on. Elkhart is one of the most densely industrialized cities in the country. We are among the Nation's leaders in per capita manufacturing jobs. Many projects have been slowed and others even brought to a halt by problems associated with brownfields. The framework provided by S. 8, along with a willingness on the part of a city to work creatively with the private sector, will go a long way toward accelerated brownfield recycling. The Nation's mayors are uniquely interested in Superfund reform, because we have been directly affected by the best and the worst of Superfund. We believe that the Superfund program has been successful in meeting three national policy objectives: (1) the dramatic reduction in use of hazardous materials by industry and commerce, (2) the ability for our nation to respond to emergency spills and contamination that pose an immediate health and environmental threat, and (3) creation of a much safer, national hazardous waste management and disposal system. No one doubts that industry and businesses have significantly reduced their use of hazardous substances because of the threat of CERCLA liability. When CERCLA was passed in 1980, many companies entered the hazardous materials business in expectation that the need for hazardous materials management would result in handsome profits. But many of their projections did not materialize. Instead, industry changed how it did business and used less hazardous materials. The emergency response program within CERCLA is a similar success story. EPA has been able to immediately respond to hundreds of emergencies across the Nation that represented immediate endangerment to the public's health. The program gets high marks for its efficiency and should continue. Similarly, we are disposing today of our hazardous waste in a dramatically safer manner than we did prior to CERCLA's enactment. That's the best of Superfund. But along side these tremendous public benefits is a horrible, unintended consequence of the Superfund program--the fact that the private sector will not invest in hundreds of thousands of non-NPL, contaminated properties because of the fear of being caught in the Superfund liability web. The liability structure of Superfund has had a chilling effect on developers and local governments who want to redevelop these so-called ``brownfields''--sites that have been contaminated or ``might be'' contaminated because of their past industrial or commercial use. Furthermore, the Superfund program has made the cleanup of National Priority List sites expensive, bureaucratic, time-consuming and litigious. Everyone agrees that the Superfund program as it relates to NPL sites needs reforming. Local governments, non-profits and small businesses are acutely aware of this because liability associated with the normal disposal of municipal solid waste has resulted in endless litigation. While allocating costs to the polluter of an industrial facility that has undergone few changes in ownership makes sense, sorting out through the courts who disposed of municipal solid waste over an extended period in a co-disposal site is a nightmare and has accounted for some of Superfund's most egregious horror stories. Your decision to move forward with a mark up of S. 8 to reform and expedite how we deal with Superfund site cleanups is extremely important and the nation's mayors want to support your efforts. We hope that this process will coalesce in bi-partisan support for a Superfund reform bill in this Congress. brownfields Mr. Chairman, the contamination of now abandoned industrial and commercial property, which today we call brownfields, was not caused by local governments or the citizens who now must live with the consequences of lost jobs, an eroded tax base and abandoned or underutilized properties that denigrate communities. The unintended, negative consequence of our Federal Superfund policies has been the price for achieving the Superfund program's national benefits. This unfortunate situation simply must be addressed in an aggressive way as you begin the reauthorization process. We must undo the unintended harm that Superfund has imposed upon our communities. Last year The U.S. Conference of Mayors released at its Winter Meeting a 39-City Survey on the Impact of Brownfields on U.S. Cities. Of the cities surveyed, 33 cities with brownfield sites said that more than $121 million is lost each year in local tax revenues--using conservative estimates. More than $386 million is lost each year, using more optimistic estimates, suggesting that the more than 20,000 cities and other municipalities nationwide could be losing billions of dollars each year in local tax receipts due to the existence of brownfields. I am pleased to provide a copy of the survey to the committee for the record. Mr. Chairman, we also believe that the existence of brownfields and the inability to ``recycle'' our previously contaminated land has additional negative environmental effects. Urban sprawl has a direct negative impact on air and water quality, in addition to destroying farmland, forests, and open spaces. We believe that between 1982 and 1992, prime farmland equivalent in area to the States of Rhode Island and Connecticut was lost to urban sprawl. If we do not develop an aggressive farmland and forest preservation program that allows us to turn our development energies to brownfields, this alarming trend will only continue. The President of the U.S. Conference of Mayors, Fort Wayne Mayor Paul Helmke, has made brownfields redevelopment the top priority for the nation's mayors in the coming year, as did Mayor Richard Daley of Chicago during his presidency of the Conference. Your willingness to place brownfields as Title I of the Superfund reform bill is, itself, an indication that this committee understands the importance of addressing the Brownfields issue. As we speak, Mayor Helmke is meeting with the Co-chairs of our Brownfields Task force in Rhode Island to further evaluate S. 8 and its brownfield proposals. We would be pleased to forward our more detailed comments on S. 8 and the results of our deliberations to the committee in the coming days. We would also like to submit for the record the Conference of Mayors brownfields and Superfund reform policies unanimously adopted in San Francisco at our annual meeting in June of this year. Turning specifically to the proposals that we were asked to address for today's hearing, I would like to start by saying that it is important for Title I on Brownfields to provide local governments the greatest flexibility possible in the use of brownfields site assessment, characterization, and cleanup funds. The definition of brownfields should not require the site to currently have an ``abandoned, idled, or underused facility.'' Many former industrial and commercial sites have been razed, but still contain contamination that should qualify the site as a brownfield. Likewise, the list of exclusions in the definition of brownfields should be significantly narrowed or eliminated, so that local governments have the flexibility to submit brownfield sites that are local priorities. For example, the current list of exclusions within the brownfields definition would disqualify sites that should be addressed as brownfields, such as those that have been subject to emergency response actions. Many emergency response actions remove the immediate ``emergency'' but do not leave the property in a condition that would allow the private sector to invest in it. These abandoned industrial sites may have both removal and remediation needs which require action to address immediate threats and a less urgent remedial process to restore the property to a useful purpose. The current language would not provide the flexibility needed to include these sites as a part of a local government brownfields program, the principal purpose of which is to clean these sites and return them to tax generating properties. Similarly, under the current language, a facility that was subject to corrective action would be disqualified as a brownfield. But the corrective action may apply only to the ``waste disposal unit'' on the site. In these instances, the entire site should not be disqualified from the brownfield program. Furthermore, many sites have multiple contaminants that may be subject to various statutory authorities. Local governments need the equivalent of a ``one-stop'' shop at EPA where the sole objective should be to clean up the site as soon as possible and to return it to productive reuse in the community. The presence of a particular type of contaminant should not disqualify the site, particularly if the local government has determined that it is in the best interest of the community to qualify the site as a brownfield. The brownfields program offers us a unique opportunity to create that ``one-stop shopping'' approach. The bottom line is that local governments want to serve as a catalyst to attract the private sector to invest in these sites. Our goal should be results oriented: clean them up and return them to productive economic reuse, as opposed to disqualifying them. On the issue of funding, we believe that the Superfund program, which helped to create hundreds of thousands of brownfields, should devote at least 10 percent of its funding annually to the brownfield cleanup program. We are extremely pleased that both House and Senate Appropriations Committees have provided $85 and $88 million respectively in fiscal year 98 for the EPA brownfields program. We want to thank Senator Bond for his leadership in that arena. We believe this funding can be justified on the grounds that the Superfund program has served as a tremendous disincentive for the cleanup and reinvestment of these properties. But it can also be justified on public health grounds. While brownfield sites may be less contaminated than NPL sites, in many instances they are more accessible to the public. An abandoned industrial facility is an invitation to the public, particularly children. Anyone who says that such facilities can be adequately secured over long periods of time in an urban or rural environment is not realistic. Furthermore, the inability to redevelop these sites has resulted in the denigration of many communities, loss of jobs and therefore a general decline in the health of a community. We believe these reasons are more than adequate to justify significant funding for brownfields cleanup and redevelopment. We believe that the limitations on funding per site in the current draft are overly restrictive. Certain large brownfield sites may well need more assessment and cleanup funds than are allowed for in the current draft. Similarly, the limitations on the size of capitalization grants for local revolving loan funds are also overly restrictive, especially when one considers communities that have been, or are, heavily industrial, or smaller communities that may have a single, but very large brownfield site. In addition to capitalization grants, language should clarify that grant funds can also be used directly to clean up sites, particularly those sites held by local governments or those located in distressed communities. We want to commend the committee for providing liability provisions which protect certain third party purchasers of brownfield properties. We want to make sure that local governments are afforded equal liability protections if they acquire property for brownfield redevelopment or have acquired the property as a result of tax foreclosure. It is also extremely important that the legislation include strong provisions for ``finality'' of sites cleaned up through State voluntary cleanup programs, with well defined, limited parameters as to when EPA may reintervene. Additional comments on these provisions, which we consider of critical importance, will be submitted for the record in the coming days. Mr. Chairman, we consider Title I of the revised draft of S. 8 to be an excellent starting point for further consideration and we look forward to working with you to further improve it. superfund provisions Mr. Chairman, the policy which mayors adopted in San Francisco calls for Superfund reauthorization to include provisions that expedite the cleanup of co-disposal landfill sites by providing liability protections for generators, transporters, and arrangers of municipal solid waste and capping liability for local government owners and operators of such landfills. The provisions of S. 8 clearly begin that process and go a long way toward that end. We are concerned, however, that the bill does not provide generators and transporters of MSW protection from third party contribution lawsuits for cleanup costs incurred prior to date of enactment at codisposal sites. Because we believe Congress never intended municipal solid waste and sewage sludge to be considered hazardous under CERCLA, we believe that some form of liability relief should also be extended to pre-enactment costs for generators and transporter of MSW, particularly those related to third party contribution suits that have not yet been settled. Numerous studies have indicated that MSW contains less than one-half of 1 percent (.5 percent) toxic materials. In almost every instance, NPL landfill sites are co-disposal sites contaminated principally by hazardous waste, not municipal solid waste. We also encourage the committee to include local government ``ability-to-pay'' provisions in the bill. Our policy also calls for the EPA to adopt administrative reforms to provide liability relief to generators, transporters, and arrangers of municipal solid waste at co-disposal sites. We are pleased that the Agency has responded with its recent proposal, which should apply to all pending third party suits. One concern, however, is how will EPA adjust the per ton fee as more cost efficient remedies are performed on co-disposal sites, and how can local governments be assured that they do not pay an unreasonable percentage of cleanup costs at co-disposal sites under this proposal. The most important principle set forth in EPA's policy is that municipal solid waste has virtually never been the cause for listing co-disposal landfills on the NPL. This principle should guide the policies for both legislative and administrative reform. Various legislative proposals in the past have relied on the principle that in no case should generators and transporters of municipal waste pay more than 10 percent of total response costs--a threshold that the EPA administrative reforms must meet in order to be viable. We are currently evaluating the EPA proposal to determine if it meets this test. However, we agree with the chairman's mark which reflects the view that the toxicity of MSW is so low that the transaction costs of collecting funds for response costs incurred after date of enactment warrant a transfer of liability from individual parties to the orphan share. Mr. Chairman, we look forward to working with the committee to determine if there is a way to marry the benefits of both these approaches. On the issue of remediation, many of our public water systems want to make sure that Superfund reforms adequately protect public health and preserve our drinking water supplies for future generations. Water supplies that are or may be used as drinking water sources must be remediated, if feasible, by methods that offer permanent solutions. Remedies that serve to protect currently uncontaminated water supplies which are or may be used as drinking water sources from becoming contaminated must take precedence over other remedies. The legislation should recognize that users of the drinking water may be in separate jurisdictions and provide for involvement of both jurisdictions in remedial action plans. Mr. Chairman, I serve as the Conference of Mayors designee to the American Water Works Association Public Affairs Committee, and in that capacity I have developed an even greater appreciation for the need to protect our long term drinking water sources from further contamination. Finally, we believe that local governments have not been adequately tapped as local management resources to help expedite the cleanup of NPL and non-NPL sites. In every aspect of the legislation, local governments should be viewed as valuable partners who are responsible for protecting human health and the environment at the local level. Therefore, we urge a stronger role for local governments in organizing the local advisory groups, in evaluating State proposals to receive delegated authority, in evaluating remedy selections, particularly as they pertain to long-term drinking water supplies, and in serving as catalysts for expediting cleanups. Mr. Chairman, we thank you for the opportunity to appear today before the committee. We will be submitting additional comments on other aspects of the bill which we did not have time to address today. We encourage the Senate to move forward on Superfund reform and to reach a bi-partisan agreement on a bill. We believe S. 8 is a good starting point for those deliberations. I would be pleased to answer any questions the committee may have. ______ Responses by Mayor James P. Perron to Questions from Senator Inhofe Question 1. Will restrictions on new emissions restrict redevelopment opportunities in urban areas? Response. Without question, EPA's proposed implementation plan for the new air quality standards will restrict redevelopment opportunities in urban areas. The plan perpetuates the flawed regulatory approach that now targets urban ``nonattainment'' areas, imposing pollution control costs on businesses located in those areas. These costs can be, and are, avoided by locating outside of the nonattainment areas where increased pollution is allowed due to less stringent regulations. We know that redevelopment efforts in many urban areas are already hampered by the existing air regulations and implementation plan. EPA itself has admitted that the existing framework effectively drives businesses away from urban areas. The new implementation plan could serve to exacerbate this problem, not only because it retains most elements of the existing implementation plan, but also because it threatens to impose even more restrictions on many urban areas and is fraught with regulatory uncertainty. The existing implementation plan for the former 1-hour ozone standard already hinders redevelopment efforts in many urban areas, with many of the largest urban areas in the Nation already classified as ``nonattainment'' for ozone. Under the current legislative and regulatory framework, industrial and commercial businesses located in ``nonattainment'' areas are forced to comply with a number of stringent regulations that do not apply to ``attainment'' areas. Among other requirements, businesses that want to construct a new facility or expand an existing facility in a nonattainment area confront the following: a lengthy, complicated permitting process; an offset requirement, which means that a new emitting facility cannot be built unless an existing facility decreases its emissions or ceases its operations; and an obligation to comply with the ``lowest achievable emission rate,'' or LAER, which requires use of the most stringent emission control technology available. We have seen how this scheme effectively drives businesses out of major urban areas. Businesses that either cannot, or choose not to, comply with the stringent air regulations in nonattainment areas can easily avoid them simply by locating their facility in an attainment area, on a greenfield site. EPA has even admitted that this policy negatively impacts economic development in cities. Former EPA Assistant Administrator for Air and Radiation Mary Nichols acknowledged these concerns in a July 24 interview with BNA. In discussing how air standards designate areas in or out of attainment, she said that creating these two categories ``has had the unintended consequence of creating incentives for new businesses and new developments to spread out into the countryside, as opposed to helping build the economies of our core cities.'' Nichols then explained that ``I don't think it's so much that urban areas have been neglected per se. It's that we have not given as much time and attention to helping figure out how air quality goals can meld into other goals that we have.'' EPA's present denial of the link between air quality regulations and brownfields redevelopment efforts simply ignores its recognition of the unintended consequences brought by its regulation. EPA's proposed implementation plan for the new air quality standards will perpetuate and magnify the burdens on urban areas, further undermining brownfields redevelopment efforts. For the new ozone standard, EPA is proposing an implementation plan that designates geographic areas as either ``nonattainment,'' ``transitional'' or ``attainment.'' The ``nonattainment'' designation and the current implementation plan would continue to apply to all areas still designated ``nonattainment'' for the prior ozone standard. The stringent regulations discussed above, which clearly are in direct conflict with brownfields redevelopment efforts, would remain in place. Once these areas meet the prior standard, the new ozone standard would take effect. At that time, EPA has said that even more local controls will need to be implemented, serving to even further discourage urban redevelopment in those areas. The ``transitional'' designation will further thwart urban redevelopment efforts because it will discourage businesses from redeveloping in even more urban areas than the number of urban areas now where redevelopment is already discouraged. As we understand EPA's plan, the new ``transitional'' designation, which will apply to all areas meeting the prior standard but not the new standard, will likely attach to the remaining urban areas not already designated ``nonattainment.'' Interestingly, EPA created the ``transitional'' category to avoid having to impose ``burdensome local planning requirements'' and ``stigmatize areas by labeling them ``nonattainment.'' This is yet another acknowledgement that its current air regulations discourage businesses from locating in urban areas. But even the ``transitional'' designation will serve to discourage brownfields redevelopment. According to EPA's proposed plan, the transitional areas may or may not need new local controls. Faced with such regulatory uncertainty, businesses looking to make sound economic investments will certainly try to avoid transitional areas in favor of attainment areas where regulations are guaranteed to be far more lax. The proposed implementation plan for new particulate matter standard will also discourage urban redevelopment efforts, in that it creates uncertainty for at least the next 5 years. Businesses will not want to locate in an area that has the potential to be designated nonattainment. In summary, we disagree with EPA's representation that brownfields redevelopment efforts will not be jeopardized by the new air quality standards. Urban redevelopment is already hindered by the current standards, and will be further hindered under the new standards. EPA's approach to clean air clearly undermines efforts to redevelop our urban environments, and is wholly inconsistent with the many brownfields initiatives being pursued throughout the country. Question 2. Would a successful brownfields program require special flexibility from the new NAAQS standards? Other environmental standards? Response. While a brownfields program with special flexibility from the new NAAQS would be helpful in resolving the inconsistency between the air regulations and the goal of brownfield programs, a far better solution would be to correct the problem via the implementation plan for the air quality standards. As The U.S. Conference of Mayors has pointed out in numerous other forums, the current and proposed implementation plans not only thwart urban redevelopment efforts but have numerous other problems as well, including unintended, negative consequences for both public health and the environment. A revised implementation plan--one that treats all communities equally for purposes of regulating air quality rather than singling out individual cities for disproportionate or stigmatizing treatment--would resolve the conflict with brownfields redevelopment programs and many of these other public health and environmental problems. If revising the implementation plan for the air quality standards will take excessive time to accomplish, then the Conference of Mayors believes that an interim, flexible approach is needed to relieve urban areas attempting to redevelop brownfields of the undermining effects of the air regulations. One suggestion that the Conference is currently developing would be to award emission credits for businesses that choose to develop at a brownfield site. The emission credits would be justified due to the fact that employees traveling to a worksite in the inner-city, as opposed to outlying areas, can generally get there by relying on public transit or making shorter auto trips. There are other benefits that can be realized when we develop these sites where densities offer many environmental and other advantages. In answer to the question of whether a successful brownfields program would require special flexibility from other environmental standards, the Conference would be interested in seeing increased Federal funding for the cleanup of brownfields, and Federal support and recognition of State voluntary clean-up programs to encourage cleanup and redevelopment. ______ Prepared Statement of Wilma Subra Thank you for the opportunity to testify on the issue of Superfund reauthorization. I have been involved in Superfund issues since the inception of Superfund, working with citizens groups living around sites, serving as a technical advisor on the National Commission on Superfund, and provide technical assistance to citizens groups at 8 Superfund Sites through the TAG process. state delegation The transfer of authority to States in order to perform the Superfund program may be appropriate for a few States, but the wholesale transfer of the Superfund program to a large number of States will have a negative impact on the program. An example of a State that should not be granted Superfund authority is the State of Louisiana. The State lacks the financial resources, personnel and political will to even implement their own State program. The majority of the National Priority List sites in Louisiana were submitted to EPA by citizens groups. The State did not want the stigma of hazardous waste sites being on a Federal list. In 1995, the State legislature removed almost all of the funding and personnel from the State program. The current State program only has sufficient financial resources to perform small emergency removal actions when midnight dumpers drop off barrels of waste along roadsides and to provide Federal required oversight at the 14 Superfund Sites in the State. There is little or no resources to evaluate the more than 500 potential sites or to perform remedial activities at confirmed sites. During the past two fiscal years 57 confirmed hazardous waste sites sit waiting for cleanup when and if resources become available. When sites pose an eminent and substantial threat, the EPA has to step in to finance and perform emergency removal actions for the State. The most recent examples of the need for Federal resources and manpower was the Broussard Chemical Co. sites in Vermilion Parish. The EPA spent more than $2.5 million performing an investigation, removal and disposal action at 6 separate locations operated by Broussard Chemical. A number of additional sites operated by the same person are currently being investigated by EPA. If it were not for the EPA and the financial resources of the Potentially Responsible Parties, little progress would be made in the State of Louisiana in addressing the hazardous waste sites. The EPA is currently funding site inspections at 15 potential hazardous waste sites in the the State of Louisiana. More than 40 pipeline companies are performing site evaluation at sites along their pipelines throughout the State of Louisiana. Site cleanups were completed at 7 PRP funded sites. The EPA is funding a program to assist the State in identifying up to 25 additional sites per year. But the State will still lack the financial resources to address the newly identified sites. At PRP funded sites the State is still responsible for oversight. The lack of personnel resources has a major impact on the process. In Louisiana, the lack of sufficient technical resources has resulted in the State missing critical technical issues on the Shell--Bayou Trepagnier site. One of the issues missed involved the diluting of the contaminant levels by the PRP including the control samples in both the site samples and the control samples. Thus lower contaminant concentrations were evaluated for the site. The State of Louisiana and many other States which lack financial and personnel resources should not be even given the opportunity to request State delegation or feel pushed by Congress into having to accept the delegation of the Superfund Program. failure to act The delegation of the Superfund Program to individual States contains a clause entitled Failure to Act. This clause is contained in three separate portions of the delegation requirements (pg. 37, 45 and 46). Under the Failure to Act clause, if a determination is not made by the Administration within a specified number of days after the required information is received from a State, the transfer of responsibility shall be deemed to have been granted. This clause is inappropriate. A State should not be automatically granted delegation of the Superfund Program. The EPA must be given the opportunity to completely evaluate information provided by the State. treatment of hot spots The preference for permanence in Superfund remedies has been modified to only treatment of hot spots. Attempts are made to justify the appropriateness of only treating the hot spots by including containment for the other hazardous substances. Reliance on containment is not a permanent remedy and merely puts off addressing the hazardous contamination until a future date. During that period when the containment fails, public health and the environment will be impacted. The community members in the area of the site will once again be exposed to the hazardous substances and bear the burden of health impacts. The preference for permanence should be expanded to include a larger portion of the hazardous contaminants than just the hot spots. A containment remedy is being proposed for the Agriculture Street Landfill Superfund Site in New Orleans. The landfill was operated by the city of New Orleans from 1909 to 1965. The city then developed 47 acres of the 95 acre site on top of the landfill an private and public housing, recreation facilities and an elementary school. The residential population consists of 67 privately owned homes, 179 rent- to-own townhouses, and 128 senior citizen apartments. The proposed containment will be a permeable two feet of soil in the residential area and one foot of soil in the undeveloped area. The hazardous waste will still be located one to two feet under the residential area with only a permeable layer separating the people from the waste. Even representatives of waste disposal companies have stated that no one should be made to live on top of an old landfill. In this case the people should be relocated and an appropriate containment remedy implemented. community advisory group composition The composition of the Community Advisory Group is defined under SCAA Section 303(h)(5)(ii). The first type of group defined is ``Person who resides or owns residential property near the facility.'' In the case of some Superfund sites, people live and own land on the Superfund site. These people should be represented on the Community Advisory Group. An example of such a site is the Agriculture Street Landfill Superfund Site in New Orleans. Approximately 1,000 people live on top of the landfill and 67 families own their own homes on top of the landfill. delisting Under Section 135(a)(i), the bill proposes a delisting process that will be initiated no later than 180 days after the completion of physical construction to implement the remedy. The initiation of the delisting process after construction completion rather than after remedy implementation completion is totally inappropriate. Under the most ideal circumstances, implementation of the remedy after construction has been completed encounters snags that were unknown during the planning process. In some cases these problems have required a change in part of the remedy process and required additional construction activities. Just a few months ago, the solidification and stabilization portion of the remedy at the Gulf Coast Vacuum Superfund site had to be reevaluated. The waste at the site is biotreated in land treatment units and was to be solidified and stabilized with portland cement. Bench scale tests provided appropriate results. However, when the first field test was executed, the stabilized mixture failed to meet the appropriate standards due to chromium contaminants contained in the portland cement. A search for noncontaminated cement was unsuccessful. The remedy is now being reevaluated utilizing different stabilizing chemicals. If the delisting process proposed in the bill was in place, this site would have already been delisted. Therefore I would request that the delisting process only occur after the remedy has been implemented and completed. In the case of delisting a site, the Technical Assistance Grants could be lost due to site delisting. If delisting occurs after construction completion but before the remedy has been implemented and completed the community will be cut out of participation in the critical implementation phase of the process. There is a misconception that once the remedy is selected and construction completed, there is no need for public participation. At all of the Superfund Sites that I have been involved in, there are always situations that arise during remedy implementation that require involvement of the public in resolving the issues to everyone's satisfaction. Please do not initiate a process that prevents public involvement and participation in the remedy implementation phase of the Superfund Process. state concurrence The addition of sites to the National Priorities List can only be accomplished ``with the concurrence of the Governor of the State'' in which the site is located (SCAA Section 802(i)(3). In the State of Louisiana the Governor has only concurred on one site That site was the Southern Shipbuilding Site in Slidell. The Southern Shipbuilding site waste was to be treated in the existing Bayou Bonfouca Superfund onsite incinerator and the same contractors were to perform the work. Thus the Governor concurrence allowed the local contractors to perform the second Superfund job. At the other sites investigated and proposed for inclusion on the NPL, the Governor did not concur. The failure to concur stopped the Superfund process and put on additional financial burdens on the already over burdened State agency. Even though the majority of the non-concurrence sites would have been PRP funded, the State agency is still responsible for providing financial and technical resources to perform oversight activities. The non-concurrent sites have had little or no progress since the non-concurrence. The ability of the Governor to have the veto over a site being listed on the NPL in inappropriate. It not only puts an additional burden on the State agency if anything is to be accomplished at the site, it also prolongs the exposure of the citizens living and working on or near the site, or consuming seafood and animals contaminated by the site, as is the case of Bayou D'Inde in Calcasieu Parish, Louisiana. limitation on new sites The proposed bill establishes a limit on the number of new sites that can be added to the NPL (SCAA Section 802(i)(1)). The number of sites decreases from 30 in 1997 down to 10 in the year 2000 and each year thereafter. For States without sufficient funding to address sites that should be fund led, this limit on the number of new sites will be an additional burden. In reality the additional burden will be borne by the citizens living on and adjacent to these sites. The establishment of a limit on the number of new sites should be removed from the bill. Thank you for the opportunity to provide input into this process. ______ Prepared Statement of Gordon J. Johnson, New York State Assistant Attorney General My name is Gordon J. Johnson, and I am the Deputy Bureau Chief of the Environmental Protection Bureau in the Office of New York Attorney General Dennis C. Vacco. I very much appreciate the opportunity to appear before the committee, and particular thank Senators Chafee and Baucus, as well as Senator Moynihan from New York State, for giving me the time to present comments on S. 8 and the chairman's draft mark of August 28, 1997. I am appearing today on behalf of my office, which has had considerable experience in natural resource damage cases, and on behalf of the National Association of Attorneys General, NAAG. My office has handled or is now counsel in more than 25 major natural resource damages cases arising from the release of hazardous substances or petroleum products. We also challenged on behalf of the State of New York the initial natural resource damage assessment regulations promulgated by the Department of the Interior in 1986, a case which I argued before the United States Court of Appeals for the District of Columbia Circuit. That case, Ohio v. Department of the Interior, 880 F.2d 432 (D.C. Cir. 1989), led to significant changes in the assessment regulations. When the revised regulations were challenged, New York with other states intervened in support of the rules. The decision in that case, Kennecott Utah Copper Corp. v. Department of the Interior, 88 F.3d 1191 (D.C. Cir. 1996), upheld the Department's rule in large part. At its Summer meeting on June 22-26, 1997, the sole resolution adopted by NAAG addressed Superfund Reauthorization; a copy of the resolution is attached. Attorney General Vacco was among the group of bipartisan sponsors of the NAAG resolution. The resolution directly addresses the natural resource issues which are the subject of this panel. The NAAG resolution arose from the state Attorneys General's recognition of the critical importance of the Superfund programs in assuring protection of public health and the environment from releases of hazardous substances at thousands of sites across the country. They also know first hand the problems with the statutory scheme, and the need to limit transaction costs and streamline certain processes required by Superfund today. In particular, the Attorneys General want to make the tasks of assessing natural resource damages and restoring injured or destroyed resources less complicated, and to reduce the amount of litigation that may result when trying to accomplish those goals. In the following paragraphs, I will first address the issues raised in the NAAG resolution, and then address other significant issues in the current bill and the chairman's draft of August 28, 1997. 