<DOC> [1997 Senate Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:45562.wais] S. Hrg. 105-60 SUPERFUND CLEANUP ACCELERATION ACT ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON SUPERFUND, WASTE CONTROL, AND RISK ASSESSMENT OF THE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS UNITED STATES SENATE ONE HUNDRED FIFTH CONGRESS FIRST SESSION ON S. 8 A BILL TO REAUTHORIZE AND AMEND THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, LIABILITY, AND COMPENSATION ACT OF 1980, AND FOR OTHER PURPOSES __________ MARCH 5, 1997 __________ Printed for the use of the Committee on Environment and Public Works U.S. GOVERNMENT PRINING OFFICE 40-816 cc WASHINGTON : 1997 _______________________________________________________________________ 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 Steven J. Shimberg, Staff Director and Chief Counsel J. Thomas Sliter, Minority Staff Director ------ Subcommittee on Superfund, Waste Control, and Risk Assessment ROBERT SMITH, New Hampshire, Chairman JOHN W. WARNER, Virginia FRANK R. LAUTENBERG, New Jersey JAMES M. INHOFE, Oklahoma DANIEL PATRICK MOYNIHAN, New York WAYNE ALLARD, Colorado BARBARA BOXER, California JEFF SESSIONS, Alabama BOB GRAHAM, Florida (ii) C O N T E N T S ---------- MARCH 5, 1997 Page OPENING STATEMENTS Allard, Hon. Wayne, U.S. Senator from the State of Colorado...... 27 Baucus, Hon. Max, U.S. Senator from the State of Montana......... 6 Boxer, Hon. Barbara, U.S. Senator from the State of California... 8 Chafee, Hon. John H., U.S. Senator from the State of Rhode Island 4 Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 14 Letter, relative to Oklahoma cleanup sites, from EPA......... 378 Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey......................................................... 2 Smith, Hon. Robert, U.S. Senator from the State of New Hampshire. 1 Thomas, Hon. Craig, U.S. Senator from the State of Wyoming....... 15 WITNESSES Biagioni, Linda, vice president of environmental affairs, Black & Decker Corporation, on behalf of the Superfund Action Alliance. 41 Prepared statement........................................... 395 Responses to additional questions from: Senator Lautenberg....................................... 402 Senator Smith............................................ 401 Browner, Hon. Carol M., Administrator, Environmental Protection Agency......................................................... 10 Charts and tables............................................ 361 Letter to Senator Inhofe..................................... 378 Prepared statement........................................... 345 Responses to additional questions from: Senator Allard........................................... 368 Senator Lautenberg....................................... 369 Senator Smith............................................ 366 Senator Thomas........................................... 368 de Saillan, Charles, Assistant Attorney General, Natural Resources, Environmental Enforcement Division, State of New Mexico......................................................... 60 Prepared statement of Tom Udall, attorney general, State of New Mexico................................................. 428 Responses to additional questions from: Senator Lautenberg....................................... 466 Senator Smith............................................ 465 Florini, Karen, Esq., senior attorney, Environmental Defense Fund 39 Prepared statement........................................... 384 Garcia, Terry, Acting Assistant Secretary, National Oceanic and Atmospheric Administration..................................... 55 Prepared statement........................................... 415 Responses to additional questions from Senator Smith......... 421 Gimello, Richard, Assistant Commissioner for Site Remediation, New Jersey Department of Environmental Protection, on behalf of National Governors' Association................................ 37 Prepared statement........................................... 382 Heig, Rich A., senior vice president, Engineering and Environment, Kennecott Energy Company.......................... 62 Prepared statement........................................... 473 Responses to additional questions from Senator Smith......... 475 Lockner, Larry L., manager for regulatory issues, Shell Oil Company, on behalf of American Petroleum Institute............. 57 Prepared statement........................................... 423 Responses to additional questions from Senator Smith......... 426 O'Regan, Karen, environmental programs manager, City of Phoenix, on behalf of American Communities for Cleanup Equity, International City County Management Association, National League of Cities, National Association of Counties, U.S. Conference of Mayors, and National School Board Association.... 45 Analysis of bill passed by Arizona Senate relative to Superfund program.......................................... 414 Prepared statement........................................... 410 Responses to additional questions from Senator Smith......... 413 Spiegel, Robert, director, Edison Wetlands Association........... 59 Williams, Barbara, owner, SunnyRay Restaurant, Gettysburg, PA, on behalf of National Federation of Independent Business.......... 43 Prepared statement........................................... 402 ADDITIONAL MATERIAL S. 8, Superfund Cleanup Acceleration Act of 1997................. 73 Article, State to Study Possible Effects of Contaminated Water, Soil, UPI...................................................... 566 Comments on Executive Order 13016: Chemical Manufacturers Association........................... 502 Several energy companies..................................... 487 Letters: Bair, Sierra................................................. 52 Chemical Manufacturers Association........................... 500 Kennecott Energy Company..................................... 485 National Association of Industrial and Office Properties (NAIOP).................................................... 578 New Mexico Governor Gary Johnson............................. 468 New Mexico Secretary of the Environment Mark Weidler......... 470 Sierra Club.................................................. 547 Reports: Summary of S. 8, Superfund Cleanup Acceleration Act of 1997, Congressional Research Service............................. 332 VIACOM Merger, Sierra Club................................... 555 Statements: Association of State and Territorial Solid Waste Management Officials (ASTSWMO)........................................ 534 Chemical Manufacturers Association........................... 539 Government Finance Officers Association...................... 568 National Association of Industrial and Office Properties (NAIOP).................................................... 579 National Federation of Independent Business.................. 406 Oregon Department of Environmental Quality................... 584 Superfund Action Alliance.................................... 399 SUPERFUND CLEANUP ACCELERATION ACT ---------- WEDNESDAY, MARCH 5, 1997 U.S. Senate, Committee on Environment and Public Works, Subcommittee on Superfund, Waste Control and Risk Assessment, Washington, DC. The committee met, pursuant to notice, at 9:34 a.m. in room 406, Senate Dirksen Building, Hon. Robert Smith (chairman of the subcommittee) presiding. Present: Senators Smith, Inhofe, Allard, Thomas, Lautenberg, and Chafee [ex officio]. Also present: Senator Baucus. OPENING STATEMENT OF HON. ROBERT SMITH, U.S. SENATOR FROM THE STATE OF NEW HAMPSHIRE Senator Smith. The subcommittee will come to order. I'd like to welcome Administrator Browner here this morning and thank her for being here. We look forward to hearing your testimony and discussing Superfund reform. We do have 11 witnesses this morning, 10 following you, Administrator Browner, so I'm going to be very brief in my opening remarks. We've expended a lot of time and effort over the past 3 or 4 years to try to get Superfund reauthorized. I think there are a number of areas that we agree upon; there clearly are many that we don't agree upon. I hope though that we can reach common ground. I think the American people realize that this legislation, in spite of good intentions, has not done the job that it was designed to do. While we continue to debate it, there are people out there who are frankly innocent victims of this. We will hear from some of them today who are caught up in this liability mess. We owe it to them and to the environment to get this situation straightened out so that more money can be put toward cleanup and less toward administrative and legal costs. So I think we can do a better job, we can do a faster job, we can streamline and I'm hopeful that we'll be able to come up with some type of compromise, if that's what it takes, to get Superfund reauthorized. I must say I was somewhat taken aback by the intensity of the negative comments in your statement, Administrator Browner, regarding S. 8, but I look forward to discussing that with you. We spent many hours, many days, many weeks of meetings both at the staff level and at the personal level working from the committee's bill from last year, S. 1285, to work toward a compromise. I felt that we were a lot closer than the remarks that you made in your statement seem to indicate, but maybe we'll be able to find some common ground along the way this morning. Thank you. [The prepared statement of Senator Smith follows:] Prepared Statement of Hon. Robert Smith, U.S. Senator from the State of New Hampshire Good morning. I would like to thank everyone for coming to this morning's hearing. We are here today to receive testimony on S. 8, the ``Superfund Cleanup Acceleration Act of 1997.'' I am going to be brief in my remarks. Frankly, the American people have been waiting too long for comprehensive Superfund reform, and I for one, don't want to waste any more time. We have expended a lot of effort on this subject over the past 4 years, and as a result of extensive negotiations we conducted in the last Congress, I believe that I can say that the number of areas we agree upon, significantly outnumbers the areas that we don't. In those areas we don't agree, I believe that we are close to reaching common ground. Superfund came about in 1980 in an effort to quickly clean up the toxic waste sites that scarred our Nation. We all agree that these sites need to be cleaned up. It is not right that one out of four of our citizens lives near a toxic waste site. Yet, the results of the Superfund program could be better. After 17 years, only 125 sites have been cleaned up and deleted from the National Priorities List. There are still more than 1200 sites left on the list and more are still being proposed. While some will suggest that more sites are being cleaned up now than previously, recent EPA testimony estimates cleanups are still taking 8 to 10 years to complete. The fact is, we can and should do a better and faster job of cleaning up these sites, and I am encouraged that everyone seems to agree on this point. Administrator Browner, whom we will hear from today, has sincerely tried to improve the Superfund program during her tenure though the use of administrative reforms. I think our agreement in many of these areas is indicated by the fact that some of the provisions in S. 8 were derived from the administrative reforms, and likewise, some of the EPA's administrative reforms were based on proposals that I had made in the last Congress. Yet, Ms. Browner has nonetheless, remained a vigilant supporter of comprehensive Superfund reform. I appreciate her position, and I agree with her. Today, I hope we get past the rhetoric that clouds this issue. It would be unfair and untrue to state that anyone on this Committee doesn't want to clean up toxic waste sites. That is not the reason for this bill. Instead, this bill recognizes that these sites are not being cleaned up fast enough. Our citizens and environment deserve better. Today, we will hear from representatives of Federal, State and local organizations, from environmentalists, and from businesses large and small. I want to take the opportunity in advance to thank the witnesses for coming today. By the end of their testimony, I am sure we will have a clearer picture of how we should proceed toward reauthorizing this important legislation. Senator Smith. Senator Lautenberg. OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR FROM THE STATE OF NEW JERSEY Senator Lautenberg. Thanks, Mr. Chairman. In the interest of time and showing my appreciation for your calling this hearing, I will be brief. I particularly want to see us do the job better and more efficiently, to speed cleanups; but in the process, I am not willing to abandon the safeguards that protect the public. I believe that it's possible, based on our past experience of working together--Senator Smith, Senator Chafee, Senator Baucus and I came very close to a solution last Congress. Perhaps this is a bit of nostalgia. I feel like Frank Sinatra--they were very good days, but if we can be assured that the costs will be distributed fairly, that the process will be closely monitored, we may have a successful law. I think there are certainly some weaknesses in the present law. We're going to have to work very hard, all of us, if we're going to pass a bill that achieves full, bipartisan support. I would put my entire statement in the record and Mr. Chairman, you heard from our distinguished committee chairman, that he promises to read every word of the statement if I put it in the record. Thusly, I'm willing to acquiesce and I will put my statement in the record. I thank you very much. [The prepared statement of Senator Lautenberg follows:] Prepared Statement of Hon. Frank R. Lautenberg, U.S. Senator from the State of New Jersey Mr. Chairman, I welcome this opportunity to hear from the Administration and a cross section of stakeholders on the reauthorization of the national hazardous waste cleanup law, known as Superfund. As you know, this is a program of great importance to my State of New Jersey, and to innumerable communities across the country. 73 million Americans live near toxic waste sites. That is about one in every four of our citizens. Although it is difficult to say precisely how dangerous there sites are, recent data from the Agency for Toxic Substance and Disease Registry are troubling. For example, some studies found that in all but one of New Jersey's 21 counties, cancer rates in areas around hazardous waste sites exceeded the national average. Studies from other parts of the country also suggest that those living near toxic waste sites suffer disproportionately from serious health problems. Beyond their adverse health effects, hazardous waste sites often have serious negative economic effects on our cities and neighborhoods. If we don't clean these sites up, we will deprive communities of good jobs and needed local tax revenues. Unfortunately, the Superfund program got off to a slow start. However, in recent years, the program has turned around. Under the Clinton Administration, toxic waste cleanups have been 20 percent faster and 25 percent cheaper. We have seen real progress in cleaning up sites, as well as an increased emphasis on fairness to settling parties. Still, all of us here today are trying to help make the system work better yet. We would like very much to speed cleanups, to reduce unnecessary litigation, and make the program work more fairly and efficiently. I am especially eager to hear from our witnesses about the various administrative reforms that have been implemented in the program. Many criticisms of Superfund address problems that existed long ago. In fact, I used to be a leading critic of the program. However, today's program has changed considerably, thanks largely to improvements begun by Administrator Reilly and a broad range of significant new reforms developed by Administrator Browner. EPA's reform efforts have led to a Superfund program that is much faster, fairer, and more efficient than it was 4 years ago, when these reauthorization efforts started. We need to build on those reforms, rather than addressing problems that no longer exist. During the last Congress, Senators Smith, Chafee, Baucus and I spent countless hours, along with the Administration, trying to resolve our differences. I remain committed to a process that will improve Superfund, and produce a bipartisan bill that deserves the President's signature. I am hopeful we will succeed. We have made some significant process in certain areas, and have faith that this will continue. At the same time, I am deeply concerned about some of the provisions in S. 8 that would dramatically reduce the responsibility of many polluters. For example, S. 8 relieves from liability generators of industrially-derived hazardous wastes if they were savvy enough to have buried their waste at a landfill that also accepted ordinary household trash. In other words, the companies who elected to use midnight dumpers will profit. Responsible industrial generators, who paid a higher price to dispose of their wastes at industrial landfills, will continue to be enmeshed in Superfund's liability scheme. This makes Superfund more unfair, not less. I am also concerned that S. 8 fails to adequately protect the safety of our drinking water because it fails to require that groundwater be cleaned up. The bill also repeals an existing preference for cleaning up the pollution to protect future generations and the environment. Instead, S. 8 would allow the materials to remain at sites, so long as there is a fence around them, even if the materials continue to pose health risks. In addition, I am very concerned about the broad authority granted to States without a showing that they have the technical and financial capacity to adequately protect public health and the environment. To help us explore these issues, I look forward to the comments today of Carol Browner and all the witnesses, in particular the two witnesses from New Jersey. Robert Spiegel will explain the importance of community participation in Superfund decisionmaking. His experience at the CIC site in New Jersey shows the benefits and savings that can be achieved if the community is part of the process. I also want to welcome one of the leading State managers of hazardous waste cleanup, Rich Gimello, who operates the hazardous cleanup program in New Jersey and today is representing Governor Whitman and the National Governors Association. Senator Smith. Senator Chafee. OPENING STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE STATE OF RHODE ISLAND Senator Chafee. Thank you, Mr. Chairman. Yes, indeed, I will read Senator Lautenberg's statement. I will curl up in bed this evening with it and look forward to it as an exciting bit of reading. It isn't just this statement of yours, Senator Lautenberg, that I'll read, I make an effort to read all of your statements. The effort hasn't been totally successful, I will confess. [Laughter.] Senator Chafee. I will not have a long statement, Mr. Chairman. I just want to say that we've made tremendous efforts to accommodate the desires that have been put forth over the years. You and I joined together in co-sponsoring S. 8. It's not a dream package for any particular interests; it's an effort that I believe will greatly improve the status quo. I don't think that anybody thinks that the existing law is functioning correctly. Our new liability proposal moves a considerable distance toward the Administration and the proposals that the current minority had made in years past. I look forward to Administrator Browner's testimony. Mr. Chairman, I also want to thank you for all the time and effort you've put into this over the years. You've been a stalwart in trying to achieve success in this measure and I want to publicly commend you for what you've done. [The prepared statement of Senator Chafee follows:] Prepared Statement of Hon. John H. Chafee, U.S. Senator from the State of Rhode Island Good morning. I want to thank Senator Smith for holding this hearing on S. 8, the Superfund Cleanup Acceleration Act of 1997. Thanks to his leadership, we are closer to comprehensive reform of this troubled program. We are off to a very fast start this year. Working together with the Minority and Administration, we stand a good chance of enacting Superfund reform legislation in the 105th Congress. I also want to thank Senators Baucus and Lautenberg. While I know they continue to have problems with provisions in S. 8, I know they are ready to roll up their sleeves and get to work on our common agenda: real legislative reform for Superfund's problems. Finally, I want to thank Carol Browner, EPA Administrator and the Administration's leader on Superfund. We have spent many hours together personally trying to bridge our differences on Superfund. I look forward to her testimony today and to a successful conclusion to the bipartisan negotiations we started but could not finish in the 104th Congress. I would like to say a few words about how S. 8 was developed. At the outset of the 105th Congress, the Republican Conference collectively decided to include a Superfund reform bill as one of its ten highest legislative priorities. S. 8 was drafted in a short period of time in order to be introduced with other Republican Leadership priority bills on January 21, 1997. S. 8 is based on the discussions and negotiations conducted in the 104th Congress on S. 1285. It differs significantly from its 104th Congress predecessor in a number of key areas. The most significant changes in S. 8 from S. 1285 are in titles dealing with brownfields, selection of remedial actions, liability, and natural resource damages. We intentionally drafted S. 8 to considerably narrow the differences with the Minority and the Administration that were identified in the previous negotiations on S. 1285. I must say, however, after reading through EPA's testimony I fear the Administrator may think that this bill moved away from her position and not towards it. Superfund remains our most troubled environmental statute. The time has come to reform this program, which was designed to clean up toxic waste sites. Instead, it has brought about too much litigation, not enough cleanup, inefficient use of scarce resources, and decaying cities, where many abandoned sites are not being redeveloped because potential developers fear incurring Superfund liability. I have joined Senator Smith in cosponsoring S. 8. The bill is not a ``dream package'' for any particular interest. Rather, S. 8 is a comprehensive reform effort which, when enacted, will be a tremendous improvement over the status quo. As we discussed at yesterday's hearing, a central focus of the Superfund Cleanup Acceleration Act of 1997 is brownfields revitalization. It is our position that comprehensive reform of Superfund is necessary to spur redevelopment at low-risk sites, and the higher-risk sites that might score high enough to be on the Superfund National Priority List. In all likelihood most of these ``NPL-caliber'' sites never will be added to the list. There are 200 such sites in Rhode Island alone, many with redevelopment potential. Our new liability proposal moves a considerable distance towards the Administration and Minority proposals of years past. It attempts to target relief toward three central problems in Superfund liability: first, the unfairness of imposing joint and several liability on parties whose liability is in fact capable of proportional allocation; second, the unfairness of a liability net that is cast so wide that it sweeps in parties no one ever foresaw as potentially responsible parties, like small businesses; and third, a liability system that encourages claims and counterclaims at sites with hundreds or thousands of small-volume waste contributors. S. 8 does not create a blanket exclusion for any class of site. Instead it focuses on the parties and their conduct. So who will pay for cleanup under this new proposal? If you polluted a site, you will have to pay your proportional share of the costs of cleanup. If your liability is excused in some way by the public policy-based liability protections in this proposal, your share is paid by the taxes we are reimposing upon industry. What could possibly be fairer? There are significant changes to other provisions of the bill that reflect our hundreds of hours of negotiations last year. We have clarified groundwater provisions to ensure protection of uncontaminated groundwater and where, technically practicable, restore contaminated groundwater. We have limited more narrowly the circumstances under which an old remedy can be reopened and strengthened the roles of governors in that process. We have loosened the cap on additions to the NPL. We have streamlined the natural resource damages provision to focus on restoration and not speculative damage measures. We have added money for Brownfields remediation. We feel we have moved a great distance in a short time. The effort to reform Superfund should be a bi-partisan one. In the last Congress, Senator Smith and I enjoyed a positive working relationship with our Minority counterparts, Senators Baucus and Smith. I know that the Minority and Administration have concerns over the process for moving forward, and I appreciated Senator Baucus' comments on this issue before yesterday's hearing. I know we can work out a process that is acceptable to all sides. President Clinton and others in his Administration, including Administrator Browner, have long-since recognized the need to reform Superfund. In fact, EPA has undertaken three rounds of Administrative reforms of Superfund. While these reforms do address some of the problems inherent in Superfund, they are no substitute for a thorough legislative overhaul. I know the Administrator agrees with me on this. There is merit in many of the EPA reforms. Indeed, many of policies contained in these reforms have long been advocated by Republicans. Two examples are cleanups based on future use of the site, and an expanded use of federal money for orphan shares. However, these administrative changes are mere exercises of EPA or Justice Department discretion. Because these reforms are discretionary, there is no long-term certainty in EPA-issued guidance. Guidance can be changed at the whim of the issuing official. For these reasons, any significant changes to the Superfund statute must be achieved through the legislative process. It is long-past time that we reform the Superfund statute. With a concerted bi-partisan effort, we can achieve Superfund reform this year. We cannot put off Superfund reform any longer; the cost is simply too great. Senator Chafee. Thank you, Mr. Chairman. Senator Baucus. OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE STATE OF MONTANA Senator Baucus. Thank you, Mr. Chairman. Mr. Chairman, I'm not sure anybody's going to read my statement, so I'm going to give it. It's very brief. As I look out in the audience, I'm struck with how many years we've been at this. I'm reminded of Yogi Berra's statement, ``It's deja vu all over