1. judicial review In the resolution, NAAG urges Congress to clarify that in any legal proceeding the restoration decisions of a trustee should be reviewed on the administrative record, and be upheld unless arbitrary and capricious. S. 8, as introduced, contained provisions in Sec. 702 regarding the administrative record and public participation which, when read together, appeared to accomplish that goal. The chairman's mark-up retained the provision regarding the establishment of the administrative record but removed the language in the public participation section providing that judicial review of the trustee's restoration plan decisions would be on that record. S. 8 also removed the rebuttable presumption provided in current law to a trustee who adheres to the assessment regulations when conducting an assessment. The deletion of the judicial review provision is unfortunate and unwise, and likely will lead to greater litigation, increased expense, and secretive and duplicative assessments. Unless the selection of a plan and the assessment which led to that selection is entitled to the usual administrative presumption of correctness, no trustee could afford to conduct an assessment and select a plan on an open record with full public input knowing that responsible parties would not bound in any fashion by the determination. The key to reducing the costs of assessment and constructing a cooperative relationship with responsible parties is judicial review limited to correction of arbitrary decisions by a trustee. Such a process has been at the center of administrative law processes, and has received the approval of all courts as to its constitutionality. We again urge the committee to restore the judicial review provision deleted in the recent draft. We suggest language that makes clear the standard of review, thereby limiting the ability of the ever inventive CERCLA lawyers to raise a new issue with which to clog the courts and delay the implementation of restoration plans: [add to end of paragraph of draft chairman's mark--August 28, 1997 in Administrative Record (new Sec. 107(f)(20(C)(v)(I)] In any judicial action under this chapter, judicial review of any issues concerning the selection of a restoration plan shall be limited to the administrative record, and a trustee's selection shall be upheld unless the objecting party can demonstrate, on the administrative record, that the selection is arbitrary and capricious or otherwise not in accordance with law. In reviewing any procedural errors, the court may disallow damages only if the errors were so serious and related to matters of such central relevance to the plan that the plan would have been significantly changed had such errors not been made. 2. statute of limitations The Attorneys General ask that CERCLA be amended to provide that claims for natural resource damages be brought within three years of the completion of a damage assessment. Currently, CERCLA has a complicated two-prong statute of limitations period. The ``discovery prong'' requires filing a suit within three years of the discovery of the loss and its connection with the release in question, and the ``regulatory prong'' requires its filing within three years of promulgation of natural resource damage assessment regulations. Final promulgation of regulations that comply with the statutory directives still is not complete. The language of both prongs is ambiguous, and provides little guidance. What constitutes ``discovery of the loss'' and ``its connection with the release'' is far from obvious, and certainly has various interpretation in any given situation. Even the ``regulatory prong'' has had numerous judicial interpretations. See, Kennecott Utah Copper Corp. v. Dept. of the Interior, 88 F.3d 1191, 1209-13 (D.C. Cir. 1996); United States v. Montrose Chemical Corp., 883 F. Supp. 1496 (E.D. Cal. 1995), rev. sub nom. California v. Montrose Chemical Corp., 104 F.3d 1507 (9th Cir. 1986); Idaho v. M.A. Hanna Co., No. 83-4179, slip op. at 8-9 (D. Idaho July 17, 1995). These provisions often put a trustee in a difficult position and result in unnecessary litigation: the trustee may have to bring suit before he or she has sufficient information to determine the scope of the injury or to quantify damages, and even before the RI/FS is completed. In contrast, in the Oil Pollution Act of 1990, Congress adopted a clear rule: the limitations period runs three years after completion of an assessment. See, OPA Sec. 1017(f)(1)(B). This period has not resulted in uncertainty for trustees or liable parties. In addressing response costs for oil spills, states and the Federal Government generally have addressed natural resource damages and either settled or dropped claims, or established timetables for an assessment. Trustees cannot afford to delay assessments and thereby extend the liability period because evidence and data needed to conduct an assessment disappears after time. As demonstrated under OPA, NAAG's proposed solution has proved workable and just. The August 28, 1997 draft complicates the issue further. The pertinent provision, new Sec. 705, would apply a third period when trustees and responsible parties enter into an agreement regarding the performance of an assessment. By setting a limit of six years from the signing of the agreement, the provision may well force a trustee to court before the assessment is complete in complicated cases, and limits the flexibility parties need when negotiating an agreement. Indeed, this new provision may well discourage agreements and settlements because responsible parties might prefer to rely on the current ambiguous provisions that still would remain and avoid the certain extension this new provision provides. We suggest the follow language instead: Statute of Limitations.--(1) Section 113(g)(1) of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. 9613(g)(1)) is amended by striking the first sentence and inserting the following: ``(1) Action for natural resources damages.--Except as provided in paragraphs (3) and (4), no action may be commenced for damages (as defined in section 106(6)) under this Act, unless that action is commenced within 3 years after the date of completion of the natural resources damage assessment in accordance with the regulations promulgated under section 301(c) of this title, or, if the trustee elects not to follow those regulations, of a plan for the restoration, replacement, or acquisition of the equivalent of the injured, lost, or destroyed natural resources adopted after adequate public notice, opportunity for comment, and consideration of all public comments.'' (2) Section 112(d) of CERCLA is amended by striking paragraph (2) and inserting the following: (2) Claims for recovery of damages.--No claim may be presented under this section for recovery of the damages referred to in section 107(a) unless the claim is presented within 3 years after the date of completion of the natural resources damage assessment in accordance with the regulations promulgated under section 301(c) of this title or if the trustee elects not to follow those regulations, of a plan for the restoration, replacement, or acquisition of the equivalent of the injured, lost, or destroyed natural resources adopted after adequate public notice, opportunity for comment, and consideration of all public comments.'' 3. superfund moneys for assessments When CERCLA was amended in 1986, Congress provided in CERCLA that the Superfund Trust Fund could be used by state and Federal trustees to conduct damage assessments, recognizing in particular that many state trustees lack the funds to pay for the necessary expertise to conduct assessment themselves. In conference, language was added to the amendments to the Internal Revenue Code which had the practical effect of negating that CERCLA provisions. NAAG long has asked that the conflict between the IRS Code and CERCLA be eliminated and that state trustees be able to draw on the Fund to conduct assessments, as they can currently to conduct RI/FS's. 4. use of reliable assessment methodologies Just as Congress does not direct EPA to use only certain scientific methodologies in the changing and developing area of remedial science, NAAG believes that Congress should retain the ability of trustees to recover damages based on any reliable assessment methodology. S. 8, however, provides that assessments must be conducted only in accordance with regulations not yet promulgated by the President, and effectively forbids the use of one methodology, the admittedly controversial ``contingent valuation'' methodology, in the assessment process. We believe that state trustees should not be compelled to use one federally dictated method to assess damages, particularly given the myriad types of hazardous substances and release scenarios and the experience of state trustees in assessing damages in ways that are reliable and cost-effective. The precise methodologies allowed is a matter of scientific expertise best left to the regulatory and judicial process for resolution. 5. liability cap We are pleased that S. 8 does not alter the current liability cap. We are confident that trustees will continue to use their good sense, and in any event that the courts will not award excessive damages. Calamities such as the Exxon Valdez spill and the contamination of the Hudson River convince us that there may be circumstances where altering the current liability cap may result in a gross injustice to the people of the United States. 6. recovery of enforcement and oversight costs S. 8 provides that trustees may recover the costs of their assessments, but is silent with respect to the related costs of enforcement and recovering the damages and a trustee's cost of overseeing restoration of damaged resources. The NAAG resolution asks that Congress clarify that such costs are inherent in a sound assessment process, and explicitly provide that trustees can recover both the costs of enforcement, including attorney fees generally incurred by a state Attorney General's office, and the costs of overseeing the implementation of a natural resource damage restoration. The NAAG resolution is consistent with the general and uncontroversial policy that persons responsible for the release of hazardous substances have an obligation to make the public whole in the event that there is an injury to our natural resources. Well over a hundred years ago in cases on the abatement of nuisances and the public trust doctrine, the courts made clear several bedrock principles. The states and the Federal Governments are trustees for the people, and that their trust corpus includes this nation's glorious natural resources. We, as trustees, have an obligation to protect these often irreplaceable resources from harm, and those that harm them have the obligation to restore them for all the people. A strong and clear natural resource damages remedy is essential to accomplishing these goals. Implementation of CERCLA's natural resource damage provisions had a difficult birth and early childhood. The initial assessment regulations were deeply flawed, and states such as mine had to go to court to seek their repromulgation. Contrary to Congress's directive, the Federal agencies entrusted with implementation of the Superfund natural resource damages program gave them little attention at first. Since the 1989 decision in the Ohio v. Department of the Interior case, however, the Federal program has matured. States have continued their progress in implementing fair and just recovery programs at state levels, relying in large part with the tools provided by CERCLA. We recognize that like almost any tool, the natural resource damage provisions of CERCLA could use some sharpening. We ask that this committee and Congress maintain the central provisions of CERCLA that make the public whole when a release causes injury. Other Issues S. 8 and the August 28, 1997 draft address a number of natural resource damage issues important to the remedy provided by CERCLA. In the following paragraphs, I address some of the major issues, relying on the experiences of my office and those of other Attorneys General, as well as the experiences of trustees since the early 1980's with the natural resource damage provisions. I note that the August 28, 1997 draft suggests some revisions to S. 8 that address certain problems state trustees and my office found in the bill as introduced. I comment on those revisions first. A. Consistency Requirement The August 28, 1997 draft rewrote the consistency provision of S. 8 at Sec. 703, removing troublesome language and creating in its place a provision requiring a trustee to ``take into account'' implemented or planned removal and remedial actions when selecting a restoration alternative. The trustee also is required to advise EPA of the selection, confirm that the selected plan is, ``to the extent practicable, consistent with the response action planned or accomplished at the facility,'' and to explain any significant inconsistencies. The proposal provides a workable solution to the hypothetical problems that might arise between EPA cleanup measures and trustee restoration plans. New York would suggest one minor alteration: in cases where EPA has not implemented or planned any removal or remedial action and the site is not on the NPL, notice need not be given EPA of the selected plan. While in most significant cases a state normally will include EPA in the process at least on an informational basis, requiring the statement adds just another layer of paper and imposes another mandate on state trustees in cases where EPA has had no involvement and plans no future involvement. B. Payment Period S. 8 provided that payment of damage over a period of years would be appropriate. While periodic payment settlements are far from uncommon in this area, S. 8 included the ``period of time over which the damages occurred'' among the factors to be considered when establishing as schedule for payment. The August 28, 1997 draft wisely removed that consideration. With that and the other changes, the provision is appropriate. C. Lead Federal Trustee The August 28, 1997 draft modifies the provision regarding the appointment of a lead Federal trustee appropriately. S. 8 at Sec. 702(a). The revised provision requires regulations to provide for a ``lead Federal administrative trustee'' at a facility undergoing an assessment, who presumably will coordinate the Federal trustees' activities administratively. This role is important, because it will give state trustees the ability to contact one Federal official when seeking to coordinate state efforts with Federal activities. We think that the committee should clarify either in the bill expressly or through the committee's report that the ``lead Federal administrative trustee'' would be the lead only among the Federal trustees, not among the Federal, state and tribal trustees. At many sites, it is much more appropriate and effective for a lead trustee who handles matters with the responsible parties or among all the trustees to be a state or tribal trustee. Who should be the lead among all trustees should be left to the trustees to decide, and co-lead trustees should be allowed. Finally, we do not think it is appropriate for the lead Federal trustee to be a responsible party, a situation which may occur in cases addressing damages arising from releases at a Department of Energy or military facility. In those situations, the lead Federal administrative trustee should be from one of the Federal agencies not liable for damages in order to eliminate even the appearance to the public and the states that the fox is deciding on repairs to the chicken house. D. Interim Losses and ``Temporary Restorations'' By arguably limiting a trustee's ability to recover interim damages to natural resources, the provisions of S. 8, even as modified by the August 28, 1997 draft, significantly depart from the principle that when natural resource are damaged, the party responsible for that damage has an obligation to make our citizens whole. While S. 8 places emphasis, appropriately, on restoration or replacement of injured or damaged resources, arguable restrictions on recovery of interim losses may also have the ironic effect of delaying that restoration. Moreover, in cases where the injury to the resources cannot be repaired except by natural recovery because restoration is infeasible or grossly expensive, the language of the August 28, 1997 draft could be read to imply that a trustee cannot recover any damages whatsoever, leaving the public alone to bear the consequences and costs of injured or destroyed natural resources. Restoration of injured natural resources, or their replacement or acquisition of their equivalent when restoration is not feasible or appropriate, has always been the goal of a trustee. Natural resources almost always provide numerous ecological and human services and have intrinsic values to society that are difficult to quantify, and thus the first step in insuring proper compensation is to restore the resource. Pending that restoration, however, our citizens do suffer losses which also should be compensated. The August 28, 1997 draft's explicit inclusion of language allowing recovery for ``temporary replacement of the lost services'' is a step in the right direction, but is too limited. First, while the draft provides that a restoration alternative selected by a trustee may include such temporary replacement, it should clarify that a trustee may begin providing such services before the restoration plan is selected at the end of an often lengthy assessment study, and that the costs of such pre-selection provision of services will be recoverable. Second, even if a resource recovers naturally quickly following a release, the public still has suffered quantifiable and compensable damages. For instance, when public recreational facilities, such as beaches, are closed for days after a spill, temporary replacement often will not be practicable or implementable on a short-term basis even though the public has suffered an injury. Trustees still should be able to recover damages and use sums to improve beach access or otherwise enhance the resource. Third, the bill should be clarified to confirm that temporary replacement is allowed in non-restoration alternatives. A trustee may also evaluate ``replacement'' and ``acquisition'' alternatives when evaluating plans. Pending implementation of such plans if selected, a trustee also should' be able to recover for providing replacement services. E. Double Recovery Language CERCLA presently contains a clause expressly prohibiting double recovery: ``[t]here shall be no double recovery under this chapter for natural resources damages, including the costs of damage assessment or restoration, rehabilitation, or acquisition for the same release and natural resource.'' CERCLA Sec. 107(f)(1). While double recovery has not been an issue in the years since 1980, S. 8 rewrites the otherwise clear language. Unfortunately, the new version may create fertile ground for litigation. A strained reading of the new language may suggest that anyone who has recovered response costs which are used to restore an injured resource--and remedial work often has that consequence, obviously--cannot recover natural resource damages. Moreover, the new language appears to preempts state laws, and could result in significant unfairness. For instance, most states have long allow recovery for spills which kill fish in a river, with recoveries paid to a state's fish stocking programs. Such damages may not necessarily be recoverable under S. 8. Thus, this new language would appear to prevent a state from recovering such damages in the event of a natural resource recovery under CERCLA as amended by S. 8. Moreover, recovery by a state for just this element of typical damages may preclude any recovery under S. 8 for all the other effects of a release. Double recovery has not been raised as a problem, and the current language protects against such a result. We urge the committee to return to the current statutory language. F. Injury Before 1980 Section 701(7) of the August 28, 1997 draft imposes significant and unwarranted restrictions on recovery of damages when a release occurred prior to 1980 even though damages resulting from that release still are being incurred. First, under current law, a trustee can recover if the damages caused by a pre-1980 release continue after 1980. See CERCLA Sec. 107(f)(1) [last sentence]. Under S. 8, a trustee may recover only if the injury continues. This one word substitution may be read to preclude recovery of all damages whatsoever for a pre-1980 release, even one which continues to have significant impacts and harms, because some courts have concluded that the ``injury'' occurs at the moment of release while damages occur thereafter. See, e.g., In re Acushnet River & New Bedford Harbor Proceedings, 716 F. Supp. 676, 681-687 (D. Mass. 1989). Claims now being litigated for numerous sites could well be affected and extinguished. At common law, the creator of a nuisance which continues to cause damage after its creation still is liable for its abatement. This well- grounded common law doctrine is at the heart of the natural resource damages remedy, and should not be discarded by this committee. G. Apparent Ban on Modeling Modeling of releases and spills to calculate damage quickly and inexpensively is not only permitted by current law, but expressly encouraged. See, CERCLA Sec. 301(c)(2). Especially when damages resulting from a spill are not extensive, modeling avoids the costs associated with damage assessment and the necessary scientific procedures and analyses that otherwise might be required to complete a site-specific assessment. In contrast, S. 8 provides that all aspects of the assessment process shall, ``to the extent practicable, be based on facility- specific information.'' S. 8 at Sec. 703(a). This provision could be read as essentially prohibiting modeling despite the huge savings in assessment costs resulting from its use. We believe that the provision is counterproductive and may well increase assessment costs--which would be paid by liable parties--to many times more than any miscalculation modeling of restoration costs might yield at a specific site. We urge this committee to allow modeling and other types of expedited assessments as possible methodologies that could be considered when promulgating assessment regulations. H. Identification of Trustee Responsibilities S. 8 requires the assessment regulations include procedures for trustees to identify the resources under their trusteeship and the legal bases for their authority. These procedures are not useful, and could create issues for time-consuming litigation as well as foster jurisdictional disputes among state, Federal and tribal trustees. In New York, we have repeatedly worked with other trustees from the Federal Government, tribes and other states. Cooperation is fostered when we agree to avoid debates over the status and nature of our trusteeships, and has allowed us to work more cooperatively and efficiently with responsible parties. This provision of S. 8 is unnecessary. I. Timeliness of Suit The August 28, 1987 draft adds a paragraph prohibiting recovery by a trustee if the resource has returned to baseline condition before the trustee files a claim or incurs assessment or restoration costs. This provision would unfairly penalize the public and award polluters when a trustee lacks the finances or opportunity to address immediately a particular release even though the public has suffered considerable injury until the resource recovered. For instance, a release may close recreational facilities or kill fish, but before a trustee can turn his or her attention to the matter, the resource may have returned to baseline conditions. As discussed above, such events do cause damage which should be compensable. More ominous, however, is the inducement created by this section for a responsible party to withhold crucial information about a spill and its effects from the trustee and the public until the resource has naturally recovered. We urge that this provision be deleted from the bill. J. Non-use Values S. 8 expressly prohibits recovery for ``any impairment'' of non- use, or passive use values. In New York, we believe that such a provision could inappropriately devalue natural resources, and may force the State and its taxpayers to bear themselves the costs arising from improper release of hazardous substances. The value of a natural resource is a combination of its value as a useful commodity, such as the value of an aquifer as drinking water or seal pelts as clothing, and its passive values. These passive values include the value placed on having a resource available for future use, and the fact that we repeatedly pay to have resources available merely because we value their existence. My state expends thousands of dollars a year to protect and propagate endangered species, even though we cannot think of any use for a piping plover, for instance. We protect whales and will incur costs to save stranded ones not because the whales are ``useful'' as commodities, but because we value their existence. Unique resources, such as majestic canyons and rivers like the Grand Canyon and the Hudson River, are valuable to society not only for their actual uses as parks, waterways, or recreational facilities, but because they just are. By prohibiting recoveries predicated on these values, S. 8 ignores the costs borne by government to protect and safeguard these resources. Under S. 8, a spiller who kills endangered species may not have to pay any damages whatsoever when it is not possible to restore the species through a breeding program, even though government may have expended thousands of dollars that year alone to protect the species. There is no doubt that the resource has been injured and that we, the public, have suffered damages, yet we will have no remedy under S. 8. Moreover, the provision is susceptible to misuse in litigation. It will certainly be used in legal arguments to oppose restoration plans in situations where nonuse values predominate and influence a plan's conclusion that the cost of restoration is not disproportionate to the benefits of restoration. There are numerous safeguards in our legal and political systems to prevent the inappropriate use of nonuse values. The settlements reached in natural resource damage cases to date reflect trustees' common-sense utilization of the economic concepts relating to both use and passive use valuation. New York urges that this provision be dropped from the bill. ______ National Association of Attorneys General adopted summer meeting, june 22-26, 1997, jackson hole, wyoming resolution--superfund reauthorization WHEREAS, the Attorneys General of the States have significant responsibilities in the implementation and enforcement of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and analogous state laws, including advising client agencies on implementation of the cleanup and natural resource damage programs, commencing enforcement actions when necessary to compel those responsible for environmental contamination to take cleanup actions and to reimburse the states for publicly-funded cleanup, and advising and defending client agencies that are potentially liable under CERCLA; WHEREAS, the Superfund programs implemented under CERCLA and analogous state laws are of critical importance to assure protection of public health and the environment from uncontrolled releases of hazardous substances at thousands of sites throughout the country; WHEREAS, Congress is currently considering legislation to amend and reauthorize CERCLA; WHEREAS, to avoid unnecessary litigation and transaction costs over the interpretation of new terms and new provisions, amendments to CERCLA should be simple, straightforward, and concise; WHEREAS, the National Association of Attorneys General has adopted resolutions in March 1987, July 1993, and March 1994 on the amendment of CERCLA; state role WHEREAS, many state cleanup programs have proven effective in achieving cleanup, yet the CERCLA program fails to use state resources effectively; WHEREAS, state programs to encourage the cleanup and redevelopment of underutilized ``brownfields'' are making important strides in improving the health, environment, and economic prospects of communities by providing streamlined cleanup and resolution of liability issues for new owners, developers, and lenders; federal facilities WHEREAS, Federal agencies should be subject to the same liability and cleanup standards as private parties, yet Federal agencies often fail to comply with state and Federal law; liability WHEREAS, the core liability provisions of CERCLA, and analogous liability laws which have been enacted by the majority of the states, are an essential part of a successful cleanup program, by providing incentives for early cleanup settlements, and promoting pollution prevention, improved management of hazardous wastes, and voluntary cleanups incident to property transfer and redevelopment; WHEREAS, the current CERCLA liability scheme has in some instances produced expensive litigation, excessive transaction costs, and unfair imposition of liability; remedy selection WHEREAS, constructive amendments to CERCLA are appropriate to streamline the process of selecting remedial actions and to reduce litigation over remedy decisions; natural resource damages WHEREAS, constructive amendments to CERCLA are appropriate to make it less complicated for natural resource trustees to assess damages and to restore injured natural resources, and to reduce the amount of litigation that may result in implementing the natural resource damage program. NOW, THEREFORE, BE IT RESOLVED THAT THE NATIONAL ASSOCIATION OF ATTORNEYS GENERAL urges Congress to enact CERCLA reauthorization legislation that: A. State Role 1. Provides for delegation of the CERCLA program to qualified states, and for EPA authorization of qualified state programs, with maximum flexibility; 2. Reaffirms that CERCLA does not preempt state law; 3 Ensures that states are not assigned a burdensome proportion of the cost of operation and maintenance of remedial actions and in no event to exceed 10 percent; 4. Clarifies that in any legal action under CERCLA, response actions selected by a State shall be reviewed on the administrative record and shall be upheld unless found to be arbitrary and capricious or otherwise not in accordance with law; B. Federal Facilities 5. Provides for state oversight of response actions at Federal facilities, including removal actions. 6. Provides a clear and unambiguous waiver of Federal sovereign immunity from actions under state or Federal law; C. Liability 7. Provides a liability system that: (a) includes the core provisions of the current CERCLA liability system that are essential to assure the effectiveness of the cleanup program; (b) provides incentives for prompt and efficient cleanups, early cleanup settlements, pollution prevention, and responsible waste management; (c) addresses the need to encourage more settlements, discourage excessive litigation, reduce transaction costs, and apply cleanup liability more fairly and equitably, especially where small contributors and municipal waste landfills are involved; and (d) assures adequate funding for cleanup and avoids unfunded state mandates; 8. Provides reasonable limitations on liability for disposal of municipal solid waste; 9. Provides an exemption from liability for ``de micromis'' parties that sent truly minuscule quantities of waste to a site; 10. Encourages early settlements with de minimis parties that sent minimal quantities of waste to a site; D. Remedy Selection 11. Provides for the consideration of future land use in selecting remedial actions, provided that future land use is not the controlling factor, and provided that remedial actions based on future land use are conditioned on appropriate, enforceable institutional controls; 12. Retains the requirement that remedial actions attain, at a minimum, applicable state and Federal standards; 13. Retains the prohibition on pre-enforcement review of remedy decisions; 14. Provides that cost-effectiveness should be considered, among other factors, in remedy selection; 15. Allows EPA or the state agency to determine whether to reopen final records of decision for remedial actions, as under current law; E. Natural Resource Damages 16. Clarifies that in any legal action, restoration decisions of a natural resource trustee shall be reviewed on the administrative record and shall be upheld unless found to be arbitrary and capricious or otherwise not in accordance with law, without precluding record review on other issues; 17. Provides that claims for damages for injuries to natural resources must be brought within three years of that completion of a damage assessment; 18. Allows Superfund moneys to be used for assessments of damages resulting from injures to natural resources and for efforts to restore injured natural resources; 19. Retains the ability of trustees to recover damages based on any reliable assessment methodology; 20. Does not revise the cap on liability for natural resource damages so as to reduce potential damage recoveries; 21. Clarifies that trustees are entitled to recover legal, enforcement, and oversight costs; F. Brownfields 22. Strengthens state voluntary cleanup and brownfields redevelopment programs by providing technical and financial assistance to those programs, and by giving appropriate legal finality to clean up decisions of qualified state voluntary cleanup programs and brownfield redevelopment programs; G. Miscellaneous 23. Allows EPA to continue to list new sites on the National Priorities List based upon threats to health and the environment, with the concurrence of the state in which the site is located. BE IT FURTHER RESOLVED that the CERCLA Work Group, in consultation with and with approval of the Environmental Legislative Subcommittee of the Environment Committee, and in consultation with NAAG'S officers is authorized to develop specific positions related to the reauthorization of CERCLA consistent with this resolution; and the Environmental Legislative Subcommittee, or their designees, with the assistance of the NAAG staff and the CERCLA Work Group, are further authorized to represent NAAG's position before Congress and to Federal agencies involved in reauthorization decisions consistent with this resolution and to provide responses to requests from Federal agencies and congressional members and staff for information, technical assistance, and comments deriving from the experience of the state Attorneys General with environmental cleanup programs in their states. BE IT FURTHER RESOLVED that NAAG directs its Executive Director and General Counsel to send this resolution to the appropriate congressional committees and subcommittees, and to the appropriate Federal agencies. ABSTAIN: Attorney General Don Stenberg ______ Responses by Gordon J. Johnson to Questions from Senator Moynihan Question 1. What is the State's experience with the natural resource damage provisions in the current law? How would that change under the chairman's mark? Response. New York has been or is the plaintiff in over 25 cases that have sought natural resource damages arising from releases of hazardous substances and petroleum products. In a majority of these cases, the State has settled with responsible parties and recovered funds that are used to restore or purchase wetlands, replant shorelines, enhance groundwater supplies and provide alternative water supplies, and implement other measures relating to the restoration or replacement of damaged or destroyed resources. The right to recover damages has also helped improve remedial measures; aware that a trustee could recover damages for lost interim uses until restoration is complete, responsible parties have agreed to speedier and more extensive remedial measures in order to reduce potential damages. The chairman's mark will have significant effects on New York's use of the natural resource damage recovery remedy. For instance, when it is not possible to fully restore a contaminated aquifer, funds might not be recoverable that could be used to protect the groundwater from further degradation in compensation for the reduced or completely lost use of the aquifer because the measure of damages only allows for the temporary replacement of services rather than compensation for lost uses. See, Section 701(7), adding Sec. 107(f)(1)(E)(i)(I). Arguably, the State also could no longer recover funds to protect or enhance habitats of endangered species--animals or plants which may have little or no use value--unless the habitat itself was degraded because no recovery is allowed for ``impairment of nonuse values.'' See Section 701(7), adding Sec. 107(f)(1)(E)(ii). The State's ability to fully recover for the loss of fisheries, impacts on birds and other species, and related injuries arising from longstanding but continued discharges of chemicals into rivers or lakes may well be jeopardized by changes in the provisions governing pre-1980 releases. See Section 701(7), adding Sec. 107(f)(1)(E)(iv)(II). Because the full value of lost interim uses may not necessarily be recoverable--such recovery arguably being limited to the costs of temporary replacement of services--delay in implementing remedies and restoration may work to the advantage of responsible parties, leading to drawn out litigation. See, Section 701(7), adding Sec. 107(f)(1)(E)(i). Question 2. Are the present methods for determining the ``value'' of natural resources adequate? How will the chairman's mark affect our ability to determine natural resource damages? Response. The current methods generally are adequate. A trustee will usually follow the procedures set forth in the natural resource damage assessment regulations, 43 C.F.R. Part 43, which provide a range of methodologies that allow a trustee to calculate the full value of natural resources, including the non-market values that often are at the core of the resources' value to society. Using these methodologies, a trustee can calculate damages arising from the destruction or impairment of endangered species, aquifers, beaches, wetlands and other resources that are not traded in a market and thus lack market valuations, and which have significant non-consumptive values, such as existence and option values. See State of Ohio v. United State Department of the Interior, 880 F.2d 432, 462-4 (D.C. Cir. 1981) (requiring Interior Dept. to structure regulations ``to capture fully all aspects of the loss'' as intended by Congress). The chairman's mark would significantly hinder the determination and recovery of the full value of the loss. The absolute restriction on recovery of non-use values, the restriction on the use of the contingent valuation methodology, an apparent limitation on the recovery of interim lost uses, which is only partially ameliorated by the ability to recover the cost of a temporary restoration of services, and language implying that modeling may not be used to determine damages each will diminish a trustee's ability to determine and recover damages. Ironically, under both S. 8 as introduced and the chairman's mark, the greater the injury to and the more irreplaceable the resource, the less likely that a trustee will recover damages because of the restrictions on recovery for impairment of non-use values and interim loss values; injuries to unique and pristine resources that cannot be replaced or are not currently being used may have very low values under the current versions of S. 8. ______ Responses by Gordon J. Johnson to Questions from Senator Wyden Question 1. Does the National Association of Attorneys General support including a clearer, more comprehensive waiver of sovereign immunity in Superfund reform legislation than what is currently provided in existing law. If so, could you explain why NAAG believes it is necessary to clarify the Superfund law's waiver of sovereign immunity and bring it into line with what is already provided for hazardous waste laws in the Federal Facilities Compliance Act? Response. The National Association of Attorneys General (NAAG) strongly supports a clearer, more comprehensive waiver of sovereign immunity in Superfund reform legislation. This position is reflected in the July, 1997 NAAG Superfund Reauthorization Resolution, a copy of which is attached to my written testimony. NAAG has advocated a clarification of this waiver for approximately ten years. It proposed such an amendment in the 1990 report ``From Crisis to Commitment: Environmental Cleanup and Compliance at Federal Facilities'' co- authored with the National Governor's Association, and in its July, 1993 NAAG Resolution on Superfund Reform. Numerous attorneys general, including those from Colorado, Washington and New Mexico have testified in favor of such a clarification,\1\ and forty-three attorneys general signed a May 3, 1995 letter requesting such a clarification, among other things. On July 10 of this year, 39 attorneys general urged passage of H.R. 1195 introduced by Representative Dan Schaefer's last spring. A copy of this letter is attached. Rep. Schaefer's bill would amend the current CERCLA waiver to accord more closely to the language in the Federal Facilities Compliance Act (FFCA). --------------------------------------------------------------------------- \1\ See e.g., Testimony of Tom Udall, Attorney General of New Mexico before the House Subcommittee on Commerce, Trade and Hazardous Materials of the House Committee on Commerce, October 26, 1995; Testimony of Christine Gregoire, Attorney General of Washington before the Senate Committee on Environment and Public Works, April 24, 1996; Testimony of Gale Norton, Attorney General of Colorado before the Senate Subcommittee on Superfund, Waste Control, and Risk Assessment, Committee on Environment and Public Works, May 9, 1995. --------------------------------------------------------------------------- NAAG supports a clarification of the waiver of sovereign immunity in CERCLA to enable Federal, State and local regulators to hold Federal facilities to the same standard that is applied to private parties. Although section 120(a) currently contains a waiver, it does not include the detailed, explicit language that appears necessary to avoid litigation with the Department of Justice and to withstand ultimate judicial scrutiny by the Courts which are compelled to construe any perceived ambiguity in favor of the sovereign. The waiver language in section 120(a)(4), pertaining to liability under State law, is particularly weak, and must be replaced with language similar to that in the FFCA to avoid fruitless disputes with recalcitrant Federal agencies.\2\ The fact is, as Senator Stafford remarked a decade ago, ``no loophole, it seems, is too small to be found by the Federal Government.\3\ Clarification of the waiver of sovereign immunity is necessary to eliminate some of the loopholes that the Federal Government has already found, and to ensure that more State and Federal resources go to determining how best to comply, and not to disputing and litigating over whether compliance can be compelled. --------------------------------------------------------------------------- \2\ See, Everett, H., ``Federal Sovereign Immunity and CERCLA: When is the United States Liable for Costs,'' 9 J. Natural Resources and Environmental Law 479 (1994). A copy of this article is attached. \3\ 132 Cong. Rec. 514903 (daily ed. Oct. 3, 1986). Question 2. Another important issue involving Federal Facilities is whether an interagency agreement like the Hanford Tri-Party Agreement can be used by Federal agencies as an excuse not to have to comply with otherwise applicable environmental laws. This was the issue in the Heart of the America case. Has this issue been resolved or are there still outstanding issues about Federal agencies' responsibility to comply with environmental laws during the course of cleaning up Hanford and other Federal Facilities? Response. The issue raised by the Heart of America case has not been resolved. The United States argued successfully in that case that the existence of the Tri-Party Agreement at Hanford brought all environmental activities at Hanford under the CERCLA umbrella, even those expressly delineated in the Agreement as activities that would be regulated pursuant to State authorities. As a result, citizens were precluded by the pre-enforcement review ban in section 113(h) of CERCLA from enforcing applicable State law. Although the ruling was limited on its facts to citizen suits, States are concerned that the Federal Government may argue that its reasoning also applies to State enforcement actions. States have therefore been reluctant to enter into comprehensive agreements at Federal facilities for fear of losing the independent enforcement authorities they would otherwise have. Thus, the case provides a counter-incentive to cooperative relations between the regulators and regulated agency, and stymies efforts to develop sensible, coordinated, efficient responses at these very complicated sites. Language proposed by Representative Schaefer in H.R. 1195 would address this question to the satisfaction of NAAG (see above-referenced July 10, 1997 letter in support of H.R. 1195). Question 3. Governor Nelson stated in his testimony that NGA supports having applicable State environmental laws apply at Federal Facilities in the same manner that they apply at non-Federal Facility sites. Does NAAG agree with NGA that States should be authorized to apply their state cleanup laws to Federal Facilities? Response. NAAG concurs with NGA's position that Federal facilities should be treated the same as private responsible parties, and finds no justification for establishing unique delegation and remedy selection procedures to apply to Federal facilities.\4\ Rather, Title II on state role should be modified to include Federal sites. This modification along with other reforms urged by States would allow States to apply their laws at Federal facilities in the same manner that they apply them at non-Federal Facility sites. --------------------------------------------------------------------------- \4\ See e.g., NAAG Resolution on Superfund Reauthorization, June, 1997. States have urged one exception to this general rule. In the States' Reform Proposals Regarding Environmental Obligations at Federal facilities transmitted to President Clinton by letter dated July 12, 1995 and signed by thirty-eight Attorneys General and eleven governors, States advocated that the transfer of EPA authority at Federal facilities to States with corrective action authority should be automatic. This exception is necessary because at Federal facilities, unlike private sites, EPA cannot act truly independent of its sister agencies. [GRAPHIC] [TIFF OMITTED] T6587.018 [GRAPHIC] [TIFF OMITTED] T6587.019 [GRAPHIC] [TIFF OMITTED] T6587.020 [GRAPHIC] [TIFF OMITTED] T6587.021 [GRAPHIC] [TIFF OMITTED] T6587.022 [GRAPHIC] [TIFF OMITTED] T6587.023 [GRAPHIC] [TIFF OMITTED] T6587.024 [GRAPHIC] [TIFF OMITTED] T6587.025 [GRAPHIC] [TIFF OMITTED] T6587.026 [GRAPHIC] [TIFF OMITTED] T6587.027 [GRAPHIC] [TIFF OMITTED] T6587.028 [GRAPHIC] [TIFF OMITTED] T6587.029 [GRAPHIC] [TIFF OMITTED] T6587.030 [GRAPHIC] [TIFF OMITTED] T6587.031 [GRAPHIC] [TIFF OMITTED] T6587.032 [GRAPHIC] [TIFF OMITTED] T6587.033 [GRAPHIC] [TIFF OMITTED] T6587.034 [GRAPHIC] [TIFF OMITTED] T6587.035 Statement of Susan Eckerly, Director, Federal Government Relations, National Federation of Independent Business Mr. Chairman, members of the committee, thank you for the opportunity to testify today on the recently revised version of S. 8, the Superfund Cleanup Acceleration Act of 1997. My name is Susan Eckerly, and I am the Director of Federal Government Relations-Senate for the National Federation of Independent Business (NFIB). The NFIB is the nation's largest small business advocacy organization, representing 600,000 small business owners in all fifty states. The typical NFIB member employs five people and grosses $350,000 in annual sales. Our membership reflects the general business profile in that we have the same representation of retail, service, manufacturing and construction businesses that make up the nation's small business community. NFIB sets it legislative positions and priorities based upon regular surveys of its membership. I commend the committee for its continued efforts to reach consensus on legislation that will overhaul the Superfund program. We support your efforts to move forward by marking up legislation next week and hope that this Congress will at last put an end to the Superfund liability nightmare for small business. Those caught in the Superfund web cannot wait much longer for relief. superfund's unintended effects When Superfund was originally passed in 1980, it was believed that the number of hazardous waste disposal sites and the costs to clean them up were relatively simple. Unfortunately, that has not been the case. Over the past seventeen years this program has proved to be one of, if not the worst, environmental programs on the books. It has failed to meet its mission of cleaning up hazardous waste sites and instead has encouraged wasteful, excessive litigation that can last for years and cost billions of dollars. Today's system is fraught with the wrong incentives: incentives to prolong cleanup, continue expensive litigation and to drag even the smallest contributor through the lengthy process. When examining the sites that have been cleaned up, the costs associated with such cleanups, coupled with the staggering amount of money that has gone directly to lawyers' coffers, it is easy to see that the fault and liability system currently in Superfund is flawed. Congress may have envisioned a system that would only catch the few, large, intentional or irresponsible polluters, however, the reality has been very different. There have been over 100,000 different potentially responsible parties (PRPs) identified at Superfund sites. Obviously, a majority of these are not Fortune 500 companies, but are small businesses. Since Congress last reauthorized Superfund, we have experienced an increasing number of complaints and questions from our membership. The effect of the current liability system is permeating all segments of the small business community. No issue in this very complex public policy debate will have a more direct impact on the present and future economic viability of many small businesses than this aspect of Superfund reform. There is not one segment whether it be a retail store, a professional service business, or a construction business that has not been touched. small business attitudes It is helpful to keep in mind the unique nature of a small business when you examine small business owners' reactions to environmental legislation. Small business owners wear many hats. Two of the most important are being both a business owner and a citizen of a community. They drink the water, breathe the air and fish in the lakes. They want a healthy environment both for themselves and for their children. They also expect the government to be fair and responsible. It is this lack of fairness and responsibility in the area of Superfund that is causing a groundswell of anger, distrust and in many cases, despair. The committee has heard testimony twice from one of our members, Barbara Williams, a restaurant owner, who is a fourth party defendant at the Keystone landfill in Gettysburg, Pennsylvania. She is being sued for over $76,000 because she legally dumped her restaurant's trash, which consisted mostly of food scraps. If she is forced to pay this amount, she likely will close her restaurant and her employees will lose their jobs. As Barbara has testified: ``This suit defies common sense. I have recycled for years. I used the trash hauler that was approved and permitted by my borough government.'' With the continuing emergence of these kinds of stories, NFIB began asking our members questions about Superfund in an effort to identify their specific concerns. Overwhelmingly, our membership indicated that the liability scheme in the current statue was the area they felt needed the most reform. I would like to call your attention to a study undertaken by the American Council for Capital Formation (ACCF) in conjunction with the NFIB. This study surveyed small business PRP's and asked numerous questions about their experiences with Superfund. Approximately 70 percent of the 5,000 small PRP's surveyed indicated that the liability system was the major burden of Superfund. And at the 1996 White House Conference on Small Business, reform of Superfund's liability was voted by the conference as the group's fifth highest priority. Thus, our focus has been on the liability system and how to make it more equitable and efficient for the small business owner. Liability--Small Business Concerns What are the small business problems with regard to liability? NFIB members have identified three major problems. First, the nature of Superfund encourages litigation. In most cases, our members are dragged into the process by being named as a PRP in a third party lawsuit. They are forced to spend thousands of dollars and an excessive amount of their time defending themselves when they have done nothing wrong or illegal or have no records to prove their innocence. Second, they are forced to remain in the liability scheme when many times small businesses could and should be eliminated from the lengthy settlement process through exemptions. These businesses contributed a minute amount of waste, and it frankly is a waste of time and money to include them in the process. Nothing is gained--either for the economy or the environment--when businesses are forced to close their doors due to the lack of reasonable settlement offers. Third, the retroactive joint and several liability scheme is what our members find most unbelievable and unfair. The fact that they can today be held responsible for past actions that were legal at the time they were undertaken and could be forced to pay for 100 percent of the cleanup costs is un-American and outrageous. It forces our members to choose between two equally bad and unfair decisions: either pay for the cleanup even though you did nothing wrong or face years of litigation, huge legal fees, loss of credit and the threat of bankruptcy. With the large number of small businesses already entwined in this web and with the increasing threat of thousands more in the future, NFIB's goal is to achieve meaningful reform in this Congress. Given the widespread agreement among the Administration and both parties in Congress that liability relief should be provided to small business, we sincerely hope that these business owners do not have to wait much longer for the rhetoric to become reality. superfund reform proposals As we testified in March, Senator Smith's and Chairman Chafee's bill, S. 8, is an important step forward to eliminating the liability nightmare for small business. It contains some excellent reforms, and we appreciate the steps that have been taken to eliminate some of the inequities and burdens placed on small business. We are pleased that the draft chairman's mark, distributed on August 28, contains much of the small business reforms included in S. 8. For the first time, a small business exemption is applicable to those businesses with fewer than 30 employees or less than $3,000,000 in gross revenues. This will provide much needed relief and an early exit to the truly small businesses who, in most cases, do not deserve to be caught up in the Superfund litigation morass. By identifying an employee and monetary threshold, S. 8 approaches reform from a standpoint that NFIB has long advocated. Both proposals also take positive steps to reform the current liability system by eliminating the liability for those parties involved in co-disposal municipal landfill sites and those parties who contributed only municipal solid waste to a site. Many NFIB members will benefit from this reform. In addition, S. 8 and the revised draft make strong improvements in the current program by including a ``de micromis exemption'' to exclude the smallest of contributors from Superfund liability. We are disappointed, however, that the draft chairman's mark fails to contain the one-percent ``de minimus exemption'' included in S. 8, as introduced, and instead subjects those contributors to an expedited settlement procedure. Due to the limited financial and legal resources of most small business owners, we believe that both de micromis and de minimus contributors serve no purpose but to delay the process and hinder the ultimate goal of cleaning up our nation's most polluted sites. We hope that you will reconsider this modification. small business improvements to s. 8 While these liability reforms move in the right direction, there are several areas that NFIB would like to see clarified or that we have concerns with. NFIB has consistently supported creating an ``ability to pay'' definition that would become a required criteria when assessing a small business's contribution during the allocation process or any expedited settlement procedure. We feel that a strong definition that does not leave the burden on the small business owner to bring forward information and initiate the process is necessary. Notification to small business parties should be an automatic requirement in which all small businesses are requested to provide necessary financial documents and then the burden should be on the government to determine small business' ability to pay. In addition, NFIB has advocated that EPA and the allocator meet certain time deadlines set forth both in the expedited settlement procedure and in the allocation process. These deadlines, both for the commencement of the allocation process and for de minimis settlements, are a necessary ingredient in order to have a more expeditious and decisive process. We feel that such prompt determinations are an essential element if a reformed process is to succeed. To ensure that EPA and the allocator meet these imposed deadlines, we suggest that incentives be included. Finally, we applaud the exemption for recyclers. NFIB would suggest that the elimination of liability provision be broadened to include oil recycling or refining centers. The parties that sent their oil to these types of sites were not only following the direction of their local governments, they were attempting to improve the environment. They should not be penalized for acting responsibly. Conclusion Mr. Chairman, we feel that the revised S. 8, in combination with our suggested changes, would address most of the concerns that our members have expressed. If passed, these reform suggestions will dramatically reduce unnecessary litigation, ensure that money will go toward its intended purpose, and most importantly, ensure that sites will be cleaned up in a timely manner. We thank you for this opportunity and for your efforts to address the small business concern with Superfund. Response by Susan Eckerly to a Question from Senator Inhofe Question. The draft chairman's mark contains a definition for small businesses of 30 employees and three million dollars in gross annual revenue. Does this definition meet other statutory or private sector definitions for small businesses? Please describe other methods for defining a small business. Response. While there is no standard definition of an average small business, NFIB generally would define a small business as a business with less than 100 employees. We have not included a revenue number because that would vary depending upon the type of the business. According to the Small Business Administration, the general definition of a small business is: . . . a business smaller than a given size as measured by its employment, business receipts, or business assets. The SBA's Office of Advocacy generally uses employment data as a basis for size comparisons, with firms having fewer than 100 or fewer than 500 employees defined as small. [The State of Small Business, 1995] In spite of the SBA's authority on these matters, most laws and regulations typically devise one of their own. In fact, we have identified 19 statutory recommendations, outside of the tax code, regarding the size of a small business. The following constitute a sampling of the various laws that have small business definitions, thresholds or exemptions. Family and Medical Leave Act: requires employers with more than 50 employees to provide unpaid family and medical leave. Americans with Disabilities Act: Title I, which relates to the employment of individuals with disabilities, applies to employers with more than 15 employees. Age Discrimination in Employment Act: exempts employers with less than 20 employees. The WARN Act: exempts employers with fewer than 100 employees from coverage. ______ Prepared Statement of Robert N. Burt, Chairman and Chief Executive Officer, FMC Corporation on behalf of The Business Roundtable The Business Roundtable welcomes the opportunity to submit comments on the August 28, version of S. 8, ``The Superfund Cleanup and Acceleration Act of 1997.'' The Roundtable is an organization of the Chief Executive Officers of over 200 of the nation's largest companies which agree that passing a comprehensive Superfund reform bill should be a priority for this Congress. We are pleased, therefore, that the chairman has put this bill forward as the vehicle for consideration by the Environment and Public Works Committee. While 280 of the sites on the NPL had reached the construction complete stage by June of this year (an additional 139 of these sites have already been delisted), 491 sites still have construction underway and approximately 500 sites are still in the study phase. Moreover, thousands of sites on the CERCLIS list remain as potential NPL sites. The slow pace of this program under current law (the GAO calculates it now takes twice as long to clean up a site as it did 10 years ago), its cost to the economy, the precedents it sets for other cleanup activities and its potential under current law to stretch out well into the next century, make reform a priority among our members. We would urge the committee to proceed to mark-up this bill in a bipartisan way which accommodates honest differences on this issue. The Roundtable is keenly aware of the differences which can divide opinion on how Superfund should be reformed. The Roundtable is comprised of companies which have paid a large proportion of the over $18 billion in business taxes which have gone into the Superfund Trust Fund since the law's enactment. The Roundtable also is comprised of companies which have spent some $30 billion on Superfund settlements over the life of the program, in addition to comparable sums in litigation concerning liability and other aspects of the Superfund program. Some of our members cleaned up sites in the early years of this program's history; while others still have substantial costs ahead of them. Despite sixteen years of disparate experience among our membership, we are united in our view on the need for reform and have reached basic agreement on how such reform should occur. The considerable debate over this issue over three consecutive Congresses has substantially narrowed our differences on Superfund policy. In many important ways, S. 8 is consistent with the consensus we have reached in the Roundtable over how best to proceed with reform. However, we would also note that there are important issues which we believe need to be addressed during the committee's consideration of this bill before it can have our full support. Moreover, given the limited timeframe in which we had an opportunity to review this bill, we may find it necessary to supplement these comments as our members review in more depth specific provisions. Before turning to our concerns and recommendations, let me briefly summarize the principles which we believe need to be part of a comprehensive Superfund reform effort: The tax revenue from Superfund must be dedicated to clean up. Significant reform of the remedy selection provisions of the law must be achieved, including elimination of the preference for treatment and the mandate for permanent remedies. Liability reform should provide all parties with fair and equitable relief; and not increase the burden on the economy. No Superfund taxes should be enacted without comprehensive reform, including reform of the current law's Natural Resource Damages (NRD) provisions. NRD should be geared to restoration of proven damages to resources, not to obtaining punitive damages. In our own analysis of how the current Superfund law should be reformed to enable better performance, we have concentrated on the liability provisions in the law. However, throughout our economic analysis of several liability reform proposals, it has become increasingly clear that liability reform cannot and should not be addressed apart from other issues such as remedy selection, funding and NRD. While we understand this increases the challenge and complexity of the debate, we are pleased that this committee will be addressing Superfund in a comprehensive way. The following are the ways in which S. 8 is consistent with The Roundtable's position. We also will point out areas where it falls short of our goals or where the intent of the draft is unclear: Remedy Selection: The remedy selection provisions underscore the need to base cleanup decisions on real rather than hypothetical risks. As drafted, this title of the bill will allow the parties involved in remedial decisionmaking greater flexibility to address site specific characteristics with emphasis on the current and reasonably anticipated uses of land and water resources, taking into account the timing and use of those resources. S. 8 does so while retaining the current goal for protection of human health in the National Contingency Plan (NCP) (i.e., 1 10-4 to 1 10-6) and by adding an important new, practical definition for environmental protection based on plant and animal populations. These goals are clear and will not require time consuming revision to the NCP before changes are realized. We believe that S. 8 has been substantially revised in an attempt to conform the law to the better practices EPA and the states are implementing on groundwater cleanup. This includes distinguishing between the cleanup goals of drinking water and water used for other purposes, and reinforcing EPA's initiatives to look at the specific characteristics of each site and propose a deliberative, managed remedial approach. Looking at groundwater in separate zones and phasing in needed control measures facilitates this cost-effective, but protective approach. We would note, however, S. 8 does seem to have some confusion in terminology related to groundwater. For example, it is not clear whether the balancing factors cited in the general rule applying to remedies also apply in the case of groundwater, or if the specific groundwater factors take precedence over these. There is also some need for clarity around the reference to groundwater that is ``suitable for use'' versus groundwater where the ``currently or reasonably anticipated future use'' is for drinking water. This is important in that remedial actions must ``seek to protect'' uncontaminated groundwater suitable for use as drinking water unless technically impracticable. Since the bill provides a very limited definition of what is not suitable as drinking water'' and this definition triggers specific control goals, further clarification is needed for this section of the bill. We are also concerned that land use determinations are made based on site specific factors while the use of groundwater gives substantial deference to state classification efforts which are generally not facility specific. There also needs to be clarification of whether the bill has created any inflexible mandates. The reference to attaining cleanup goals to the edge of that contamination which is managed in place, might be read so as to in fact eliminate flexibility of site managers to look at the nature and timing of use and other factors. It is the experience of our membership that EPA in its own implementation of its administrative reforms, has gotten away from arbitrary requirements in terms of compliance points and choice of remedial measures. The bill should be clarified to conform to current practice. While the bill does maintain the current law's preference for treatment, it does so for certain discrete areas. The definition provided appears consistent with sound principles of protection of human health and the environment. It also would appear to maintain flexibility in how actual risk from discrete areas of highly toxic, highly mobile contamination with the potential for human exposure can best be addressed. But it is not clear that this flexibility is sufficiently defined to take into account the unique characteristics of certain types of facilities which affect our membership (i.e., landfills and mining sites). We would also note the improvements made from prior Congresses in the approach to reevaluating Records of Decision (ROD's). This is an important provision for our membership and to the pace of future cleanup, particularly since many of our members signed ROD's and performed cleanup activity in the early years of this program's operation. We are concerned that the language in the bill can, in certain instances, be interpreted to fall short of current EPA practice. For example, under current administrative reforms, EPA follows three criteria as the basis for review: (1) changes in the remediation technology which would result in a more cost-effective cleanup; (2) modification of the remediation objectives due to the physical limitations posed by site conditions; and (3) modification of monitoring to reduce sampling, analysis and reporting requirements where appropriate. We would note that only the first of these criteria is a part of S. 8's approach and we would recommend adoption of the other two. We also believe it is unnecessary to invite a Governor's veto of the Remedy Review Board's decision because state input to this process is already a part of this bill. In addressing the ROD review issue we recognize that reform must attempt to balance the competing needs of fairness and program pace. We would emphasize that it is in no one's interest to burden the EPA with having to make decisions on every single ROD currently in the pipeline; or to create a system that puts the Agency in the business of reviewing existing ROD's to the virtual exclusion of negotiating new ones. We believe given the status of sites in the current pipeline and the limits on the-number of new sites coming into the system under S. 8, the ROD review procedure should not impede program pace. We agree with the elimination of ``Relevant and Appropriate'' standards being applied to remedial decisions under Superfund. Historically, this has led to an almost arbitrary application of remedial standards at some sites. Retention of state ``applicable' standards as is now proposed, is acceptable if the standard relates to the remedy or to the siting of facilities and applies to the conduct or operation of remedial actions or cleanup levels under state law. However, it is not clear that these applicable state standards must satisfy the balancing criteria which apply to other remedies. We believe they should. Further, the bill requires any more stringent state applicable requirements relating to the remedy or facility siting law promulgated by the state after enactment to be published as a rule and consistently applied. However, the provision appears not to limit these new state standards to those that relate specifically to the conduct or operation of the remedy or the contaminants involved. We believe this clarification would improve the bill. Liability: We believe this section of the bill should significantly decrease the litigation inherent in the current Superfund liability system. It does so by establishing an allocation system which can mitigate much of the inherent unfairness of the joint and several liability system. And, it eliminates liability altogether for small and other appropriate parties, further acting to reduce what is now an almost institutionalized unfairness in the liability system. On principle we believe all parties should receive uniform treatment under any reformed liability system, regardless of their status as a PRP or the type of site at which they are involved. S. 8 does not adhere to this principle for co-disposal sites at which certain categories of responsible parties would be treated more favorably than others. For example, a generator or transporter of waste at a co-disposal facility is treated more favorably than an owner and operator of such a facility. Moreover, parties at co-disposal facilities are generally treated more favorably than PRP's at other sites, including other, large multi-party sites. However, we are also aware that co-disposal sites historically have been prone to the type of litigation which is most objectionable under the current Superfund; i.e., third-party cost recovery litigation, often involving literally thousands of small parties. It is our understanding that the basis for the so-called ``co-disposal site carve out'' is to reduce the burden on the allocation system and reduce these transaction costs. We would also acknowledge that removing the liability of a vast majority of parties at co-disposal sites and thereby eliminating there need for allocation, significantly reduces what may be a burden on the allocation system and should, therefore, facilitate the application of this important feature of the bill to other multi party sites. Moreover, our preliminary economic analysis of the approach to liability reform currently embodied in S. 8 indicates that this approach is affordable within historic EPA Superfund budget levels. For the majority of parties, the critical element of fairness in S. 8 comes from its revised allocation system. By exempting small business and de micromis contributors early in the process, the bill eliminates the need for these parties to be present or have representation during an allocation. Moreover, the bill has in our view, the appropriate amount of specificity around the allocation process; it appropriately sets forth the authority conveyed to the allocator (including broad powers to discover information), indicates the so-called ``Gore factors'' as the basis for determining appropriate shares, defines the penalties for non-settling parties, and defines the role of the Administrator in defending the Fund. The definition of orphan share is a step in the right direction with the Fund assuming a pro rata share of the unattributable portion of the orphan. However, as a matter of fairness, The Roundtable believes the unattributable share should be paid fully if resources are available. We support fairness for those parties already well into the cleanup process, as well as for those newly identified parties. S. 8 precludes those sites already under a settlement agreement from the mandatory allocation procedure. While we would oppose any double recovery of costs, there are conditions under which some sites at which there is an existing settlement should benefit from a mandatory allocation for future costs. These conditions could include the following: very high cleanup costs, a very large orphan share, cleanup costs which are driven primarily by the activities of orphan or recalcitrant PRP's, and viable PRPs that have cooperated with EPA in performing the cleanup work. Under such circumstances, third-party litigation to recover future costs at the site would of course be stayed. Moreover, we believe the mechanics of payment should be clarified. The language in the bill clearly intends to structure a method for reimbursement for construction costs for lead PRP's (i.e., PRP's which volunteer or are ordered to undertake construction of the remedy at a site). But it is less clear in setting up a specific mechanism to assure that the dollars from the Fund are dedicated for this purpose. Nor is a specific amount for such Fund contribution designated. We believe more specificity needs to be given to issues such as the size of the Fund, how much is available for reimbursement, how the Fund will handle requests for reimbursement that exceed the annual size of the Fund (or the allocated portion), what recourse the PRP has if the government fails to meet its obligations, etc. These are important issues since under the bill one or more responsible parties will continue to perform work at the site. They will then receive reimbursement from the Fund for any costs