again.'' Administrator Browner has talked to us many times about Superfund; we've had a large number of witnesses at hearings and spent many hours on this subject. During the last 4 years, we've had 20 hearings on Superfund. We've had 3 days of markup, and we've heard from 161 witnesses, whose compiled testimony comes out to 4,490 pages already and we still don't have a bill. It's my hope, and I know it's the hope of all of us, that is going to change, that this might be the beginning of the end. I'm reminded of Winston Churchill's statement many years ago during the Second World War and whether the war was at the beginning of the end, and he said that it was the end of the beginning. It's my hope that this effort is the beginning of the end and we're going to wrap this up in this Congress. I'd like also to recall a point that I made in yesterday's hearing--maybe we can use the Safe Drinking Water Act as a model. We worked together, and worked hard without a lot of fanfare, getting the job done. As I mentioned yesterday, that bill passed because it was a ``win-win'' situation. It was win-win, first of all, because we did reduce Federal regulations, but we also helped improve the quality of drinking water. In this case, I think we can and we should reduce the cost of the Superfund program. We should make cleanups more efficient. I think we can do that in a new law. In many respects, Administrator Browner has already done so with the regulatory powers of the EPA Administrator. I think we can also make the liability system more fair. Those are very important goals. On the other side of the ``win-win'' coin, I think we can also increase environmental protection. More than 70 million Americans live within 4 miles of a Superfund site. I think those Americans want us to pass a law that provides them with more protection, Mr. Chairman, not less, and also a statute that gives them a greater voice in how a cleanup will affect the future of their communities. If there is an opportunity for more local involvement earlier on, that will help improve environmental protection. So as we work together, I urge all of us to look creatively for win-win solutions. Turning very briefly to the specifics of S. 8, first, there is good news. S. 8 is better than S285 from last year, in the last Congress. That's a fact. A month of discussions and negotiations have paid off. Still, we still have a long way to go. I have several significant concerns which I have described in my prepared statement which I know all of you will read very assiduously and I ask that be included in the record, Mr. Chairman. I'll mention just one, natural resource damages. I don't want to belabor the point, I've made it before, and the natural resource damages provisions of S. 8 contain improvements over previous versions. Let me just say this: The Clark Fork site in Montana is the largest Superfund site in the Nation--I repeat, the largest Superfund site in the Nation. The natural resource damage is massive; it stretches for 135 miles from Butte, MT, to Missoula, MT. The State of Montana has filed a damage claim for more than $700 million to restore the damaged resources. The State of Montana has pressed this case hard to Republican administrations, to Democratic administrations in Montana for 13 years. The case finally went to trial just a few days ago on Monday of this week. Maybe we will prove our case, maybe we won't; that's for the court to decide. For my part, I will do everything in my power to prevent anyone from pulling the rug out from under Montana on the courthouse steps. These and other remaining issues are very serious, Mr. Chairman. We all know that, but they are not insurmountable. It is my hope, with a little more hard work, and with the cooperation of the Administration, we can get a good bipartisan bill this year finally. [The prepared statement of Senator Baucus follows:] Prepared Statement of Hon. Max Baucus, U.S. Senator from the State of Montana Thank you, Mr. Chairman. I never intended to make Superfund the focus of my Senate career, but it is starting to seem that way. During the 103d Congress, we held 11 hearings and 3 days of mark up on Superfund reform. Last Congress, we held nine hearings. We've heard from a total of 161 witnesses, and compiled 4,490 pages of testimony. Hopefully, today's hearing is the beginning of the end. I'd like to make a couple of basic points. First, Superfund is a very important environmental program. Love Canal was not some kind of a fluke. As our country industrialized, there was an unfortunate side effect: the creation of toxic waste sites that threaten public health and the environment. There are at least 1,300 of these sites, all across the country. When State and local resources seemed inadequate to clean these sites up, Congress created the Superfund program to get the job done. And we were right to do so. Second, Superfund has had its problems. The program got off to a terrible start. Some people went to jail. Even after the initial problems were solved, cleanups were slow, paperwork piled up, and transaction costs were out of sight. But things have changed. First under Bill Reilly, and now under Carol Browner, EPA has made significant improvements in the Superfund program. As we will hear today from Administrator Browner, EPA has taken steps to accelerate cleanup, cut litigation, and improve the quality of cleanup. Many of those reforms seem to be working. EPA has now cleaned up over 400 sites, begun work at more than 1,200 sites, and settled liability with 14,000 small parties. These are positive steps. I believe that we can go even further. For example, I support legislative changes to make cleanups more efficient. To reduce litigation and other transaction costs, especially for municipalities and small businesses. To enhance the State role. I also believe that we have a good opportunity this Congress to produce a solid bipartisan Superfund bill that the President will sign. But we are not there yet. Clearly, S. 8 is better than where we started last Congress. The months of discussions and negotiations seem to have paid off. But a number of serious concerns remain. Most importantly, the new bill includes changes that allow up to 600 existing cleanup agreements to be reopened, restudied and renegotiated. Undoing decisions that have already been agreed to will only delay cleanup and reopen old wounds. It also includes changes that will dramatically reduce the amount of cleanup at some sites. For example, it allows highly toxic wastes to remain untreated and left in place. And it requires groundwater to be cleaned up only if doing so will cost less than letting nature do the job or restricting the uses of that water. It continues to prevent streams, wildlife habitats and other natural resources damaged from long-term pollution from being fully restored. Finally, it exempts many large, viable companies from their responsibility to clean up toxic dumps that they helped create. By exempting these companies, it puts the burden of paying for cleanup on the backs of the taxpayer. The proposal would have a particularly harsh effect on my State of Montana. It would allow signed cleanup agreements to be reopened, thereby delaying cleanups in a dozen places throughout the State. And it would undermine efforts to restore the damage along the Clark Fork river. I don't want to belabor this point. I've talked about it before, at some length. And the natural resource damage provisions of S. 8 contain some significant improvements over previous versions. But let me just say this. The Clark Fork site is the largest Superfund site in the Nation. The natural resource damage is massive. It stretches for 135 miles, from Butte up to Missoula. The State of Montana filed a damage. claim seeking more than $700 million to restore the damaged resources. Montana has prosecuted this case vigorously, through Republican and Democratic administrations, for 13 years. The case finally went to trial Monday. Maybe we'll prove our case. Maybe we won't. That's for the court to decide. But, for my part, I will do everything in my power to prevent Congress from pulling the rug out from under Montana on the courthouse steps. These and other remaining issues are serious. But they are not insurmountable. It is my hope, Mr. Chairman, that with a little more hard work, and the cooperation of the Administration, we can get a good bipartisan bill this year. Senator Smith. Thank you very much, Senator Baucus. I have a statement by Senator Boxer for the record. [The prepared statement of Senator Boxer follows:] Prepared Statement of Hon. Barbara Boxer, U.S. Senator from the State of California Thank you, Mr. Chairman, for calling this hearing today to continue discussions toward meaningful reform of the Superfund program. I am hopeful that your dedication, and the hard work of Senator Lautenberg and other members of this subcommittee, will make Superfund reform a reality this session. Mr. Chairman, as you know, Superfund is one of the most important environmental laws for the people of California. California has ninety- six Superfund sites, the third highest number of any State, and seven Natural Resource Damage sites, more than any other State. Over forty percent of Californians live within four miles of a Superfund site. Superfund helps protect the health and environment of millions of Californians by addressing some of the most contaminated sites in my State. An example is the Montrose Chemical Corporation Site (that contaminated with DDTs and PCBs four different groundwater aquifers, two of which are a source of drinking water. Another is the Purity Oil Sales Site in Fresno, where the soil is contaminated with lead. This was an area where the children of migrant farm workers regularly played. Clearly we need to fix the problems with Superfund, but I am concerned that the proposal before us does not adequately reflect fundamental principles that I believe need to be the basis for reform. We need reform that will streamline the Superfund process, speed-up cleanups at Superfund sites, and help eliminate unnecessary litigation without compromising the principles of ``polluter pays'' and ``putting public health and safety first''. Provisions such as the reopening of Records of Decision (ROD's) seem to go against the concept of streamlining and speeding up cleanups. If ROD's are reopened, the over 46 sites (48 percent of California National Priority List Superfund sites) that have a final ROD in place could face ROD petitions that would stop all ongoing cleanup efforts pending review. If ROD's were reopened, the San Gabriel accord (which was signed in March 1994) would be undermined. The groundwater aquifer underlying the San Gabriel Valley is one of the most complex and contaminated Superfund sites in the country. The site has been on the Superfund list since 1984. Over 10,000 businesses and other parties potentially share liability for this problem. It is a truly unique site that is being successfully worked on by PRP's, EPA and the State of California. At the Baldwin Park site in San Gabriel Valley, a reopening of the ROD could result in an additional year plus $800,000 to redo the documentation. The San Gabriel Valley Water Quality Authority has estimated that the delays in cleanup would add $25 million to the cost of treatment because of further spread of contamination during the delay. The groundwater aquifer underlying the San Gabriel Valley is one of the most complex and contaminated Superfund sites in the country. The site has been on the Superfund list since 1984. Over 10,000 businesses and other parties potentially share liability for this problem. It is a truly unique site that is being successfully worked on by PRP's, EPA and the State of California. Mr. Chairman, the goal of minimizing the cost of cleanup is a sound one, but I believe that cost should come into consideration only after we agree to certain cleanup standards and remedies that have been selected on the basis of public health and safety. Provisions in the bill emphasize cost savings over public health and environmental restoration. I believe that if we mandate that selection of cleanup remedies be dictated by cost considerations, it will inevitably lead to cleanups that are less protective of the public health. Putting cost first will in effect shift our emphasis away from cleanup toward less expensive short term containment strategies. We will in effect be putting the burden of cleanup on future generations. On the issue of remedy selection, I would also like to emphasize my concern with provisions in the bill which could limit EPA's ability to protect children and other sensitive subpopulations. This could lead to the selection of cleanup remedies that overlook the fact that children are more susceptible and more at risk from exposure. Cleanups and even containment strategies might not be protective of our children's health and safety. Mr. Chairman, our liability scheme in Superfund must reflect the ``polluter pays'' principle. This principle has been very successful in requiring polluters to pay for cleanup. It has helped recast a corporate mind-set that once saw the careless dumping of toxic waste as every day business-as-usual and has acted to deter careless disposal and encourage pollution prevention. The bill before us contains very broad liability exemptions that will in effect remove cleanup responsibility from polluters and place the burden on States and taxpayers. I believe that the goals of the Superfund program can best be achieved with a sound liability scheme and an effective funding mechanism to pay for cleanups. Another concern I have with the bill is the provision that would not allow the States to enforce their own stricter cleanup standards and recover costs from Potential Responsible Parties. The preemption of California's ability to apply stricter cleanup standards would mean that, in the case of the Baldwin Park site, the State of California would have to pay an additional $5 million in capital and $20 million in operation and maintenance costs to bridge the gap between Federal and State drinking water standards. One other concern I want to briefly mention is the bill's provisions on groundwater cleanup which I believe would jeopardize groundwater safety. Groundwater cleanup issues are of major concern to California. Ninety-two percent of the sites in California involve groundwater contamination. Most (81 percent) NPL sites are in residential areas. At least 3.2 million people get their drinking water from aquifers over which a site is located. The bill before us only requires the selection of cleanup remedies that will ``prevent or eliminate any actual human ingestion of contaminated drinking water''. The most cost effective strategy might be to put a filter on a tap or simply provide bottled water--delaying any cleanup and allowing contaminated groundwater to spread or go unchecked. Mr. Chairman, thank you for the opportunity to express my concerns. I look forward to continued work with you to achieve meaningful reform and would like to extend a warm welcome to Administrator Browner and all of today's witnesses. Senator Smith. Administrator Browner, before I turn to you, I just want to mention one of your aides, Bob Hickmott, who is the Associate Administrator for congressional and Legislative Affairs, I understand is leaving to go to Secretary Cuomo's department. He now goes with Elliott Laws. You're driving everybody out of your department now. [Laughter.] Senator Smith. You can defend yourself on that, if you like. Let me just say good luck to you, Bob. It's been a pleasure working with you. I'll turn to you now, Ms. Browner. As you know, your statement is made a part of the record and if you can summarize as briefly as possible, we'd appreciate it. Welcome. STATEMENT OF HON. CAROL M. BROWNER, ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY Ms. Browner. Certainly, Mr. Chairman. Members of the subcommittee, thank you for this opportunity to testify on the subject of reforming our country's toxic waste cleanup program. Several times, I don't think at all 20 hearings, but certainly at a number of hearings over the past 4 years, I have had the privilege to appear before this subcommittee to discuss how we can best work together to eliminate the toxic waste sites that plague far too many of our communities, and to do it faster, fairer and more efficiently. Each time, you have heard me say that legislative reform is needed to improve Superfund. Each time, I think there has been a consensus in this committee that something should be done legislatively to strengthen the program and to enable it to fulfill its potential for improving the quality of life in our country. On behalf of the 1 in 4 Americans, including 10 million children who live within 4 miles of a toxic waste dump, we must not let Superfund fall short of its promise. We must not shrink from our shared 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. Mr. Chairman, it is time for us to hammer out responsible, consensus-based legislation that we can all agree on and to finish the job of ridding America's neighborhoods of toxic waste dumps. Speaking on behalf of the Clinton administration and the array of Federal agencies that have a role in Superfund, let me say to you and to each member of this subcommittee and committee, we are ready, willing and able to work with you, Members of Congress from both sides of the aisle, with stakeholders, and especially with the communities across the Nation to enact legislation that will cleanup these sites, return land to communities for productive use, and protect the health of our citizens. I would respectfully suggest, Mr. Chairman, that a good starting point would be to recognize the positive success of the administrative reforms that we have already put in place. When we first took office 4 years ago, I said on numerous occasions, and the President said, that Superfund was broken, that it needed to be fixed, and so we launched a series of innovative measures designed to improve the work within the current statutory framework. I think we've all heard the story about the man, when asked why he kept hitting himself in the head with a hammer, replied because it feels so good when I stop. Mr. Chairman, I'm happy to say that we can now put the hammer away when it comes to Superfund. The Superfund Program of today, site after site, is vastly different than it was 4, 8, 12 years ago. We have made major improvements through our administrative reforms, we have made it faster, fairer, more efficient. We have instilled the system with more common sense and as a result, I think it is fair to say that many of the old criticisms simply do not apply anymore. Thanks to our administrative reforms, today's Superfund provides significantly faster cleanup at lower costs. 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 a goal of saving even more time. In addition, our reforms have protected thousands upon thousands of small parties from Superfund litigation, removing them from the liability system, the liability net, and thus, ensuring that their dollars are spent on actual cleanup and not on lawyers, not on expensive legal costs. We've worked to reduce transaction costs, to work more cooperatively with responsible parties, and to increase fairness. We've created a National Remedy Review Board to review Superfund decisions, ensure consistency, fairness and cost effectiveness. We've updated existing remedies to ensure they are consistent with the latest science and technology, and we have developed standardized remedies for certain kinds of sites. These save time, they save money by eliminating the need for studies that, in effect, have already been performed at similar sites. We've expanded our contact with stakeholders and citizens, appointing a Superfund ombudsman in each region, creating community advisory groups, and putting a wealth of Superfund information on the Internet. We have formed a closer relationship with State environmental agencies, helping them forge a greater role in the Superfund site selection process, and working with them through our Brownfields Initiative to promote the cleanup and redevelopment of lightly and moderately contaminated sites. Mr. Chairman, these are just some of the improvements that have enabled us to complete a total of 250 Superfund cleanups over the past 4 years, more than in the previous 12 years combined. We all recognize that the job is not done. We have promised the American people that toxic wastes should be cleaned up, should be removed from their communities, and we have a responsibility to finish what we have started. As President Clinton mentioned in his State of the Union Address, we are determined to double our current pace and cleanup another 500 toxic waste sites by the year 2000, literally allowing millions of children the ability to live and play in neighborhoods free of toxic threat. We have provided for faster, fairer, more cost effective cleanups and more common sense in the system and we will continue to do so without sacrificing one iota of our commitment to protect the public health and the environment. That is this Administration's No. 1 priority. Every time we complete another toxic waste site cleanup, every time we close the books on a Superfund site, we want to be satisfied that those who live in the community, who live nearby, can go on with their lives free from worry that the site will one day reemerge as a health threat to their communities and to their children. At the same time, we are also committed to ensuring that those responsible for polluting these sites are indeed held responsible for cleaning them up. Why should we stick the taxpayers with the bill. Mr. Chairman, we fully agree that the bulk of Superfund money should go to clean up activities and not to lawyers. That is why we have acted to reduce transaction costs, that is why we have acted to reduce litigation between the parties. We agree that the churches, the Girl Scout groups, the mom and pop businesses should be protected from the broadly cast litigation net, often put in place by private sector parties. That is why we have acted to remove more than 9,000 small parties from Superfund litigation over the past 4 years. Let us not forget the benefits of the unfairly maligned Superfund liability system. That system, and we admit there are problems, and we have worked to fix those problems, is responsible for more than $12 billion committed by responsible parties to clean up hazardous waste sites. That is $12 billion in money that otherwise would not have been available for the critical task of ridding the Nation of these highly dangerous hazardous waste sites. That is $12 billion that responsible parties have committed to clean up the polluted environment. Is the system perfect? Of course not. Can we continue to improve it? Absolutely. That is why we believe we need consensus-based, legislative reform. We do have problems with S. 8. We believe that it is important to build on the proven successes of our administrative reform. We are concerned that S. 8 would impose a new system that could, unfortunately, result in delay of cleanup, shifting costs from polluters to taxpayers, reducing community involvement, and preventing hundreds of sites from being addressed. We believe that S. 8, as we read it, is a creative system that is less protective of the public's health than the one we have today. We believe it would end requirements for the treatment of even the most highly toxic and highly mobile waste. Contaminated groundwater might not be cleaned up in perhaps most, if not all, cases. It would impose redundant expense of time-consuming, new risk requirements as well as new cost considerations on existing cleanups, cleanups actually being performed in the field today resulting in further delay and disruption. We believe it might undermine the efforts by the States to work with EPA in partnerships to address their hazardous waste sites and to limit real community involvement. We are also concerned that S. 8's numerous liability exemptions and limits basically reject the notion that the largest polluters provide the funds for the cleanup costs. We believe that is not something the American taxpayers will tolerate, nor should they be expected to. Mr. Chairman, I want to be very clear that while we do have our substantive differences, we do not believe they are insurmountable. Many visions in S. 8 where we have problems appear to be the result of honest efforts of people in this body to address problems that quite frankly, no longer exist in the day-to-day operation of the program. They seem to be focused on outdated anecdotes about goldplated, overprotective remedies, or liability provisions that purportedly prevent cleanup. We think that a consensus- based process must be based on where we find the program today; that by focusing on today's Superfund program, a program that now has more than 70 percent of NPL sites cleaned up or in cleanup construction, we stand a much better chance of developing a consensus and enacting responsible reform legislation in this Congress. If I might just very, very briefly speak to the four points, the four cornerstones of what we think would be responsible legislation. First, it should protect public health and the environment, promote cost effectiveness, and foster the return of contaminated sites to protective use by their communities. Second, it should hold polluters responsible while at the same time, allowing parties to resolve their liability as efficiently as possible and not trapping parties unfairly in the liability net. Third, it should encourage and support citizens in their efforts to participate in the cleanup decisions that ultimately affect their lives. We have learned over and over again, when we involve the citizens on the front end, we save time on the back end. Let's bring them to the table, let's make them part of the decisionmaking from the beginning. Finally, it should support a continued working relationship between all levels of government in cleaning up the toxic waste sites. This is not something that any one level can do alone. It will take all of the Federal, State, and local governments working together to get the job done. We all know how much Americans want these hazardous sites removed from their communities forever; we know how much they actually want the Superfund Program to succeed. I believe we can, in fact, work out something for their benefit. Mr. Chairman, if I might suggest, why don't we get everyone together, why don't we pull out a blank sheet of paper, why don't we draft a Superfund reform bill that recognizes the progress that we've made, addresses the remaining problems, and sets the program on the right course for the future, with an ultimate goal of ridding our Nation of hazardous waste sites and protecting the public health. I can assure you that we are eager to get on with the job of making America's toxic waste cleanup program faster, fairer and more efficient, and thus, bringing relief to many more communities. Let us work together to forge a consensus that will protect future generations of Americans, let us all say yes to a stronger, better, more effective, more successful Superfund process. We look forward to working with you, Mr. Chairman. We have enjoyed I think a very positive dialog over the last several years. We would like to build on that. Together we can see Superfund legislation drafted and passed this year. Thank you. Senator Smith. Thank you very much, Administrator Browner. Senator Inhofe, do you have a statement you want to make at this time? OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE OF OKLAHOMA Senator Inhofe. Thank you, Mr. Chairman. As you know, we have a Senate Armed Services Committee also simultaneously, so I'll have to be leaving. I did want to get something in the record, so I do have an opening statement, but I'll just read a little bit of it so that I can get the point across. The point that I have tried to get across in many of these hearings over the past 2 years is that even though most of the people in this room probably work for the EPA and wouldn't agree with this, at the local level, we've had such great successes. I won't use the old examples, we've got new ones this time, Madam Administrator. Instead of using OxyUSA, let me just share an experience in Oklahoma that I think illustrates this perfectly. Two former refineries were purchased by the same company, Arco. Both had similar wastes and similar remedies and both needed to be cleaned up. The difference was that the State of Oklahoma took the lead for one, while the Federal EPA managed the other. The difference was dramatic and underscores the inherent problem of directing a local cleanup process from Washington, DC. The EPA site took 8 years longer and $37 million more. Specifically, the State site was a refinery located in Vinta, OK. Remediation began in 1989, took less than 3 years and only cost $6 million. The Federal site was a refinery located in Sand Springs, OK. Remediation began in 1985 and it was finished in 11 years in 1996, just finished, at a cost of $43 million. Both remedies involved the solidification of an onsite land filling of petroleum refinery acid sludges. I only bring this out because we have case after case, and you mention in your fourth point, working together, working relationships with the States and the counties and the Federal Government. I'm just saying I think we have one very expensive step that has not demonstrated that it has been able to clean up these sites efficiently. I'd ask my entire statement be placed in the record. [The prepared statement of Senator Inhofe follows:] Prepared Statement of Hon. Jim Inhofe, U.S. Senator from the State of Oklahoma Mr. Chairman, thank you for calling today's hearing and I want to commend you for your quick start on Superfund reauthorization. I believe we will be able to move Superfund this year, provided we have the support of the Administration. You have done a good job of taking the Superfund discussions from the last Congress and drafting legislation that moves the process forward. I am looking forward to working with my colleagues on both sides of the aisle to fix a system that everyone agrees is broken. While I recognize that EPA has made some administrative changes in the Superfund program, it is not nearly enough and a congressional overhaul of the entire system is desperately needed. We must: 1. We must shift the program to the States and local communities. 2. We must improve the cleanup process and shorten the time it takes to clean up a site. 3. We must reform the liability structure to ensure that parties are responsible for only their own actions, not others. The best way to change the system is to get the cleanups down at the State level. The added bureaucracy of the Federal Government only adds unnecessary costs and red tape to the process. Cleanups are delayed and more people are exposed to hazardous waste under the Federal system. I have one example from Oklahoma that illustrates this perfectly. Two former refineries were purchased by the same company, ARCO. Both had similar wastes and similar remedies and both needed to be cleaned up. The difference was that the State of Oklahoma took the lead for one while the Federal EPA managed the other. The difference was dramatic and underscores the inherent problems of directing a local cleanup process from Washington D.C. The EPA site took 8 years longer and $37 million dollars more. The State site was a refinery located in Vinta, Oklahoma. Remediation began in 1989, took less than 3 years, and only cost $6 million dollars. The Federal site was a refinery located in Sand Springs, Oklahoma. Remediation began in 1985 and was finished 11 years later in 1996 at a cost of $43 million dollars. Both remedies involved the solidification and onsite landfilling of petroleum refinery acid sludges. The extra Federal costs included multiple demonstrations of solidification technologies which added years to the project and extra EPA reviews of the design documents which caused the project to be delayed numerous times. It actually took longer for the EPA to review the documents than it did to produce them. At the conclusion, the State site cost $92 per cubic yard to clean up while the EPA site cost $313 per cubic yard. And this was not a site that was cleaned up 15 years ago, it was just finished last year while we were debating Superfund. We need to get more sites cleaned up at the State level, they do it cheaper, faster, and more efficiently than the Federal Government will ever be able to do. Mr. Chairman, I am looking forward to working with you on this legislation so that we can finally get these Superfund sites cleaned up and off the list. Senator Smith. Senator Thomas, any opening remarks? OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM THE STATE OF WYOMING Senator Thomas. Mr. Chairman, I do have a statement I would like to have entered in the record. [The prepared statement of Senator Thomas follows:] Prepared Statement of Hon. Craig Thomas, U.S. Senator from the State of Wyoming Mr. Chairman, thank you for scheduling this hearing, and for your hard work to see that the Federal Superfund law is finally reauthorized. I want to commend you and Chairman Chafee for your hard work on this important issue. Nearly everyone agrees the current Superfund law is broken and changes need to be made. Unfortunately, the consensus doesn't last much past that statement. A program designed in 1980 to clean up hazardous waste sites has cost us over $30 billion and we've cleaned up less than one-quarter of the over 1300 sites on the National Priorities List (NPL). More disappointing than the lack of progress is the fact that by some estimates, less than half the money spent goes to actual cleanup. So the lawyers line their pockets while the vast majority of Superfund sites see little progress. The bottom line is that the current system doesn't protect the environment or preserve the health and safety of future generations. There are several changes Congress must make to the current law if we are to achieve our goal of protecting public health: provide a common sense approach to cleanups, control costs, reform the liability system, accelerate cleanups, increase State and public participation in the process, and address Natural Resource Damages (NRD). S. 8 moves us toward achieving those goals. S. 8 injects some common sense into the cleanup program by allowing cost-effective remedies that protect human health and the environment, including groundwater. It takes the future use of the site into account when selecting the cleanup remedy. In addition, the current rigid statutory preferences for permanence will be replaced with flexibility to allow consideration of all cleanup options based on several important factors. These provisions will help accelerate cleanups and control costs. If there's one area of the current law that has driven much of the public outrage over Superfund, it is the liability system. All across the country, and in my State of Wyoming, small business owners who sent a tiny amount of waste to an eventual Superfund site are drawn into the costly litigation process. Remarkably, the system of liability puts every potential party on an equal liability footing, so even though a small businessman may have only contributed a small amount of contaminant, he's on the hook for the full amount of the cleanup, just like the major contributors to the site. S. 8 addresses this concern by eliminating liability for small businesses, parties that contributed extremely small amounts of waste, and religious and charitable groups among others. It also proposes a ``fair share'' allocation process for multiparty sites. These changes will dramatically reduce the litigation costs associated with Superfund. I regard NRD as the ``sleeping giant'' of the Superfund program. This is a program that is just beginning to develop, and it's clear trustees--States, the Federal Government and Indian tribes will use this portion of the law to file huge claims against companies for questionable ``values'' of the lost use and non-use of natural resources. I'm concerned that reforming the Superfund Cleanup program without addressing the NRD portion of the law will only move our problems with the current law from one portion of the program to another. I am pleased S. 8 addresses this concern by eliminating non-use and lost use damages for pre-1980 activities. The opponents of Superfund reform like to talk about making the ``polluter pay.'' The fact is, however, that the Federal Government is the single biggest ``polluter'' in this country. There are over 155 Federal Superfund sites, there's even one in my State of Wyoming. These sites are some of the most complex and costly in the country. The inability to control costs, reform NRD and get cleanups done quickly result in additional liability to Federal agencies, costs that are passed along to the American taxpayer. Therefore it is in everyone's interest that we pass substantial reform quickly. I am sure we will hear from some of today's witnesses that the reforms the Clinton Administration has initiated have solved the problems with Superfund. I agree that they have made some improvements to the system. However, there remains a good deal of work to be done. Even with these reforms, there is too much litigation, cleanups cost too much and sites are not being cleaned up quickly. I encourage the administration to come to the table so we can work together to pass comprehensive legislation in order to truly reform Superfund. S. 8 makes some very real improvements to the current mess. It's not perfect, but it takes us a step forward on resolving these contentious issues. S. 8 represents an excellent effort and I hope we can move forward very soon. Thank you, Mr. Chairman. Senator Thomas. I hope things are going as well as you report. Each time you come before Congress, Madam Administrator, it sounds like everything is perfect and the Congress just ought to keep quiet. Frankly, I have to tell you that we have a role too and our role comes from where we live and our experience. You come and lecture us about how things are going so well that we ought to shut up and go home. I just don't agree with that and I want you to know that. Ms. Browner. Mr. Chairman, if I might just briefly respond. I have absolute respect for the role of the Congress. I am here today to ask you to please rewrite the law. I am in no way suggesting you don't have a very important role. Senator Thomas. I'm not just talking about today. We were here last year and it just seems like you always talk about partnerships, but the partnership is like horse and rabbit stew, one horse and one rabbit. It's about that equal. I think we could really get along a little better if you accepted us as partners, real ones. Ms. Browner. Senator Thomas, with all due respect, we worked with this committee to craft very important legislation last year, we worked in partnership. Senator Thomas. Yes, I was on this committee. Ms. Browner. And that is what we would like to do here. In no way do we suggest, nor have I ever suggested to this committee or any body of this Congress, that we don't welcome the oversight, that we don't welcome involvement. We may have the need for in-depth discussion and debate, but if we can sit down together, which is what I am asking for here today, and look at where the program is today. It is a different program, it is not the same program of 5 years ago. Senator Thomas. I don't mean to be argumentative, but I'm sharing a perception. You can dismiss it if you like, but that is the perception. I'm not the only one in the world who has that perception. Ms. Browner. I'm sorry if you have that perception. I believe that I have demonstrated personally and my agency and this Administration have demonstrated a real willingness to work. We wrote two pieces of legislation together last year that make fundamental changes in programs for the people of this country, and we are proud of the work we have done together. Senator Thomas. I'm sharing my view. You can reject it if you choose. Senator Smith. Administrator Browner, let me start by first of all saying there is no question that you have made great strides in regards to making administrative changes during your tenure that I think most of us would agree are certainly in the right direction. Without being confrontational or directly critical, let me just say people, private parties, people out in the various States say though that although these administrative reforms are well-intentioned, in fact, they are not being consistently implemented, and that the scenario that you paint here is not as rosy as you say it is. Could you just respond to that briefly? Is there some evidence that you're having a difficult time implementing these administrative changes. Ms. Browner. The changes which we have unfolded in three sets of administrative reforms over the last 3 years are at various phases. We'd be the first to admit, the ones we started 3 years ago are further along than the ones we started a year ago. There are parties other than EPA that have looked at these administrative reforms and their success. For example, the Superfund Settlement Project, which is made up of companies like Ciba-Geigy, Dupont, General Electric, General Motors, IBM, so on and so forth, and we can provide this to the committee, looked at the first year of implementation of our administrative reforms and what they found is they're working and they do make a difference. These come on a long history, and I think we would all agree, a sometimes painful history, but we have absolutely committed ourselves to change, we have been willing, we have encouraged third parties to come in and review the changes. The Chemical Manufacturers Association, CMA, also has a project underway to evaluate our reforms. At the end of the day, the best thing we can all do is take those reforms, understand them, and rewrite the law. That is what is the most important thing to do now. Senator Smith. But that report does not cover all of the EPA regions is my understanding. That only covers some of them and there are some successes in there, but there are other regions where the success has not been that good. Ms. Browner. The report looked at, in an effort to take a snapshot, if you will, of activities across the country, it did look at activities outside of Washington. I think that's extremely important. The reforms are going on in all 10 of the regions. The nature of the problems in individual regions will vary. In Senator Baucus' part of the country, we have large numbers of mining sites and those tend to be different than the sites we see in the industrial northeast or the midwest, for example. So there are variances in the type of sites. I think there is a study now underway in all 10 of the regions and we can certainly provide that for the record. Senator Smith. Is it still your position that we should have comprehensive Superfund reform in spite of the administrative changes you've made? Ms. Browner. Absolutely. Yes. Senator Smith. In your comments about S. 8, if in fact some of the changes that we make in S. 8 are based on problems that you say don't exist--maybe you're right in some areas, maybe we're right--let's assume that many of the problems that we say exist don't exist and you have taken care of them, what would be wrong--if we codified the changes? Ms. Browner. We don't disagree with taking the administrative reforms and placing them in legislation. Unfortunately, as we now read S. 8, and perhaps we misread it, and we will stand corrected if we do, the way in which the reforms are playing out, our experience of the reforms in the field is not captured in S. 8. For example, we do believe it is important to update cleanup decisions. We absolutely agree with the need. Technology does advance, there are cost savings that can be brought to bear. As we read S. 8, it would literally allow everything to be reopened, including where you have construction underway and we think that is, quite frankly, going to result in significant delay at far too may sites. So maybe it's a judgment call. We agree with the need, the flexibility should be embodied in the law to allow the update of remedy decisions, but to require every single remedy on the books to be reopened, we think will not serve anyone well. Another example would be orphan shares. We couldn't agree more with the need. I think every time I have testified I have spoken to the need for an orphan share fund. We are doing orphan share allocations right now. We have more than 20 sites where we've made it available, it's more than $50 million. The way we read S. 8 would essentially put orphan share funding in front of every other activity in the program, and so you would again have, we think, unfortunate and unwise delays in cleanups. I think as both you and Senator Lautenberg said, we've made a lot of progress. This is not a gap that cannot be closed. We think it can be closed. We would just ask for the opportunity, and this is a very detailed process, to actually sit down with your staff, with yourselves, whomever, to go through what is actually working, what should be put into the law in a very strict manner, and where perhaps some flexibility would serve all of us, and most importantly, the communities where the sites are located. I can give you a number of examples where we've moved, you've moved, but we're not quite there yet, and I think maybe we can get there, but it's going to take some real dialog. Senator Smith. Senator Lautenberg. Senator Lautenberg. Thanks very much, Mr. Chairman. Thanks, Ms. Browner, for your excellent statement. As I listened to my distinguished colleagues ask some questions about your management and your response to inquiries on oversight, I'm reminded of the fact that the Superfund program was developed at the end of 1980; that it had its first dozen years under Presidents Reagan and Bush; and in the first dozen years, this program barely moved and we spent a ton of money. As a matter of fact, we had one of those terrible incidents that occur sometimes in government when the person responsible for managing the program was accused and a deputy was punished severely for malfeasance or misfeasance, whatever the appropriate word is, of duty. So we spent 12 years learning what was happening and we've begun to catch up with this thing. We had rampdowns and rampups because we couldn't get the funding for it, I'd point out to my colleagues here that this is a job I think that has developed very well in the last few years and it's a testimony of you, Ms. Browner. The fact is that you have been responsive. I have yet to hear about your unwillingness to appear before a committee or unwillingness to answer questions. You've been there when asked and I must say I admire your courage because you've stood up and taken the criticism not only graciously, but also with a follow-up to the programs that further distinguishes you and your department. I'm pleased to see you here and hope that we can work something out that would satisfy both parts, both ends of the spectrum. I don't know whether it's possible. I think we have an obligation to the American people to do it. My mission is not to protect any of the parties who are responsible for pollution. Those who are exempt are exempt. We've agreed with that, but to make sure that those who are responsible pay the price for their deeds, but above all, that we protect the citizens who live nearby and whose responsibility we share. I'd like to just get a couple of questions in and time runs fast here. Your administrative reforms have been recently reviewed by Superfund settlement projects, the Industrial Coalition which is chaired by John Quarles at Morgan, Lewis & Bockius. Can you tell us about the third round of administrative reforms that you implemented and their results? Is that something you can do sort of quickly so we can get in as much time as possible? Ms. Browner. When you take the three rounds of administrative reforms, there are more than 50 specific actions that they entail. The third round did such things as create a National Remedy Review Board which actually looks at sort of the most complex, the largest sites, in terms of what is an appropriate remedy. That group is already meeting. They've been looking at sites and they currently estimate potential savings of $15 to $30 million based on just 12 remedies at 11 sites. They expect to review an additional 10 to 12 remedies in fiscal year 1997. Again, this is focusing on the worst, the most complex sites. That is what it is designed to do. It comes in prior to a final decision to make sure that the best technology is really being brought to bear. We have also, as I mentioned briefly, created a mechanism for reviewing existing remedy decisions, for updating them, to take into account the fact that technology does advance in this field. Over 30 site remedies have been reviewed because of technology advances and the cost savings there are estimated at $280 million in future cost reduction, in other words as application of the new technologies are brought to bear at the site. We will review an additional 60 remedy decisions in the coming months. We've offered $57 million in orphan share compensation as I mentioned previously. We're out there trying out this idea of orphan share. We're finding out whether the parties come to the table, what does it take to bring them to the table, what does it take to get the lawyers out of the picture, to reach an agreement on who does what in the cleanup and to actually get the cleanup done. Finally, we were able to reach an agreement with the Department of Treasury that the dollars that the responsible parties place in trust funds or escrow accounts, if you will, for cleanup costs down the road, can accrue interest and that interest goes back into that account, so there are more dollars available for those cleanups. It is the Site Specific Interest- Bearing Account Program. Those are some of the Round 3 reforms. They're up, they're working and we can provide you with detailed information on each of them. Senator Lautenberg. Just one more. That is that S. 8 gives the kind of crucial decisionmaking authority on remedy selection to PRPs. EPA then has to object in 180 days if they disapprove of the PRP-chosen remedy. What are the practical implications of the PRP picking their own remedies? Ms. Browner. The concern we would have is that a PRP might not choose the remedy that clearly protects the public health, that protects the environment. You could have a PRP choose a remedy, quite frankly, because of dollar amounts and not the level of public health and environmental protections that are promised to the American people. We think there has to be a check and balance in the system. In many instances, the sites we're dealing with are sites where PRPs have not been forthcoming, have not been willing to accept the responsibility to get on with the task. Now, to suddenly allow them to make a choice without that check and balance, without that public participation, we don't think guarantees the environment and public health protections, and moreover, we are concerned that we may be moving problems onto future generations that we'll just sort of deal with the surface problem and leave the underlying problem. Senator Lautenberg. Thanks, Mr. Chairman. Senator Smith. Senator Chafee. Senator Chafee. Thank you, Mr. Chairman. I'd just like to comment on that last point of Senator Lautenberg. Under S. 8, and I believe under your administrative reforms, the PRP has a say in the selection of the remedy with the oversight of the EPA. So I don't think it's quite accurate to say we're handing it over or to suggest that we're just turning the problem over to the responsible party and letting them just choose cleanup remedies, the easiest and the least expensive. You and I met, Madam Administrator, a couple of weeks ago and the question I asked you was, ``Who is in charge here from the Administration's point of view.'' In your statement, you talked about ``We are eager to get on with the job. Let us work together.'' The ``us'' and the ``we,'' I assume is you? Ms. Browner. It's me. Senator Chafee. It's not Ms. McGinty from CEQ and it's not the Vice President, and the Department of Justice or the Department of Energy, or the Department of Defense. It's you, is that correct? Ms. Browner. That is right. I am responsible, for the day- to-day operation of the Superfund program. Obviously I answer to the President, I answer to the Vice President. I am also the person that the President has asked to work with Congress to fashion a legislative proposal. That is something he asked me to do before I even accepted his offer of the nomination to this job more than 4 years ago. Now, Mr. Chairman, as I know you are aware, Superfund involves many parts of the Federal Government. It is not something EPA does on its own--the Department of Defense, the Department of Transportation, the Department of Energy, the Department of Justice all have a role to play in administering the law. We promise you that whatever consensus-based process this subcommittee and committee create, we will undertake the responsibility, I, EPA, to ensure that we have the right Federal agencies and departments in the discussion at the right moment, as we did on drinking water, as we did on food safety. Senator Chafee. As you know, last year, I asked, pleaded perhaps is a better word, that the rhetoric be reduced on this ``polluter pays'' or ``letting polluters off the hook.'' I wasn't totally successful in my plea. I'm interested in the part of your prepared testimony in which you say, ``EPA's reforms''--I'm talking about the section at the bottom--``getting the little guy out early.'' ``EPA's reforms are removing thousands of small volume waste contributors from the liability system.'' Under the liability system, there is a joint and several liability and by definition, the small-volume waste contributors are polluters, aren't they? Ms. Browner. They are people who have certainly participated in a site, that is true. Senator Chafee. So what you