incurred after the date of enactment in excess of their allocated share. The Roundtable agrees that PRP's should continue to be the lead at sites to maximize efficiencies in site cleanup. However, we believe the bill, or at a minimum legislative history, needs to be more precise in defining the decision rules under which these performing parties will be reimbursed for amounts spent in excess of their allocated share of responsibility. Natural Resource Damages: While we acknowledge that the experience with actual NRD claims is relatively limited, the consistently large size of pending claims, coupled with statements by the trustees that additional claims will follow, leads us to conclude that a fundamental reassessment of the current NRD provisions is needed. Claims upwards of a billion dollars, with a majority of those costs based on speculative methodologies and unrelated to what is needed for restoration, clearly warrant the full attention of this committee. It could well be that we make real reforms in the rest of Superfund and accelerate the pace of cleanup, only to find that natural resource damage claims dwarf the transaction costs which are and historically have been associated with the liability and remedy provisions of current law. S. 8 does take steps toward modifying the unconstrained features of NRD provisions of current law. The bill seeks to eliminate so-called non-use damages which are based on the highly speculative Contingent Valuation Methodology (CVM) and unrelated to restoration. Similarly, The Roundtable opposes imposition of past lost use in that it is punitive and not related to the actual injury to the resource. We are also encouraged by the requirement mandating mediation of NRD claims as a way to fairly reduce the potential for protracted litigation. We are greatly concerned, however, that this sensible approach may be negated by other provisions that trustees may construe as taking away a defendants ultimate right to a de novo trial by jury. We would encourage the committee to reexamine the language of the bill which describes the objective of restoration and the criteria which Trustees consider in developing alternatives and selecting restoration measures. Specifically, unless a reformed law directs the trustees to select measures which are cost reasonable, there is no mechanism to insure that the ratio of benefits to costs will be balanced. S. 8 recognizes this important concept when it comes to selecting remedies, which makes it all the more important to apply this concept to NRD as well. In addition, it is critical that trustees be given a rational, objective benchmark for when the goal of restoration is accomplished. In our view, the benchmark should be reinstatement of the public's ability to use and enjoy the resource again. We would note that a number of provisions relating to restoration in S. 8 would, if made mandatory, allow trustees and PRP's to get on with the business of restoring injured resources; but because they are discretionary, they likely will lead to protracted litigation. These include all the criteria for selecting restoration alternatives; the reliance on facility specific information and scientifically valid principle in assessing, planning and quantifying restoration costs; conduct of assessments in accordance with regulations; and trustee coordination. These are the critical elements which will define the scope of the natural resource damage program. To truly focus this program on resource restoration, the committee should conclusively decide the parameters under which this will be accomplished, rather than deferring to continued court interpretation and litigation. Moreover, reforms adopted in this bill should apply to pending NRD claims. Funding: S. 8 makes reforms to the current law in a number of ways which will have measurable impacts on the costs of the program. We believe it is important that the authorizing committee continue its close coordination with the funding and appropriating committees on issues which affect how this program will be paid for in the future. S. 8 addresses these issues in an indirect way, in particular in limiting future listings on the NPL to an additional 100 sites until the year 2000 and not more than 10 per year thereafter. We believe current assessments of the NPL pipeline by the states and GAO, and EPA's own initiative to trim CERCLIS indicate such limits represent a workable target. As authorizing legislation, S. 8 understandably does not address future funding issues which we believe are critical for this Congress if we are to put the reformed program on a sound financial footing going forward. Yet we believe it is important for this committee to understand our views on enhancing the funding integrity of this program by more closely tying the funding aspects of this program to performance-based objectives. In this context, we would note that to date, the business community has paid virtually the entire cost of the Superfund program. The major dedicated Trust Fund, which funds EPA's responsibilities, has been funded by three industry taxes: excise taxes on the chemical and petroleum industries, and an across-the-board corporate income tax. In addition, individual PRP's pay the full costs of cleanup and transaction costs on sites at which they take the lead. They also reimburse EPA for Federal oversight costs at those sites. We would note that the amount of revenues to the Trust Fund, historically from $1.8 to $2.2 billion has been significantly greater than appropriations. This has resulted in a significant and growing surplus in the Fund. Due to the surplus and the limitations this bill would place on NPL listings going forward, the opportunity exists for future funding of the program to be tied to the pace of the program; or, put another way, its success in meeting its goals. The Roundtable members believe future funding for Superfund should be tied to needed NPL site cleanup. We would further note that ``core'' or non-cleanup activities have grown to be almost equal to clean up expenditures on EPA led sites. S. 8 addresses the continued pressure for expenditure of funds from the Superfund Trust Fund for brownfields development, community participation, health analysis, and other items not directly related to cleaning up sites on the NPL. And, as indicated by provisions in the State Role Title of S. 8, states will inevitably assume a larger role in the management of individual sites on the NPL. How large a role they play will be determinant in the amount of funds they will require from the Fund as well. We would ask that the committee give special attention to the extent to which it is conveying additional non-NPL related cleanup activity to the Fund. In this context of providing greater fiscal discipline to the Superfund budget, we note that the limitation on future NPL listings is an important step toward defining a successful end point to the Superfund program, which was not intended to be a permanent Federal Government responsibility. In addition, the inclusion of a ``Results Oriented Cleanup'' section begins to address the need to impose budget discipline on this program, allowing the Agency the latitude to define how it can best be measured. We believe additional emphasis needs to be placed on the discussion of how a reformed Superfund will be funded. This discussion should include consideration of constraints on non-cleanup funding, and limitations on moneys raised other than for cleanup purposes. These two provisions represent a constructive step in this direction. Other Provisions: We would also note S. 8 makes substantial improvements to current law in enhancing the role citizens play in the remedy decisionmaking process. It is the experience of many of our members that such involvement can assist in developing remedies which are truly protective of human health and the environment, while taking into account the specific concerns of communities about comparative risks of alternative remedies. More often than not, citizens are looking to return Superfund sites to some productive use where this is consistent with meeting appropriate health and environmental standards. S. 8 also addresses fundamental issues associated with brownfields redevelopment, including limiting the liability of prospective purchasers and innocent landowners. However, we remain concerned that without additional clarification of future Superfund liability of for PRP's who undertake cleanup at non-NPL sites, there will be reduced incentive for them to undertake brownfields cleanups at non-NPL sites. In conclusion, The Roundtable looks forward to continuing to work with the committee in modifying S. 8 to accommodate the diverse range of views on these and other important issues in Superfund. We are prepared to do additional analysis of S. 8's economic and environmental impact by using of The Business Roundtable's Programmatic Superfund Model. Additionally, we are prepared to respond to amendments to S. 8 as offered by members of the committee during mark-up. We thank you for this opportunity to comment. ______ Prepared Statement of Karen Florini, Senior Attorney, EDF; Accompanied by Jacqueline Hamilton, Senior Project Attorney, NRDC introduction On behalf of the Environmental Defense Fund (EDF) and the Natural Resources Defense Council (NRDC), I appreciate this opportunity to discuss the revised version of S. 8, the ``Superfund Cleanup Acceleration Act of 1997,'' amending Superfund. EDF and NRDC have been actively involved in the Superfund reauthorization process, serving on EPA's NACEPT Committee on Superfund and on the National Commission on Superfund, and testifying repeatedly on Superfund during the last two Congresses. Most recently, I testified before this committee's Subcommittee on Superfund, Waste Control, and Risk Management regarding the initial version of S. 8 on March 5, 1997. While some of the most problematic features in S. 8 as introduced have been moderated,\1\ we believe that there are still numerous fundamental flaws in the bill as revised, compelling us to continue to oppose the bill in its current form. These include features that will make cleanups less protective, disempower communities (particularly where authorities are transferred to States), and let large industrial polluters escape liability without policy justification and with unacceptable consequences for the future of the cleanup program. --------------------------------------------------------------------------- \1\ In particular, we are glad to see that the ``polluters in charge'' provisions of S. 8 as introduced--under which polluter-written cleanup plans could have been approved by default--have been deleted. We also applaud the fact that the revised bill no longer allows Potentially Responsible Parties to serve as voting members on the Community Advisory Group [SCAA Sec. 303, adding CERCLA Sec. 117(h), p. 72]. And we support the provision dropping the requirement in existing law for matching contributions for Technical Assistance Grants [SCAA Sec. 303, adding CERCLA Sec. 117(g)(2), p. 80], and expressly allowing up-front payments for TAGs. --------------------------------------------------------------------------- In addition, numerous provisions, taken together, will dramatically slow the pace of cleanups. This is a particularly inopportune time for doing so, given that the Superfund program has finally begun to make substantial progress in recent years. We urge Congress not to turn back the clock to an earlier era in which Superfund cleanups were abysmally slow. In particular, Congress must not divert funds needed for cleanups to sweeping liability carve- outs for polluters who can well afford to pay to clean up the messes they have made, nor divert EPA's resources by creating unnecessary, time-consuming new tasks. Rather, Congress should: adopt a targeted set of broadly supportable provisions to enhance program effectiveness and public participation, increase funding to allow cleanups to proceed as promptly as is consistent with good decisionmaking and full public participation, and reinstate the now-defunct taxes that help finance the program. We would welcome an opportunity to work with the committee in developing a bill meeting these objectives. The remainder of this testimony focuses on our principle criticisms of the current version of S. 8, the August 28 ``Draft Chairman's Mark.'' Because the draft bill was made available to us only 4 business days before today's hearing, please note that we may subsequently identify additional concerns. i. community disempowerment: how s. 8 makes communities irrelevant Almost everyone agrees that early, robust public participation pays handsome dividends in avoiding controversy--and thus cleanup delays-- down the line. Accordingly, it is surprising as well as disappointing that a bill denominated the Superfund Cleanup Acceleration Act would contain numerous provisions that systematically curtail public participation in key contexts, most notably those involving state roles.\2\ While EDF and NRDC do not oppose a greater role in cleanup for states that have adequate resources, authorities, and commitment, this expansion must not occur at the expense of curtailing the public's role in Superfund cleanups. --------------------------------------------------------------------------- \2\ Although the community Participation provisions, Title Ill of S. 8 are an improvement over existing law, they will be largely irrelevant for all sites transferred to states given the weaknesses of Title II's state roles. --------------------------------------------------------------------------- Yet just such curtailment could well result from the state role provisions in Title II of S. 8 as revised. Problems with S. 8's state role provisions include the process through which delegation or authorization occurs, as well as the consequences of delegation or authorization. In effect, both communities and EPA are forced to trust that state programs will contain adequate community involvement provisions without any way of verifying that such provisions will indeed be included--and without meaningful recourse if they are not. Similar problems exist in Title I, the Brownfields title. Both are discussed below. A. Curtailing community participation through inadequate state role criteria and procedures Public participation is conspicuous by its absence from the list of criteria for EPA to evaluate in making delegation determinations [SCAA Sec. 201, adding CERCLA Sec. 130(e)(3)(C), p. 44]. To make matters worse, the bill expressly precludes EPA from including any conditions regarding public participation (or anything else) in approving a delegation request [Sec. 130(e)(4)(D), p. 46]. Similarly, for authorization, states merely are required to have ``procedures to ensure public notice and as appropriate opportunity for comment'' on cleanup plans [Sec. 130(c)(1)(C), p. 37]--a loophole potentially big enough for a proverbial Mack truck. Similar language exists for Brownfields programs [SCAA Sec. 102(b), adding CERCLA Sec. 128(b)(2), p. 15].\3\ --------------------------------------------------------------------------- \3\ This weakness in the Brownfield title is especially objectionable because NPL sites are (inappropriately, in our view) eligible to be included under Brownfield programs [SCAA Sec. 102(b), adding CERCLA Sec. 128(c), p. 16]. --------------------------------------------------------------------------- Not only is public participation omitted as a criterion for transfer of authorities to States, but the public is excluded from decisions about whether to transfer such authorities. There is no allowance for public notice and comment in proceedings either for delegation or authorization. The public is even more emphatically excluded from participating in the context of ``expedited authorization'' applications, given that states meeting any 3 of 5 specific criteria are ``conclusively presumed'' to warrant authorization [Sec. 130(d)(1), p. 38]. And expedited authorizations cannot be challenged in court [SCAA Sec. 130(d)(4)(D), p. 42]. So, if there are grave deficiencies in a state's program, the public will have no opportunity to call these to EPA's attention. Similarly, the public will have no opportunity to voice concerns about state enforcement authorities despite the fact that even delegated states are to use state enforcement authorities [Sec. 130(e)(1)(C), p. 43]. Moreover, the bill's liberal use of default approvals mean that delegation or authorization can occur without any actual review by EPA of the adequacy of the state program. Decisions about toxic waste dump cleanup programs are too important to be relegated to the flipping of pages on a calendar. This is true regardless of the cause of any bureaucratic delays in making decisions--whether they be due to a personal tragedy that befalls an EPA reviewer, or a change of personnel, or a government-wide shutdown, or even simple inertia. Deadlines play a legitimate role, but default approvals do not. B. The draconian consequences of state delegation and authorization Exclusion of the public from authorization and delegation decisions is particularly troubling because those decisions have profound consequences under S. 8 as revised. For example: State roles override CERCLA's citizen-enforcement provisions, because the bill provides that neither EPA nor any other person can take judicial enforcement action against any person regarding a transferred site [SCAA Sec. 201, adding CERCLA Sec. 130(h)(4), p. 52]. Thus, citizens will be unable to use existing Sec. 310 of CERCLA even to enforce cleanup agreements. The Brownfields title contains similar strictures for facilities ``subject to'' state cleanup plans, apparently regardless of whether those plans meet any criteria whatsoever [SCAA Sec. 103, adding CERCLA Sec. 129(b)(1), p. 18]. These limitations are radical and unwarranted departures from prior law not only under Superfund, but indeed virtually all Federal environmental programs. There is no justification for barring citizen enforcement of Superfund requirements. State delegation/authorization eliminates virtually all EPA authority. The public needs and deserves an effective Federal fallback where states fail to carry out their environmental responsibilities appropriately for toxic site cleanups, just as occurs for air and water pollution programs. Yet, extraordinarily, the bill provides that EPA cannot act at a site covered by a delegation agreement unless the agency goes to court and obtains a declaratory judgment that the state has failed to make reasonable cleanup progress [SCAA Sec. 201, adding CERCLA Sec. 130(h)(4)(B)(ii)(II), p. 53]. For a bill that supposedly seeks to accelerate cleanups and reduce litigation, forcing EPA to wait helpless pending completion of a lawsuit against a state is as curious as it is counterproductive. Provisions almost as onerous apply in the Brownfields title, with regard to any facility that is ``subject to'' a State remedial action plan--despite the fact that EPA apparently has no role in reviewing state remedial programs at all [SCAA Sec. 103, adding CERCLA Sec. 129(b)(4), p. 18]. All the preceding problems are compounded by the fact that the bill offers EPA no option of partial de-delegation or de-authorization. Instead the only option is the ``nuclear'' one of total program withdrawal--a seldom-used tactic. C. Other features that undercut effective public participation. In addition to the state role and Brownfields provisions discussed above, several other features of the bill undercut public participation as well. These are briefly discussed below.\4\ --------------------------------------------------------------------------- \4\ In addition, the presumptive remedies section as now written further disempowers communities. While the concept of presumptive remedies can be beneficial, S. 8 as revised seems to make the presumption an irrefutable one--regardless of community concerns. Specifically, the bill provides that the Administrator may select a presumptive remedial action ``without consideration of (other) technologies, approaches, or methodologies'' [SCAA Sec. 403, adding CERCLA Sec. 132(c)(2), p. 120]. This could be read to allow the Administrator to adopt a presumptive remedy regardless of community views at a particular site. At the same time, the bill specifies that identification of presumptive remedies does not constitute rulemaking and need not go through public notice and comment procedures [Sec. 132(b)(3), p. 120]. The text of the bill should make clear that nothing in the presumptive remedy section authorizes EPA to disregard comments and alternative remedies suggested by interested parties at sites for which presumptive remedies exist. --------------------------------------------------------------------------- 1. Shutting the Public Out through Silent Vetoes. Yet another way the public is shut out of meaningful participation arises from provisions under which new sites can be added to the Superfund list ``only with the concurrence of the Governor of the State'' in which the sites are located [SCAA Sec. 802, adding CERCLA Sec. 105(i)(3), p. 246]. Similarly, a state can block any administrative cleanup order under Sec. 106 by failing to concur within 90 days [SCAA Sec. 103, adding CERCLA Sec. 129(c), p. 20]. While it may be appropriate to give states ``first dibs'' on cleanups at sites that will be appropriately addressed through state action, these provisions go much too far. A state could, through simple inaction, bar an NPL listing or a 106 order even though the site will not otherwise be cleaned up. The State need not even give any reasons for failure to concur, inviting potential abuses (if, for example, a major PRP at the site also happened to be a campaign contributor to a high-ranking State official). Moreover, these provisions invite creation of ``pollution havens'' by Governors seeking to lure business from other states by declaring an indefinite moratorium on NPL listings. EPA should defer to a state program only upon affirmatively determining that the State will conduct an adequate, timely cleanup absent the listing or 106 order. 2. Shifting the Public Out of Cleanup Decision Revisions. As written, the bill's provisions for reopening existing cleanup decisions essentially eliminate opportunities for effective public participation. Given that review boards are to complete their review within 180 days [SCAA Sec. 406, adding CERCLA Sec. 136(d), p. 144], communities often will have inadequate time to receive notice and respond. This is particularly true at sites where no Technical Assistance Grant is currently in place. (Even where TAGs already exist, the limited number of community-oriented technical experts would be unable to provide effective support if large numbers of reopener petitions are submitted--a possible outcome under the bill as now drafted, see section III below.) To assure that the public is meaningfully involved, the Administrator should be able to extend the deadline for the Board to complete its review. ii. s. 8's inadequate cleanup provisions Although the revised version of S. 8 has dropped the egregious provisions that let polluters run the cleanup decisionmaking process, the remedy title still has several major deficiencies that make it highly objectionable. These include a preference for treatment of ``hot spots'' that is worse than useless; critical omissions from the range of cleanup objectives; and important weaknesses in the cleanup standards themselves. These are discussed in turn below. A. The hot spots ``preference'' Given current EPA practice of cleanup up to unrestricted use at only one-third of sites even with the existing preference for treatment, we have increasing reservations about whether there is any rationale for changing this portion of the law. However, if the preference for treatment contained in current law is to be narrowed, it is essential to provide a preference for treatment of ``hot spots.'' While S. 8 as revised now includes such a preference, as currently drafted it applies only when contaminants ``cannot reliably be contained'' and ``present substantial risk . . . because of high toxicity . . . and high mobility'' and there is ``a reasonable probability of actual exposure based on site-specific factors'' [SCAA Sec. 402, amending CERCLA Sec. 121(c)(3), p. 108]. Such an approach is highly objectionable because it implies that treatment will occur only when these onerous and unworkable requirements are met. More generally, this approach entirely misses the point of having a preference for treating hot spots: to avoid intrinsically uncertain guesstimates about whether material cannot reliably be contained, and whether and how future exposures will occur. Because it is impossible to see into the future with the level of confidence these phrases suggest, a preference for treatment is vital. Another approach to this issue may also warrant consideration. The current statute's preference for treatment and mandate for permanent remedies have caused problems primarily at sites with high volumes of low-toxicity wastes. That problem could be dealt with explicitly, by maintaining the preference for treatment while creating an exception for high-volume, low-toxicity sites. Rather than making containment the rule and hot spots the exception, Superfund would maintain treatment as the rule and make the problematic type of sites (high-volume, low toxicity) the exception. B. Weaknesses in institutional controls provisions Even with Superfund's existing mandate for permanence and broad preference for treatment, many sites have been cleaned up only part way, to a degree that allows for some but not all types of use of land or water (e.g., industrial use only, or no excavation). To assure that restricted-use sites are in fact only used in a manner consistent with their restrictions, legal mechanisms known as ``institutional controls'' may be employed. Unfortunately, while S. 8 would do much to increase the prevalence of restricted-use sites,\5\ it provides no real assurance that any institutional controls adopted as part of such cleanups will actually work. As experience at Love Canal itself amply illustrates, institutional controls that fail can be a disaster on many fronts.\6\ --------------------------------------------------------------------------- \5\ For example, the bill expressly provides that use of institutional controls is `to be on an equal basis with all other remedial action alternatives'' [SCAA Sec. 402, amending CERCLA Sec. 121 (c)(4)(E), p. 112]--despite the fact that institutional controls are inherently more uncertain than treatment-based remedies. The bill also requires facility-specific risk evaluations to ``consider the use of institutional controls'' [SCAA Sec. 403, adding CERCLA Sec. 131(b)(1)(D), p. 116]. \6\ Love Canal is a classic illustration of the failure of institutional controls. The deed contained a notice of the presence of chemical wastes, but a subsequent owner eventually disturbed the waste when doing construction on the site. See U.S. v. Hooker Chemicals & Plastics Corp., 722 F. Supp. 960,962 (W.D.N.Y 1989). --------------------------------------------------------------------------- Among other problems in this critical section, the definition of ``institutional controls'' is itself overly broad [SCAA Sec. 402, amending CERCLA Sec. 121(c)(4)(A), p. 1 10]. While zoning, land use plans, and notification systems may be extremely valuable as supplements to institutional controls, these devices are too ephemeral and/or too weak to serve as institutional controls in this context: protecting human health and the environment from the effects of toxic contaminants left on land or in water after cleanup activities are ``complete.'' Similarly, the bill's current ``requirements'' for institutional controls--that they are ``adequate to protect human health and the environment,'' ``ensure . . . long-term reliability,'' and ``will be appropriately implemented, monitored, and enforced''--are far too vague to be meaningful [SCAA Sec. 402, amending CERCLA Sec. 121(c)(4)(c), p. 112]. Rather, the bill must explicitly require that specific criteria be met for any institutional control that is adopted as part of a remedy. These include, at a minimum: permanence (i.e., the control will remain in effect until removed following an affirmative, site-specific determination that it is no longer needed because the contamination is gone); universality (i.e., applies to all current and future interest-holders of the land or water); enforceability (i.e., by all interested parties, including citizens); and permanent notice (i.e., in land records unless inappropriate given the specific nature of the control). Given the Byzantine complexity of much of American property law, some jurisdictions may lack mechanisms that meet these criteria. Congress should create an array of Federal institutional controls to assure that qualifying mechanisms are available in all jurisdictions. The only other alternatives are either unlikely (disallowing institutional controls in jurisdictions that lack qualifying controls and requiring that all sites be remediated to unrestricted use) or intolerable (allowing use of inadequate institutional controls). C. Weaknesses in cleanup standards The cleanup standards in S. 8 continue to commit critical sins of omission. In particular, there is still no explicit requirement for protecting the health of children and other highly susceptible or exposed groups.\7\ Likewise, ``protection of health'' is still defined as a cancer risk in the range of 10-4 to 10-6 [SCAA Sec. 402, amending CERCLA Sec. 121(a)(1)(B)(i)(l), p. 85], but without the National Contingency Plan's provision specifying that 10-6 is the ``point of departure.'' As a result, cost considerations are likely to tilt remedies toward the less-protective outcome, since cleaning up to a less-protective level is almost always cheaper. --------------------------------------------------------------------------- \7\ This problem is exacerbated by the fact that the bill calls for use of central estimates in risk communication principles [SCAA Sec. 403, adding CERCLA Sec. 131 (d)(2), p. 118]. This is a specific statistical technique that is only appropriate under particular circumstances--ones generally not found in the Superfund context--and are otherwise affirmatively misleading. This language should be stricken. --------------------------------------------------------------------------- Similarly, S. 8 continues to lack explicit objectives of protecting clean groundwater, and making contaminated land and groundwater available for beneficial use. These important objectives have, until now, been inherent in the program, given the existing mandate for permanence and preference for treatment. If those provisions are to be narrowed, the list of objectives must grow (with the recognition that not every remedy may be able to attain these additional objectives). While the revised bill has taken some steps in this direction, it does not go far enough. Beneficial use of land is now included, but only as one element in developing future land use assumptions [SCAA Sec. 402, amending CERCLA Sec. 121(b)(1)(B)(ii)(IV), p. 97]. Protection of groundwater shows up only in an amorphous way--the bill merely provides that remedial action ``shall seek to protect uncontaminated groundwater], and ``shall seek to restore groundwater to a condition suitable for beneficial use'' [SCAA Sec. 402, amending CERCLA Sec. 121(c)(?)(B) & (C),\8\ p. 100]. It is not clear how these aspirational statements relate to the bill's express objectives and balancing factors. Moreover, even they are ``not required to be attained in an area in which any hazardous substance, pollutant, or contaminant is managed in place'' [SCAA Sec. 402, amending CERCLA Sec. 121(b)(1)(B)(v), p. 102]--potentially an immense loophole if interpreted to mean areas other than those directly underlying landfills or other clearly and narrowly delineated areas. --------------------------------------------------------------------------- \8\ The numbering of this subparagraph appears to be erroneous. --------------------------------------------------------------------------- More generally, S. 8 continues to provide only limited protection for water resources. In particular, protection of groundwater is dependent on its anticipated use--with all the inherent uncertainties of predicting both who will need the water when, and where the water will be at that time--rather than its status as a valuable and limited resource. Moreover, the bill provides that assumptions about future water use are to take into consideration state water use plans [SCAA Sec. 402, amending CERCLA Sec. 121(c)(2), p. 98]. Unfortunately, in many cases, these plans were originally developed with no meaningful public input, often many years prior to the cleanup decisions and in a generalized statewide rulemaking or policymaking context in which it was not clear to any member of the public or affected community that the decision would have any effect upon a particular site's cleanup.\9\ --------------------------------------------------------------------------- \9\ Moreover, it is not clear what will happen when a State has designated an area as a low priority for protection under one program-- such as a classification of groundwater protection program--but as an underground source of drinking water (USDW) in a rulemaking under the underground injection control program. Clearly, the most protective of the state actions should control In addition, it is important to clarify two additional points: first, that point-of-use devices may only be used on a temporary basis (i.e., while more permanent arrangements are being made), or where no other approach is technically feasible; and second, that technical feasibility'' means what can be accomplished from an engineering and technical perspective. --------------------------------------------------------------------------- Finally, one other point bears mention with regard to clean up standards. The bill exempts on-site activities from otherwise- applicable provisions of hazardous waste regulations under the Resource Conservation and Recovery Act (RCRA) [SCAA Sec. 402, amending CERCLA Sec. 121(a)(1)(C)(i)(II), p. 89]. The bizarre result will be that Superfund sites will be the only locations in the United States where untreated hazardous-waste soils can lawfully be placed in substandard landfills. This provision is an artifact of a problem that EPA has already taken formal steps to alleviate, through the proposal of rules tailoring hazardous waste standards to clean up situations.\10\ Rather than eviscerating RCRA's applicability to on-site cleanups, the tailored rules should themselves become the applicable standards. --------------------------------------------------------------------------- \10\ 61 Fed. Reg. 18780 (Apr. 29, 1996); The proposal is due to be finalized in the next several months. --------------------------------------------------------------------------- iii. superfund slowdown: how s. 8 is the superfund cleanup deceleration act? More than a dozen provisions of the revised bill impose major new or expanded obligations on EPA. But far from assuring that additional resources will be available so that EPA can accelerate the rate of cleanup completions while meeting these new and largely unnecessary demands, the bill does precisely the opposite: it allows dollars now available for cleanups to be diverted to polluter-pays liability rollbacks, with costs shifted from polluters to the Fund, and with no ``firewall'' between cleanup costs and these pay-the-polluter funds (see discussion below in section IV). Even beyond the pernicious effect of the changes in liability on the speed and thoroughness of cleanups, S. 8 as revised has numerous features that will slow down cleanups. These include potentially creating expansive new rights to re-open existing cleanup decisions as well as bottlenecks in the Remedy Review Board process, and requiring EPA to issue a slew of complex new rules implementing changes imposed under the Act--most of which are unnecessary and counterproductive. The ROD re-opener provisions warrant particular scrutiny. Although the bill provides that a re-opener petition ``may'' be accepted if certain criteria are met [SCAA Sec. 406, adding CERCLA Sec. 136(b)(3)(A), p. 141], under existing case law that language could well be construed to require that all petitions meeting those criteria must be accepted.