have done, and I have no objection with this, but the facts are you're ``letting the polluters off the hook,'' is that correct? Ms. Browner. Senator Chafee, as we have said, we do believe there are parties unfairly trapped in Superfund, absolutely, positively. I don't think Congress, when it created this law, when it reauthorized this law, envisioned that a homeowner, that a pizza parlor owner would become a part of Superfund. What we've sought to do is honor that intent within the existing law. So homeowners are absolutely out. Senator Chafee. I've only got limited time, Madam Administrator, but the facts are that these are polluters. What I tried to say last year, as I say without total success, was that we're talking a matter of degree. These are polluters. If you strictly enforce the law, some dentist that had some pollution go into a site, could be responsible and joint and several liability for the whole thing, right? That's the law. Ms. Browner. I think that it is fair to say that courts have interpreted the law as you suggest. I do not think that's what Congress intended, I do not think that makes sense for the American people and that's why we've had a set of administrative reforms. No one ever thought when Congress wrote this law that a dentist, that a pizza parlor owner would find themselves a ``polluter.'' The courts interpreted it that way, EPA has acted now to protect them. Senator Chafee. Madam Administrator, you have taken on yourself, and I don't argue with it, but the facts are that you've taken on yourself to excuse some individuals or some small companies. You've done that. This is what you say right here, ``EPA's reforms,'' and so you've drawn the line at a certain place. I don't know where the line is but whatever you call a ``small-volume waste contributor,'' here in your testimony. Ms. Browner. We agree. We've taken them out because we don't think you ever intended for them to be there. Senator Chafee. Despite what the law says, you've taken a position that you thought was our intention. You've done it because it makes the whole process much easier. You can move on and, similarly, in S. 8, we have also removed some. Yet, you don't like what we've done. You think we've gone too far. I remind you that it's all part of the same process; we have removed some polluters, just as you've removed some. Ms. Browner. We do not disagree---- Senator Chafee. But what gets me is this aggressive language--that we all have heard, about ``polluters let off the hook,'' or you're not ``making the polluter pay.'' You're letting them off the hook and you're not making the polluter pay, but you call that reform. Ms. Browner. I think we do have agreement here in terms of the largest party should pay their fair share and the little people should be out. I don't think and you have said repeatedly you do not disagree with my efforts to protect the small parties which the law say it, this is how courts have interpreted it and we have worked around those court interpretations in terms of the small parties. This is a sensible thing to do and I think we all agree. The question now is, and I think the question appropriately before all of us who care about legislation, is the middle and within that middle, where do you draw a line in terms of who is clearly out. The law would state is clearly out, and who remains in a fair share allocation system. We are concerned that when we read all of the various parts of S. 8 and we connect them together--which is how we would actually do it in the field, that is how the law would come to work in the field--that the effect of all of the various sections of S. 8 result in large numbers of parties and sites, quite frankly, which we went over and over and around and around on last year. We are concerned about the obligation for the largest polluters to pay their fair share. Senator Chafee. My time is up but I would appreciate it if you would take the expression ``letting polluters off the hook,'' and bottle it and throw it away somewhere. Thank you. Senator Smith. Senator Baucus. Senator Baucus. Thank you, Mr. Chairman. Mr. Chairman, I think we're maybe making a little progress here. This last exchange I think illustrates it. Namely, there seems to be agreement despite the argument. The argument is whether the Administrator is letting ``some polluters off the hook.'' That's pretty much irrelevant I think to the greater goal here. The greater goal here now is what is the solution. I think we're agreeing, what's the solution. Senator Chafee. The greater goal is what? I missed that. Senator Baucus. What's the solution to the problem? That's what we're here for, to try to solve problems, not make problems. Congress somewhat solved the problem when it passed Superfund, but also made some problems, so our goal here is to solve the problems that Superfund made so that we have a better Superfund statute than we had before, namely addressing cleanups. As I hear the exchange here, it seems to me one of the solutions is to let the smaller dentists, outfits, off the hook, but I think most Americans would agree, some of the largest companies who did pollute should pay the bill, not taxpayers. I think most Americans, to repeat myself, think not only should taxpayers not pay, but the smallest polluters, the dentists, should not pay either because they're unwilling parties trapped in the situation caused by the Congress. My question to you, Administrator Browner, is this. You've outlined a lot of reforms that you've undertaken, you've done as much as I think you possibly could given the restrictions of the statute. You also have said that you'd like a comprehensive bill, is that correct? Ms. Browner. Yes. Senator Baucus. Could you outline for us today again--you gave us four points in your prepared testimony, but if you could be a little more specific and say the two or three most important areas where you think the Congress should still address reform even given your argument, that S. 8 deals with outdated concepts or problems that no longer are as great as they were, say, a few years ago. What are the two or three that you'd like to see us address, the problems that currently exist that you cannot change given the restrictions of the statute but you'd like to see changed? Ms. Browner. I think it is absolutely important that the statute, when rewritten, guarantees public health and environmental protections. What I mean by that is let's not exempt the requirement, for example, that the hot spots be treated, that they actually be cleaned up and treated. Senator Baucus. And S. 8 does that in your judgment? Ms. Browner. We are concerned that is what S. 8 does. Senator Baucus. So don't accept the hot spots. What's next? Ms. Browner. No. 2, in terms of public health and environmental protections, let's not say that bottled water is an appropriate solution when we know that groundwater can, in fact, be cleaned up and treated. Let's not have a preference or an equal footing. We've had some real confusion in understanding this section of S. 8, I'll be honest with you. We've gone back and forth with the staff, but we are concerned, and I don't think this is necessarily the intention, but that you can read S. 8 as allowing for the way the cost comes into play, the cost factors and other factors come into play, you could end up in a situation where groundwater is not addressed even though the NRC and the National Resource Council says they can do it. Senator Baucus. So groundwater is another one. What's the third area? Ms. Browner. Then in terms of the largest parties paying their fair share. Senator Baucus. You're getting into allocation of liability. Ms. Browner. Now I'm into the second category, right. We are concerned that S. 8 takes out a large category of sites when you string together the various provisions. This was the issue that I think we all spent a lot of time on last year, the co-disposal sites, which make up a significant number of the sites on the list. What we want to do is ensure that you don't needlessly drag parties through an allocation system, that there's a bright line, you're in, you're out or you're in; that it's very clear on the face of the statute and that these 1 percent type proposals mean a party has to stay in perhaps for several years while we figure out the percentages as opposed to saying, if you meet the following definitions, and let's talk about what those definitions are. Senator Baucus. Are you suggesting we enact something along the lines of your fair share allocation? Ms. Browner. We would suggest a process. I think this is an important example of where we had one position, one opinion 3 years ago based on in the field experience with our administrative reforms. Today, we have a different opinion. If I might just briefly explain it. We all spent a lot of time 3 years ago looking at an allocation system, where there would have to be people who were certified, allocated, and it was very rigorous and rigid, if you will. When we went out and actually used our administrative reform allocation system, what we found is people didn't want to be limited to a list of who they could choose as their allocator. They needed more flexibility. We would encourage you, based on that experience, and you can talk to parties who have been involved, to provide more flexibility in the allocation system. The real point of the allocation system, of the orphan share, is to get everyone in the room, get the liability resolved, move on to clean up. Senator Baucus. I see my time has expired. I just want to say, Ms. Administrator, I think you're doing a good job. Ms. Browner. Thank you. Senator Baucus. You have a nearly impossible task dealing with this statute as well as some other statutes that this Congress has enacted, all well intended, but sometimes there are also some unintended consequences which you have to live with. I might say for the benefit of my colleagues too that you've also responded very well to a lot of local initiatives and local concerns, particularly in my State of Montana. The best example that I can think of right off the top is a very innovative approach I might say to my colleagues here. We have a huge Superfund site on the outskirts of Anaconda, MT. It's a problem and the local communities as part of the cleanup got the approval of EPA to do this, and turn this Superfund site into a golf course. Jack Nicholas has designed the course. It's a great course and it is going to be open this summer. It's going to be so good, we're going to rival the U.S. Open. This golf course is going to put Montana on the map. I invite my colleagues to come out the opening day of the Jack Nicholas golf course in Anaconda, MT, which was a Superfund site this summer. Senator Smith. What are the greens fees to pay for that? [Laughter.] Senator Baucus. I don't want to get into the Senate gift rules, but I urge you to come out this summer on opening day. Ms. Browner. If I might say, this is an example of how we are taking a very common sense approach to the cleanup plans and incorporating future land use. Sixty-three percent of the cleanup plans now incorporate the community's desires in terms of future land use. You're providing an equal level of public health and environmental protection, but you're making adjustments within the cleanup plan that reflect what the community wants. Here they wanted a golf course. That does change your cleanup plan. It doesn't change your level of protection, but it allows for flexibility in designing cleanup plans. Senator Baucus. I might say to the Chairman, I don't know about greens fees, but Jack Nicholas is going to be there on opening day. Senator Smith. Senator Thomas. Senator Thomas. Ms. Browner, I haven't heard you mention, perhaps you did before I came in, the natural resource damage aspect. What's your position on that? Ms. Browner. I should explain that you will have people testifying later today specifically on the natural resource damage portion of the bill. We do believe that there should be a natural resource damage provision in a reauthorized Superfund bill. We're concerned that S. 8, the language on NRD, may impede response actions. We are concerned that it may create some inflexibility, but we do think that it is an important issue. When we say comprehensive, we mean comprehensive and we do have with us today the natural resource trustees who will be speaking specifically to that. Senator Thomas. I see, but if we had the piece of paper out here, what would you write down on NRD? Ms. Browner. I wish we could write it down in a second. I think it would take many, many sentences. Senator Thomas. Do you relieve the liability before 1980, for example? Ms. Browner. No, we would not. Senator Thomas. They're too big? Ms. Browner. Excuse me? Senator Thomas. They're too big a polluter? They don't fit in your category? Ms. Browner. I think the question of dates, whether it be in the case of NRD or in other instances, raises a new round of litigation quite frankly and I think the goal of all of us is to reduce litigation. What will happen is parties will come in and argue they did something before or after a particular date and parties will be litigating a whole other set of issues. So we have, since we began this discussion 4 years ago, consistently recommended that we not use dates as a means of determining who is in or who is out. Senator Thomas. You talked about getting polluters to pay. There is a substantial number of these sites that are Federal sites, are they not? Ms. Browner. Seventy-five percent of the cleanup expenditures now underway are being done by the responsible parties, by the PRPs if you will. The lion's share are, in fact, not Federal sites. Senator Thomas. I was confused on the numbers. I noticed in some of the material, it said---- Ms. Browner. I'm sorry, are you talking about Federal facility sites? Senator Thomas. Yes. Ms. Browner. I apologize. Senator Thomas. Like Rocky Flats. Ms. Browner. You're right, there are a number of very large Federal facilities sites in the Superfund Program. You mentioned Rocky Flats. There are any number of them. I apologize, I thought you were talking about the non- Federal sites. My confusion. Senator Thomas. We had a hearing last year on Rocky Flats. Are we making any progress? We've spent how many million dollars there and almost all of it has gone to lawyers as I understand it. Ms. Browner. I apologize, I know there was a different site with a similar name. We continue in the dialog. This is not an easy site, as you are well aware. Senator Thomas. The dialog is we pay the legal fees, while somebody else does the talking? Ms. Browner. I'm not sure I understand what you mean by we pay the legal fees? Senator Thomas. That's precisely what we do, is we pay the legal fees for the defense and two other parties are in the litigation. Ms. Browner. Where you have a Federal facility, in the case of the example you use, we seek to work with the other Federal agencies to shape a solution. There may be litigation in terms of other parties who participated in that site, but the energy tends to focus on finding a resolution between the Federal departments and agencies. Senator Thomas. It indicates in some of this material, there have been 50 sites cleaned and deleted from NPL in the last 2 years. Ms. Browner. I'm sorry, could you say that again? Senator Thomas. Fifty sites cleaned and deleted from NPL. You were talking about 250 or something of that nature? Ms. Browner. Right. In the last 4 years, we have completed work at more than 250 sites now. Senator Thomas. So you did 200 in the first 2 years? Ms. Browner. No, I apologize. I'm not familiar with the 50 number that you're using. If you want to tell me where it comes from, that would be helpful. Senator Thomas. OK, I'll get it to you and perhaps you can respond to it. Ms. Browner. The 250, no, we didn't do 200 in the first 2 years. They are spread out over the 4 years. Senator Thomas. Thank you, Mr. Chairman. Senator Smith. Thank you, Senator. Senator Allard. OPENING STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR FROM THE STATE OF COLORADO Senator Allard. Thank you, Mr. Chairman. I missed my opening statement, so I'd ask unanimous consent that be made a part of the record. Senator Smith. Without objection. [The prepared statement of Senator Allard follows:] Prepared Statement of Hon. Wayne Allard, U.S. Senator from the State of Colorado Thank you, Mr. Chairman. I look forward to today's hearing which I hope will shed some light on the urgency of cleaning up highly toxic sites around the Nation. In order to quickly and effectively clean up these sites, we need to modernize Superfund so it can work effectively, that's why I am pleased to be a co-sponsor of S. 8, the Superfund Cleanup Acceleration Act of 1997. While there may be some concerns with certain aspects of this legislation, I believe that if all interested parties make a good faith effort we can move this legislation expeditiously through Congress. Yesterday's hearing was a good lead in for today. We heard excellent testimony from State and local officials who have done as much as they can within their authority. We now need to build upon the progress they have made in the States and provide them with the responsibility and power to clean up the contaminated sites that many of them drive by every day. If we don't empower State environmental officials to act, we would be ignoring the successes we heard yesterday. I believe inaction in this case is probably the worst course we could take. Mr. Chairman, thank you for leadership in this issue, and I look forward to today's hearing. Senator Allard. Yesterday, Ms. Browner, we had a variety of witnesses who explained the States are doing a good job in running their own cleanup programs. Mr. Fields was on one of those panels. Are you wholeheartedly behind the States in controlling and running their cleanup programs? Ms. Browner. That is a complicated question. If I might take a moment to explain? Senator Allard. Yes. Ms. Browner. As I understand yesterday's hearing, it was on brownfields? Senator Allard. Yes, it was. I think we're setting down some very basic principles in brownfields and I'm trying to figure out if you're willing--and they look to me like they've been successful. I'm seeing if you're willing to carry those on with the Superfund sites. Ms. Browner. We are very proud of our Brownfields Program. We think it has been tremendously successful in addressing lightly or moderately contaminated sites. In terms of the worst sites, the Superfund sites, the big sites, it is our experience that in some instances, at some sites in some States, working with them in partnership, we would even say providing in the law that they take lead responsibility makes sense. We have supported those proposals in the past. The problem we have with the current proposal in terms of the States is that we think it is incredibly rigid, that it is sort of a one-size-fits-all approach. Let me give you an example. As we understand the current legislative proposal, if a State had what is called a remedial action plan on a site in their State, EPA could not become involved. New Jersey, which has a State cleanup law, recently had a very unfortunate situation involving mercury in an apartment building, actually in the walls, underneath the floor. It was a former industrial site that had been converted to lots and rented or sold. The State had been involved in activities there previously. I think it is fair to say they would have what amounted to a remedial action plan on that site. When they discovered this situation, they needed us to come in. They called us, they invited us in and we came in and worked in partnership and are working today to address the problem. The concern we have with S. 8 is it's an all or nothing type approach and we would encourage the committee to recognize the need for flexibility in dealing with the worse sites. We had another example recently in Georgia. They discovered a site literally 24 hours after the business shut down, decided to go out of business. They called us and said it's yours; we can't deal with this. We've already removed at this site, 415,000 pounds of mercury. We were literally vacuuming it up at the site. You need that kind of flexibility so if the State finds something it can make a judgment and we can work together to address the public health and environmental concerns. So I would just say, as I think is true for the majority of environmental and public health issues we face today, let's avoid a one-size-fits-all, rigid system of the States do everything and EPA does nothing or EPA does everything and the States do nothing. Let's recognize the differences between the States. Senator Allard. Would you be happy then to put a provision in the bill that said if the States requested you to come in, that you could be available as a consultant for them? That's what your testimony said. Ms. Browner. There are other problems with the State section of S. 8. That's one portion I was speaking to and I think what you suggest in terms of EPA being able to come in may make some sense, but there are other problems. I don't want to suggest that is the only problem, and I'm more than I'm happy to detail them for you. Senator Allard. I'm all ears. Let's hear it. Ms. Browner. One example would be when a State files under S. 8, when the State seeks delegation of responsibility for Superfund in their State, they get to self-certify in terms of their ability to assume the program. EPA is not allowed to request documents, to verify that self-certification, as we understand the provision. We have 60 days to make the decision. There is not at the conclusion of our decision, a requirement of public notice and comment. We think the stakeholders in the State should have an opportunity to comment on EPA's decision. If we fail to act in 60 days, the program is immediately moved to the State. Senator Allard. On that issue, what would be the problem with us saying if the Superfund is strictly a State issue, let them deal with it. If it's on the border of the State and could have ramifications with their neighbors, then perhaps maybe the neighbors could bring you in on that consulting basis. Would you be agreeable to that kind of arrangement in that issue? Ms. Browner. We have talked to the States about what they are willing to do and what they're comfortable doing. Many States, I wouldn't suggest all, do not want to take responsibility for every Superfund site in their State. We don't think they can. Senator Allard. In which case, they could invite you in. Ms. Browner. If you give the States the primary responsibility, I think the question you need to address is are you going to give them the authority in terms of ensuring the largest polluters pay their fair share or does the State have to pick up the tab. Senator Allard. I think those things are working. I don't see a real problem. Ms. Browner. We would agree that there is a way and we made a legislative proposal that has the support of many States to recognize the very good work that States can do, are doing at these sites. The concern we have is that there are many authorities which are vested in us through Congress that are important to the successful cleanup of these sites and we have not seen a willingness in Congress to delegate all of those authorities to the States. I think you may put the States, if you're not careful, in an awkward position of having responsibility with little or no resources to do the job of public health and environmental protection. Senator Allard. I guess the point I wanted to make is that they're closest to the problem, they have to live with the problem, I think there would be a real interest in them trying to clean up that environmental problem and the sooner you get it cleaned up, the better. I can understand those problems that may exist on State borders where you may have two States in conflict and we'd make some provisions in there to adjust that. We're getting away from the one-size-fits-all and we're setting up a mechanism where resolutions on conflicts can be reached, but basically you're not going to be calling the shots, it's going to be coming from the local level. You'd be brought in on a consulting basis and be supportive of what the States are trying to do. If we've got two States that can't agree, then maybe you'd move in as a mediator, help resolve that joint problem, working with both those States. Ms. Browner. I think, again this is not an easy issue in terms of what States would like and what individual States feel they can, in fact, assume. I think when you will find when you talk to the States great difference among them. I think it's also important to understand that it's not just a question of does a site happen to fall in two States and there are a number of the Federal facility sites that, in fact, do involve more than one State, but you may also have a situation in terms of groundwater contamination that could affect the site, that would appear to occur in one State, but could affect the groundwater supplies for any number of States. Senator Allard. Obviously those things have to be worked out, again, can be worked out between the States and maybe bring you in as a mediator in those situations, but I don't see why we can't put more confidence in the State role. Ms. Browner. Again, we did make a proposal working with the States on how to structure a program so that they could assume--we suggested a State be able to assume responsibility for individual sites, if that's what they wanted to do. I'm a former State Director and let me tell you, there are sites in Florida I'd be happy to take over day-to-day management and they're the worse ones I wouldn't want to touch and I think you have to allow for that kind of literally State- by-State dialog between EPA and the State. Anything that lock, stock and barrel just moves everything, particularly if you don't move all of the legal authorities that are important to ensuring that the largest polluters pay. Senator Allard. That's not what I'm talking about. I'm talking we don't lock, stock and barrel to the States, that we give the States that ability to pull in the EPA as a mediator. Thank you very much, Mr. Chairman. Senator Smith. I want to move on to one more round. We'll do 3 minutes and hopefully try to get the next panel up. Senator Baucus. Mr. Chairman, are we going to stick within our time limits here? Senator Smith. We'll do the best we can. Senator Baucus. Because I notice we've been pretty liberal. Senator Smith. Pretty liberal. I haven't been called liberal in a while. Senator Baucus. That's why I said it. I was waiting for you to pick up on that. [Laughter.] Senator Allard. Mr. Chairman, if we could get brief responses to our questions, I think our time would be much better allocated. Senator Smith. Let me start, Administrator Browner, by going back to Senator Chafee's line of questioning because I think that really goes to a major difference between us in terms of who you define as those people who should be in and who should be out. I think again, there's common agreement, as Senator Baucus said, Senator