\11\ Such a result would likely lead to an unmanageable explosion in EPA's workload, forcing the agency to divert additional resources from making progress in cleanups to rehashing existing decisions. --------------------------------------------------------------------------- \11\ Although we believe that such interpretations are fundamentally inconsistent with the use of the discretionary term ``may,'' the D.C. Circuit recently adopted just such a reading of section 211(f) of the Clean Air Act. There, the statute provided that EPA ``may'' grant a petition allowing use of a gasoline additive known as MMT upon finding that the additive would not foul automotive pollution-control systems. EPA made such a finding, but rejected the petition on the basis of concerns about the additive's potential health effects. The court ruled that EPA lacked discretion to consider any factors other than the one expressly stated in the statute, e.g., effect on automotive systems, regardless of the fact that the Clean Air Act's objectives expressly include protection of human health. Ethyl Corn. v. Environmental Protection Agency, 51 F.3d 1053, 1058-59 (D.C. Cir. 1995). --------------------------------------------------------------------------- Similarly, because the bill creates a new role for the Remedy Review Board in assessing reopener petitions [SCAA Sec. 406, adding CERCLA Sec. 136(b)(3)(A), p. 141], while also requiring Board involvement in reviewing a third of new cleanup decisions [SCAA Sec. 404, adding CERCLA Sec. 134(e)(2)(B)(ii), p. 131], the Board may well become a major bottleneck. To avoid that result, EPA may have to establish multiple Boards, in which case more and more EPA personnel will have to be involved in Boards instead of actual cleanup activities. With regard to regulations, the bill requires EPA to issue a slew of new rules, most within six months of the bill's enactment. Even aside from forcing EPA to divert considerable resources to re-writing rules, the pendancy of this array of rulemaking will very likely stall future cleanups, and ongoing ones, while everyone waits to see how the new rules will come out. Specific rulemaking obligations coming due within 180 days of the bill's enactment include: revise the National Priorities List to delete over-lying parcels from NPL [SCAA Sec. 407(b), p. 148]; revise the National Contingency Plan within 180 days of enactment to reflect changes made by the Act [SCAA Sec. 404, adding CERCLA Sec. 133(a), p. 122]; issue regulations for providing polluter paybacks [SCAA Sec. 502, adding CERCLA Sec. 112(g)(4), p. 161]; issue regulations establishing procedures for the remedy review board [SCAA Sec. 404, adding CERCLA Sec. 134(e)(2)(A), p. 130] issue regulations for selection of allocators (due within 90 days of enactment) [SCAA Sec. 504, adding CERCLA Sec. 136(d)(3)(A), p. 172]; issue regulations incorporating Results Oriented Cleanup requirements into the National Hazardous Substances Response Plan [SCAA Sec. 801(b), p. 244]; issue regulations implementing risk assessment and risk communication provisions (due within 18 months of enactment) [SCAA Sec. 403, adding CERCLA Sec. 131(f), p. 119]. Furthermore, the bill establishes a broad mandatory allocation process that the Administrator must conduct [SCAA Sec. 504, adding CERCLA Sec. 136(b)(1)(A), p. 165]. Allocations are mandatory even for sites at which consent decrees and settlements have long since been established, if any additional costs will be incurred. In addition, the Administrator (or the Attorney General with EPA staff participation) will need to participate in such allocations in order to assure that the Fund is not drained by unduly enthusiastic attribution of expenses as ``orphan'' shares that will be paid for by the Fund. Given that multi-party sites with 1 or more viable parties currently lacking a final settlement will use the allocation process--potentially covering several hundred sites--this resource drain is likely to prove substantial. Last but by no means least, several provisions relating to risk assessment will slow down cleanups unnecessarily and will drain EPA resources. For example, the bill requires use of ``chemical-specific and facility-specific data in preference to default assumptions whenever it is practicable to obtain such data'' in facility-specific risk assessments [SCAA Sec. 403, adding CERCLA Sec. 131(b)(1), p. 116]. This language may force EPA to engage in massive data-gathering, to little purpose. Defaults are appropriately chosen for policy purposes, including protection of health where the science is uncertain. Unless someone makes chemical- or facility-specific data available to the Administrator (and the Administrator concludes those data are reliable), generic default values should be used.\12\ --------------------------------------------------------------------------- \12\ Similarly, the bill imposes an unworkable requirement to identify research needs emerging from each risk assessment, and peer- reviewed studies that are relevant to or fail to support estimates of public health effects and methods used to reconcile inconsistencies in scientific data [SCAA Sec. 403, adding CERCLA Sec. 131(d)(4), p. 1 18]. while such steps can be useful, they should be done generically, not in each risk assessment. Moreover, the requirement in paragraph (d)(5) to discuss individual studies that fail to support' any risk estimate is at odds with a weight of evidence approach. It would end up focusing as much attention on a single study that contradicts or fails to support the risk estimate or assumption as the multitude of studies which do support that position. --------------------------------------------------------------------------- Similarly inappropriate is the requirement to use ``the best'' science in accordance with ``objective'' practices [SCAA Sec. 403, adding CERCLA Sec. 131(e), p. 119]. This is excessive, amorphous verbiage that invites endless wrangling to no useful purpose. If any such provision is to be included, it should simply direct the agency to use available, reliable data. iv. overly broad liability ``reforms'': still corporate welfare by another name \13\ There is no dispute that Superfund's existing liability system has often been abused by some Potentially Responsible Parties (PRPs) who have filed massive contribution actions against entities with minimal or no connection to the site. Curbing these abuses is necessary, but does not necessarily require legislation, since EPA routinely provides contribution protection to settling parties. --------------------------------------------------------------------------- \13\ Because the liability provisions of S. 8 as revised are substantially similar to those of S. 8 as introduced, this section of our testimony closely parallels the liability section of EDF's testimony of March 5, 1997. --------------------------------------------------------------------------- Even if legislation on this point were viewed as desirable, S. 8 as revised continues to go far beyond the boundaries of common sense. The bill inappropriately rolls back liability for vast numbers of companies that are well able to help pay for cleaning up their own messes, and who should remain responsible for doing so. In several instances, these overly broad carve-outs apply to future as well as past conduct, undercutting Superfund's vitally important incentives for safely managing today's wastes. A. The trade-off between liability rollbacks vs. cleanup dollars Although the bill provides that parties who have already received cleanup orders must carry out the cleanup, it also specifies that they will be repaid for all costs attributable to a party whose liability is limited [SCAA Sec. 502, adding CERCLA Sec. 112(g)(1) & (2), p. 160]. These paybacks apparently apply even for all future costs incurred under existing settlements. Payback payments ``shall be made upon receipt'' of an application [Sec. 112(g)(3), p. 160], and must be made within a year [Sec. 112(g)(6), p. 161]. In addition, parties that settle pursuant to an allocation have ``an entitlement'' to be promptly reimbursed for any costs they incur attributed to an orphan share [SCAA Sec. 504, adding CERCLA Sec. 136(m), p. 186]. This language creates a legal entitlement, as contrasted with discretion under current law to use the Fund for cleanups and other purposes, so paybacks will have first claim on the funds. Because there is no ``firewall'' between funds for paybacks and funds for cleanups, all of the moneys in the Superfund could be exhausted providing polluter paybacks, leaving none for actual cleanups, oversight, and enforcement by EPA, as well as vitiating programs for Technical Assistance Grants. If funds remaining in the Superfund are inadequate, one of three outcomes will occur: taxes will have to be raised, cleanup standards will have to be further weakened, or cleanups will again slow to a snail's pace. The latter two are unacceptable from an environmental perspective, while the first appears politically implausible. B. Overly broad exemption for ``co-disposal'' sites S. 8 repeals polluter-pays liability for generators and transporters of industrial wastes at hundreds of ``co-disposal'' sites at which those wastes were dumped along with municipal trash [SCAA Sec. 501(b), adding CERCLA Sec. 107((t)(1)(B), p. 153]. Even giant chemical companies will get entirely off the hook for wastes they sent to those sites. And even private dump-owners--those in business to make a profit--get their liability capped at 40 percent of cleanup costs (or the cost of closure) [Sec. 501(b), adding CERCLA Sec. 107(t)(1)(D)(i), p. 156]. C. Overly broad exemption for ``small'' businesses While we do not necessarily oppose curtailing liability for truly small businesses with a limited connection to a site who have limited ability-to-pay in any event, the current exemption is ill-crafted. First, the $3 million annual-revenue threshold is simply too high [SCAA Sec. 501(b), adding CERCLA 107(s), p. 152]. Moreover, the exemption applies to companies with either fewer than 30 employees, or less than $3 million gross revenues. This potentially exempts wealthy corporations that happen to have few employees. In addition, the exemption applies to conduct in the future, thus eliminating incentives for small businesses to manage hazardous substances carefully in the future: an unjustifiable ``pollute with impunity'' clause for small businesses. In addition, any liability exemption for small businesses should be conditioned on cooperating with appropriate information-gathering and cleanup activities. Similarly, the exclusion should be inapplicable where the Administrator determines that the material has or may significantly contribute to the response costs at the site (cf. SCAA Sec. 501(b), adding CERCLA Sec. 107(r)(2), p. 152 (exception to exemption for de micromis contributors)). v. the npl cap: dumping cleanups on communities and states \14\ Another highly objectionable feature of the bill is its inclusion of an arbitrary cap on the number of additional sites that can be added to the National Priorities List. Under S. 8, EPA can only add a total of 90 sites to the Superfund National Priorities List before 2000, and then 10 sites/year thereafter [SCAA Sec. 802, adding CERCLA Sec. 105(i)(1)(A), p. 245]. A cap has profound consequences because, unless a site is listed, EPA cannot undertake cleanup activities (other than a short-term, low-cost emergency removal). In effect, this provision dumps the problem of Superfund site cleanups into the laps of the States--regardless of whether they have the resources or capacity to conduct those cleanups. --------------------------------------------------------------------------- \14\ Because the NPL cap provisions of S. 8 as revised are identical to those as introduced, this section of our testimony is identical to that in EDF's March 5 testimony (other than with regard to bill citations). --------------------------------------------------------------------------- The General Accounting Office recently estimated that the cap could force States to accept responsibility for 1,400 to 2,300 sites (1,100 already identified by EPA, along with an estimated 300-1,200 yet- undiscovered sites). The estimated cleanup costs range from $8.4 to $19.9 billion.\15\ --------------------------------------------------------------------------- \15\ U.S. General Accounting Office, Impact on States of Capping Superfund Sites. GAO/RCED-106R. March 1996. --------------------------------------------------------------------------- The GAO report makes painfully clear that the States are in no position to take on this added burden. Indeed, States are having difficulty securing resources for their current cleanup efforts. Of the states surveyed by GAO, ``three of the seven states with active programs said that taking on these additional cleanups would exacerbate an already difficult financial situation. Two other states said that they expect to face funding shortfalls beginning in fiscal year 1997 that will make it difficult to absorb the additional cleanup responsibilities, at least for a few years subsequent to that time. Another two states said that while they had sufficient funds to manage their own inventories, funding the additional cleanups would be difficult.'' \16\ --------------------------------------------------------------------------- \16\ Ibid., p. 2. This provision also undercuts two of the valuable incentives created by Superfund: that which prompts voluntary cleanup of non-NPL sites in order to avoid a potential future NPL listing, and that which prompts careful management of wastes generated now. An example of Superfund's effectiveness in the former arena emerges from a recent story in the Cleveland Plain Dealer about the Ashtabula River Partnership, a group that is working to avoid a potential Superfund listing by creating ``a better-than-Superfund cleanup plan'' for the river's heavy-metal and PCB contamination problems. The paper quoted Rep. Steve LaTourette (R-OH) as remarking that ``[t]he prospect of a Superfund designation has proven to be a more effective tool than the Superfund itself. Without Superfund, however, most parties wouldn't even be at the table.'' \17\ --------------------------------------------------------------------------- \17\ ``Toxic Cleanup: Ohioans Aim to Skirt Superfund Listing,'' Greenwire (electronic newsletter), June 14, 1995 (synopsis of story from June 11 Cleveland Plain Dealer). --------------------------------------------------------------------------- Similarly, GAO noted that State program managers ``pointed out that a major incentive for private parties to clean up sites is to avoid having their properties added to the list of the most contaminated sites in the country.'' \18\ In short, a cap on the number of Superfund sites may have the perverse effect of creating a greater need for more Superfund listings, by reducing incentives for non-Superfund voluntary cleanups. --------------------------------------------------------------------------- \18\ GAO, p. 3. --------------------------------------------------------------------------- The NPL cap will also undercut incentives for sound prospective waste management. Facilities will be able to gamble that states will lack, or forego use of, cleanup enforcement authorities for tackling sites created after the NPL list is effectively closed. The continuing nominal availability of litigation authorities under Sec. 107 is far from an adequate substitute, given that Sec. 107 suits can only be brought to recoup expenditures--thus requiring cash-strapped States to front all the cleanup money. Where states are unable to do so, today's polluters will evade cleanup responsibilities, and sites will remain unaddressed. In short, the cap should be eliminated. vi. natural resource damage provisions \19\ While there have been some improvements in the revised version of S. 8 relating to natural resource damages, there have also been some weakening changes. Most importantly, the draft retains the major deficiencies of S. 8 as introduced: it arbitrarily prevents trustees' from factoring heritage values--the values people place on passing on to their children and their grandchildren a pristine wilderness, a population of endangered whales or a national symbol such as the Grand Canyon--into their restoration decisions and from recovering damages for the impairment of these values. This approach has the effect of valuing least our most pristine and endangered resources. --------------------------------------------------------------------------- \19\ This portion of our testimony was prepared by Sarah Chasis of the Natural Resources Defense Council. --------------------------------------------------------------------------- The revised bill accomplishes this result by retaining the prohibition on the recovery for impairment of heritage values, referred to in the draft as ``nonuse'' damages [SCAA Sec. 701, amending CERCLA Sec. 107(f)(1), p. 231] and by its prohibition on trustees' recovery for the costs of conducting contingent valuation studies [SCAA Sec. 702, amending CERCLA Sec. 107(f)(2), p. 234], a methodology that Nobel laureate economists recognize as legitimate and that market researchers and businesses use regularly. Other deficiencies of the revised bill include its limitations on the trustees' ability to recoup for the interim losses that may be suffered pending restoration of damaged natural resources. The bill has at least four significant limitations on interim losses: It limits such recoveries to ``temporary replacement of the services provided by injured . . . resource'' [SCAA Sec. 701, amending CERCLA Sec. 107(f)(1), p. 230; see also, SCAA Sec. 703, amending CERCLA Sec. 107(f), p. 240]. This language artificially limits recoveries to measures that are temporary and replacement in nature (thus precluding acquisition, for example) and also potentially limits recoveries to prospective losses, those for which temporary replacement costs are incurred, omitting compensation for past losses. The term ``services'' also could be construed too narrowly to mean just human services, rather than ecological services as well. It precludes recovery of any lost uses that occurred prior to December 11, 1980 [SCAA Sec. 701, amending CERCLA Sec. 107(f)(1), p. 231]; It precludes recovery of interim losses, no matter how significant, if the resource has returned to baseline condition before trustees have had a chance either to file a claim or to incur assessment or restoration costs [SCAA Sec. 701, amending CERCLA Sec. 107(f)(1), p. 232]; and It prohibits recovery of any lost heritage values [SCAA Sec. 701, amending CERCLA Sec. 107(f)(1), p. 231]. With respect to the selection of restoration options, we strongly support the revised version's deletion of the ``reasonable cost'' criterion that was in S. 8 as introduced. However, we remain concerned about the criteria that are included [SCAA Sec. 703, amending CERCLA Sec. 107(f), p. 239]. First, we believe they should be listed as considerations, rather than as absolute criteria, as is the case in Interior's regulations. Second, arguably the most important criterion is not even mentioned, namely effectiveness in restoring the resource to baseline. This should be included. Cost-effectiveness is included as a requirement, but the term is not defined. To avoid confusion and to clearly distinguish this criterion from a reasonable cost criterion, a definition of the term should be included. Finally, we strongly object to the limitation placed on the last factor, ``timely'' to the extent consistent with cost and the other three factors. This factor should be included without limitation, just as the other factors are. The current language renders this factor potentially irrelevant. Natural recovery will tend in many instances to be more cost effective than active restoration. If timeliness is not considered as a separate factor but must always be consistent with what is most cost effective, natural recovery will tend to win out, even if it will take decades to occur. We strongly object to the deletion from the revised bill of the provision contained in S. 8 as introduced for judicial review of the restoration plan on the administrative record. If the trustee goes through the process of compiling an administrative record, which we believe is highly desirable to ensure openness and fairness in decisionmaking, then the evaluation of the decision reached by the trustee should be based on that administrative record. The deletion of this provision from the revised bill defeats the whole purpose of providing for an administrative record with public participation. It means that a PRP could come into court with entirely new evidence that it kept out of the administrative process and use that evidence to discredit the trustee's restoration plan. There will be no incentive for the trustee to compile an administrative record since the PRP will be free to ignore the process and submit its evidence later in court. This change represents a serious step back from S. 8 as introduced. The revised bill's language on the relationship between response actions and restoration [SCAA Sec. 703, amending CERCLA Sec. 107(f), pp. 239-240] is an improvement over S. 8 as introduced, as is the provision for a Federal ``administrative'' trustee (as opposed to a lead Federal ``decisionmaking'' trustee). The provision [SCAA Sec. 705, adding to CERCLA Sec. 113(g)(1), p. 241] allowing for an extension of the current statute of limitations only where, in effect, the PRP agrees (by entering into a cooperative agreement) is ineffective in addressing trustees' concerns on this issue. We strongly recommend that the provision on mediation [SCAA Sec. 706, adding to CERCLA Sec. 136, p. 242] be made optional. To require trustees to go through a mediation process when there is no prospect of cooperation from the PRP only introduces delay and expense into the process. Mediation works only when there is a real interest on both sides; otherwise, it is a waste of time and money and further delays restoration of the resources. Three final points. We oppose the provision on double recovery which would broaden current law in a number of ways (e.g., by extending to actions brought under state law, as well as Federal law, and potentially limiting recoveries in such state actions for damages other than restoration costs, as well as extending to response actions--which are not designed to achieve restoration) [SCAA Sec. 701, amending CERCLA Sec. 107(f)(I), p. 231]. We also are concerned with the failure to call for the development, as part of the regulations, of simplified damage assessment methods. This combined with the call for ``facility-specific'' information [SCAA Sec. 702, amending CERCLA Sec. 107(f)(2), p. 233] could be used to call into question the ability of trustees to utilize simplified assessment techniques, which not only save time and money, but ensure that smaller spills and sites are assessed and restored. Finally, we have serious objections to the grandfathering provision [SCAA Sec. 707, p. 242] that seeks to carve out a special exception for the Clark Fork case in Montana. conclusion Thank you for this opportunity to present our views. ______ Prepared Statement of George J. Mannina, Jr., Executive Director, Coalition for NRD Reform Mr. Chairman, distinguished members of the committee, I am appearing today on behalf of the twenty-three companies and associations comprising the Coalition for NRD Reform. A list of Coalition members is attached as Appendix 1. Mr. Chairman, I would like to begin by thanking you for recognizing that the NRD program needs reform. As the Interior Department's 1994 Report on Reinventing Government stated: ``The existing [NRD] process is complex for all parties involved and creates conflict instead of restoring resources.'' When the NRD Coalition formed two years ago, we were told NRD was a small problem involving only a few sites. A scant two years later, Federal trustees state that they want to use their NRD authority at half the NPL sites and at 80,000 surface lagoons, 14 percent of all U.S. lake acreage and 4 percent of all U.S. river miles. EPA's recently completed study of 2,100 watersheds ranked 824 as Priority 1-5 for sediment contamination, but, to date, trustees have asserted major NRD claims at only 10 of the 824 priority watersheds. To put the EPA survey into further perspective, one watershed which EPA placed in its lowest priority category is the subject of an NRD claim of over $1 billion. The rapidly escalating NRD program also presents a serious problem for the Federal Government, particularly at sites owned by the Departments of Energy and Defense where there is extensive contamination of resources subject to state and tribal authority. The problem which brings us before you today is that the NRD program has lost its focus on reasonable restoration. Unless the NRD program is reformed, not only will the problems with this program dwarf the well recognized problems of the cleanup program, but any progress made on remedy reform in S. 8 will be undone. Remedy reform without NRD reform will be like squeezing a balloon at the bottom, all the air will shift to the top--government agencies will be able to bypass the new remedy requirements under the guise of resource restoration. For example, while S. 8 establishes an environmental protection standard tied to population and community level effects on plants and animals, Federal trustees assert that any measurable adverse change in the chemical, physical, or biological environment justifies an NRD claim. In other words, trustees claim that any change from the so-called baseline--or pre-release--condition supports an NRD claim--even when there is no population or community level impact. If the trustees' definition of injury prevails, reforms to EPA's remedial program can be overridden or rendered moot. Small and large businesses which have engaged in cleanup under EPA standards, agreed to a remedy selection, or entered into a covenant not to sue with EPA can find themselves liable for additional cleanup under the NRD program. Because trustees define a resource injury requiring NRD action as any measurable adverse change in the chemical, physical or biological environment, Superfund is no longer two programs, cleanup and restoration, but it is three programs: cleanup 1 administered by EPA designed to protect human health and the environment; cleanup 2 administered separately by resource trustees in which trustees can second guess EPA remedial decisions; and natural resource restoration administered by trustees to restore fisheries, wetlands, etc. S. 8 offers a unique opportunity to fix the problem of having two separate cleanup programs. Unfortunately, the language in the chairman's mark does not clarify the differences between the remedial program and restoration, thereby allowing NRD to remain as a second cleanup program. In fact, we think the trustees will read the first part of proposed Section 703(a) as confirming that NRD is a second cleanup program. We strongly urge you to develop a clearer definition of the objective of restoration. We would like to work with you to address this issue which we believe must be fixed--otherwise the Superfund program will become even slower and more litigious. Trustees for the public should focus on restoring injured public resources and providing the public with appropriate alternatives to use while restoration is taking place--not on creating a second cleanup program. Having said that, there are provisions in the chairman's mark which we think are positive. The requirements for technically feasible and cost effective restoration are good, as is the requirement for proof of causation and the clarification of the right to seek contribution from other responsible parties. We are interested in the provisions allowing for an extended payment period and would like to better understand your intent. We are particularly pleased by the intent of the chairman's mark to limit the measure of damages to the cost of restoration, including permanent and temporary measures, and to exclude surplus and punitive damages. However, we are concerned that trustees will circumvent your intent. The chairman's mark states non-use ``values'' are not allowed. But trustees have begun to change the words, asserting that they are not collecting values and damages but are collecting ``compensatory restoration'' or determining the proper level of restoration. Non-use claims need to be prohibited regardless of what they are called. We would be pleased to work with you in this regard. Similarly, the chairman's mark does not clearly prohibit the use of the much criticized contingent valuation methodology (``CVM''). The mark only says trustees cannot collect the costs of a CVM study from liable parties. This implies that CVM can still be used. Again, we think a simple fix could be made to prohibit the use of CVM and we would like to work with you to accomplish that. Since much of the debate on NRD reform has swirled around non-use and lost use damages, it is worth taking a moment to trace the history of these damage claims because the history demonstrates how the regulatory expansion of the NRD program has changed congressional intent and mired the program in controversy and litigation. When Superfund passed in 1980, there was no hint that the NRD program included lost use and non-use damages. Not until 1986 did the Federal regulations introduce the concept of lost use and then it was to require that liable parties pay the lesser of the cost of restoration or lost use. And non-use was only to be considered if it was impossible to restore the resource or to compute lost use damages. Today, trustees claim they can require parties to pay for the full cost of restoration plus past lost use and non-use. If the resource is fully restored, what are past lost use and non-use moneys used for? The answer is that they are surplus to the actual cost of restoration and are punitive damages. A moment ago, I told you that because of regulatory interpretations adopted by Federal trustees Superfund has become three programs, cleanup 1, cleanup 2, and restoration. Based on this regulatory history, I think it is fair to say trustees have added a fourth program not intended by Congress--punitive non-use and past lost use damages. Such damages undermine your intent to limit the measure of damages to the cost of restoration. In this regard, it is worth noting the most recent regulatory expansion of the NRD program. The trustee's latest view is that lost use also includes surplus resource to resource lost use. In simple English what that means is that trustees are going to attempt to compute the value to the squirrel of having to eat acorns instead of walnuts while restoration is occurring, or the value to a robin of eating bugs instead of worms--and to file claims for the robin's pain and suffering. That type of lost use will lead to speculative claims, increased litigation, and conflict instead of restoring resources. We hope that your focus on actual restoration precludes this result and we would like to work with you to clarify this issue. The NRD program should focus on restoration. We also understand your intent is to leave the status quo unchanged on the critically important issue of a defendant's right to a trial. However, we think you have inadvertently changed existing law and may have established record review by (1) referencing Section 113(k) which provides for record review, (2) providing for the creation of an administrative record, which implies that judicial review is based on that record, and (3) repealing the rebuttable presumption which has been relied on by courts as proof that the law requires trial de novo, not record review. The Coalition is unalterably opposed to record review and we believe this section of the chairman's mark must be changed. We cannot understand why the trustees are afraid of a standard which requires that they prove their case in court. We urge you to delete those provisions in the chairman's mark which will be used by trustees to argue for record review under which trustees do not have to prove that their case is supported by the preponderance of the evidence. Mr. Chairman, as I said at the beginning of my statement, the Coalition for NRD Reform thanks you for recognizing that the NRD program needs reform. We believe important substantive adjustments need to be made to the chairman's mark to better effectuate your policy of reforming the NRD program so that it focuses on real restoration and we look forward to working with you. We also think there are important technical issues which merit additional attention. For example, your double recovery provision only prohibits persons from acting first under Superfund and then proceeding under another statute. The double recovery prohibition should be expanded to run both ways as it does in Section 114(b)(1) so that persons also cannot collect for a natural resource injury under another statute and then proceed under CERCLA for the same injury. The double recovery provision should also prohibit more than one person from recovering for the same resource. A second technical issue involves the statute of limitations issues. Since CERCLA's existing statute of limitations provides that the statute of limitations begins to run after the promulgation of regulations, and since the courts have ruled the regulations have been issued, one possible reading of the chairman's mark which requires regulations to be issued within two years is that you are reviving claims now barred by the existing statute of limitations. We understand that is not your intent and we hope you will clarify this point. Efforts by the trustees to apply the statute retroactively for NRD are bad enough, double retroactivity by reviving stale claims is doubly bad. A third technical issue is that there are a number of positive provisions in the chairman's mark which are then undermined by saying the provisions are requirements only ``to the extent practicable.'' We think the ``to the extent practicable'' language should be deleted. Why, for example, should trustees use the best available scientific information only ``to the extent practicable.'' Or why should trustees use site specific analyses to determine the extent of injury at a site only ``to the extent practicable.'' Finally, the requirement for the designation of a lead Federal trustee is positive but your language is subject to interpretation at sites involving Federal, state and tribal trustees. One interpretation of your language is that the Federal trustee will be the lead trustee at every site, even sites principally involving state or tribal resources. We believe that would not be the right result. Mr. Chairman, I appreciate the opportunity you have given the Coalition for NRD Reform to testify before you today and I would pleased to answer any questions you might have. Thank you for this opportunity to testify. ______ Appendix 1 members of the coalition for nrd reform ALCOA ARCO General Electric Company Zeneca, Inc. ASARCO FMC Kennecott American Petroleum Institute Reynolds Metals Co. Fort Howard Corporation Georgia-Pacific Corporation Hercules Elf Atochem USX Corporation Mobil American Forest and Paper Association Montrose Chemical Corporation National Paint & Coatings Association Beazer East, Inc. Dow Chemical Co. National Mining Association Amoco Corporation Western Regional Council ______ Responses to Questions Submitted by Senator Daniel Patrick Moynihan to George J. Mannina, Jr., to Supplement September 4, 1997 Hearing Record. Question 1. You mention in your testimony that natural resources can recover on their own--essentially, you suggest that we can wait for a ``natural recovery'' rather than trying to speed the process of recovery through restoration. How long, sir, are you prepared to wait for such ``natural recovery'' to occur? Answer. Although my testimony does not mention natural recovery, your question is an important one. The facts are that once cleanup is completed, the environment will begin to recover and many resources will recovery naturally. In such circumstances, the question becomes how much money should be spent to accelerate the recovery process. To simplify the analysis, assume that a resource can recover naturally in 15 years, but also can recover in 10 years with the expenditure of $5 million or in 2 years with an expenditure of $10 million. If all three restoration alternatives achieve the same result, the question becomes which alternative should be selected. Without more information, it is not possible to make that decision. The needed information relates to the purpose of the NRD program which is to restore what the public lost. If the affected resource has a very high public use, if may be appropriate to select the more expensive option in order to accelerate restoration. If the resource has a lower public use, then a slower restoration alternative might be appropriate. The Coalition for NRD Reform has never advocated that we should always wait for natural recovery. Rather, we have recommended that natural recovery be considered as an option but that restoration should be timely. This means there must be careful consideration of the loss to the public. Often, this will argue against natural recovery and for accelerated restoration. When considering accelerated restoration alternatives versus natural recovery, it is also important to recognize that accelerated restoration options may create unintended problems. For example, scientists have long recognized that in certain circumstances it may be appropriate to allow natural forces to cover over contaminated sediments rather than dredge such sediments. The reason is that the act of dredging releases otherwise trapped contaminants into the water column causing adverse environmental consequences. Question 2. Is it your view that there are no non-use values associated with natural resources? If so, is the habitat of an endangered species worthy of protection? Answer. The purpose of the NRD program is to restore, replace, or acquire the equivalent of the injured resource. Unfortunately, trustees have expanded the program to collect money that is surplus to the actual costs of restoration. Non-use damages fall into that category. If the resource is fully restored, what is the additional non-use money used for? The answer became clear in a Senate stakeholders meeting when trustees responded by stating that they would use non-use funds to address other environmental issues. The point is that non-use values are surplus to the cost of restoration. With respect to your specific example of endangered species, if a release caused an injury to an endangered species, the Coalition for NRD Reform would support necessary restoration actions. If the impact on the endangered species was occurring because of impacts to the habitat, then habitat restoration measures would clearly be appropriate. However, claims for ``non-use values'' are surplus to the cost of actual restoration. In fact, any non-use values which may attach to endangered species are satisfied once the resource is restored. Question 3. How do you feel we should address natural resource damages like those associated with the contamination of the Hudson and St. Lawrence Rivers? Answer. The question assumes incorrectly that the trustees have established that there are natural resource damages associated with the Hudson and Saint Lawrence Rivers. To date, the trustees for both rivers have completed only the preassessment screen, the first step in determining whether there are any compensable injuries (i.e., actual adverse effects) to natural resources. It remains to be seen what natural resource damages (i.e., the cost of restoring, replacing, or acquiring the equivalent of any injured natural resource plus reasonable assessment costs) if any, are associated with any such injuries to natural resources of the Hudson and St. Lawrence Rivers. With respect to the Hudson, the General Electric Company (GE) has spent more than $130 million on PCB research and cleanup at its two plant sites and the River. In 1976, GE settled a claim by New York for PCB damage to the River to the full satisfaction of the State. The Natural Resources Defense Council, the Hudson River Fisherman's Association and the Sloop Clearwater were parties to the settlement. The State also received $20 million from the Federal Government to address PCB contamination in the River, but did not take any action using those funds. In 1984, EPA concluded that no action other than natural recovery and the capping of exposed areas near GE's plant sites was appropriate at that time to address PCBs in the River. GE performed the capping pursuant to an agreement with EPA. In 1990, EPA began a reassessment of the River under Superfund, which will not be complete for at least another two years. GE has cooperated fully with that effort. In addition, GE settled the claims of the commercial fisherman for PCB damage. We also note that there have been no restrictions on swimming, boating, or other recreational use of the Hudson or on its use as a drinking water supply because of PCBs. In a 1993 report entitled ``20- year trends in Water Quality of Rivers and Streams in New York State, Based on Macroinvertebrate Data 1972-1992,'' the New York Department of Conservation (DEC) classified the seventy miles of the Hudson lying between Hudson Falls and Fort Edward and the City of Hudson as non- impacted or slightly impacted, reflecting ``excellent'' water quality and ``good'' water quality. The DEC, which was well aware of the PCBs in the river, concluded, ``No impact at the community level has been observed at any site that can be attributed to high PCB levels.'' Fish are abundant and healthy in the Hudson.'' In 1995, the DEC described the upper River as supporting ?robust populations of prized gamefish, largemouth bass, smallmouth bass, walleye, northern pike and striped bass of excellent size and quality [that] will draw recreational anglers from much of eastern New York.'' As to birds, the Fish and Wildlife Service study of tree swallows cited in the preassessment screen does not show or claim any reduction in the abundance of tree swallows or other birds found along the Hudson. After a hundred years, eagles have returned and hatched on the lower Hudson. Obviously, if eagles have not been present in the Hudson Valley for 100 years, something other than PCBs was the cause. Claims that there are significant natural resource damages associated with the Hudson River ignore these facts and other evidence of the robust health of the River. To the extent that there are any compensable natural resource injuries associated with contamination of the Hudson and St. Lawrence Rivers that may give rise to damages, such injuries can be addressed effectively and responsibly by implementing a natural resource damages program as proposed by the Coalition for NRD Reform and detailed in the attached chart. Under that proposal, which is based in large part on the statute and the Department of the Interior's Type B damage assessment regulations, the trustees must first determine, using scientifically valid, site-specific assessment methods, that a release of hazardous substances has caused a natural resource injury. If the trustees determine that a release has injured a natural resource, the trustees next would determine whether the injured natural resource was committed to public use at the time of the conduct giving rise to the release. If the resource was so committed, then the trustees would determine whether the services provided to the public by the resource have been eliminated or impaired. If the services have been eliminated or impaired, the trustees then would develop and select a technically practicable, cost-effective and cost-reasonable plan for restoring those services in as timely a manner as is consistent with those criteria. Trustees would not be permitted to assert claims for non-use damages or past lost use damages, which are surplus to the cost of restoration. This approach would move the focus of the natural resource damages program away from maximizing damages claims to restoring what the public has lost as a result of an injury to a natural resource. ______ CRS Report--Superfund: Summary of the Draft Chairman's Mark of S. 8, the Superfund Cleanup Acceleration Act of 1997; Prepared at the Request of the Senate Committee on Environment and Public Works--September 2, 1997 (By Mark Reisch, Mark Holt, James E. McCarthy, Linda Schierow, Mary Tiemann, Environment and Natural Resources Policy Division) summary The Superfund Cleanup Acceleration Act, S. 8, was introduced on January 21, 1997, by Senator Bob Smith. It proposes extensive changes to the Superfund law, and would reauthorize it for 5 years at a level of $8.5 billion. Title I (Brownfields Revitalization) authorizes $65 million per year for programs to characterize brownfields, to capitalize revolving loan funds for their cleanup, and to promote state voluntary cleanups. The Federal Government may not intervene at a site subject to a state remedial action plan unless there are certain specified risks present. Liability protection is given to neighbors of a Superfund site, and to innocent purchasers of contaminated property. Title II (State Role) allows a state to receive authorization, or full or partial delegation of Superfund authorities at sites in the state. The state may ask EPA to remove cleaned sites from the National Priorities List (NPL). The 50 percent state cost-share requirement is reduced to 10 percent, or a percentage determined by the Office of Management and Budget. Title III (Local Community Participation) authorizes the establishment of Community Action Groups to be conduits of information, and to represent the people during cleanup planning and implementation. The funds-matching requirement for Technical Assistance Grants to communities would be eliminated; early disbursements would be allowed. Title IV (Selection of Remedial Actions) requires cleanups to be cost-effective and protective of human health and the environment. Remedies must be based on site-specific conditions and future use. It generally replaces the law's preference for permanent treatment remedies with specified factors, and establishes remedy review boards to reexamine remedy decisions. Title V (Liability) exempts waste generators and transporters at co-disposal landfills for their liability for activities prior to January 1, 1997. Co-disposal landfills are those that mostly received municipal solid waste and sewage sludge. The liability of owners and operators (O/O) is capped at varying amounts depending on whether the O/O is private or a municipality, and how large the municipality is. Small businesses and other small waste contributors are exempt from liability. The bill establishes an allocation process for dividing liability at multi-party sites. Title VI (Federal Facilities) allows the cleanup of Federal facilities to be delegated to a state provided it uses the Federal remedy selection process and standards. Federal facilities may be used to test innovative technologies. Title VII (Natural Resource Damages) eliminates non-use damages, and claims for lost-use activities for pre-1980 activities. Title VIII limits the number of sites that can be added to the NPL, and doubles the emergency response authority to $4 million and 2 years. Title IX authorizes $8.5 billion for 5 years. Superfund: Summary of the Draft Chairman's Mark of S. 8, The Superfund Cleanup Acceleration Act of 1997 The Superfund Cleanup Acceleration Act of 1997, S. 8, was introduced on January 21, 1997, by Senator Bob Smith, Chairman of the Environment and Public Works Subcommittee on Superfund, Waste Control, and Risk Assessment. The bill reauthorizes the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA, or Superfund) for 5 years at a level of $8.5 billion total, and makes extensive amendments in its nine titles. The subcommittee has received comments on the bill since its introduction, and has negotiated changes with Senators and the Administration. The draft chairman's mark circulated by the subcommittee in late August is the result of those discussions and is summarized in this report. A hearing on the revised bill is scheduled for September 4, 1997, and markup is planned for September 11. title i--brownfields revitalization There is no specific brownfields authority in CERCLA; the current program was initiated administratively by EPA. It provides 2-year grants of up to $100,000 annually ($200,000 total) to help communities address brownfields, which are abandoned, idle, or underused industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination. The grants are for site assessment and related activities--not cleanups. The Taxpayer Relief Act of 1997 (P.L. 105-34) allows brownfield cleanup costs to be deducted in the current year, a tax break estimated at $417 million by the Joint Committee on Taxation, that ends December 31, 2000. S. 8 directs EPA to establish two programs. The first, the Brownfield Characterization Grant Program, would provide grants of up to $100,000 per year for 2 years to characterize and assess brownfield sites; $15 million annually is authorized for the program for 5 years. ``Eligible entities'' to receive the grants are local governments, regional councils, state-chartered redevelopment agencies, and Indian tribes. The second program, the Brownfield Remediation Grant Program, would provide grants to states or eligible entities to capitalize revolving loan funds (RLF) for brownfield cleanups. A state receiving a grant must pay a matching share of at least 50 percent of the costs of the response action for which the grant is made, from other sources of state funding. The maximum amount of a grant with respect to any facility may not exceed $150,000 annually for 2 years. Twenty-five million dollars annually is authorized for the program for 5 years. An eligible entity receiving a grant for either program may leverage the funds by using them at a brownfield project for which funding is received from other sources, but the grant may only be used for the purpose specified (site characterization or capitalizing the RLF). Requirements for grant applications are set out, as are criteria for EPA to use in ranking the applications. Facilities being cleaned up under other authorities are excluded from the program, namely: facilities subject to emergency removal actions under CERCLA, facilities on the National Priorities List (NPL), facilities subject to corrective action under RCRA,\1\ --------------------------------------------------------------------------- \1\ Resource Conservation and Recovery Act, also known as the Solid Waste Disposal Act. --------------------------------------------------------------------------- facilities being closed under RCRA, facilities subject to administrative orders or consent decrees, Federal facilities, and facilities for which cleanup assistance has been provided under the Leaking Underground Storage Tank (LUST) Trust Fund. The bill also authorizes technical and financial assistance to states to maintain, establish, and administer voluntary response programs. Elements of a qualifying state program include public participation in remedy selection, streamlined procedures, oversight and enforcement authorities to ensure that response activities are completed, and a requirement for state certification that the response is complete. A voluntary cleanup at an NPL site must protect human health and the environment to the same extent as a remedial action selected by EPA. The bill authorizes $25 million per year for 5 years for assistance to states. Each qualifying state program is guaranteed at least $250,000 per year. EPA must notify a state prior to undertaking an administrative or judicial enforcement action at a facility \2\ where there is a release or threatened release of a hazardous substance. The state must notify EPA within 48 hours whether the facility is currently, or has been, subject to state remedial action. The Federal Government is forbidden from taking an administrative or judicial enforcement action, or bringing a private civil action against anyone at a facility subject to a state remedial action plan. There are several exceptions to this prohibition. EPA may bring an administrative or judicial enforcement action if: --------------------------------------------------------------------------- \2\ This provision and the rest of this section describing title I applies to any applicable facilities, not just brownfields. --------------------------------------------------------------------------- the state requests assistance; or EPA makes a written determination that the state is unwilling or unable to take appropriate action, after giving the governor notice and an opportunity to cure; and (1) the Agency for Toxic Substance and Disease Registry issues a human health advisory, or (2) EPA determines there is an imminent threat; or EPA determines the contamination has migrated across a state line; or EPA obtains a declaratory judgment in U.S. district court based on: newly discovered information about the contamination; the discovery of fraud; a failure of the remedy; or a change in land use that presents a clear threat of exposure to hazardous substances. At a facility not subject to a state remedial action plan, the President shall provide notice to the state within 48 hours after issuing a section 106(a) administrative order.\3\ The order shall cease to have effect 90 days after issuance unless the state concurs in the continuation of the order. --------------------------------------------------------------------------- \3\ A section 106(a) administrative order is a unilateral administrative order whereby EPA can order a potentially responsible party (PRP) to perform certain remedial actions at a Superfund site if there is an imminent and substantial endangerment to public health, welfare, or the environment; failure to comply with a section 106 order is subject to a fine of not more than $25,000 per day. --------------------------------------------------------------------------- The bill protects from liability landholders whose property may be contaminated by a contiguous NPL site, if they did not contribute to the contamination; such landholders shall provide cooperation and facility access to those cleaning up the property. Also relieved from liability are purchasers of contaminated property, if they did not contribute to the contamination, and conducted appropriate inquiries prior to the purchase. ``Appropriate inquiries'' is clarified. title ii--state role At present, states are involved in the selection of remedies and may enter into cooperative agreements with EPA to carry out most cleanup activities on a site-by-site basis. However, final remedy selection must be done by EPA. The bill defines several terms for use in this title, including: ``Authorized state'' means a state that is authorized to apply its own cleanup program requirements, in lieu of the requirements of CERCLA, to the cleanup of a non-Federal listed facility. ``Delegable authority'' means the authority to perform all the elements in one or more of the following categories of authority: (1) site investigations, evaluations, and risk analyses; (2) development of alternative remedies, and remedy selection; (3) remedial design and remedial action; (4) operation and maintenance; and (5) information collection, and allocation of liability. ``Delegated state'' means a state that has received delegable authority. Delegation allows a state to implement the Federal CERCLA program. ``Delegated facility'' means a non-Federal listed facility with respect to which a delegable authority has been delegated to a state. ``Non-Federal listed facility'' means a facility not owned by any entity of the U.S. Government, and that is on the National Priorities List (NPL). ``Enforcement authority'' means all authorities necessary to recover response costs, to require Potentially Responsible Parties (PRPs) to perform response actions, and otherwise to compel implementation of a response action, including: issuance of a section 106(a) administrative order, a response action cost recovery, imposition of a civil penalty or award, settlement, and information gathering. ``Non-delegable authority'' means authority: (1) to make grants to Community Advisory Groups; and (2) to conduct research and development under CERCLA's provisions. The bill directs EPA ``to seek . . . to transfer'' to states the responsibility to perform response actions (cleanups) at non-Federal listed facilities. There are four ways to accomplish the transfer of responsibility: by authorization, expedited authorization, delegation, and limited delegation. Authorization allows a state to implement its own program within its borders. Delegation allows a state to implement the Federal program. Authorization. EPA may authorize a state to apply any or all of the requirements of the state's cleanup program in lieu of CERCLA to any non-Federal listed facility if the state: (1) has adequate legal authority, financial and personnel resources, organization, and expertise; (2) will implement its cleanup program in a manner protective of health and the environment; (3) has procedures for public notice and an opportunity to comment; and (4) agrees to use its enforcement authority to require potentially responsible parties (PRPs) to perform and pay for the response actions. EPA must determine within 180 days whether the state meets the requirements, or the transfer of responsibility to the state is deemed to have been granted. Expedited Authorization. A state that meets any three of the following five criteria may receive expedited authorization to operate its program in lieu of the Federal program: (1) the state's program has been in effect for at least 10 years; (2) the state has spent at least $10 million from its state cleanup fund or other state source of cleanup funding; (3) the cleanup program has at least 100 employees; (4) at least 200 response actions have been performed at non-NPL sites under the program; and (5) there are at least 100 non- Federal listed facilities in the state, or 6 non-Federal listed facilities per million state residents. EPA has 90 days to review the state's certification, after which the transfer of responsibility to the state is deemed to have been granted. Delegation. A state may apply to receive one or more delegable authorities for one or more non-Federal listed facilities. The state must demonstrate that its enforcement authorities are equivalent to those under CERCLA. Its application must identify each delegable authority it requests for each non-Federal listed facility for which it requests delegation. The application must also enable EPA to determine whether and to what extent: (1) the state has adequate financial and personnel resources, organization, and expertise; (2) the state will implement the delegated authorities in a manner protective of health and the environment; and (3) the state agrees to require PRPs to perform and pay for the response actions. EPA must approve or disapprove the application within 120 days or the application is deemed to have been granted. Limited Delegation. EPA may delegate to a state limited authority to perform, ensure the performance of, supervise, or otherwise participate in the performance of one or more delegable authorities, as appropriate. A state shall have sole authority to perform the transferred responsibility. A delegated state shall implement the applicable provisions of CERCLA (including regulations and guidance issued by EPA) in the same manner as EPA at facilities that are not delegated. EPA may withdraw the transfer of responsibility if it finds that a state does not meet the requirements that it has certified or agreed to. Before EPA performs an emergency removal at a non-Federal listed facility under section 104 it must notify the state. If the state notifies EPA within 48 hours that it intends to take action, EPA shall not proceed unless the state fails to act within a reasonable period of time. In case of a public health or environmental emergency, EPA need not provide notice prior to acting. If there is a hazardous substance release at a non-Federal listed facility where responsibility has been transferred to the state, the Federal Government may not take an administrative or judicial enforcement action, or bring a private civil action, unless the state requests assistance, or EPA obtains a declaratory judgment in U.S. district court that the state has failed to make reasonable progress and there is an imminent threat of exposure to hazardous substances. Of the amount of any response costs recovered from a responsible party by a state that has received transferred responsibility for a non-Federal listed facility, the state may retain: (1) 25 percent of any Federal response costs incurred there, plus (2) any response costs incurred by the state at the facility; the remainder shall be deposited in the Superfund trust fund. EPA may recover response costs from a PRP if the state says it does not intend to, or the state fails to take timely action in light of applicable statutes of limitation. If EPA takes a cost recovery action against a PRP, the state may not take any other action for recovery of response costs relating to that release. A state may request EPA to remove all or part of a transferred facility from the NPL, and EPA shall do so if the delisting is not inconsistent with a requirement of CERCLA. The agency shall report annually to Congress describing actions taken under this provision. Facility-specific and non-facility-specific grants to delegated states are provided for. Grant money may not be used to pay the state share of response costs. The 50 percent state cost-share requirement at state- operated facilities would be repealed. The state cost share would be the lower of 10 percent, or a percentage determined by the Office of Management and Budget. title iii--local community participation Currently, CERCLA requires only that there be a public notice and comment period before the adoption of many emergency removal actions and all remedial (cleanup) actions. Technical assistance grants (TAGs) of $50,000 are available to the public. Title III would facilitate participation in decisionmaking by the people affected by sites that are on or proposed for the National Priorities List (NPL), or where there is a removal action expected to last more than a year or that will cost more than the amount specified in section 104(c)(1). EPA would be required to inform and consult with the affected community and to consider their views in developing and implementing the remedial action plan. The affected community would have access to documents regarding response actions, but not to those relating to liability nor confidential documents. S. 8 directs EPA to assist in establishing Community Advisory Groups (CAGs). A CAG shall contain 20 or fewer EPA-approved voting members representing the affected community, including residents or property owners; other affected citizens; the local medical community; local Indian communities; citizen, civic, environmental, or public interest groups; local businesses; and employees at the facility. When appropriate, CAGs will include as non-voting members representatives of EPA, other Federal agencies, states, Indian tribes, local governments, facility owners, and potentially responsible parties. CAGs would serve as conduits of information to and from the community, and represent it during the remedial action planning and implementation process. CAGs may be recipients of technical assistance grants (TAGs) to obtain expert assistance in interpreting information or for training in community involvement. No more than 10 percent of a grant could be used to train citizens. As in current law, TAGs are for $50,000, but the bill allows a waiver of that limit. The bill eliminates the current law fund-matching requirement, and authorizes early disbursement to the TAG recipient in advance of the recipient's making expenditures to be covered by the grant; up to $5,000 may be advanced at a time. title iv--selection of remedial actions Under CERCLA, cleanup standards are set by looking at applicable or relevant and appropriate requirements (ARARs) of Federal and state laws. Where no ARARs exist, cleanup levels are determined using site- specific risk assessments. The law states a preference for remedies using treatment (of soil and groundwater) that permanently reduces or eliminates volume, toxicity, and mobility of contaminants. Section 401 adds two definitions to CERCLA section 101. The first new definition, ``technically impracticable,'' means impracticable due to engineering infeasibility or unreliability or inordinate costs. The second added definition, 'beneficial use,'' means the use of land on completion of a response action in a manner that confers economic, social, environmental, conservation, or aesthetic benefit. Mandate to Protect Human Health and the Environment. Section 402 requires the President to select a cost-effective remedial action that achieves the mandate to protect human health and the environment, and that complies with other applicable Federal and state laws. The bill states that, notwithstanding any other provision of this Act, a remedial action shall protect human health. The remedial action is deemed to protect human health if, considering the expected exposures associated with the current or reasonable anticipated future land and water use, and on the basis of a facility-specific risk evaluation, the remedial action: (1) achieves a residual risk from exposure to threshold carcinogenic hazardous substances such that the cumulative lifetime additional cancer risk is in the range of 10-4 to 10-6 (one in 10,000 to one in 1,000,000) for the affected population; (2) achieves a residual risk from exposure from nonthreshold carcinogenic and noncarcinogenic hazardous substances that does not exceed a hazard index of 1; and (3) prevents or eliminates any human ingestion of drinking water containing hazardous substances in excess of Safe Drinking Water Act maximum contaminant levels (MCLs), or if MCLs have not been established for the substance, at levels that meet the goals for protecting human health. Stated another way, the remedial action will ``protect human health'' if the remaining chemicals at the site are: (1) at levels unlikely to cause more than one case of cancer in a population of between 10,000 and 1,000,000 people who are exposed all their lives; and (2) below levels expected to cause any other adverse health effects in any people exposed.\4\ --------------------------------------------------------------------------- \4\ The intent is to ensure that exposure to hazardous substances is small enough that adverse health effects are either: precluded (for threshold substances that are known to be harmless at low exposure levels); or highly unlikely (for nonthreshold hazardous substances that have no known level of harmless exposure, such as many carcinogens). --------------------------------------------------------------------------- The remedial action for a facility is deemed to protect the environment if it protects plants and animals from significant impacts resulting from releases of hazardous substances at the facility. The determination of what is protective would not be based on individual plants and animals unless the species is listed as threatened or endangered under the Endangered Species Act. A remedy must comply with the substantive requirements of Federal and state environmental and facility-siting laws applicable to the conduct of the remedial action or to the determination of the cleanup level. More stringent state requirements may be applied at NPL sites if the state demonstrates that they are generally applicable and consistently applied to remedial actions, and the state publishes and identifies the applicable requirements to the President. Federal hazardous waste management provisions of the Solid Waste Disposal Act (Section 3004) do not apply to the return of ``contaminated media into the same media in . . . then-existing areas of contamination at the facility.'' Federal and state procedural requirements, including permitting requirements, shall not apply to response actions conducted on site at the facility. Waivers from the substantive requirements of Federal and state environmental and facility siting laws are authorized for specified reasons; however, the President must publish findings including documentation and an explanation of how the remedial action meets the cleanup requirements of Section 121. If no applicable Federal or state standard exists for a contaminant, a remedial action must meet a standard that the President determines to be protective. Remedy Selection Methodology. The President shall select a remedial action from among a range of alternatives by following remedy selection rules and balancing adequately the following factors: effectiveness of the remedy in protecting health and the environment; reliability in achieving the protectiveness standard over the long term (replacing the current law's preference for permanence); short-term risk posed by implementing the remedial action; acceptability to the community; implementability; and reasonableness of the cost. A remedial action that implements a presumptive remedial action is considered to achieve the goals to protect human health and the environment, balance the above factors, and account for remedy selection rules.\5\ --------------------------------------------------------------------------- \5\ Presumptive remedies are preferred technologies for common categories of sites, based on historical patterns of remedy selection and EPA's scientific and engineering evaluation of performance data on technology implementation. --------------------------------------------------------------------------- Remedy Selection Rules. In selecting a remedy for a facility, the President shall take into account the reasonably anticipated future use of land and water potentially affected by the release. In developing assumptions regarding reasonably anticipated future land uses, the President must consider the views of local officials and community members and consider specified factors. In developing assumptions regarding reasonably anticipated future groundwater and surface water uses, the President must give substantial deference to classifications in a state comprehensive groundwater protection program and consider other designations or plans adopted by the governmental unit that regulates surface or groundwater use planning in the area. The information on which the President bases the development of these assumptions must be included in the administrative record. If appropriate, a remedial action for contaminated groundwater may proceed in phases, allowing collection of sufficient data to evaluate other actions at the site, and to determine the appropriate scope of the remedial action. Groundwater decisions must take into consideration current or reasonably anticipated future use of the groundwater, any natural attenuation that would occur without action, and the effect of any other response actions. A remedial action shall seek to protect uncontaminated groundwater that is suitable for use as drinking water for such beneficial use unless it is technically impracticably to do so. For contaminated groundwater that is, or is planned to be, used for drinking, if it is technically practicable, the President shall try to restore it to a condition suitable for beneficial use. In determining technical practicability and timeframe for restoring groundwater, the President may distinguish among groundwater contamination zones at a site. For contaminated groundwater that is suitable for drinking water, a remedial action must, if technically practicable, attain in the contaminated groundwater plume and extending to the edge of any contaminant that will be managed in place, either Federal drinking water standards or state water quality standards for water designated for drinking water use, whichever is more stringent. If no standard exists, then the remedy must attain a level that is protective of human health and the environment. If restoration is technically impracticable, the selected remedy may rely on point-of-use treatment or other measures to ensure there is no ingestion of contaminated drinking water; point-of-use treatment shall be considered as part of the remedy's operation and maintenance. For groundwater not suitable for drinking water, a remedy must, if technically practicable, attain a standard that is protective of the current or future uses of the water and any connected surface water. Groundwater shall not be considered suitable for drinking water if naturally occurring conditions prevent it, or it is so contaminated by broad-scale human activity (unrelated to a facility release) that restoration is technically impracticable, or if it is physically incapable of yielding 150 gallons a day to a well or spring (unless it is currently used as drinking water). For discrete areas containing highly toxic contaminants that cannot be reliably contained or are highly mobile, and present a substantial risk to human health and the environment, the remedy selection process shall include a preference for a remedy that includes treatment. For such areas, the President may select a final containment remedy at a landfill or mining site in specified circumstances. The Administrator may not select a remedy that allows a contaminant to remain at a facility above a protective level unless institutional and engineering controls are incorporated into the remedial action that ensure protection of human health and the environment. Institutional controls are defined to mean restrictions of the permissible use of land, groundwater or surface water included in any enforceable decision document for a NPL facility to comply with the requirements to protect human health and the environment. A remedial action that uses institutional and engineering controls shall be considered to be on an equal basis with all other remedial action alternatives. EPA is required to maintain a registry of institutional controls that place restrictions on land, water, or other resources uses; and that are included in an enforceable decision document. If, after reviewing a remedy, the President finds that attaining a standard is technically impracticable, the President shall select a technically practicable remedy that protects public health and most closely achieves the cleanup goals through cost-effective means. Facility-Specific Risk Evaluations. Section 403 states that the goal of a facility-specific risk evaluation is to provide informative estimates that neither minimize nor exaggerate the current or potential risk posed by a facility. A facility-specific risk evaluation shall: (1) use chemical and facility-specific data in preference to default assumptions whenever practicable or, if this is not practicable, use a range and distribution of realistic and scientifically supportable default assumptions; (2) ensure that the exposed populations and all pathways are accurately evaluated; (3) consider current and anticipated future use of land and water resources in estimating exposure; and (4) consider the use of institutional controls. The President may consider only institutional controls that are in place at the facility when the risk assessment is conducted. This section directs that facility-specific risk evaluations be used to: determine the need for remedial action evaluate the current and potential exposures and risks at the facility; screen out contaminants, areas or exposure pathways from further study; evaluate the protectiveness of alternative proposed remedies; demonstrate that the selected remedial action can achieve the goals of protecting health and the environment and land and water resource uses; and establish protective concentration levels if no applicable requirement exists or if an applicable requirement is not sufficiently protective. The President must ensure that the presentation of health effects information is informative, comprehensive and understandable. The document reporting the results of the risk evaluation must specify each population addressed by the risk estimates, present the central estimate of risk for specific populations and the upper- and lower- bound risk estimate, identify uncertainties is the assessment process, and known peer-reviewed studies that do or do not support the health effects estimates and the methodology used to reconcile inconsistencies in the data. In preparing facility-specific risk evaluations, the President must use the best available peer-reviewed science and studies, and data collected by accepted methods. Within 18 months of enactment, the President must promulgate a regulation implementing this section. Presumptive Remedial Actions. For the purpose of streamlining the remedial action selection process, Section 404 directs EPA to establish presumptive remedial actions that: identify preferred technologies and approaches for common categories of facilities, and identify site characterization methodologies for those categories of facilities. Such presumptive remedies may include institutional and engineering controls. They must be practicable, cost-effective, and protective of human health and the environment. Within one year, EPA must issue a list of presumptive remedial actions that are available for specific categories of facilities. At least once every three years, EPA must solicit information for updating the presumptive remedial actions to incorporate new technologies or to designate additional categories of facilities. Section 404 directs the President to expedite implementation of response actions and reduce transaction costs. This is to be achieved by implementing measures to accelerate and improve the remedy selection and implementation processes, tailor the level of oversight of response actions, and streamline the process for submitting, reviewing and approving plans and other documents. The President must attempt to expedite completion of response actions through appropriate phasing of investigative and response activities. The results of initial investigations shall be used, as appropriate, to focus subsequent data collection or to develop multiple phases of a response action. The bill authorizes the President to allow a potentially responsible party (PRP) or group of PRPs to perform a response action where the President determines that the party(ies) will perform the action properly and promptly and the PRPs agree to reimburse the Fund for oversight costs. The President may tailor the level of oversight of PRP-led response actions taking into consideration specified factors. The bill requires EPA to issue guidelines identifying the contents of a draft proposed remedial action plan which must include a discussion of alternative remedies and their costs, a recommended remedy, and a summary of information used to make the recommendation including a brief description of site risks. Remedy Review Boards. EPA must establish at least one remedy review board comprised of technical and policy experts from Federal and state agencies. Within 180 days of enactment, EPA must promulgate a regulation establishing procedures for the operation of the review board including