Chafee said, we agree with the de minimis parties, they should be out, but when you start moving down the line, then you're starting to pick winners and losers here and that's where we disagree in terms of how we apply that standard. Let me just use the example on the co-disposal. There's been a long debate over whether the cost of cleaning up co- disposal sites is driven mostly by toxicity, by hazardous materials or whether it's by the volume that's in the site or the solid waste. Senator Chafee and I thought in S. 8 we had addressed this by saying it makes a lot more sense to collect the taxes, the environmental income tax, the chemical feedstocks, the oil import, collect those taxes and recognize that these other sites that we're arguing about here are a problem, take those dollars and put them in and cleanup those sites. You say we are letting them off the hook. You also say the taxpayer pays. I want you to explain to me how the taxpayer, any taxpayer is paying for the cleanup of those sites? Where in our bill does it say or in any way infer that the taxpayers are paying for this? Ms. Browner. As we understand the effect of S. 8, if I might step back for a second because I do think there is an important agreement here. When it comes to sole source sites, one party is responsible for the site, I think we all agree they should pay, solve the problem. There's sort of three categories of sites in Superfund--one party, a site, they deal with it; then there are what we call multiparty sites where maybe you have six or a dozen or so parties at a site and we have mechanisms for that. Then that leaves the third category which are these co- disposal, largely landfills and I think that's where we've had the most difficulty in finding common ground. Senator Smith. But other than the taxes, if those taxes are reinstated and we do call for the reinstatement of those taxes in our bill, those taxes, yes, they are taxes, they are paid, but I don't want to speak for the corporations that pay these taxes, but the frustration has been that they've not been used for cleanup, those dollars. They've been used, in some cases, in the general fund, and in others, to pay for attorneys rather than cleaning up. The point is we reinstate those taxes, those dollars then go into these co-disposal sites. Take out this group of people that you now want to keep in. The point is if you talk to people around the sites, they want the sites cleaned up. Ms. Browner. We agree. Senator Smith. They're not looking to hunt down people as common criminals here and apply a group of penalties; they want the sites cleaned up. You say the taxpayer pays. Where does the taxpayer pay for this? Ms. Browner. First of all, the taxes that are collected for Superfund are ultimately passed onto the consumer. I think we would all agree with that, the corporate environmental tax, the feedstock taxes, ultimately some portion, if not all of that, is passed onto the consumer. Senator Smith. You're not advocating getting rid of them, are you? Ms. Browner. No. Senator Smith. Then it's an academic argument. We accept that. We're on common ground here. We accept those taxes should be reinstated. The question is, why not reinstate them, take from those funds and go to these co-disposal sites and get these people out and stop arguing and doing litigation? If you would agree to that, we'd have common grounds on 50 percent of the bill anyway. Ms. Browner. Could I ask a question, a point of clarification? I know you get to ask me the questions and I answer, but I do have a question here. Is it your proposal to take out the co-disposal sites? Is that what you're proposing? It would help me to understand because I admit, and I have tried to say repeatedly throughout this hearing, that we are confused by sections of S. 8. There were staff briefings and we came away with one impression; perhaps it is wrong. It would be helpful to me to understand if your position is---- Senator Smith. Yes. Ms. Browner. Yes, you want to take out the 250 co-disposal sites? Senator Smith. Yes. You put degrees to it; we want to take them out so we don't argue about it. My time has expired. I'm not trying to be argumentative, I'm trying to get common ground here. I think the frustration I feel is you apply a different standard of fairness to a de minimis person or site or an entity that happens to have a larger liability. I'm fully supportive of taking care of the de minimis people, but again, it's still an issue of fairness and we're paying. We're going to clean it up. Ms. Browner. If I might respond. This is obviously the issue we spent a lot of time on last year and we were hoping that S. 8 made some progress in this regard. Perhaps it doesn't make the progress that we thought it made. If might just succinctly state our concern. Because someone happened to choose to send their toxic wastes to a landfill--that's what these co-disposal sites are in large measure. We estimate there are approximately 250 under your definition, co-disposal sites. Because they happened to send it to a landfill and not to a multiparty site or didn't keep it in their backyard, you would say that the nature of the site where they sent it excludes them from a responsibility. What we're saying is don't do it by site, do it by party. That's the only difference here. Senator Smith. It's because you wouldn't agree to multiparty. I have long been an advocate of repeal of retroactive liability, but you won't even get to first base on that one, so we have no choice. So we went to co-disposals because that's where you were headed to try to get some common ground and now you don't want to move on that either. Ms. Browner. No, we can address the small parties, the municipalities. There is a way to address those people that I think we all agree are at the co-disposal sites and unfairly trapped in Superfund, if we can do it by party and not by site. Senator last year, we costed out, we looked at what it would cost to deal with all the co-disposal sites and there are many more coming. In fact, we would probably litigate many other sites because everyone would try to become a co-disposal site to get out of any obligation and quite frankly, we couldn't afford it. Senator Smith. My time has expired. Go ahead, Senator Lautenberg. Senator Lautenberg. Vigorous. Senator Smith. I was trying to get some common ground. Senator Lautenberg. Yes. Madam Administrator, the present national contingency plan expresses an expectation that aquifers be restored to drinking water uses wherever practicable, but S. 8 establishes rules for groundwater remedies that favor natural attenuation and give equal weight to alternatives such as water treatment systems in people's homes rather than removing the contamination from the environment. Is this backsliding necessary? Does it accomplish what we think that the rules ought to accomplish for the safety and well-being of our people? Ms. Browner. I think it is now well documented by independent groups, including NRC, the National Research Council, in a 1994 study, that we can, in fact, cleanup groundwater. I think everyone recognizes there may be a handful of places where it is more difficult than not but in large measure, the technology exists. Our concern with S. 8 is that it seems to require a justification that the cleanup of groundwater substantially accelerates the availability of drinking water beyond the rate of natural attenuation. You have two problems there. No. 1, is why would you do that if the technology exists to actually clean it up, but No. 2, is there are many of these groundwater sites which may not today be a drinking water supply but could easily become a drinking water supply in the not too distant future. I think here is an example where we are very concerned that you're passing a problem onto a future generation and unfairly so. Senator Lautenberg. The remedy selection in S. 8 that would elevate engineering and institutional controls to a level on the par with treatment would eliminate the preference for permanence or treatment from the present scheme. What might this lead to? Are we talking about hazardous waste museums? Ms. Browner. The concern we have is that there appears to be a provision essentially if implemented would say that if cleanup, actual cleanup, removal, treatment cost too much, then you can essentially avoid the goal of human health and environmental protection. The concern is that you could find in situations, sites fenced off and again, we had a discussion about this last year. We certainly hope that's not what these provisions mean. We've gone over this and we are concerned that institutional mechanisms being given the kind of equal footing, if you will, in terms of solving problems, could result in some sites not actually being cleaned up, could result in bottled water being made available as opposed to treatment of potential drinking water sources. Senator Lautenberg. Thanks, Mr. Chairman. Senator Smith. Senator Chafee. Senator Chafee. Ms. Browner, I just want to point out that you specifically stated that you wish a rewrite of the Superfund law and it is very apparent that can't be accomplished without bipartisan cooperation. There can't be a law unless we pass one up here. We can't pass a law without the cooperation of the Administration. We certainly can't have it enacted into law. There have been various attempts to do something about this. In the 103d Congress, we had the situation where the Democratic Party controlled the House, they controlled the Senate and they controlled the presidency. They had a Superfund bill that came out of this committee, I voted for it, but it didn't pass in the Senate and no Superfund bill passed in the House. So there's really a tough challenge. It behooves all of us to be in a cooperative mood if we're going to get anything. On the co-disposal sites, it was our philosophy that the dumping was done legally; that's one of the requirements we had under the co-disposal sites, it would be legal when they did it. That's where the biggest controversies come, that's where they have to hire a hall to take care of all the lawyers. Our philosophy was, let's just get it over with but that's a philosophy, at this point, you don't agree with. I want to say I listened to the three issues you listed. Your first one was hot spots and the third one was the co- disposal exemption for big industrial waste. We can negotiate these. Your second one was on groundwater and I believe that there's a misreading or an ambiguity in there and that can be straightened out. So this thing can be solved. We've got to start with something. This business of taking a blank sheet of paper, we spent a lot of time on this and we've got to start somewhere. I would hope that you'd give further consideration to using S. 8 as a starting vehicle, recognizing that it's not written in concrete and it is subject to negotiation and to be amended. Thank you, Mr. Chairman. Ms. Browner. Mr. Chairman, we would like nothing better than to work on a consensus-based process with you. We would look forward to you setting out a process; we'll be here ready to go. We would hope, as I think you would, the importance that all of the parties, and there are unfortunately many--I'm not talking about Federal Government, I'm talking about communities, State, local government, PRPs, big, small--be a part of that process also. I have high hopes that we can finally see Superfund rewritten. It remains something that I am personally committed to; it is one of the reasons I came to EPA and it is something I would like to see done this year. Senator Smith. Thank you. Senator Baucus. Senator Baucus. Madam Administrator, we all agree we want to speed up the cleanup of sites, not slow it down. You have indicated in your statement that there are portions of the bill before us, S. 8, which you think will have the opposite effect, that is, it will not speed up cleanups but rather slow down cleanups. Could you be much more precise, please? Ms. Browner. I can give you examples of provisions that we are concerned about. First is what we refer to as the ROD reopener, the fact that you can go back into essentially any and all of these decisions that have been made and reopen them. We would suggest that there be a threshold, that cost and technology be brought into play because we are concerned that someone could merely engage us in a sort of round-robin of discussion where there are no new technologies. Senator Baucus. As you read S. 8, could all sites be reopened? Ms. Browner. Our understanding is not only can all decisions be reopened, but even once construction has commenced, the decision can be revisited. Senator Baucus. Would you give us a sense of how that slows things down? Ms. Browner. We enter into 150 decisions in terms of cleanup plans annually. If all of those can be reopened, that means there are literally 1,500 right now on the books, if every single one is reopened, what is to prevent a party from reopening? Why shouldn't a lawyer reopen it, a private party's lawyer? It means they don't have to get around to cleaning it up anytime soon. You could see us doing almost nothing but dealing with these reopeners. Senator Baucus. Is there ever a good reason to reopen? Ms. Browner. Yes, and we have a program to do just that. Senator Baucus. When? Give us a sense. Ms. Browner. Where you have a real advance in technology, and that does occur, where you have a new discovery, a new solution. That is absolutely appropriate. Senator Baucus. Can you give us an example, for the record if you don't have it right now? Ms. Browner. Some of the sites where initially maybe 8 to 10 years ago the preferred treatment would have incineration, today bioremediation solves the problem. That's an example. Senator Baucus. So you believe on this issue that there is reason to reopen some decisions, but we shouldn't go all the way allowing construction or RODs to be reopened? Ms. Browner. We do have a program today for updating remedies. We have a program right now for sites, to come in, to review them, based on cost and technology advances and make adjustments. We have made adjustments and we will provide you with a list of the sites and the projected cost savings. I think the cost savings are $280 million for the sites that we have revisited the remedies because of technology advances. Senator Baucus. Thank you very much. Thanks, The Chairman. Senator Smith. Senator Allard. Senator Allard. Thank you, Mr. Chairman. You would agree that the liability is a real problem with these Superfund sites, I believe, and if we don't get the liability issue straight, I guess no amount of money is going to lead to clean up of sites because everything is going to be eaten up by lawsuits and lawyers and we'll never get around to getting the bottom line resolved. Would you agree with that? Ms. Browner. I think it's important to understand what EPA spends its money on. A very, very small percentage of Superfund dollars go to parts of the program other than cleanup. This chart shows you that 77.6 percent of the money you appropriate goes to clean up activities from people out in moonsuits to the brownfields work we're doing and a very, very tiny part goes to a variety of other efforts. Certainly in reauthorizing Superfund, the question of who pays is not a small question. We absolutely agree that the little parties should be taken out, absolutely, positively. We have programs doing that as I said. We've taken out more than 9,000 parties in the last 4 years; homeowners are protected now. I think the discussion that we will all need to engage in as we seek to find consensus is, of the remaining parties, is it appropriate to shift their responsibility to the fund and thereby to the taxpayer. Senator Allard. Is it possible for a company that's been cleaned up under CERCLA, to then have RCRA applied to that same site? Ms. Browner. I think the easiest way to make a distinction here is RCRA is for facilities that are ongoing operations and it requires a certain set of activities to prevent problems and to address any problems that may develop in an ongoing action. Superfund not exclusively, but does tend to focus on those facilities, those sites where the parties may have moved on or occasionally, what you have in Superfund is a situation where part of the site is Superfund and then there is an ongoing activity adjacent. Senator Allard. So it is possible for a company to have to deal with both CERCLA and RCRA? Ms. Browner. And appropriately so. They should have to deal with RCRA because that is the permitting program we have in place, the law in place, to ensure in part that we are not creating future Superfund sites. Senator Allard. I haven't got any prejudged opinion on this, I'm just asking is there a potential for a double jeopardy effect? Ms. Browner. Not for the same contamination, no. They would be handled separately. Senator Allard. Because one is ongoing and the other has already occurred? Ms. Browner. That's one distinction. There are not any bright lines, unfortunately. Another distinction would be you might have an ongoing activity where there is historical groundwater contamination all underneath the ongoing site. That would perhaps be addressed through Superfund and then if there was some accident that happened, some inappropriate action that had taken place in the meantime, that might be addressed through RCRA, but you don't use both laws to address the same problem. It is true that a company, a site, there may be RCRA problems and Superfund problems but they are for different contaminants or contamination activities. Senator Allard. That's all, Mr. Chairman. Thank you. Senator Smith. Thank you, Senator. Administrator Browner, thank you very much for being here this morning and I think perhaps we made some progress. I think I understand some of the concerns you have. I think we certainly are going to pledge to you to work with you and with our colleagues on the other side of the aisle to do our best to get a bill because I think it's in the best interest of the country to get it done. We're going to do our best to do it and we look forward working with you. Ms. Browner. That is our interest too. Thank you. Senator Smith. The next panel could come up--I'm just going to call the names here rather than take a recess--Mr. Richard Gimello, assistant commissioner for Site Remediation, New Jersey Department of Environmental Protection, speaking on behalf of the National Governors' Association; Ms. Linda Biagioni, vice president of Environmental Affairs, Black & Decker Corporation on behalf of The Superfund Action Alliance; Ms. Karen Florini, senior attorney, Environmental Defense Fund; Ms. Barbara Williams, Sunny Ray Restaurant, Gettysburg, PA, on behalf of the National Federation of Independent Business; and Ms. Karen O'Regan, Environmental Programs Manager, city of Phoenix. Welcome ladies and gentlemen for being here this morning and let me just indicate to you that your statements will be made a part of the record as written. If you could summarize your statement in 3 or 4 minutes, it would be appreciated. We'll set the clock at 4 minutes and hopefully we can wrap it up in 4 minutes and then go to some questions. Mr. Gimello, why don't we start with you. Welcome. Senator Lautenberg. If I may, Mr. Chairman, Mr. Gimello is a New Jerseyite. Unfortunately, we have grown very successfully, Superfund sites all across our State. It happened as a result of our proud industrial past and Mr. Gimello has had a lot of experience. We welcome him here this morning representing the Governors' Association. STATEMENT OF RICHARD GIMELLO, ASSISTANT COMMISSIONER FOR SITE REMEDIATION, NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, ON BEHALF OF NATIONAL GOVERNORS' ASSOCIATION Mr. Gimello. Thank you. The testimony that I offer today is on behalf of the National Governors' Association. As I am sure you can appreciate, the NGA has a strong interest in Superfund reform and believes that a variety of administrative, as well as legislative and regulatory changes are needed to improve the Superfund Program's ability to clean up the Nation's worse sites. We realize the importance of passing legislation this year and want to ensure that the collective interests of the States are considered carefully in development of the final bill. Funding is essential for the continuation of cleanups in this country and the ultimate objective of the Superfund Program depends on the continued funding. The Governors appreciate the opportunity to review and comment. I'd like to begin by stating that NGA is very appreciative of the many improvements made in the bill over last year's bill. The Governors acknowledge the vast compromises that the bill reflects and commend the committee for introducing legislation that addresses many State concerns. Today, I'd like to address NGA's overall assessment of the bill and suggest a few areas where improvements could be made. With regard to 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 the brownfield language. Many States have developed highly successful voluntary cleanup programs that have enabled sites to remediate more quickly and with minimal governmental involvement. It's important that any legislation supports and encourages successful programs by providing clear incentives and by ensuring that any minimum program criteria established by the Environmental Protection Agency be extremely flexible. Also, in the event that EPA discovers an imminent and substantial threat to human health and the environment at a site, or at the request of a State, it should be able to continue using its emergency removal authority. With regard to State role, the impacts of hazardous waste sites are felt primarily at the State and local levels. The Governors are very supportive of the efforts of the chair, Senator Chafee and others to strengthen the role of the States in this program. We appreciate the inclusion of options for both noncomprehensive and comprehensive delegation. We especially support allowing States to operate their programs in lieu of the Federal program. It is critical that States, with established goals and standards, be able to apply at all sites these standards regardless of the lead agency and without a cost shift. We cannot support EPA being allowed to withdraw delegation on a State-by-State basis. Withdrawal of delegation should be consistent with the approval or rejection of a State's application for delegation. The Governors strongly support the 10 percent cost share for both remedial actions and operation and maintenance, and we appreciate the inclusion of this provision in the bill. However, we do not support any change that will require the State cost share for removal actions. States are not currently required to cost share in this area and we don't think it's appropriate. Selection of remedial actions, the Governors believe that changes in remedy selection should result in more cost effective cleanups and a simpler, streamlined process for selecting remedies and more results oriented. Allowing State-applicable standards to apply at both national priority list sites and State sites is one way of ensuring such an approach. Any caveats to the use of State RARs must be minimal. The Governors believe that 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. We also believe, however, that groundwater resources must be forwarded a sort of receptor status to prevent any future or ongoing impacts during the remedy selection. The Governors recognize that there are some records or decisions that should be reopened because of cost considerations or technical impracticability. However, we believe the Governors should have the final decision on whether to approve a petition for the reopening of a ROD. With regard to liability, liability schemes employed in any hazardous waste cleanup program are critical to the success of the program. However, the current system has a history of leading to expensive litigation and transaction costs. Therefore, the Governors can support liability reform. In general, we support the elimination of de minimis and de micromis parties and believe the liability for municipalities needs to be addressed. However, we question broader releases of liability for other categories or responsible parties. Further, we support the concept of an allocation process so that costs are assigned appropriately to responsible parties, but we need assurance that funding will be available for this process, including support for State allocation programs. Finally, as I mentioned earlier, we fully support the release of Federal liability at non-NPL sites where a release of liability has been granted under State cleanup laws. With regard to Federal facilities, the Governors support legislation that ensures a strong State role in the oversight of Federal facility cleanups. We urge you to strengthen the program by amending the statute of limitations to run for 3 years with regard to natural resource damages. In general, I want to emphasize on behalf of the States that we do recognize the extent of the compromises reflected in this draft and are eager to work with this committee and Federal EPA to finalize this job that we've started. I thank you. Senator Smith. Thank you very much, Mr. Gimello. Ms. Florini. STATEMENT OF KAREN FLORINI, ESQ., SENIOR ATTORNEY, ENVIRONMENTAL DEFENSE FUND Ms. Florini. Thank you, Mr. Chairman. On behalf of the Environmental Defense Fund and its 300,000 members, thank you for this opportunity to present our views on S. 8. While the Environmental Defense Fund supports an improved Superfund Program, we regret to say that, in our view, virtually all provisions of S. 8 would not in fact lead to that result. Rather, they would have, in many instances, the opposite effect. For example, with regard to clean up standards, the bill seems to regard doing cleanups fast as more important than doing them right. Speeding cleanups by making them weaker is a giant step in the wrong direction. The cleanup provisions have numerous flaws that exacerbate each other. Specifically, the bill largely puts polluters in control of decisionmaking and constrains both EPA and public oversight. Even polluters who are under criminal indictment for illegal dumping at a particular site potentially could end up with the lead role if they hire the right consulting firm. Polluters can let cost considerations override cleanup goals including health goals. In addition, the bill completely repeals the existing preference for permanent treatment so that even highly toxic hot spots could remain onsite. Likewise, the bill makes no effort to promote restoration of land to productive use. Indeed, the future uses that can be considered are specifically limited to those that are currently planned or zoned or those that have a substantial probability of occurring. That is an inappropriately high standard, one that effectively requires a community to either have a crystal ball or limit its consideration to today's probabilities, instead of tomorrow's possibilities. All these problems are made worse by the outrageous provisions under which polluter-written cleanup plans get approved by default if EPA is unable to act to review it within 180 days. Cleanup decisions are complex and high stakes ones for communities, particularly site neighbors. Default approval has no place in the Superfund program. The bill also undermines public participation in several ways. It fails to let the public participate in decisions about which States shall implement the program, even though State delegation greatly, and in my view, inappropriately, constrains EPA's ability to act. It limits technical assistance grants to $100,000 without exception even though the bill's changed cleanup standards will often lead to remedies that demand long-term community oversight, oversight that the bill fails to empower communities to provide. S. 8 even lets polluters ignore existing cleanup decisions until and unless EPA catches them at it. Then the polluters get to decide whether to comply with the existing plan or to modify it. S. 8 reopener provision for existing decisions are also structured in a way that thwarts effective public participation and would additionally cause considerable delay in the program overall. Another highly objectionable feature of the bill is inclusion of an arbitrary cap on the number of additional sites that can be added to the National Priority List, namely 100 until the year 2001 and 10 a year thereafter. A cap has profound consequences because unless a site is listed, EPA cannot undertake long-term site cleanup activities. This approach effectively dumps the problem on the States regardless of their capacity to deal with it. Finally, the bill's liability provisions create new forms of what amounts to corporate welfare. While it may well be, and in fact, probably is appropriate to tailor the liability system as applied to entities it will be unable to pay or have only a very limited connection with a site, S. 8 goes way too far. The co-disposal provisions of this bill would exempt large companies as well as small ones, and would inappropriately let companies that can well afford to pay off the hook. Similarly, the small business exemption applies to future as well as past conduct, thereby wiping out Superfund's powerful and significant incentives to avoid future pollution. The bill requires paybacks to polluters, including those who have already agreed to do work under existing settlements. What's more, there is no firewall between liability to carve out dollars and S. 8's other provisions, so there is no assurance that adequate funds or indeed, any at all, will remain available for the other elements of the program. Mr. Chairman, a substantial and growing number of environmental and public health organizations are investing major resources in Superfund reauthorization at this point. We would welcome an opportunity to work proactively with you to improve the program. We are currently finalizing a set of principles on Superfund and hope to provide those to you later this month. Thank you. Senator Smith. Thank you, Ms. Florini. Ms. Biagioni. STATEMENT OF LINDA BIAGIONI, VICE PRESIDENT OF ENVIRONMENTAL AFFAIRS, BLACK & DECKER CORPORATION, ON BEHALF OF THE SUPERFUND ACTION ALLIANCE Ms. Biagioni. Thank you, Mr. Chairman and members of the subcommittee for inviting me to testify. My name is Linda Biagioni and I am vice president of Environmental Affairs for the Black & Decker Corporation. Black & Decker is headquartered in Towson, MD, and is the world's largest producer of portable electric power tools, power tool accessories, residential security hardware, and electric lawn and garden tools. We are also leaders in small household appliances, plumbing products and engineering fastening systems. In the United States, we employ several thousand people in more than 30 manufacturing facilities in 16 States and at Black & Decker service centers throughout the country. I'm here in support of S. 8 because of the unnecessarily high transaction costs we have incurred due to the current liability scheme and the tendency to select unreasonably stringent remedies. We are disappointed and frustrated by the failure of the previous Congresses to resolve the inefficiencies in the program. Superfund was designed to clean up old hazardous waste sites, but the existing law causes us to proceed too slowly on many serious sites and to spend too much time and money on low priority environmental concerns and legal proceedings. Years of serious criticism of the existing Superfund Program from almost every segment of the political spectrum have damaged its credibility and periodically paralyzed its progress. EPA's administrative reforms have apparently been somewhat successful, but the most important failings can only be cured by Congress. The program needs a new congressional mandate, public support and assured funding. I hope that the 105th Congress can find a middle ground and finish reauthorization this year before electoral politics once again polarize the discussion. The Senate is off to a good start. Superfund reform has been identified as a high priority objective by the Majority Leader and the members of this committee from both parties appear to be moving forward constructively. S. 8 looks to us like a balanced and thoughtful attempt to resolve the crucial problems that bedevil the Superfund Program. Like everyone else, we recommend certain changes to S. 8, but the desire for a more perfect bill should not obscure the fact that overall, S. 8 would be a vast improvement over existing law. We commend you for your diligent efforts to craft a workable approach that can attract bipartisan support. I'll address two areas where the existing Superfund law is seriously flawed and needs immediate repair--the liability scheme and the remedy selection criteria. With one exception, Black & Decker is not the owner, operator or a predominant generator at any Superfund National Priority List site. Nevertheless, Black & Decker accepts that it should bear a reasonable portion of cleanup costs where it contributed hazardous substances to a disposal site that has become an environmental hazard. We also recognize the necessity for the business taxes that support the Superfund, but the burden of the current retroactive, strict, joint and several liability system is simply too high. In practice, the current law delays cleanups, misdirects the energies of responsible parties, and generates enormous transaction costs wasting money that should rightfully be directed at cleanup efforts. The liability title of S. 8 would significantly reduce these costs. First, the exemptions for 1 percent de minimis parties, de micromis parties and certain other parties, along with the limitations on liability for municipalities will remove the threat of liability for thousands of parties at hundreds of Superfund sites. The exemptions for small quantity generators are particularly appropriate because their volumetric contribution is usually of minimal environmental significance and they had little or nothing to do with the management of the original site. Second, for the parties who remain liable for National Priority List sites, the allocation system in S. 8 would ameliorate much of the unfairness inherent in the current system. In my opinion, S. 8 would be fairer if it expanded the orphan share to cover fully the unallocable shares, not just shares of known insolvent parties or parties whose liability is capped. There is one aspect of the liability system that S. 8 does not address: the small party exemptions and the allocation system only apply to National Priority List sites. Private cleanup sites which have engendered a tidal wave of litigation would still be governed by the inequitable retroactive, strict joint and several liability provisions of the existing laws. We believe that Congress should return the lawmaking power over these sites to the States by limiting the application of section 107(a), to National Priority List sites and other sites where the Federal Government has either conducted or ordered remediation. Again, our desire for changes to the proposed liability scheme of S. 8 does not detract from our enthusiasm for S. 8 as compared to the status quo. Remedy selection, the selection of the most appropriate remedy for each site, is the heart of the Superfund Program. In 1986, Congress created a series of inflexible remedy selection rules requiring a preference for permanence and treatment, compliance with applicable and relevant and appropriate State and Federal laws, and groundwater standards that seem to require that all potentially usable groundwater at Superfund sites meet drinking water standards in the ground as soon as possible. These inflexible standards have contributed significantly to the misdirection of resources and remedial activities that produce little or no benefit to the public. In reality, Superfund sites vary widely in the nature of the risk they present and in the nature of their geological land use, locational and other circumstances. These facts should determine what remedial technology can usefully be employed. S. 8 wisely drops most of these arbitrary requirements. It directs EPA and the States to focus on the real risk to public health and the environment posed by each site using site- specific data wherever possible to meet the protectiveness standards, taking into account long-term reliability, effectiveness, public acceptability, technical practicability, costs, and the nature of existing and reasonably anticipated land and water uses. Cost is just one factor to be balanced in the good judgment of the agency, neither an overriding consideration, nor subordinate or irrelevant. Unfortunately, S. 8 does not appear to apply this risk- based approach fully when it comes to groundwater. While it is true that groundwater moves and many aquifers are interconnected, the same intellectual analysis and the same criteria should apply to remediation of groundwater as elsewhere, namely identification of real risk and the reasonable remedial measures that can be employed to ameliorate those risks. Finally, the review of remedies already selected under the existing law is crucial. Having learned from more than a decade of experience that our existing remedy selection criteria are ill-suited to the task, it would be foolish not to reconsider previously selected remedies where significant cost savings could result from applying S. 8's new criteria. In conclusion, let me reiterate the important point. It's time for Congress to act. Only Congress can correct Superfund's crucial deficiencies and put the Superfund Program back on track. I commend this subcommittee for its work and thank you for the opportunity to present our views. Senator Smith. Thank you, Ms. Biagioni. Ms. Williams. STATEMENT OF BARBARA WILLIAMS, SUNNYRAY RESTAURANT, GETTYSBURG, PA, ON BEHALF OF NATIONAL FEDERATION OF INDEPENDENT BUSINESS Ms. Williams. Good morning, Mr. Chairman and members of the committee. Thank you for the opportunity of appearing before you again. I am Barbara Williams. My business is Sunny Ray Restaurant in Gettysburg, PA. I have been a member of NFIB since 1982 and am grateful for their support. I want clean air and water for myself and the generations that will follow me. I am not the enemy of the environment. My trash is not the problem. Small businesses are not the enemy of the environment. I am here to tell you again that your wonderful idea of cleaning up our country's environment through the EPA and CERCLA does not work in the real world. Your intentions were not followed. You legislated for results, you got bureaucracy, regulation and litigation. Legions of environmental attorneys, not environmental solutions were created. I fight not only the unjust burden of this lawsuit, but the injustice of the landfill on the Superfund National Priority List 10 years and still no cleanup has been started. I have no graphs or charts, no auditors' reports. I believe we can all agree on this--too much time, too much money, too few results. Please remember the more than 700 third and fourth party defendants are not businesses which regularly produce hazardous or toxic waste. We are in this suit not because of what we discarded, but because of how much waste someone has estimated we threw away. We simply and legally put out the trash according to local and State regulations. CERCLA is unfair because it imposes strict liability on the public without any real notice as to what we should or should not put in the trash. If ballpoint pens are hazardous waste, why are there no directions for their disposal? There is no evidence that any third or fourth party defendant sent hazardous substances to the site. Our guilt is based on an expert's report which assumes some hazardous material in all garbage, but there is no real evidence. For small businesses, this suit can be devastating. It is an uninsured loss; the money for settlement is considered a penalty, so it will not be deductible as a business expense. Small businesses will have to make enough money to pay this on top of our other bills and payroll. So here we are. The landfill is not cleaned and the litigation goes on. When I testified last April, I was encouraged by your statement that you understood our situation and were resolved to remedy it. That hope was reinforced when I read S. 8. I am very pleased to see that S. 8 addresses many areas I was concerned about--municipal solid wastes, small business defendants, and co-disposal landfills. I believe you listened and responded. It means a great deal to learn that our voices were heard. It appears plain to me that in S. 8, your intentions are to resolve the issues that have been used to allow litigation to take precedence over cleanup. I believe that you know how critical the wording of this bill is. My concern is that others will not see it so clearly. I am concerned that there will always be a well-meaning official who believes he knows better than you what you meant when the law was written. My fear is that these officials will challenge the authority and intentions of Congress and the President, that some judge somewhere will listen and rule that you did not write the law to say what you meant and this current course of action will continue indefinitely. I am one American citizen crying out against injustice. Are regulations more important than rights and results? When Lincoln came to Gettysburg, he expressed concern for our system of government of the people, by the people, for the people. My concern is that we are perilously close to losing the government Lincoln described, not because of outside enemies, but because of an ever-growing, all-powerful bureaucracy. You are our hope. Thank you. Senator Smith. Thank you very much, Ms. Williams. Ms. O'Regan. STATEMENT OF KAREN O'REGAN, ENVIRONMENTAL PROGRAMS MANAGER, CITY OF PHOENIX, AND ON BEHALF OF AMERICAN COMMUNITIES FOR CLEANUP EQUITY, INTERNATIONAL CITY COUNTY MANAGEMENT ASSOCIATION, NATIONAL LEAGUE OF CITIES, NATIONAL ASSOCIATION OF COUNTIES, U.S. CONFERENCE OF MAYORS, AND NATIONAL SCHOOL BOARD ASSOCIATION Ms. O'Regan. Chairman Smith and members of the subcommittee, my name is Karen O'Regan. I'm the Environmental Programs manager for the city of Phoenix where I have been for 6 years. Prior to that, I had jobs in the Federal Government, State and private and now the local roles. I've been involved with Superfund for about 16 years. I'm providing this testimony on behalf of the International City County Management Association, National League of Cities, the U.S. Conference of Mayors, National Association of Towns and Townships, the Municipal Waste Management Association, and the American Communities for Cleanup Equity. We very much appreciate the opportunity to present this testimony. We represent thousands of cities, towns and counties throughout the United States. Because hazardous waste sites impact the health of our citizens and the environmental and economic viability of our communities, we are well-qualified to provide the committee with comments on how the program can be improved. Phoenix has been heavily involved in Superfund as a generator of municipal solid waste, an owner-operator of a co- disposal site, a water provider with wells closed due to contamination, and a representative of citizen concerns. We've also been involved with four Federal Superfund sites and nearly a dozen State Superfund sites without or about our borders and paid approximately $20 million in response costs at various Federal and State Superfund sites. We're honored to provide you with suggestions on S. 8 beginning with its proposed liability scheme. Across America, local governments are burdened with millions of dollars of liability simply because we owned or operated municipal landfills or sent garbage or sewage sludge to landfills that were also used by generators and transporters of hazardous waste. Most of us are drawn into Superfund because of the past co- disposal of municipal trash with more toxic industrial waste. Our situation justifies statutory relief because we are required to provide waste collection and disposal services for public health purposes. There is strong consensus in support of municipal liability relief and the related provisions of your bill are definitely a step in the right direction. However, we do have some concerns. First, limiting the local government owner, operator, generator and transporter relief provisions to cost incurred after the date of enactment leaves us open to potentially large costs incurred prior to the date of enactment. We urge that liability relief that is provided to local governments for activities related to municipal solid waste and sewage sludge should include relief and credit for costs incurred that have not yet been settled prior to the effective date. Second, the conditional nature of the relief for Subtitle D facilities is slightly troubling. The bill would make the Subtitle D liability cap at co-disposal sites unavailable to a facility that was not operated in substantial compliance with local laws and permits. Granted, we administer those local laws and permits. However, we'd request that you make the language a little more specific to ensure that local governments are not penalized for minor infractions such as vector control. Third, local governments who are owners and operators of co-disposal sites would be asked to pay up to 20 percent of cleanup costs while generators and transporters of hazardous waste are exempt. We suggest you consider a more balanced liability scheme. Fourth, the bill should address potential liability arising from municipal ownership and operation of public sewer systems and related treatment works. We provide this vital public service to protect the health and welfare of the community and should not be liable under Superfund. Finally and most important, the liability scheme must be workable within the financial limits of the Fund and the demands of the cleanup program. Onward to remedy selection. The bill has many positive remedy selection provisions that add needed flexibility to the statute. We are concerned that although it may just be an ambiguity in the way we read it, that the focus upon treatment at the point of use may not adequately protect the groundwater resource. We urge the committee to require containment of contaminant plumes when drinking water or future potable water sources are threatened. In addition, the Remedy Review Board has broad powers and we are concerned that this board would overturn agreements reached after years of negotiation with stakeholders, including local governments and citizens. While we understand that RODs need to be reviewed given new technology, we propose instead that an advisory board be established to provide guidance on remedy selection and monitor Superfund Program activities. We urge that local governments be part of any such body. The brownfields grants proposed in the bill are critical to help local governments and we very much appreciate the opportunities to redevelop and reuse brownfields with the money it provides. However, because many communities want to encourage private investment activities, we ask the subcommittee to consider other incentives such as Federal tax incentives. We support the community response organizations. However, we are concerned that the bill establishes them as the only formal mechanism for local governments to participate in the decisionmaking process. We, therefore, recommend that we have a separate and distinct route for input on decisions affecting our communities and that the bill be amended to require EPA to directly consult with us when developing and implementing cleanup plans. In conclusion, the Superfund Program must ensure that sites are cleaned up quickly and effectively without threatening the economic viability of our communities. The Superfund Program must provide adequate funding for site remediation and establish cleanup standards that are reasonable, yet protective of human health and the environment. This will ensure that sites are not continuing problems for our communities. We appreciate the opportunity to comment on the bill and if you have any questions, I would be happy to try and answer them. Thank you. Senator Smith. Mr. Gimello, let me ask you, many critics of giving the States more authority have said that there would somehow be a race to the bottom in terms of cleanup which would result in ``crummy cleanups.'' Speaking for your own State and what you have done, do you agree with that assertion? Mr. Gimello. I couldn't disagree more, Senator. I think that any rational look at the way cleanups are being done in this country must acknowledge the flexibility and the aggressive nature of States in actions on these areas. We, in the State of New Jersey, as an example, are looking at 1,500 voluntary cleanup applications on a monthly basis. Other States, Massachusetts, I'd be hard pressed to point to a State that is not experiencing a lot of action in this area and I think this notion somehow that the Feds are doing cleanups one way and the States are doing them another way and not being protective of human health and the environment is just categorically incorrect. Senator Smith. Is there any justification to the argument that some States may not be handle it as well as you do in New Jersey? Mr. Gimello. I think many States have acknowledged the fact that program size is going to differ. I think in those situations, a partnership with EPA is important and I think the opportunity for that partnership exists and it will be improved by many of the provisions in this bill. Senator Smith. Ms. Biagioni, I also want to say that we worked very closely with Black & Decker on legislation to provide for the recycling of rechargeable batteries and we appreciate your help on that. Ms. Biagioni. We very much appreciate your help on that. Senator Smith. Do you think the allocation process we've outlined in S. 8 will reduce litigation? Ms. Biagioni. Yes, I absolutely do because there will be more effort placed at finding the responsible parties up front rather than finding one or two large parties and then leaving the allocation process up to the parties to argue and fight amongst themselves. Senator Smith. Do you support the right for Governors to have a veto right over any record of decision, any ROD reopener? Ms. Biagioni. I wouldn't be surprised that Governors would want that right and I think they probably have the right to have that, yes. Senator Smith. Ms. Florini, I know you're very critical of the legislation and we appreciate hearing your criticisms. I don't agree with all of them, but let me just give you an example of the frustrations we feel in regard to trying to get to the bottom of some of these problems and trying to come to accommodation on a bill. Right down the road from here is the Navy Yard. There is a proposal to add the Navy Yard to the NPL and interestingly enough, the Sierra Club Legal Defense Fund is challenging the listing. The reason they're challenging it is they think it's just the Navy's way of creating another bureaucratic hangup. What does that tell you about the policies and the problems faced by the Superfund program if one environmental group thinks by putting it under the NPL, it's a way to get out of getting it cleaned up? Ms. Florini. Senator, I don't think that is a legitimate characterization of the Sierra Club Legal Defense Fund's position on the matter. In point of fact, this is a setting where for many years the site has been evaluated and processed and things are moving along. The question is would putting that site on the NPL accelerate the process or not? In addition, it's very important to remember that what the Navy was doing was arguing that the existing litigation that the Sierra Club Legal Defense Club had brought in fact should be stayed pending the process of putting it on the NPL. What the court recently did was say there is no reason to stay the lawsuit. Senator Smith. Well, the direct quote from the Washington Post from the Sierra Club is ``We feel that this is just the Navy's way of creating a bureaucratic hangup. We want to see some action. The Navy wants Superfund because it's a lengthy process and we can't sue them.'' Ms. Florini. That's because there is a pending lawsuit that would be disrupted by placement of that site on the NPL. This is an effort to dismiss the Sierra Club Legal Defense Fund lawsuit on the basis of an NPL listing. That is why it was being resisted. Senator Smith. Senator Lautenberg. Senator Lautenberg. Thanks very much. Mr. Gimello, you and I know that New Jersey has one of the best hazardous waste cleanup programs in the country, but there have been times, several times, when New Jersey felt incompetent to handle the cleanup and asked the Federal Government to take over. Some of the sites, you and I will know the names, but we'll put them in the record--Chemsol, Montclair site, Fairlawn Wells, Montgomery-Rocky Hills site, to name a few, Grand Avenue site in Hoboken. If the State prepares a remedial action plan that isn't adequate to do the job, whether the State lacks the competence or whether there are so many problems that we can't get by the court suits et cetera, should the Federal Government come in and lend their expertise if the States aren't getting the job done? Mr. Gimello. I think so and I think that kind of partnership has served us well in New Jersey as you articulate. Senator Lautenberg. I think it has, but I thought from your National Governors' Association presentation that it was intimated, if not suggested directly, that the further the Federal Government steps away from it. Mr. Gimello. Perhaps I could be more clear. I think what the Governors are trying to say is that the option to involve the Federal Government ought to be one that's available, but in the absence of a need to go there in a delegated State with a clear track record of successful cleanups, that the preference for how Superfund sites are cleaned up or other sites ought to lie with the State. So it's a matter of degree, Senator. I think that is what the Governors were trying to say. Senator Lautenberg. You know it happens when you put down a proposal here, either of the sides