cost-based or other criteria for determining which draft proposed remedial action plan will be eligible for review. EPA may develop different criteria for different categories of facilities. The criteria shall, to the extent practical, allow for the review of not less than an annual average of one-third of the draft proposed remedial action plans. A proposed remedial action plan that meets the criteria shall be submitted to the board unless EPA determines that review by the board would unacceptably delay measures to protect human health and the environment. The Administrator shall give substantial weight to the board's recommendations in determining whether to modify a remedial action plan. The President may approve a draft proposed remedial action plan prepared by a PRP. Delisting NPL Sites. Section 405 sets procedures and timeframes for EPA to provide notice of completion of a remedial action and delisting of a facility from the NPL. Delisting does not affect liability allocations, cost-recovery provisions, or operation and maintenance obligations. A PRP is released from liability if the facility is available for unrestricted use, and operation and maintenance are not needed. If the facility is not available for unrestricted use, or operation and maintenance are required, EPA must review the status of the facility every 5 years and require additional remedial action, as needed. A facility or portion of a facility may be made available for restricted use. Transition rules for remedy review. Section 406 establishes transition rules for facilities currently involved in remedy selection. EPA is directed to use the remedy review boards to determine, on petition by the implementor of a record of decision (ROD), whether an alternative remedy should apply to a facility, rather than the one specified in the ROD. For facilities for which a record of decision (ROD) was signed before the date of enactment and that meet specified criteria, the implementor of the ROD has one year to submit to the remedy review board a petition to update the ROD to incorporate alternative technologies or approaches in the remedial action. To be eligible for review, the implementor must demonstrate that the alternative proposed remedial action meets the cleanup requirements of Section 121, the Governor does not object to consideration of the petition, the ROD was issued before certain dates, and the ROD has implementation costs in excess of $30 million (or the cost is between $5 million and $30 million, and the alternative remedy achieves at least a 50 percent cost savings). The review board must prioritize decisions to accept petitions for remedy update based on the above criteria and the potential for cost savings. In forming recommendations for remedy updates, the review board must consider the continued relevance of the exposure and risk assumptions in the original remedy, the effectiveness of the original cleanup strategy, cleanup goals, new technologies and approaches, the level of community and PRP involvement and consensus in selecting the original strategy, and other factors. The board must submit its recommendations to EPA within 180 days of receiving a petition. In deciding whether to approve a proposed remedy update, EPA is to give substantial weight to the board's recommendations. EPA must submit an annual report to Congress on the Agency's activity in reviewing and modifying RODs signed before the date of enactment of this section. In conducting remedial action reviews, EPA should give priority consideration to RODs that were issued before October 1, 1993, and that involve primarily groundwater treatment for dense, nonaquaeous phase liquids. National Priorities List. When listing a site on the NPL, EPA should not include, to the extent practicable, any parcel of real property at which no release has occurred, but to which a released contaminant has migrated in groundwater unless the groundwater is (or was) in use as a public drinking water supply, and the facility owner or operator is liable for any response costs. title v--liability Current law imposes joint and several liability on a strict and retroactive basis, covering owners and operators of sites, generators and transporters of hazardous substances released at Superfund sites, and those who arranged for disposal at those sites. It authorizes EPA to settle with PRPs, provides authority for EPA to prepare non-binding allocations of responsibility, and has special settlement provisions for de minimis parties. EPA may use mixed funding, and may provide settling parties protection from third party lawsuits and covenants not to sue. The bill defines ``codisposal landfills'', ``municipal solid waste'', ``municipality'', and ``sewage sludge''. A codisposal landfill is one that was listed on the NPL as of January 1, 1997; received municipal solid waste or sewage sludge (MSW or SS); and also may have received, before the effective date of RCRA subtitle C requirements,\6\ hazardous waste, if the landfill contains predominantly MSW or SS that was transported to the landfill from outside the facility. --------------------------------------------------------------------------- \6\ Subtitle C of the Resource Conservation and Recovery Act address the generation, handling, treatment, storage, and disposal of hazardous waste; for most purposes, its effective date was November 19, 1980. --------------------------------------------------------------------------- Title V would exempt from liability for any response costs incurred after the date of enactment the generator, arranger, and transporter of MSW and SS. De micromis contributors are exempt from liability for response costs incurred after enactment unless the material contributed or may contribute significantly to the amount of response costs; a de micromis contribution is less than 200 pounds or 110 gallons of material containing a hazardous substance prior to January 1, 1997. Also exempt from liability is any small business with fewer than 30 employees, or less than $3 million in annual gross revenues. For generators, transporters, and arrangers there is no liability for response costs incurred after enactment for codisposal landfills. For the owners and operators of codisposal landfills, the situation is different, and depends on whether the owner or operator is private or a municipality, and if the latter, on its size. Large and small municipalities are defined as those with populations above and below 100,000 respectively. For a codisposal landfill that is owned or operated only by small municipalities, and is not subject to RCRA subtitle D \7\ criteria, the aggregate liability of the municipalities for response costs incurred after enactment shall be the lesser of (a) 10 percent of the total response costs, or (b) the cost of complying with RCRA subtitle D (as if the facility had continued to accept MSW through January 1, 1997). For large municipalities, their aggregate liability would be the lesser of 20 percent of the total response costs, or the RCRA subtitle D compliance costs. --------------------------------------------------------------------------- \7\ RCRA subtitle D addresses non-hazardous wastes. --------------------------------------------------------------------------- For codisposal landfills owned or operated by non-municipalities, and that are not subject to RCRA subtitle D, the liability would be the lesser of 40 percent of the total amount of response costs, or the costs of complying with RCRA subtitle D. For codisposal landfills owned or operated by a combination of small and large municipalities, or persons other than municipalities, and are subject to RCRA subtitle D, the allocator shall determine the proportion of the use of the landfill that was made by small and large municipalities and persons other than municipalities, and shall allocate among them an appropriate percentage of total liability not exceeding the aggregate liability percentages stated. For a codisposal landfill that is subject to RCRA subtitle D, regardless of the status of the owners and operators, the aggregate liability is no more than the costs of complying with RCRA subtitle D. The codisposal landfill exemption does not apply to one who acted in violation of RCRA subtitle C or D if the violation pertains to a hazardous substance that caused the incurrence of response costs at the facility. A responsible party who currently is subject to a section 106 administrative order or has entered into a settlement decree is required to fulfill his obligations, even if the responsible party is not liable by reason of a liability exemption or limitation. The party may apply to the Fund for contribution, and shall be reimbursed expeditiously. The bill replaces the de minimis settlement provisions of section 122 with a provision establishing expedited settlement procedures for parties that contributed less than 1 percent of the volume of material containing a hazardous substance at an NPL site. It provides that any such settlement will be final if the settling party pays a premium of not to exceed 10 percent of the amount of the settlement. The bill would establish a mandatory, non-binding allocation process for multi-party sites where response costs are incurred after enactment. Excluded from the allocation process are facilities where cost shares are already determined. The bill excludes from liability relief any party found guilty of violating Federal or state law resulting in the release of a hazardous substance which caused the incurring of response costs at the facility. The bill sets a moratorium on litigation until 120 days after the allocator's report is issued. The bill would require that each allocation be performed by a neutral third-party allocator in a fair, efficient, and impartial manner. The allocator is to make every effort to streamline the process and minimize costs. Prior to issuing a final allocation report, the allocator shall give each party opportunity to comment on a draft. The actions of the allocator would not be subject to judicial review. Within 90 days of enactment, the bill requires EPA to establish a process for the expedited selection and retention of a neutral allocator. The EPA Administrator or the Attorney General shall participate in the allocation process as the representative of the Fund from which any orphan share shall be paid. Allocators are authorized to acquire reasonable support services, and the Administrator may not limit the discretion of the allocator in the conduct of the allocation. The Administrator begins the allocation process for a facility by performing a comprehensive search for all potentially responsible parties. The allocator is required to allow each of these parties at least 30 days to name additional potentially responsible parties and provide supporting information. These parties will be included on the list of allocation parties unless there is no basis to believe they are liable. Any party assigned a zero share in the allocator's final report, however, will be entitled to recover its costs of participating in the process, including attorney's fees, from the person who submitted its name. The allocator is required to provide a written final allocation report to the Administrator and each allocation party specifying the percentage share of each party and any orphan shares. The allocator shall allow the parties 60 days to reach a voluntary settlement, and shall adopt any such settlement in lieu of issuing an allocation report if it allocates at least 95 percent of the recoverable costs of response action and contains the terms and conditions generally applicable to allocation settlements. The allocator shall prepare a nonbinding allocation report that specifies the percentage share of each party, and any orphan share. The factors for allocation are: the amount, degree of toxicity, and mobility of hazardous substances contributed by each party; the degree of involvement of each party; the degree of care exercised with respect to hazardous substances; the cooperation of each party in contributing to any response action, and in providing complete and timely information to the allocator; and such other equitable factors as the allocator determines are appropriate. The orphan share consists of: (1) the shares of insolvent or defunct parties; (2) the remainder of any share not paid by a party where: (i) it was an expedited settlement with a person with limited ability to pay; (ii) the party's share is eliminated, limited, or reduced by any provision of this Act; or (iii) the person settled with the U.S. before the allocation was completed. Unattributable shares will be distributed among the allocation parties and the orphan share in accordance with the allocated share assigned to each. The allocator has information-gathering authorities, including the authority of the President under section 104(c) and authority to issue subpoenas. Information submitted to the allocator is to be kept confidential by all persons involved in the allocation and is not discoverable (if not independently discoverable or admissible) in judicial or administrative proceedings. The submission of information to the allocator does not constitute a waiver of any privilege under any Federal or state law. The Administrator and the Attorney General may jointly reject a report by an allocator if they determine, not later than 180 days after the Administrator receives the report, that no rational interpretation of the facts would form a reasonable basis for the shares assigned to the parties, in light of the factors required to be considered, or that the allocation process was directly and substantially affected by bias, procedural error, fraud, or unlawful conduct. If a report is rejected, the allocation parties shall select an allocator to perform a new allocation based, to the extent appropriate, on the record available to the previous allocator. Unless a report is rejected, any party at a mandatory allocation facility shall be entitled to resolve its liability to the United States if it offers to settle on the share specified by the allocator within 90 days of issuance of the allocator's report. The terms of such settlements shall provide authority for the Administrator to require any allocation party or group of parties to perform the response action, and shall include i) a waiver of contribution rights against all potentially responsible parties; ii) a covenant not to sue and provisions regarding performance or adequate assurance of performance of the response action; iii) a premium not to exceed 10 percent to cover the risk of the United States not collecting unrecovered response costs; iv) complete protection from all claims for contribution; and v) provisions for prompt contribution from the Fund for any response costs incurred in excess of the party's allocated share. The bill provides that an allocation party that incurs response costs after the date of enactment to an extent that exceeds its allocated share shall be entitled to prompt payment of the excess amount from the Fund, reduced by an amount not exceeding the litigation risk premium. The bill includes specific provisions concerning the timing of any such payment, failure to perform work, auditing of claims, and waiver of contribution rights from other responsible parties. If funds are unavailable in any fiscal year to provide contribution to all eligible allocation parties, the Administrator may delay payment until funds are available. The priority for payment shall be based on the length of time that has passed since settlement. Delayed payments shall include interest on the unpaid balance at a rate equal to that of the current average market yield on outstanding marketable obligations of the United States with a maturity of 1 year. If a party does not pay its allocation share within 120 days of the allocator's report, EPA may commence an action to recover response costs not recovered through settlements with other parties. Parties that do not pay their allocation share are subject to the joint, several, strict, and retroactive liability of section 107. The cost of implementing the allocation process and the funding of orphan shares shall be considered necessary response costs under Superfund. Response action contractors (RACs) would receive additional liability protection by being excluded from the definition of owners and operators, and by extending their existing exemption from Federal law to state law. RAC negligence would be evaluated based on the standards and practices in effect at the particular time and place. Subcontractors are also covered. The liability of ``501(c)(3) organizations'' (religious, charitable, scientific and educational organizations) that receive a facility as a gift, would be limited to the fair market value of the facility. The bill relieves the liability of a railroad owner or operator of a spur track if he is not responsible for a release. The bill provides an exemption from liability for those who arrange for the recycling of seven specified materials if they can meet certain threshold demonstrations. The seven materials are paper, plastic, glass, textiles, rubber (other than whole tires), metal, and batteries. title vi--federal facilities Current law makes Federal agencies subject to CERCLA in the same way as other parties. The agencies must pay for cleanup of their facilities out of their appropriations; they are not eligible to use any Superfund moneys. Cleanups of federally owned sites on the NPL are under the sole jurisdiction of Federal environmental laws; federally owned sites not on the NPL are subject to state law concerning removal, remedial action, and enforcement. Title VI authorizes EPA to transfer responsibilities over federally owned NPL sites to qualified states. To receive authority over a site, a state must have an adequate environmental enforcement program, utilize CERCLA's remedy selection process and standards, and abide by the terms of any existing interagency agreement between EPA and the Federal agency that owns the site. The President may take enforcement action at such a transferred site if the state requests it, or if EPA obtains a declaratory judgment in U.S. district court that the state has failed to make reasonable progress and there is an imminent threat of exposure to hazardous substances. A Federal officer, employee, or agent may not be held criminally liable for failing to comply with a state order to take a response action at a federally owned or operated site, unless: (1) he has not fully performed his duties to ensure that a sufficient request for funds to undertake the response action was included in the President's budget, or (2) appropriated funds were available to pay for the response action. The President may designate Federal facilities on the NPL for research, development, and application of innovative technologies by Federal and state agencies, and public and private entities. EPA may approve or deny the use of any innovative technology at a Federal site. title vii--natural resource damages CERCLA makes the Federal and state governments trustees for natural resources; claims against responsible parties must be made within 3 years after the later of (1) discovery of the loss, or (2) the date on which regulations are promulgated. The bill would limit the measure of damages for injury or loss of natural resources to the costs of restoration, replacement, or acquisition of equivalent natural resources, and the costs of assessing damages. The bill eliminates non-use damages, and claims for lost-use activities that occurred prior to December 11, 1980; there can be no double recovery under both CERCLA and other law. Nor can there be recovery if the natural resource has returned to its baseline condition before the filing of a claim for natural resource damages, or the incurrence of assessment or restoration costs by a trustee. The bill strikes the provision which gives a trustee's determination of damages the force and effect of a rebuttable presumption. New natural resource injury and restoration assessment regulations must be written that identify procedures for determining the reasonable cost of restoration, and that require consideration of natural recovery as a restoration method, and the availability of replacement or alternative resources. The regulation shall be issued within 2 years of enactment, and be reviewed every 5 years. Under the bill, the goal of any restoration shall be to restore the injured natural resource to the condition it would have been in had the hazardous substance release not occurred. A trustee shall select a restoration alternative that is technically feasible, in compliance with applicable law, consistent with CERCLA and the National Contingency Plan, cost-effective, and timely. The range of alternatives considered by the trustee shall consider an alternative that relies on natural recovery. In selecting a restoration alternative, the trustee shall take into account what any removal or remedial action carried out or planned has accomplished or will accomplish. A restoration alternative may include temporary replacement of the lost services provided by the natural resource. A responsible party may seek contribution from other liable persons for natural resource damages. The bill proposes that where the trustees and PRPs have entered into a cooperative agreement, the period in which an action for damages may be brought would be the earlier of 6 years after the signing of the cooperative agreement, or 3 years after the completion of the damage assessment. A trustee seeking damages for injury to a natural resource shall initiate mediation of the claim with any PRPs within 120 days after commencing the action for damages. The amendments made by this title shall not apply to an action to recover natural resource damages under section 107(f) in which trial has begun before July 1, 1997, or in which a judgment has become final before that date. title viii--miscellaneous Section 801 amends section 105(a) of CERCLA to require the President to revise the National Hazardous Substance Response Plan (a part of the National Contingency Plan) to establish results-oriented procedures for remedial actions that minimize the time required and reduce the potential for exposure to hazardous substances in a cost- effective manner. Section 802 amends section 105 of CERCLA to limit additions to the National Priorities List to 30 vessels and facilities in 1997, 25 in 1998, 20 in 1999, 15 in 2000, and 10 in any year after 2000. EPA shall prioritize the vessels and facilities on a national basis in accordance with the threat they pose to health and the environment. Additions to the list may be made only with the concurrence of the Governor of the state in which the vessel or facility is located. Section 803 increases the authority for emergency response actions from $2 million to $4 million, and the time limit from 1 year to 2. title ix--funding Section 901 amends CERCLA section 111 to authorize appropriations from the Fund of $8.5 billion for the 5-year period, fiscal years 1998 to 2002. Section 902 amends CERCLA section 111 to allow payment of orphan shares as a use of the Fund. Section 903 amends CERCLA section 111 to authorize appropriations from the Fund for the activities of the Agency for Toxic Substances and Disease Registry of $50 million for each of fiscal years 1998-2002. Section 904 sets limits for FY 1998-2002 of $30 million per year for alternative or innovative technologies research, development, and demonstration programs; for hazardous substance research, demonstration and training, $37 million for FY 1998, $39 million for FY 1999, $41 million for FY 2000, and $43 million each year for FY 2001 and FY 2002, with no more than 15 percent of those amounts to be used for training; and $5 million annually for university research centers. Section 905 authorizes appropriations from General Revenues of $250 million annually for fiscal years 1998-2002. Section 906 limits funding for Community Action Groups to $15 million for the period from January 1, 1997, to September 30, 2002. The section also specifies that any response cost recoveries will be credited as offsetting collections to the Superfund appropriations account. Section 907 amends CERCLA section 111(a) to allow the Fund to be used to reimburse PRPs if a PRP and EPA have entered into a settlement under which the Administrator is reimbursed for response costs, and the Administrator determines (through a Federal audit) that the costs are unallowable due to contractor fraud or the Federal Acquisition Regulation, or should be adjusted due to audit procedures. ______ Prepared Statement of the American Petroleum Institute The American Petroleum Institute (API) has long supported reform of the Superfund program. API members believe that S. 8, the ``Superfund Cleanup Acceleration Act of 1997,'' incorporates many important and necessary reforms to the program. As we have previously stated, the petroleum industry has a unique perspective with regard to Superfund. Petroleum-related businesses are estimated to be responsible for less than 10 percent of the contamination at Superfund sites; yet these businesses have historically paid over 50 percent of the taxes that support the Trust Fund. This inequity is of paramount concern and should be rectified forthwith. It has caused API members to focus on those elements of reform that affect the costs of the program and the authorized uses of the Trust Fund. API members are pleased that the Senate bill would reduce the number of sites to be added to the NPL in the future and commend the sponsors for taking this important step. Limiting new additions to the NPL ensures a more reasoned, cost-efficient, and focused Federal program with reduced future funding requirements. Once again, we urge subcommittee members to add provisions to the bill limiting the Federal program to emergency removal actions at newly discovered sites. The following sections of this testimony provide specific comments on remedy selection, state roles, liability/funding reform, natural resource damages, used oil recycling, as well as exploration and production wastes. Additional comments on various provisions contained in S. 8 are outlined in an attachment to this testimony. We--and other stakeholders--have had limited time to review the revisions to S. 8; thus, this testimony represents our initial reactions. As we develop other comments, we will forward them to you. remedy selection reform API members continue to support remediation standards that are site-specific and risk-based and are pleased that provisions in the bill would establish requirements for facility-specific risk evaluations to determine the need for remedial actions and to evaluate the protectiveness of remedial actions. However, it should be made clear that the President is required to use the results of risk assessments in selecting the appropriate remedy. API members believe that the remediation process should provide protection of human health and the environment through methods that are practical and achievable in a cost-effective fashion. The remedy reform measures contained in the S. 8 largely reflect these attributes, and API members endorse many of the approaches taken in the bill. As noted in our previous testimony, API members support the provisions in S. 8 that would: Establish a protective risk range of 10-4 to 10-6 for all remedies; Establish facility-specific risk evaluations; Establish the reasonableness of cost as a remedy selection criterion; Give consideration to reasonably anticipated future land and water use; and Consider all remedial alternatives on an equal basis, including engineering and institutional controls. API also endorses the use of the remedy selection balancing criteria and is pleased to see that the Chairman's mark maintains the reasonableness of cost as a remedy selection criterion. The balancing criteria are the keystone of the remedy selection process, and API believes that all remedy selection procedures and applications, including groundwater remediations, should be subject to them. API has several serious concerns with the bill, and these are outlined below. Preference for Treatment. API is concerned that the bill's proposal to maintain a preference for treatment for some discrete areas containing hazardous substances is inconsistent with the overriding principles of remedy selection (e.g., facility-specific risk assessments and the balancing of environmental and economic factors). There should be no generic preference for treatment, and this section of the bill should be deleted. The need for treatment should be determined on a site-specific basis for each facility using the balancing criteria and the risk assessment procedures. Presumptive Remedies. The bill would allow EPA to select presumptive remedial actions without allowing a PRP the opportunity to select more cost-effective and protective remedies. A PRP should be able to conduct a risk-based response action in lieu of a presumptive remedy. The inequity of this situation is compounded by the fact that presumptive remedies are subject to neither traditional rulemaking procedures nor judicial review. API members believe that stakeholders must have an opportunity to review and comment on such remedies and that there must be an opportunity for judicial review. Applicable Federal and State Laws. The bill would also allow the use of ``applicable'' Federal and state laws and state standards in selecting remedial alternatives. We continue to hold the view that ``applicable'' laws should be subject to the balancing factors; otherwise, there will be diminished savings, increased costs, and little appreciable benefit to human health and the environment. Clearly, the Fund should pay for remediation only when applicable laws have been subject to remediation requirements including the balancing criteria and the risk assessment procedures. Technical Impracticability. The consideration of technical impracticability in remedy selection and groundwater is poorly defined. Factors for determining technical impracticability need to be made clear. The bill should clearly specify the timing constraints on such determinations, and the concept of ``inordinate costs'' as included in the definition of technical impracticability should be defined. Moreover, there is no opportunity in the statute for PRPs to participate in the technical impracticability decision through public notice and comment. Establishment of Standards. If no applicable Federal or State standard has been established for a specific hazardous substance and pollutant and contaminant, the bill gives the President broad authority to establish such standards. Current laws define the process for developing such standards, and this bill should not undermine the established process. We believe that generic cleanup standards are unnecessary and that remediation should be determined by site-specific risk evaluations. Most importantly, any requirement to adopt standards should not be granted without a requirement for public review and comment. Groundwater. We find the bill's groundwater provisions to be troublesome and confusing for a variety of reasons. First, it needs to be made clear that the requirement to protect and restore groundwater is subject to the balancing criteria and the risk assessment procedures. The reasonableness of cost must be considered when selecting a groundwater protection remedy. The Chairman's mark would allow only inordinate costs caused by technical impracticability to be considered. Second, remedial actions for contaminated groundwater are required to attain ``a standard'' that is protective of the current or reasonably anticipated use of the water. Once again, the term ``standard'' is not clearly defined, and API is opposed to the establishment of generic cleanup standards for groundwater and other media without due process. Third, the bill would require restoration of contaminated groundwater to meet maximum contaminant levels or state drinking water standards throughout the groundwater plume. Such a requirement would be very difficult--if not impossible--to attain and would be achieved only at great expense. Cleanup of contaminated groundwater should be based on a reliable risk analysis and the balancing of environmental and economic factors. Finally, as drafted, the preference for treatment appears to apply to groundwater remediation as well as remediation on land. Given the difficulty of groundwater treatment, it must be made clear that the preference for treatment does not apply to groundwater remediation. state roles API members support the bill's provisions that would delegate Superfund remedial authority to states at non-Federal NPL sites. However, we have concerns about the bill's State authorization provisions. While delegated States must implement provisions of the bill, there is not a similar provision for authorized States. Presumably, authorized States could ignore the remedy reform contained in S. 8 as long as the State cleanup program met the extremely general standard of protecting human health and the environment. Authorized State cleanup programs should be implemented in accordance with the reformed Federal program. Additionally, the bill appears to allow authorized States to apply more costly remedies at NPL sites and to recover the additional costs. States applying more stringent remedies should not be able to recover incremental costs from PRPs, other agencies, or the Fund. liability/funding reform API member companies support liability reform. Reform in this area will expedite cleanups and reduce transaction costs. Clearly, under current law, too much money is wasted on high legal costs. However, as an industry that has borne a highly disproportionate share of the taxes that support the Trust Fund, the petroleum industry is concerned about the impact that any liability changes would have on program costs. We continue to question the cost of the liability exemptions outlined in S. 8. For example, under the liability provisions, the Fund would pick up orphan-share costs as well as post-enactment response costs at co-disposal landfills for generators, transporters, and arrangers who contributed wastes prior to January 1, 1997. Moreover, municipal owners'/operators' and others' liability for response costs under Superfund and any other Federal or State statute would be capped at such landfills. In addition, de micromis, de minimus parties and others would be exempt. These provisions are far too broad and the costs to the Fund are not known, but they are likely large. We need to understand whether the cost savings associated with the remedy selection and the administrative-process provisions are sufficient to offset the additional costs arising from the shift in liability from PRPs to the Fund or, whether the program as envisioned under S. 8, would place increased demands on the Fund. Taxpayers to the Fund--which is expected to cover most of the future costs of the Federal Superfund program--need to know these cost implications to evaluate legislation. Without substantial reform of the underlying Superfund program and the tax system supporting the fund, API opposes authorization of any Superfund taxes. It is critical that Congress restructure the taxes that support the Fund. Superfund sites are a broad societal problem, and taxes raised to remediate these sites should be broadly based rather than focused on a few specific industries. EPA has found wastes from all types of businesses at most hazardous waste sites. As consumers, as residents of municipalities, and as residents and taxpayers of a nation, our entire economy benefited in the pre-1980 era from the lower cost of handling waste. To place responsibility for the additional costs resulting from retroactive CERCLA cleanup standards on the shoulders of a very few industries when previous economic benefits were widely shared is simply unfair. The additional costs to the Fund from exempting parties from liability must be offset by other reform measures including remedy selection reform. natural resource damages (nrd) API is an active member of the Coalition for Legislative NRD Reform and strongly supports the coalition's positions and the testimony they are submitting. While the bill would favorably repeal liability for non-use values, API members are extremely concerned by the bill's failure to require de novo trials of NRD cases and to distinguish the objective of restoration from remediation. The focus of the bill should be on restoring the functions of natural resources that were committed to public use at the time of the injury. used oil recycling The bill exempts recyclers of scrap glass, metal, paper, plastic, rubber, textiles and spent batteries from liability; however, used oil recycling is noticeably absent from the list. If the Senate is intent on maintaining recycling exemptions, API members feel strongly that used oil recycling, including used oil filters, should be exempt as well. Adding used oil and used oil filters to the list of recyclable materials encourages recycling of these valuable commodities. exploration and production waste As noted in our testimony of March 5, 1997, API believes that the exploration and production waste language in the law needs clarification. Some court opinions have misinterpreted congressional intent to exempt high volume, low-toxicity wastes, which EPA has determined do not need to be treated as hazardous wastes. API continues to urge Congress should clarify that these wastes are excluded under Superfund. conclusion In summary, API commends members of the subcommittee for their continuing efforts to develop meaningful Superfund reform. However, we believe our concerns must be addressed if the Superfund process is to be truly reformed. The cost constraining measures contained in S. 8 are fundamental, and any weakening of these provisions may jeopardize Superfund reauthorization. We believe it is important that the reauthorization process continue, and we look forward to working with subcommittee members to accomplish this goal. additional comments Protection of Human Health The bill says that a remedial action shall be considered to protect human health if a residual risk from exposure to threshold carcinogenic and noncarcinogenic hazardous substances does not exceed a hazard index of 1. This is overly prescriptive. API recommends using the wording ``shows no appreciable risk of deleterious effects'' as opposed to a specific index number. State Applicable Standards The bill allows for the application of more stringent state standards. States should have the flexibility to impose--where appropriate--less stringent state standards. Waiver provisions are established where the Administrator determines that it is not appropriate for a remedial action to attain a Federal or state standard. Historically, waivers have been difficult to obtain. Rather than being established as conditions for a waiver, these provisions should be set out as conditions where Federal and state standards would not apply. New state laws that may create standards with general applicability should be subject to a rulemaking process. Contaminated media is exempt from the substantive provisions of section 3004 of RCRA. Since many states are authorized to implement these provisions, the exemption should also apply to state corrective action requirements. Land and Water Use Considerations In determining reasonably anticipated future land use, EPA should consider the views of the broadest spectrum of stakeholders including facility owners and operators as well as potentially responsible parties. Facility owners and operators should be listed among those whose views are to be considered regarding reasonably anticipated future uses. In determining reasonably anticipated future use of water resources, the bill requires EPA to give substantial deference to classifications and designations in State groundwater protection programs. API agrees that State classifications are important, but we also believe additional factors should be considered (e.g., current water uses, recent development patterns, population projections, as well as the plans of the owner/operator of the facility). Groundwater The bill would require protection of uncontaminated groundwater and restoration of contaminated groundwater that is suitable for use as drinking water. The bill needs to make clear that the requirements are applicable only to drinking water used for human consumption. API endorses provisions that would give consideration to reasonably anticipated future land and water use. However, we are concerned that in considering reasonably anticipated future use, EPA may consider the potential for ``beneficial use'' which encompasses conservation and aesthetic benefits. The consideration of these speculative factors is troublesome and could lead to requirements to remediate all groundwater. Judicial Review Provisions should be made that would allow pre-enforcement judicial review. Risk Assessments The bill establishes requirements for facility-specific risk evaluations. Such requirements are supported by API members. The bill should be clarified to require that facility- specific risk assessments be used in selecting the remedy. The bill should also include language to clarify that facility-specific risk evaluations are tiered. A full risk assessment may be unnecessary at every site. Additionally, the bill should make clear that PRPs have the right to conduct risk assessments in authorized or delegated states. ROD Reopeners API supports the concept of reviewing proposed remedies and previously negotiated RODs as expressed in the bill. However, qualifications for members of the remedy review board and PRP participation must be clarified. Future Use of a Facility The bill provides that a facility deemed suitable for unrestricted use would be subject to no further liability while a facility available for limited use would be reviewed every five years and potentially required to conduct additional remedial action. A facility available for reuse of any type should be subject to no further liability or review; otherwise the bill may have a negative impact on brownfield programs. Brownfields The bill does not explicitly release owners, sellers, or buyers of brownfield properties from liability. This will result in impediments to recovery of such properties for re-use. Community Participation Section 301 defines an affected community to be a group of two or more individuals who may be affected by the release or threatened release of a hazardous substance. The definition of affected community should be limited to persons living within some reasonable proximity to a site. The local community and its advisory group should be required to submit comments on remedy selection in a timely manner. The process for selecting facility employees for community advisory groups should be determined by the facility. Federal Facilities Federal employees, who fail to take or comply with response action requirements, will not be subject to criminal liability unless they have failed to ensure that sufficient funds were available in the President's budget. This provision should be deleted. Criminal prosecution under environmental laws requires the government to prove criminal intent. ______ Prepared Statement of the American Public Health Association and the National Association of County and City Health Officials The following statement is submitted on behalf of the American Public Health Association (APHA) and the National Association of County and City Health Officials (NACCHO). APHA represents a combined national and affiliate membership of more than 50,000 health professionals. NACCHO is the principal organization representing local public health officials and serves all 3000 of the nation's local health departments--in cities, counties, and townships. The statement explains why Superfund is a public health program and urges the committee to keep public health issues in the forefront as it considers reauthorization of this program. superfund is a public health program The underlying purpose of Superfund is to prevent disease and disability due to toxic exposures. Human exposures to toxic substances have many potential adverse health outcomes, including neurological damage, birth defects, and cancer. Preventing the exposure of entire communities to potentially devastating health consequences is no less important than protecting people from infectious diseases such as polio or diphtheria, or protecting them from food poisoning. Identifying potential health hazards and cleaning up hazardous waste sites are just as important in protecting public health as vaccinating children or requiring safe food processing. Public health does not concern itself solely with the health of individuals. It encompasses a much broader concept of community health and well-being. Public health practice is a comprehensive approach to ensuring that individuals and communities remain healthy--this means tracking the occurrence of disease, providing health care services, identifying and addressing hazards before they cause damage, and educating the public about how to prevent disease and injury. Public health involvement in Superfund site assessment and remediation has been built into the program from the beginning, primarily through the activities of the Agency for Toxic Substances and Disease Registry. However, the full potential of public health approaches to improve the efficiency and effectiveness of Superfund has never been fully realized. To achieve this potential, the Superfund program must require early, strong, and meaningful involvement of public health agencies and experts at local hazardous waste sites, beginning at site discovery. public health participation is essential in addressing hazardous waste sites Public health experts, Federal, state and local, must be engaged actively at the earliest stages of the Superfund process. When a hazardous waste site is identified in a community, everybody has questions and concerns. Responding to these requires collection of the proper kinds of data using the most appropriate scientific methods and practices. Public health assessments, using the best epidemiologic and toxicological methods and data available, serve two important purposes. First, they alert all the parties to what the key public health problems are. Second, they can alleviate many concerns by ruling out health problems that are unrelated to the site. When a hazardous waste site is identified, there is a window of opportunity for establishing baseline health and exposure data, understanding potential health risks, and developing plans for remediation that specifically address those health risks. This window often is closed before public health expertise has been tapped. Early involvement by public health experts assures that public health needs will determine the priorities for clean-up. Early public health involvement will improve the ultimate outcome of Superfund site clean-ups in achieving and documenting better public health outcomes and sustaining healthy communities. Public health involvement must extend to off-site activities as well. For instance, testing of air, water, and soil in nearby locations is necessary to identify more precisely which neighbors of a hazardous waste site may be subjected to toxic exposures, and which are not. This is important also in addressing the interactive effects of exposures to a community through air, water, and soil contamination, whether or not all such contamination is attributable to the site itself. Local public health agencies, which often are left out or brought in late in the Superfund process, are ideally situated to spearhead early public health involvement in hazardous waste sites. They bring a critical local perspective to a process that is largely governed by state and Federal agencies. They can provide an immediate response to imminent hazards. For instance, a local health department can promptly arrange a safe drinking water alternative where there is suspected drinking water contamination around a hazardous waste site. The Superfund statute requires action by Federal and state agencies that is largely confined to the sites, with little flexibility to address community problems and concerns. Local health agencies, which have no statutory authority related to the Superfund process, have responsibility and expertise for protecting the health of the community and addressing the community's health concerns. They know the demographic and cultural characteristics of the community and they know the other health problems of the community. This knowledge, and the relationships that have been cultivated by addressing other community health issues, can be critical when dealing with the myriad problems caused by a hazardous waste site. community involvement is integral to a public health approach Community involvement is necessary not only because the Superfund process is intended to protect the community, but also because communities can offer extremely valuable information and assistance. Residents have knowledge that nobody else has. They know how a site has been used in the past, who lived near the site, and who has moved away. This information is essential to the conduct of studies that help us understand both the short-term and long-term health effects associated with a hazardous waste site. For example, in Michigan City, Indiana, a partnership between the local health department and a minority health coalition uncovered exposures to contaminated game and fish by an African-American community that hunted and fished for food. Community participation in Superfund processes also helps the public better understand what has taken place at the site, what will be done about it and what it means for their health. The Presidential/ congressional Commission on Risk Assessment and Risk Management strongly recommends including all stakeholders in environmental risk management decisions at the earliest possible time. Information builds trust and support within the community and helps individuals affected by toxic exposures to take appropriate steps to protect their own health. A successful and efficient Superfund clean-up process is one that avoids frustration, stalemates, and delays due to poor communication and misunderstandings. It is one that creates a sense of ownership and shared responsibility in the entire community, including residents, community organizations, health professionals, and elected officials. It is one that employs to best advantage all the community's resources in cleaning up the site to protect public health. superfund must support the use of public health tools. Data collection, research, ongoing disease surveillance, and health education must be adequately supported to enable Superfund to achieve its purpose of protecting the health of communities. The Agency for Toxic Substances and Disease Registry (ATSDR) is the cornerstone of public health in the Superfund program, in partnership with state and local health departments, the National Institute for Environmental Health Science, and universities. Within the limits of the resources available to it, ATSDR has performed well. Local and state public health departments that have used ATSDR's technical expertise in addressing hazardous waste sites in their communities have a high regard for its work. ATSDR has also invested in building the capacities of state and local health departments to respond to hazardous waste issues, thus increasing our nation's ability to meet public health concerns related to hazardous waste. However, health departments, physicians and other health care providers in communities around Superfund sites have a significant unmet need for training and technical assistance in matters of hazardous substances. In order to do its job better, ATSDR also needs expanded authority and flexibility in conducting site-specific public health assessments, health studies, surveillance and registries. ATSDR's various activities complement each other and work together to enable Superfund site activities to address adequately the health needs of communities. Superfund reforms must provide expanded support for ATSDR. For further information, please contact: Ilisa Halpern, American Public Health Association; Donna Grossman, National Association of County and City Health Officials. ______ Prepared Statement of John H. Sullivan, Deputy Executive Director, American Water Works Association introduction The American Water Works Association (AWWA) appreciates the opportunity to present its views on Superfund Reauthorization and S. 8, The Superfund Cleanup Acceleration Act of 1997). AWWA is the world's largest and oldest scientific and educational association representing drinking water supply professionals. The Association's 54,000 plus members are comprised of administrators, utility operators, professional engineers, contractors, manufacturers, scientists, professors and health professionals. The Association's membership includes over 3,800 utilities which provides over 80 percent of the nation's drinking water. Since our founding in 1881, AWWA and its members have been dedicated to providing safe drinking water. AWWA believes few environmental activities are more important to the health of this country than assuring the protection of water supply sources, and the treatment, distribution and consumption of a safe and healthful supply of drinking water. AWWA strongly supports measures which protect groundwater from contamination and the remediation of drinking water sources from groundwater. AWWA urges the committee to include groundwater remedy standards at least as protective as current law in the Superfund reauthorization bill. AWWA commends Senator Chafee and Senator Smith for their leadership in moving the legislative process forward by introducing S. 8 and holding hearings on Superfund Reauthorization. AWWA supports superfund reforms which will streamline the process, resolve the liability issues which are preventing clean-up and effectively remediate contaminated sites. However, AWWA is concerned that Superfund reforms adequately protect public health and preserve our water supplies for future generation. In this statement, AWWA will focus on groundwater protection and remediation; however, many of the issues presented also apply to surface water. Groundwater Groundwater is one of the most finite natural resources of this country. It is valuable, not only as an ecological resource, but is also the only source of drinking water for millions of Americans. Approximately 100 million Americans use groundwater from community public water systems. Another 20 million consumers get their drinking water from private wells which are fed by groundwater. Increasingly, public water suppliers throughout the country are closing down wells dues to pollution. The most recent highly publicized case is in San Bernardino, California, where some of the city wells had to be closed because of ammonium perchlorate contamination--a rocket fuel contaminant that is not regulated under the Safe Drinking Water Act (SDWA). Another chemical not regulated under the SDWA, MTBE (methyl-t-butyl ether), which is an additive to gasoline to comply with the Clean Air Act is now being found increasingly in groundwater. MTBE, because a small amount produces a foul taste, renders groundwater unfit to drink at levels far below a level which would pose a health threat. These incidents illustrate how vulnerable groundwater is to contamination, not only from highly toxic and mobile concentrations of pollutants, but also from lower levels of contamination. Much of the cost of obtaining alternative supplies of drinking water or installing expensive treatment facilities has been borne by the drinking water consumer rather than the those responsible for the pollution. AWWA urges the committee to address this inequity in the cost of cleanup and provide cleanup standards that will make groundwater fit for use as a drinking water source, where practicable, and prevent further contamination of uncontaminated groundwater (or surface water) in Superfund reauthorization. Clean Up Standards While it is recognized that Superfund reform needs to provide flexibility for effective remediation, there is concern that the elimination of ``applicable and relevant appropriate requirements'' (ARARs), such as the standards promulgated under the Safe Drinking Water Act, from the law for use in cleanup standards may not provide for protection and remediation of drinking water source supplies. Other ARARs could be used to address contaminates that are not regulated under the SDWA. Retention of the use of ARARs would provide a means of determining specific cleanup actions and standards. Remedies such as attenuation and biodegradation alone cannot be used to satisfy cleanup standards unless it occurs in a relatively short period of time. AWWA strongly urges the committee to retain stringent cleanup standards for groundwater (and surface water). Costs and Benefits AWWA supports the concept of using costs and benefits in implementing environmental statutes. However, AWWA is concerned that the value of groundwater both at the time of remediation and in the future be given high priority in these decisions. The reasonableness of cost alone in determining the technical practicability of a cleanup could potentially block the cleanup of a water supply even if there is a need for the water for drinking water purposes. The value of groundwater as a future drinking water source must be taken into consideration even if it is not used as a drinking water source at the time of remediation. Naturally occurring contamination should not be used as a sole factor in determining the suitability of groundwater as a drinking water source. Clean up of contaminants that do not naturally occur in the groundwater still should be required. AWWA urges the committee to require formal consultation with local public water suppliers in determining beneficial uses of groundwater. Permanent Solutions Superfund reforms must continue to favor permanent solutions for remediation and protection of groundwater. Water supplies that are or may be used as drinking water sources must be remediated, if feasible, by methods that offer permanent solutions rather than point-of-use devices or provision of alternative water supplies. Remedies that serve to protect currently uncontaminated water supplies which are or may be used as drinking water sources from becoming contaminated must take precedence over other remedies. Point-of-use devices, point-of-entry devices, and bottled water should be considered in remediation as a temporary expedient to resolve an urgent situation. Further, at sites in which it has been determined that it is not technically practical to clean up the groundwater as part of remediation for the site, permanent measures must be implemented to prevent the contaminant of adjacent uncontaminated groundwater. AWWA also recognizes the need to remediate highly toxic and mobile sites or ``hot spots'' but sites of lesser toxicity must also be addressed in the law, particularly when there is contamination of groundwater. AWWA recognizes the difficulties in remediating groundwater; however, to ensure the availability of groundwater as a drinking water source permanent solutions must be implemented wherever possible to assure a continuing supply of drinking water. Local Jurisdictions AWWA urges a strong role for local jurisdictions in organizing local advisory groups, evaluating state proposals to receive delegated authority, and in evaluating remedy selection, particularly as they pertain to long-term plans for drinking water supplies. Water suppliers must be part of any remedy selection process involving groundwater. Remedy selection of site which involves contaminated groundwater must not only involve the jurisdiction in which the site is located, but water suppliers in other jurisdictions which use the aquifer as a source drinking water. Without required inter-jurisdictional coordination in these cases, site remediation may not protect the drinking water sources of other communities. conclusion In summary AWWA recommends that the committee include the following points in the Superfund reauthorization bill: Put the cost of clean-up of groundwater on those responsible for the contamination rather than public water systems and consumers. Retain stringent standards for the clean-up and protection of groundwater that is or may be used as a drinking water supply. Assure that the beneficial use of groundwater as an existing or potential source of drinking water be given high value in cost-benefit analysis determinations. Favor permanent clean-up solutions to remediate and protect drinking water sources. Increase participation of local jurisdictions and public water suppliers in the Superfund decisionmaking process concerning groundwater that is or may be used as a drinking water supply. AWWA thanks you for the opportunity to present comments on Super Fund Reauthorization. We hope that comments will be helpful to the committee in its deliberations. AWWA looks forward to working with the committee on these and other Superfund issues. AWWA was very pleased to work with the committee in 1995-1996 in the successful reauthorization of the Safe Drinking Water Act. bi-partisan cooperation and consensus building among the majority party, the minority party, the Administration and affected parties such as state and local government and the drinking water community was the hallmark of that effort. We encourage the Senate to move forward on Superfund reform in a similar manner and to reach a bi-partisan agreement. S. 8 is a good starting point for those deliberations. This concludes the AWWA statement on Superfund Reauthorization and S. 8, The Superfund Cleanup Act of 1997. ______ Prepared Statement of the Association of Metropolitan Water Agencies re: superfund--remedy selection and community participation Groundwater is a finite resource and one that nearly 120 million Americans rely upon as a primary source of drinking water. About 100 million of these consumers are served by more than 40,100 community water systems using groundwater for all or most of their water supply. The remaining 20 million consumers rely on private wells, which are fed by groundwater and are not protected by Federal or State drinking water standards. Today, drinking water suppliers in different regions of the country are closing down wells due to pollution and seeking alternative sources of supply for the communities they serve. In other cases, the water utility has had to install expensive treatment methods they would not have otherwise needed. Much of this has occurred at the expense of drinking water consumers and not those responsible for the pollution. Given the overwhelming need for clean groundwater and the costly implications of pollution, the Association of Metropolitan Water Agencies (AMWA) strongly urges the Senate Committee on Environment and Public Works to develop a Superfund reauthorization bill with groundwater remedy standards at least as stringent as current law. It should ensure the protection of future sources of drinking water and place appropriate and fair responsibility for cleaning up polluted groundwater on the polluter, and not water suppliers and consumers. AMWA is comprised of the nation's largest publicly-owned drinking water systems, represented by their general managers and commissioners of water. Altogether, AMWA member agencies serve nearly 100 million Americans with clean, safe water. Having reviewed the remedy selection and community participation titles of the August 28,1997, draft proposal, AMWA offers the following specific comments: preference for treatment The association supports the continuation of the current law's broad preference for treatment and could not support the narrow preference for ``hot spots'' only. We appreciate the need to address highly toxic and mobile concentrations of pollutants, but focusing only on hot spots could leave the water supplier with a future cleanup burden. Such an amendment could lead to water suppliers having to treat low-level contamination to satisfy drinking water standards or other health standards if the circumstances of the pollution do not meet the hot spot definition. general rules AMWA believes the general rule governing remedy selection should include a statement that underlines the importance of protecting uncontaminated groundwater and, wherever practicable, restoring contaminated water to beneficial uses. legally applicable and relevant and appropriate requirements AMWA is very concerned that the elimination of relevant and appropriate requirements or ``RARs'' could leave water systems responsible for another party's pollution simply because no legally applicable requirement exists for the given contaminant. Under the August 28 draft proposal, if no official standard exists, a remedy is to be protective of public health if risk falls within a certain range. While this approach is valuable, RARs provide a State or other entity with greater authority to require a polluter to conduct a cleanup, as current law has shown. In California, water systems are just recently finding MTBE, a fuel additive, and ammonium perchlorate, a constituent of rocket fuel, in groundwater supplies. No regulations exist for these two chemicals, nor is there enough information to confidently determine risk. Without RARs, it would seem that MTBE and perchlorate contamination would go unaddressed under the August 28 draft proposal. Retaining RARs, however, would give States at least some means to direct polluters to clean up such contamination. This could mean reliance upon anti- degradation laws or other statutes or rules providing adequate authority to require a cleanup. determination of beneficial uses of groundwater AMWA strongly urges the committee to require formal consultation with local water suppliers when EPA and the States determine beneficial uses of groundwater supplies. The association applauds the Chairman for adopting the state comprehensive groundwater management plans endorsed by EPA to determine beneficial uses, but local water suppliers are integral to predicting use patterns and needs in a given area. Most large water suppliers have conducted detailed studies to plan for future needs. To ignore these plans could leave a community unprepared. uncontaminated groundwater AMWA believes the August 28 draft proposal could be more protective of uncontaminated groundwater, as it now applies only to groundwater suitable for use as drinking water. This approach is too narrow and discounts sources that could be needed in the future, but are not being used as a drinking water source at the time a remedy decision is made. The language sets aside the inherent value of groundwater simply because we have no immediate practical use for it, and it threatens to allow polluters to avoid their rightful responsibilities. groundwater not suitable as drinking water In some regions of the country, water suppliers rely on groundwater containing naturally occurring contaminants. In these cases, suppliers treat this contamination in order to meet community demands. Under the August 28 draft proposal, groundwater currently used for drinking water, but containing naturally occurring contaminants, would be exempt from treatment requirements under Superfund. The proposal allows the existence of naturally occurring contaminants in groundwater to preclude its designation as a drinking water source, thus getting around the cleanup of contaminants that are not naturally occurring in the aquifer. AMWA believes naturally occurring contamination should not be used as a sole factor in determining the suitability of groundwater as a drinking water source. technical impracticability (ti) AMWA supports the inclusion of ``inordinate cost'' as a factor in determining whether a remedy is technically impracticable, as well as the concept that a TI determination may be made at any time after adequate information is available. In addition, the association strongly supports the requirements for a polluter to execute, after a TI waiver is granted, the following, at a minimum: prevention or elimination of exposure or ingestion of the pollutant in excess of the MCL, containment of the pollution source, containment of contaminated around water, prevention of further contamination, prevention of impairment of surface water designated uses under the Clean Water Act, long-term monitoring, and assurance that the party responsible for the cleanup assumes responsibility and liability and all associated incremental costs for operation, maintenance and delivery of drinking water for present and anticipated future uses until such time as the level of contamination is reliably and consistently below the MCL. Also, use of point-of-use or point-of-entry devices and bottled water should be explicitly temporary and for the purpose of resolving an urgent situation. Consumers are entitled to a consistent and permanent source of safe drinking water they do not have to treat themselves. Nor should consumers have to rely for any significant period of time on bottled water to satisfy their everyday needs. Without these requirements, it is unclear how uncontaminated water would be protected or how exposure to contaminants would be prevented once a TI waiver is granted. Maximum Contaminant Level (MCL) To ensure compliance with Federal drinking water regulations, water suppliers often seek to keep contaminant levels reliably and consistently below the MCL. Given that cleaned up groundwater, whether returned to the aquifer or sent to a distribution system, is anticipated to be used as drinking water, consumers would be best served if parties responsible for cleanup follow the same rule of thumb to which water suppliers subscribe. This is the approach AMWA recommends if the committee seeks to provide relief to responsible parties by allowing treated groundwater to be sent to a distribution system, storage tank or reservoir, rather than back to the aquifer where it may come in contact with the source of contamination again. Community Participation The association urges the committee to include in its reauthorization bill a requirement that any remedy decision involving groundwater be made in consultation with drinking water suppliers whose districts are adjacent to the contaminated aquifer. These systems and their customers will be affected in one way or another by the contaminated aquifer. The Association of Metropolitan Water Agencies recognizes the difficulties involved in treating polluted groundwater or otherwise preventing exposure to harmful contaminants. Nonetheless, AMWA strongly believes it is the responsibility of the polluter, not the consumer or the water supplier, to treat contaminated water, where possible, and protect uncontaminated groundwater to ensure its availability as a drinking water source. We hope you have found our comments on the remedy selection and community participation titles helpful as you prepare for the September 4 hearing. In the near future, we plan to provide you with the association's thoughts on other reauthorization issues. If you have any questions in the meantime, please don't hesitate to call me. 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Its 14,000 member companies and subsidiaries, including approximately 10,000 small manufacturers, are in every state and produce about 85 percent of U.S. manufactured goods. The NAM's member companies and affiliated associations represent every industrial sector and employ more than 18 million people. The NAM commends Chairman John Chafee (R-RI) and Chairman Bob Smith (R-NH) on their attempt to reauthorize one our nation's centerpiece environmental statutes, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or ``Superfund''). The NAM is supportive of the Senators' continuing efforts to move Superfund reform legislation forward and remains hopeful that this process will result in an improved Superfund statute sooner rather than later. The NAM continues to have reservations, however, regarding several major titles and provisions of the draft chairman's mark of S. 8, The Superfund Cleanup Acceleration Act of 1997, which are summarized below. remedial actions The NAM applauds the Senators' efforts to improve Superfund's remedy provisions. The draft chairman's mark reflects progress on a number of key issues toward ensuring a site-specific, risk-based management approach to remediation. Areas that require further work include imposition of Federal and state standards, presumptive remedies and the preference for treatment. In addition, the groundwater provisions are complex and require clarification. The provisions are extremely prescriptive and fail to provide the needed flexibility to adopt common sense solutions. The groundwater provisions deviate significantly from the site-specific, risk-based approach provided for soil contamination and, in several respects, would require more expensive, less cost-effective remedies than are currently being selected at some sites. Similarly, the remedy- update proposal introduces new and significant limitations not present in current practice and represents a step backwards. liability While the liability provisions did not change significantly, the NAM remains concerned that the reforms of Superfund's liability system should not, for reasons of equity, be limited to sites listed on the National Priorities List. Other liability provisions also remain inconsistent with the NAM's principles for reform. For example, in the division of liability for unattributable wastes between the fund and parties that remain liable for their own wastes, the potentially responsible parties (PRP's) should not be held liable for any wastes not of their own making. In addition, since recycling is a positive behavior to be encouraged, the recycling provision should be designed to encourage recycling of all materials put to any productive secondary uses. Generator and transporter liability protection for recycling, whether required by law or undertaken voluntarily, should apply to all recycled material. This change would correctly provide incentives for recycling rather than narrowly providing an exemption for only specified materials. natural resource damages The new draft natural resource damages (NRD) provisions properly exclude recovery of speculative non-use values, a change that the NAM strongly supports. However, the mark does not include a definition of ``non-use values.'' Unfortunately, the provisions still allow trustees to assert claims for post-1980 lost-use damages. These claims are surplus since the aim of the NRD program is only to restore, replace or acquire the equivalent of the injured resource. In addition, the NAM's recommendations for reaffirming the liability cap and clarifying CERCLA's original intent to limit liability to damages related to post- 1980 conduct were not addressed. The draft also includes a number of new provisions to S. 8. Among the new items are: (a) use of mandatory mediation for NRD litigation; (b) confirmation of a PRP's right to contribution for NRD claims; and (c) elimination of the rebuttable presumption. The NAM generally supports these changes. The NAM's support for the elimination of the rebuttable presumption, however, is contingent on the addition of express legislative language affirming that PRPs will continue to be entitled to a trial de novo on all aspects of any claim for damages. In addition, the NAM is concerned about the language in the mark that could result in the revival of stale NRD claims, as well as the language that could take away retroactive liability defenses that may well be afforded under current law. Finally, a major issue raised by the chairman's mark is the growing number of inconsistencies between remedy-selection criteria elsewhere in the bill and the NRD restoration-selection criteria, such as use of the terms ``cost-reasonable'' and ``technical impracticability'' for remedy selection, and ``cost-effective'' and ``technical feasibility'' for restoration selection. These inconsistencies, and others, might lead to anomalous results such as NRD trustees requiring actions not permitted or required under the remedy-selection criteria. These two titles should be made consonant to reflect the reforms in the remedial actions title. While the NAM supports certain of the mark's proposed changes to the NRD program, on balance the NAM is not persuaded that the draft NRD title will enhance the overall goal of Superfund reform. state role The NAM is concerned that the mark allows states to use their own cleanup programs in lieu of any or all of the requirements of a revised CERCLA. This approach does not ensure that the federally legislated reforms will be carried through to the states where Superfund dollars are used. conclusion These issues merit serious attention and we stand ready to work with appropriate parties to reach constructive solutions. The NAM continues to support other titles of the bill, including the brownfields provisions. The NAM applauds the continued effort to pass comprehensive reform of the badly broken Superfund program and desires to work toward a bill that will speed cleanups, reduce unnecessary costs and increase equity. 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