will embrace it more forcefully than perhaps you intended. I think what we have to do is make sure the record reflects our intention. What do you think, Ms. Florini, about the Federal Government jumping in? Do States always have adequate cleanup programs? Ms. Florini. Unfortunately, clearly they don't. There are some States that really have not done a very effective job. Senator Lautenberg. So should we say, let the citizens of that State suffer? Ms. Florini. No, Senator. I actually believe that it's entirely appropriate for States that have adequate resources, adequate authorities and adequate political will to get first dibs on cleaning up sites in those States, but those are big ifs. There needs to be a process for assuring accountability, and that in fact those conditions are met, since they aren't always. That's a sad fact, but I think it is, indeed, a fact. Senator Lautenberg. Ms. Biagioni, I'm surprised and a little confused by your testimony. My understanding is that the S. 8 proposal says that regarding groundwater remedies, contaminated groundwater may be allowed to migrate if it's not consumed, and that the bill requires equal consideration of temporary remedies--water purifiers under the sink, for example--as opposed to remedies that will allow the aquifer to be used as a drinking water source by future generations. I think that your testimony indicates that you think S. 8's provisions regarding groundwater remedies don't go far enough in taking into consideration the ``real risk,'' and that you don't believe that aquifers ought to be cleaned up for their own sake. I would ask what do you think ought to happen, just kind of let it stand and let it seethe, boil, or whatever happens in those sites? Ms. Biagioni. I believe where the aquifer is a potential future source or a current source of groundwater or drinking water, that every effort ought to be made to clean that water up. However, there are many situations where there is no potential future use for that water or the technical practicability or the cost of the cleanup is just out of proportion to the future use of that aquifer. If that's the case and if there are other ways to provide a drinking source or if that water is never going to be used for a drinking source, then natural attenuation or some other sort of process ought to be allowed to happen. Senator Lautenberg. There could be quite a difference of view as to what potential use of that aquifer might be? Ms. Biagioni. That's right. Senator Lautenberg. Thanks, Mr. Chairman. Senator Smith. Thank you, Senator. Senator Allard. Senator Allard. Thank you, Mr. Chairman. S. 8 eliminates non-use damages for natural resource damages. Ms. Florini, how do you interpret in your mind what non-use damages for natural resources would include? Ms. Florini. Senator, with respect, I do not work on the natural resource damages issues. I believe that other environmental organizations will be submitting testimony for the record addressing those issues, but it is simply not within my expertise. Senator Allard. I apologize and I appreciate your candor in that response. Ms. Florini. I'm always happy to admit when I don't know something or at least willing to do so. Senator Allard. Mr. Gimello, in your opinion, what three items, maybe we're putting you on the spot here, but what three items would you think would be absolutely essential if we were going to successfully reform or modernize Superfund? Mr. Gimello. I think it's interesting because you've been touching on them all morning and for several years. I think the whole liability issue must be resolved. I think we're very close and I'd hate to see us lose that opportunity to finally figure out a way to address the problems and have the money to do it. I spoke to you from the National Governors' Association testimony which is a balance between the State program and its applicability versus a potential conflict with the Federal program and it needs to be resolved. I think it's time for the preeminence of the States to be recognized and not to be excluded from involvement upon request or emergency situations, but I think the balance needs to be assured on the side of the States because I think that's where the action is. Finally, I think this whole notion of when it is we're going to revisit RODs and how we're going to reopen them is a critical issue. Senator Allard. Ms. Florini, you deal with the liability side. Do you agree that something needs to be done on the liability in the current Superfund law and what is your response to the National Governors' Association as to reform on the liability provisions? Ms. Florini. I agree that there have been grievous and unacceptable abuses of the liability system, by private parties who have turned around and bought third and fourth party contribution actions. I am more than happy to see those abuses curtailed. I think S. 8 goes too far, but I do agree that it is appropriate and sensible to keep out of the liability system folks who aren't going to end up paying much because they don't have an ability to pay. I also think it's appropriate to get de micromis parties out. There are some concerns about the way the de minimis provisions of S. 8 are worded in detail, but the basic concept of getting the small fry out of the liability system is one I in fact support. Senator Allard. How would you define the small player? Ms. Florini. That's the hard part, isn't it? I think it's important to have an element that is focused both on size of the company in terms of number of employees and on annual receipts because I think it's inappropriate, for example, to say that a very, very small company that was making $500 million a year would be exempted from liability. Exactly how those lines get drawn will be unquestionably the source of considerable discussion and one in which I'm happy to participate. Senator Allard. You don't necessarily think the degree of pollution the individual contributed should be a factor in that? Ms. Florini. I'm sorry? Senator Allard. You may have somebody who maybe is right on the margin, for example, that maybe they contributed a lot to the Superfund site. Ms. Florini. I do agree that there should be, if you will, a kick-in provision for a particular entity who would otherwise be exempted has in fact been a significant contributor. There's language in the bill with regard to this, I think, for the de minimis parties. Senator Allard. And you're comfortable with that? Ms. Florini. Again, I've got some concerns about the precise way the details are set out, but the basic concept is one that I would support. Senator Allard. Do you think you can work with the direction of this committee and the EPA in coming up with a compromise? Ms. Florini. I do have major concerns. The site carve-out approach for co-disposal sites, which lets large as well as small entities out, is very troubling to us. I would hope, however, we can find a way to reach agreement on that. I think everybody really is primarily concerned about getting the ``small fry'' out or the small players, if you will. I think it may well, in fact, be possible to reach an agreement on that approach. Senator Allard. Do you have any problem with combining the Superfund legislation with the brownfields sites? Ms. Florini. I've got a major problem with the way the latter portion of title 1 is set up. Essentially, a relatively nebulous concept--any remedial action plan from a State--will wipe Superfund off the book with respect to that site, irrespective of whether the remedial action plan was developed with any public participation, irrespective of what it says, and irrespective of whether it will actually be carried out, irrespective of whether the State has the ability to make sure that it's carried out. Leaving that rather large category of concerns aside, there are grants provisions in the brownfields program that we certainly don't have a particular problem with. Whether it makes more sense to move those as part of Superfund versus as an independent bill, I don't think is something that needs to be resolved fully at this point. Senator Allard. Thank you, Mr. Chairman. Senator Smith. Thank you, Senator. Let me just ask a couple more questions and if Senator Allard has anymore questions, I'll be happy to go back to him. Ms. Williams, along with your testimony, you submitted a letter from a 9-year-old girl by the name of Sierra Bair? Ms. Williams. Yes, sir. Senator Smith. I just want to read a couple of lines from it. ``I'm 9 years old and I live in Hanover, PA. I'm writing to you because of the lawsuit of Keystone Sanitation, my parents, grandparents and other family members and other small businesses. I find it unfair and totally out of place for us to be involved in this horrific mess. We paid top dollar for people who took the garbage to a place where it was approved by the State and now we're being sued and we didn't do anything.'' She concludes by saying, ``I'm hopeful that my little voice might make a difference,'' and I guess she sent the letter to the President. [The letter follows:] Dear President Clinton: My name is Sierra Bair. I am 9 years old and I live in Hanover, Pennsylvania. I am writing to you because of the lawsuit of Keystone Sanitation. My parents and grandparents and other family members are in small businesses such as ours. I find it unfair and totally out of place for us to be involved in this horrible mess. We paid top dollar for people who took the garbage to a place where it is approved by the State! Now we are being sued and we didn't do anything. It is not our fault that the landfill owners put in bad garbage. My family owns restaurants and they serve food not hazardous stuff. Since when is food bad for us. Come on, get real; it's not like oil. Last year in school seminar we talked about and learned about the environment. We were taught that oil, lead paint, batteries, roof shingles, et cetera, are bad. Never did the topic of foods come up. The point I'm trying to make is that food is not hazardous. When I lay in bed, I think about my future and what the world is becoming. I want a future, a full life of happiness, but the way things are now those things might get taken from me and my brother. The way I see it, if there were six kids and one was bad, all of the kids would get punished. I guess we're just one of those six kids being punished in this lawsuit. Isn't it a shame so many are getting punished for a few. If I were President, I would have stopped this before it started. Why is this happening? And why haven't you taken charge. You know it took one black woman to give all equal rights for all black people, one woman to take prayer out of our schools and hopefully my one little voice will make a difference in the Keystone lawsuit when you think about what my little voice has said. Sincerely, Sierra Bair. P.S. I pray every night that my dreams come true and you can make that happen. Senator Smith. What connection is there with Sierra Bair and you? Ms. Williams. There is none. Senator Smith. OK. Let me ask you, in your testimony you indicated that to the best of your knowledge the only thing you put in the co-disposal site other than your normal restaurant garbage was ballpoint pens, is that accurate? Ms. Williams. When I repeatedly asked what I had thrown away that is considered to be so hazardous and toxic, I've been repeatedly given the example that if I've thrown away one ballpoint pen in the 24 years of the liability of this suit, that I have contributed toxic waste. My contention is what we all contributed was the same waste every person creates every day and we did it legally. Senator Smith. Are you a polluter? Ms. Williams. Do you want my personal opinion or do you want the opinion of the law? Senator Smith. Under the statute? Ms. Williams. My personal opinion, I am no more a polluter than every person in this room and every person in this country. Senator Smith. But under the statute, you are defined as a polluter and have been in litigation how many years now? Ms. Williams. I've been in litigation a year-and-a-half now. Senator Smith. Do you feel that the legislation we're proposing adequately addresses your concerns? Ms. Williams. It appears very promising to me. It addresses issues that I've been concerned about, the small business issue, the co-disposal site, the municipal solid wastes are all addressed in this bill. What I think sometimes and what the environmental attorneys end up telling me are sometimes different. It appears plain to me that you have addressed the inequities that I find myself living under. Senator Smith. Certainly the intent, although we don't know the exact, specific circumstances of your own case in terms of where you are and your record of decision and all that, but the intent certainly is to help people like you. This is the frustration that we all feel. We all have differences on this legislation. We've been 4 years trying to reauthorize it, reform it, change it, and there are some areas we have common ground on, but there are other areas we just can't agree on. That brings me to the next question. Ms. O'Regan, I'd like to ask you the same question I asked Administrator Browner. You may remember it if you were in the room at the time. That is, concerning the debate over co-disposal sites, where you have the toxicity of hazardous materials versus the volume of solid waste. What we get into is litigation over that issue. When Senator Chafee and I wrote this legislation, we just thought it would make more sense to take these environmental taxes, environmental income taxes, chemical feedstock taxes, oil import, take those dollars and put them in the fund, spend the money specifically to clean up sites, reinstate the taxes and use that to clean up sites. The difference between the Administration and us at this point, as I understand it on this issue, is that they don't feel that if there is hazardous material placed in that site by someone other than a Barbara Williams or Sunny Ray Restaurant, somehow if there's somebody a little bit bigger than that, they should not be removed from the liability scheme. I would just ask you what is your position on this? Would you prefer to see the dollars taken from the taxes collected specifically for Superfund reform address this concern, get the administrative fees and the lawyers out and get the sites cleaned up or continue along the same vein that we're in now, which is getting no where? What is your experience with this type of case? Ms. O'Regan. That's a very long question, Senator Smith and I'll try and answer that concisely. The city of Phoenix has been involved in co-disposal allocations on several Superfund sites and it's extremely difficult to determine who disposed of what at these sites, so I think that S. 8 which provides a cap for municipal liability is clearly a step in the right direction. The concern that we have is that municipalities will be paying owner-operators 10 or 20 percent of the co-disposal sites based upon our population. Phoenix is a very large city and we'd be paying the 20 percent. At the same time then, there is an 80 percent sort of orphan share, so we're being asked to step up to the plate and I guess the question is, is that completely balanced or does there need to be a similar cap on industrial generators that disposed of the industrial waste in our landfills because that's quite a large orphan share and again, we are being asked to step up to the plate. I guess I would pose that to you and the question is really one of funding and can those taxes take care of those sites that need to be addressed in our communities. Senator Smith. Of course that's a legitimate question and I think you can only try to give the best estimate on that in terms of the taxes collected, approximately $2 billion a year, but a lot of those dollars go for paying lawyers that don't go for cleanup. I think again, I've talked to I don't know how many hundreds of people who have been involved in cleanup or live near sites that are toxic and they tell me they could care less who pays, they just want it cleaned up so that they don't have to live next to it anymore. So they are not interested in who pays, they just want to get it cleaned up. It's very frustrating as we try to go through this thing but we are looking at degrees of definitions of polluters. You just said by your own definition, Ms. Williams, you're not a polluter. I agree with you, but somebody else who did something legally in a co-disposal site in a municipality or some other place that is a larger company than you are, perhaps has a lot more assets than you, there is a different set of standards applied to them and that's where the big dollars come from in terms of these lawsuits. It just seems to me if we can expedite cleanup, then why not just do it. Take the environmental income taxes, et cetera, put them in the fund. You say you're letting people off the hook, but people aren't off the hook. They didn't do anything wrong when they did it. We're not letting illegal dumpers out. These are people that did what they thought was right, they put some hazardous material in there. What we're saying is let's get together, take the environmental taxes, put them over here, get these people out of the system and stop arguing with each other and move on, the same thing we want to do with the de minimis folks, but we cannot get accommodation on this issue, and that is what frustrates me. We could, I suppose, take the short route and let all the de minimis people out and nibble around the edges in this thing and not change the law, not dramatically change the law but it's unfair. You don't think it's unfair? Ms. Florini. No. I think it is absolutely fair to hold the entities that are able to pay for cleaning up the messes that they made, liable for doing so. I have no problem with that whatsoever. The fact that it was not illegal at the time-- actually, under your bill they have to have been caught and convicted within the relevant statute of limitations--but the fact that it was not illegal for them to do what they did at the time is irrelevant. They made a mess, they ought to clean it up. Senator Smith. Then why shouldn't Ms. Williams clean hers up? Ms. Florini. Letting the small parties out of the system is a matter of making the system work efficiently. It would be fair, it just doesn't happen to be efficient. So let the small parties out. In point of fact, I think for her kind of waste, there is a real question as to whether in fact it generated any toxicity at all. That's somewhat separate question, but in terms of the big entities, I have no problem with fairness of leaving them on the hook. Senator Smith. Do you have a response? Ms. Biagioni. I was going to say we're a big entity and we have situations where we're being sued. We're in exactly the same position as Ms. Williams, we put only trash in a site, cafeteria waste, probably the very same material that her restaurant put in the site, yet because we are the big player and the big, deep pocket, we're in litigation. No hazardous waste went into that site. Ms. Florini. For me, small refers to both the size of the company and the quantity of the stuff. Senator Smith. Well, you've helped us to understand why we have a difficult problem ahead of us. Thank you very much and let's move to the next panel. I appreciate you all being here. The third panel consists of Mr. Terry Garcia, Acting Assistant Secretary for NOAA; Mr. Larry Lockner, manager of Regulatory Issues, Shell Oil Company, on behalf of the American Petroleum Institute; Mr. Bob Spiegel, director, Edison Wetlands Association, Edison, NJ; Mr. Charlie De Saillan, assistant attorney general for Natural Resources, Environmental Enforcement Division, State of New Mexico; and Mr. Rich Heig, senior vice president, Engineering and Environment, Kennecott Energy Company. Let me just say, gentlemen, it is kind of late and I apologize to you all. It's been a pretty long hearing this morning. Your statements will be made a part of the permanent record and if you could summarize in 3 or 4 minutes, I'll put the clock on at 4 minutes and if you can watch it when it goes to yellow and wrap it up, we'd appreciate it. I'll start with Mr. Garcia. Go ahead. STATEMENT OF TERRY GARCIA, ACTING ASSISTANT SECRETARY, NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION Mr. Garcia. Good afternoon, Mr. Chairman and members of the committee. I'm Terry Garcia, the Acting Assistant Secretary of Oceans and Atmosphere for the National Oceanic and Atmospheric Administration of the Department of Commerce. I'm here today representing the interests of the U.S. Departments of Commerce, Interior, Defense, and Energy. I would like to reassert for the 105th Congress the Clinton administration's steadfast commitment to protecting and restoring this Nation's natural resources. I will begin my testimony by quickly reviewing the progress made by the trustee agencies toward restoring natural resources under the existing laws and rules governing damage assessment activities. I would then like to highlight reforms to the natural resource damage (NRD) provisions of CERCLA that this Administration proposes. The final portion of my testimony will focus on the provisions of the Superfund Cleanup Acceleration Act of 1997. S. 8, that we feel would impede our efforts to protect and restore the Nation's natural resource heritage. Significant progress is being made by the trustees toward restoring natural resources injured by hazardous substances. By working within EPA's remedial process, trustees have reached agreements with responsible parties to restore habitat and injured resources at more than 25 hazardous waste sites as part of comprehensive government settlements. Restoration is underway at sites in Baytown, TX; New Castle County, DE; Tacoma, WA; New Bedford, MA; John Day River, OR; Lake Charles, LA; and the central California coast. The restoration work at these sites is detailed in my written testimony. Last October, the Administration forwarded to the committee and other committees with jurisdiction a proposal for reforming the natural resource damage provisions of CERCLA. Federal trustees carefully considered criticisms of NRD that had been raised during previous reauthorization efforts. Our proposal for reform is specifically designed to shift the emphasis away from monetizing the value of injured natural resources and litigation and refocusing it on restoring injured and destroyed resources. The proposal is based on our practical experience with the natural resource damage assessment and restoration process. These reforms are designed to improve the NRD programs by providing greater clarity concerning restoration, by assuring the more timely and more orderly presentation of claims and by discouraging premature litigation. NOAA and the other Federal trustees consider this proposal the foundation for reforming Superfund's NRD provisions during the 105th Congress. The Federal trustees believe that revision of CERCLA's NRD provision should be based on two principles: No. 1, restore resources to baseline condition and No. 2, restore the losses that the public suffers from the impairment of natural resources from the time of injury until restoration is complete. The Administration proposal was intended to strengthen the focus of restoration and reduce the cost associated with damage assessment claims by eliminating or reducing unnecessary litigation. Specifically, the proposal calls for adopting the restoration-based approach developed in NOAA's natural resource damage assessment regulations. The Administration's proposal shifts the emphasis of CERCLA damage assessment efforts to restoration and away from the determination of economic damages or monetization of the injury. This fundamental shift will avoid litigation and expedite the restoration of injured resources. We suggest amending the statute of limitations to provide that a claim for damages be presented within 3 years from the date of completion of a damage assessment by a trustee in accordance with the regulations or the completion of a restoration plan adopted after adequate public notice. Further, we clarify that a natural resource damage claim may be brought after an action for any other relief under CERCLA. These revisions will resolve the sequential claims issue to reduce premature filings, protect against claim splitting, and provide time for effective restoration planning, thus preserving important trust rights. Clarifying the judicial review provision for NRDA assessment to provide for a publicly-available administrative record to be developed to guide the selection of a restoration plan, and the judicial review of such plan be limited to the administrative record with an arbitrary and capricious review standard. Finally, relying on cost effective restoration, cost effective is defined in our proposal and in the NOAA regulations as the least costly activity among two or more restoration measures to provide the same or comparable level of benefits. Moving to S. 8, the Federal natural resource trustees recognize the efforts of this committee. We understand the hard work that went into drafting it. As stewards of the Nation's resources, we appreciate the provisions contained in S. 8 that reflect our concerns regarding natural resources. Nevertheless, we believe that S. 8 would weaken our ability to protect and restore the Nation's resource heritage. S. 8 precludes the restoration of non-use values, which include both ecological and human services provided by natural resources. Although these values are often difficult to quantify, they nevertheless are real. The sights and sounds of the Connecticut River, the historical significance of the Housatonic River to the people of Massachusetts and Connecticut and the cultural significance of the Snake and Salmon Rivers are examples. To allow them to be destroyed by pollution and not restored is not acceptable. S. 8 requires that responsible parties be allowed to pay for natural restoration over time based on the period of time over which the damages occurred. The trustees often agree to installment payments and negotiated settlements to reflect a responsible party's limited ability to pay or the time that would be needed for restoration. However, the amount of time over which the damage to resources occurred should not be considered in a settlement schedule. Finally, S. 8 appears to preclude the recovery of all interim losses, both use and non-use. I'll stop there. Thank you. Senator Smith. Mr. Lockner. STATEMENT OF LARRY L. LOCKNER, MANAGER, REGULATORY ISSUES, SHELL OIL COMPANY, ON BEHALF OF AMERICAN PETROLEUM INSTITUTE Mr. Lockner. Thank you, Mr. Chairman. I'm Larry Lockner with Shell Oil Company and chairman of the American Petroleum Institute's CERCLA Task Force. API appreciates this opportunity to present its views on reform of the Superfund Program. I'd like to point out that API strongly supports comprehensive reform of Superfund. We want to work with subcommittee members to accomplish this objective this Congress. S. 8 makes many needed changes to the program and is an excellent vehicle to begin this work. The petroleum industry has a unique perspective with regard to Superfund. It's estimated that the industry is responsible for less than 10 percent of the contamination at Superfund sites, yet has historically paid over 50 percent of the taxes that support the trust fund. This inequity is of paramount concern to API members. It's caused the industry to focus on those elements that affect the cost of the program and the authorized uses of the trust fund. When Superfund was enacted in 1980, Congress envisioned a program that would cost $1.6 billion and be complete within 5 years. Almost 17 years later, however, billions have been spent but relatively few sites on the NPL have been cleaned up. This program appears to be without end. API members are pleased that the Senate bill would reduce the number of sites to be added to the NPL and commend the sponsors for taking this important step. Limiting new additions to the NPL ensures a more reasoned Federal program with reduced future funding requirements. In our view, this provision in your legislation is critical to the reform effort. Additionally, we support the bill's provisions that would delegate Superfund remedial authority to the States at non- Federal NPL sites. In general, the States have well-established programs and have demonstrated capabilities for cleaning up sites. API member companies also support liability reform. Reform in this area will expedite cleanups and reduce transaction costs. Clearly under current law, too much money is wasted on 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 the program costs. For example, under the liability provisions contained in S. 8, the fund would pick up orphan share costs as well as enactment costs, response costs at co-disposal landfills for generators, transporters and arrangers who contributed waste prior to January 1, 1997. Municipal owners and operators liability would be capped at such landfills. In addition, de micromis and de minimis parties and others would be exempt. API members need to understand whether the cost savings associated with the bill's reform measures are sufficient to offset the additional costs arising from this shift in liability from PRPs to the fund or whether the program as envisioned under S. 8 would place increased demands on the fund. As the largest group of taxpayers to the fund, API members cannot conclude their evaluation of the legislation without fully understanding those costs ramifications. Some of the additional costs arising from liability exemptions will be offset by other reform measures and API supports many of the remedies, selections, and reform measures provided in S. 8. We've also outlined those areas for additional reform in our written statement. In closing, I want to note that Superfund sites are a broad societal problem, thus taxes raised to remediate those sites should be broadly based rather than focused on specific industries. Without substantial reform of the underlying program and the tax system supporting the fund, API opposes authorization of any Superfund taxes. API members believe it is critical that Congress structure the taxes that support the fund. Thank you for the opportunity to present our views. We'll be happy to answer any questions. Senator Smith. Thank you, Mr. Lockner. Mr. Spiegel. STATEMENT OF ROBERT SPIEGEL, DIRECTOR, EDISON WETLANDS ASSOCIATION Mr. Spiegel. Thank you very much for allowing me to testify today. My name is Robert Spiegel. I'm the director of the Edison Wetlands Association, a group dedicated to the preservation of the environment in New Jersey. I'm familiar with Superfund's highs and lows. New Jersey has 116 sites on the National Priorities List, more than any other State in the Nation. However, I'm here to tell you that I'm pleased about EPA's Superfund presence in Edison. I know that sounds a little strange and let me explain why. Edison has 90 contaminated sites listed by the State of New Jersey. Of these, only three--Kin-Buc Landfill, The Chemical Insecticide Site and the Renora Site are on the Superfund List. I have been involved in both the identification and remediation of many of these sites, both EPA and State lead, and I must tell you EPA leads are far superior to the cleanups that the State does. In looking at the difference between EPA and State-led cleanups, it breaks down to two major differences which are thoroughness of investigation and cleanup and the second is public participation. EPA investigations and cleanups examine in detail onsite and offsite contamination and groundwater contamination. State- lead sites rely on the polluter to submit data and the State rarely if ever challenges the data. State-lead sites often ignore offsite contamination believing in the magic fence theory which states that the contamination stops at the fence line. Only in extremely rare circumstances will the State force the polluter to investigate offsite contamination or groundwater pollution. The EPA has also aggressively pursued public input and there is an outreach program for every site in Superfund. At State-lead sites, you're lucky if you can get one of the project managers on the phone and if you want to review documents they have, it will cost you $100. I'm here today to talk about an EPA Superfund success story and how it might be affected by S. 8, the Superfund reauthorization bill. My involvement with Superfund started in 1989 with a site called the Chemical Insecticide Superfund Site, also known as CIC. Chemical Insecticide manufactured pesticides, herbicides, and fungicides including the military defoliant, Agent Orange. The site operated from 1954 to 1971 and as a result of CIC operations, the site became contaminated. After EPA confirmed that the runoff had indeed leached from the site, we decided to form a community working group. From 1991 to 1993, we had a very difficult time working with EPA. It quickly became an us against them attitude. We battled constantly in the press, the cleanup was stalled and it seemed as though we were getting nowhere fast. In 1993, the EPA encouraged us to apply for a technical assistance grant, also known as a TAG. We applied and received the grant. Since 1993, this site was turned from one of the biggest public relations disasters into a model EPA should use for all its cleanups. EPA has not just developed a community relations plan at the site, but has developed a community relationship. It was no small part due to the TAG Program. It helped us understand the Superfund Program is a complicated answer to a complex problem. We found that most of the problems stem from the lack of understanding about the nature of environmental pollution and remediation and the unrealistic expectations that Superfund can be a quick fix to these problems. I'm happy to say that the offsite cleanup of the residential neighborhoods around the site is complete and restoration work has begun. EPA has not only finished this ahead of schedule, but has also finished $2 million under budget. What's interesting to note here about EPA cleanup is that by going through a full public process and by being responsive to our concerns, EPA probably ended up slowing down the pace of the cleanup but ultimately did a better job. The contaminated offsite areas downstream from CIC could have been left under S. 8 because S. 8 does not protect highly exposed or unusually sensitive groups, given the way the bill tilts risk assessment by use of central estimates. S. 8 dumps toxic pollution on communities and is a bailout for the polluters The Government should be looking for ways to strengthen the Superfund instead of weakening it. Provisions that will pierce the corporate veil need to be included in any new reauthorization bill. The owner of the CIC site has escaped liability behind the corporate veil and has contaminated four sites, two of which are Superfund. In closing, I would like to say that we need a strong Superfund Program, one that goes after polluters, protects the public and identifies and cleans up contaminated sites. S. 8 is not this bill. The reality is, we know industry is necessary. Everything we do, use or have is due to industry in one form or another. However, we refuse to accept that we have to allow polluters to poison our water and land and allow them to walk away without liability. I hope you will go back and revise the bill so that it does not protect the American people against what is perhaps the greatest threat to our national security, the poisoning of our citizens, their land and water and air. Superfund is not perfect, but it is the only game in town. Thank you. Senator Smith. Thank you. Mr. de Saillan. STATEMENT OF CHARLES DE SAILLAN, ASSISTANT ATTORNEY GENERAL, NATURAL RESOURCES, ENVIRONMENTAL ENFORCEMENT DIVISION, STATE OF NEW MEXICO Mr. de Saillan. Thank you, Mr. Chairman and members of the committee. I'm Charles de Saillan, assistant attorney general for the State of New Mexico. I'm testifying today on behalf of Attorney General Tom Udall who regrets that he was not able to be here today. Attorney General Udall is the immediate past president of the National Association of Attorneys General and he is on the Association's Environment and Energy Committee. We very much appreciate the opportunity to appear here today and present our testimony on S. 8, the proposed Superfund Cleanup and Restoration Act that would amend and reauthorize CERCLA. This legislation is extremely important to the State of New Mexico and to many of the State attorneys general. In reviewing S. 8, we immediately recognized that many of our concerns had been addressed in this legislation. For example, the bar on preenforcement review of remedy decisions which is currently in section 113(h) of CERCLA would have been eliminated in the bill that was introduced in the last Congress. It has been retained in S. 8 and we're very pleased that it is. This provision has been very effective in limiting litigation and allowing cleanup to proceed expeditiously. We very much appreciate that the committee has taken into consideration our comments on this issue and others. We view S. 8 as a significant improvement over S. 1285, the Superfund bill that was introduced in the last Congress and we very much appreciate the hard work that has gone into it. We, nevertheless, have very serious concerns with the bill. One of our major, overall concerns with S. 8 is simply its length and complexity. It would completely rewrite CERCLA. The cleanup standards, the remedy selection process, the liability scheme, the natural resource damage provisions would all be changed drastically and in innumerable ways. Yet, every change in the law will need to be interpreted, first by the implementing agency and second, in too many instances, by the courts. The result, we fear, will be the shifting of limited agency resources to writing new regulations and new guidances, the nullification of 15 years of hard-fought judicial precedent, new rounds of litigation, more transaction costs, and most distressingly, further delays in cleanup. We strongly urge the committee to focus on those provisions of CERCLA that really need revision and to draft narrow, straightforward, concise legislation to make those revisions. Let me now summarize some of our comments on the bill. More detailed comments are included in our written testimony. First, in the State role title, we strongly support provisions to delegate the Superfund Program to qualified States. We appreciate the flexibility that the bill provides in allowing States to receive either comprehensive delegation or partial delegation. We do strongly recommend that the bill be revised to clearly allow an authorization option in addition to delegation. Under the authorization approach, which is taken under RCRA and the Clean Water Act and other Federal environmental laws, EPA would authorize qualified States to implement their program in lieu of the Federal program. Under this approach, the States would have the flexibility to apply requirements that are more stringent than the Federal requirements without needing to pick up the tab for the cost differential. Second, although NAAG has not taken an official position on remedy selection, we have a number of concerns regarding this title. We are very concerned that the relaxation of remedy selection standards will lead to less permanent remedies, and that the States will be left to deal with problems in years to come. Further, we're particularly concerned that the bill does not adequately protect groundwater. We're also troubled by the new, completely revised remedy selection procedures which allow the responsible parties to select the remedy despite the obvious conflict of interest. We believe that remedy decisions should be made by EPA or State agencies that have a duty to protect human health and the environment. Third, on the liability title, we are very pleased that the bill retains the liability for preenactment disposal activities or so-called ``retroactive liability.'' This issue is a very important one to the State attorneys general. We're concerned, however, that the various exemptions in the bill are too broad. We're particularly concerned about the co-disposal landfill exemption which would inequitably exempt generators and transporters of hazardous wastes simply because they sent their waste to a site that also received a substantial amount of municipal solid waste. We further question how these exemptions will be funded. Fourth is the Federal Facilities Title. We generally support the concept of transfer of EPA's authority over Federal facilities to qualified States. We have some concerns about how the bill would do this, and we provide more detailed comments in our testimony. We also strongly encourage the committee to adopt a clear and unambiguous waiver of Federal sovereign immunity in CERCLA. Finally, we have numerous concerns about the natural resource damage title. These provisions would largely handicap the program in most States. The bill would substantially limit recovery for pre-1980 releases, it would eliminate recovery for passive use values, and it fails to clarify the ambiguous statute of limitations. On the positive side, we're very pleased to see a record review provision in the title. That concludes my prepared statement and I'll be happy to take any questions that you have. Senator Smith. Thank you. Mr. Heig. STATEMENT OF RICH A. HEIG, SENIOR VICE PRESIDENT, ENGINEERING AND ENVIRONMENT, KENNECOTT ENERGY COMPANY Mr. Heig. Thank you, Mr. Chairman, for this opportunity to testify. My name is Rich Heig. I'm senior vice president of Engineering Services, Kennecott Corporation. Kennecott supports balanced Superfund reform which will accelerate cleanups based upon good science. Reform must also include changes to the natural resource damage provisions so that it clearly focuses on restoration of existing services. With these two points in mind, let me say there is a lot we like about this bill. Kennecott has had firsthand experience with the inefficiencies of the current Superfund Program. At our Bingham Canyon copper mine in Utah, once a historic mining area, Kennecott has spent over $230 million for cleanup. This effort included cleaning up and relocating over 25 million tons of historic mining wastes. This is equivalent to over 1 million dump trucks of material. Over 5,500 acres have been reclaimed for wildlife habitat and recreational uses. Thankfully after Administrator Browner visited Utah and recognized the depth of Kennecott's commitment to a successful cleanup program, she supported a memorandum of understanding in which Kennecott, EPA and the State of Utah agreed that placing the Kennecott sites on the NPL would be deferred if Kennecott completed certain cleanup programs, most of which were already underway. In the midst of the Bingham Canyon cleanup, Utah's NRD trustee filed an NRD lawsuit for contaminated groundwater. Kennecott needed a resolution that would not require us to pay for a cleanup twice, once for a Superfund cleanup remedy and once for NRD. Ultimately, such a settlement was reached. Kennecott's Superfund experiences have led us to believe that Superfund reform should No. 1, create a flexible mechanism to conduct responsible cleanup without the site becoming a proposed Superfund site; No. 2, require cleanups and remedies to be based on reasonable risk assumptions and reasonable land and water use designation; No. 3, restrict NRD recoveries to restoration and eliminate double cleanup requirements. Restoration should be cost effective and reasonable based upon what is needed for actual restoration with a reasonable cap on ultimate liability and no NRD retroactivity. Mr. Chairman, Kennecott is pleased to see the efforts being made by the sponsors of S. 8 to reform Superfund. However, we respectfully ask the committee to consider the following comments. Title 1 should include a voluntary Federal response program in addition to that which is proposed for the States. Kennecott generally supports the concepts of remedial action provisions of title 4 which No. 1, require the selection of remedies that are cost effective; No. 2, are based onsite-specific conditions and risk assessments; No. 3, consider reasonably anticipated future uses of land and water; No. 4, allow for the consideration of natural attenuation and biodegradation in groundwater remediation; No. 5, recognize institutional and engineering controls; and No. 6, eliminate the preference for permanence and treatment. Kennecott supports the attempt in title V to fairly allocate response costs at non-Federal multiparty sites including mixed funding for orphan shares. We ask that an additional provision be included that would allow remining of historic mining sites for the economic recovery of metals or minerals without imposing Superfund liability for past releases. Remining may be the only practical approach to a cost effective cleanup and in virtually all cases, could be a boost to local economies. We believe the changes to NRD included in title 7 are a good start. However, there are several areas that we believe could be clarified and we have discussed those in our written testimony. The NRD Program should be modified to complement not duplicate cleanup remedies. The improvements to be gained from cleanup reforms will be lost if NRD trustees can require additional cleanup under the guise of restoration. While Kennecott and Utah were able to reach a compromise that so far avoids a double cleanup, this type of result should be formalized for all NRD claims rather than left to an NRD trustee's discretion. A more detailed analysis of S. 8 is included in our written testimony and I ask that it be included in the hearing record. Mr. Chairman, thank you for this opportunity to testify. Senator Smith. Thank you. It will certainly be a part of the written record. Mr. Garcia, let me start with you. Again, in the testimony regarding the Administration views, we continue to have what I consider to be rather strong statements. ``The Administration believes that S. 8 does not represent an acceptable basis for achieving bipartisan consensus on Superfund reform,'' et cetera. How does this kind of rhetoric help the process? The Senate puts together a bill that worked on for 2 years with the Administration and our colleagues on the other side. Granted, we didn't come to accommodation, I'd be the first to admit that, but there was no attempt here to write a bill without their input or to impose our will upon them and yet, you still continue to use these statements. What is an acceptable basis for achieving bipartisan agreement, your bill only, your position only? Mr. Garcia. Mr. Chairman, in my oral statement I indicated there were certain weaknesses which we had identified--non-use values, interim losses, the time payments. Those are real weaknesses and they're material weaknesses in terms of our ability to conduct natural resource damage assessments. We are willing to engage in a bipartisan effort to achieve a consensus on Superfund reform and we've been working with the stakeholders for months now. We have worked with your staff, we'll continue to work with the staff. We welcome the opportunity to do so. We have submitted a proposal which we believe balances, in an appropriate manner, the legitimate interests of the stakeholders, of the responsible parties, and the Government's interest, the trustees' interest in restoring natural resources. As a member of the panel said, it's a restoration-based approach. Senator Smith. But you won't even give us this as a starting point. You're basically saying it's not even a starting point. Mr. Garcia. I don't believe that I said that in my statement. I would suggest, and the Administration would support, that we each come to the table with our proposals and we discuss them. I acknowledged in my testimony that S. 8 had incorporated certain provisions that acknowledge the concern of the trustees, but there are other provisions that are of very serious concerns to us. Again, I would suggest that we sit down with our proposal, the Administration's proposal, and S. 8 and begin that discussion. Senator Smith. In the heading of your testimony, you say that you speak on behalf of the U.S. Departments of Interior, Agriculture, Energy and Defense. Do they all agree with you? They totally agree with your statement? There is no dissension among any of those? Mr. Garcia. The statement was cleared through the interagency process and my understanding is that we're in full agreement on these matters. Senator Smith. Mr. Lockner, I was somewhat interested in your comments regarding the taxes. As you know, when CERCLA was written, it's 101.14, there is an exclusion for petroleum, including crude oil or any fraction thereof as well as natural gas or liquified natural gas from being covered under Superfund. Now, are you saying now that no taxes is your position, no taxes be collected whatsoever? Mr. Lockner. No, I'm not saying that at all. Our position is that the program needs reform, not only of the programmatic issues but the tax base as well. The imbalance is clear. We're paying 50 percent of the taxes, yet only have 10 percent of the liability. That's the issue. It's an issue of fairness. Senator Smith. You don't suggest we eliminate the petroleum exclusion, do you? Mr. Lockner. No, I wouldn't wish that CERCLA be placed on those petroleum issues at all. Let's be frank, let's talk about what that could do to the country. Our friend with the small business here could face a problem, farmers could face problems, the users of our products who would blame the complexity and bureaucracy of CERCLA on the users of petroleum and petroleum products would be a nightmare. Senator Smith. Aren't you somewhat frustrated or are you somewhat frustrated that the taxes that are collected from the petroleum industry in many cases are not used directly for cleanup? Mr. Lockner. Indeed. We're 17 years now into a 5-year program and they seem to be without end and they're used for budget-balancing purposes, for nonrelated purposes and they just go on forever. We'd like to see some sort of finality to this, some sort of agreement we could reach conclusion with this and that's why we support turning a lot of the program over to the States. Let them manage the program. They seem to be well-equipped in a lot of instances. Senator Smith. Senator Baucus. Senator Baucus. Thank you, Mr. Chairman. Gentlemen, I'd like to explore the degree to which restoration should include extrinsic value or sometimes known as non-use value which is a big technical term, but basically it's extrinsic value or intrinsic value. For example, the Grand Canyon, wilderness area, old growth forests, deep stream lakes, 30 or 40 feet down, I'd like you to tell us the degree to which, Mr. Heig, I'll start with you, the restoration should include intrinsic value as well as lost human use. Let me ask the first question, should it at all? Mr. Heig. I don't believe it should. Senator Baucus. At all? Mr. Heig. The real focus on NRD should be for restoration. Paying for past lost use and non-use is surplus to restoration. It is punitive. Senator Baucus. So it doesn't matter to you whether the Grand Canyon is destroyed, even though you've not visited it? It does not matter to you or the Washington Monument is destroyed or say a wilderness area is no longer wilderness, so long as the human use of that, if you can quantify the number of visitors and so forth is met, it doesn't matter to you or do you think it should not matter to the American public? Mr. Heig. Well, first of all, I'm dealing with this mining situation. Senator Baucus. I'm talking about the basic principle of intrinsic value in an area that's been destroyed or substantially damaged. Mr. Heig. If restoration occurs---- Senator Baucus. Should restoration deal with intrinsic value? Mr. Heig. In my opinion, no. Senator Baucus. Mr. de Saillan, your view on that? Mr. de Saillan. We definitely believe that non-use values or passive-use values should be considered in determining the value of natural resources. If you just consider natural resources based on the value of the board feet of the timber in the forest, or the market value of the fish in the stream, you wind up undervaluing the resources. One of the difficult things in the natural resource damage program is how you put a value on the resources. By considering passive use values, it gives us an ability to comprehensively or more fully place a value on resources which are very hard to quantify because they are not traded in the market. That's what we're trying to get at with passive use values. Senator Baucus. Your view is, even though they are hard to quantify, they should be valued and considered in determining their restoration? Mr. de Saillan. Absolutely. In our experience, even though it's not real easy to quantify it, most of these cases are negotiated, settlements are reached. The cases that are being litigated are really the exception. In New Mexico's experience, we have not litigated a single natural resource damage claim. We sit down with the responsible parties, we give our arguments, they give their arguments, and we come to a settlement. Senator Baucus. Mr. Lockner, your view on this? Mr. Lockner. The problem with the issue is that there's no real way to quantify the losses, if indeed they are losses. Every citizen that might be questioned under a scheme such as contingent valuation, would have a different opinion. Though I'm not an expert at NRD, these problems appear readily apparent. I think if you would turn your attention to the testimony that will be provided to the record by the Coalition of Legislative NRD Reform, I think they will be more explicit in those issues. Senator Baucus. But as difficult as it is to value, should an attempt be made to try to value it? Mr. Lockner. Again, I think if an attempt is made, the answer that is received is going to be completely without value. It's going to be based on esoteric values by individuals. Senator Baucus. So you see no need to attempt to restore the lost intrinsic value of a resource, the beauty of a resource. That does not make any difference? Mr. Lockner. Not based on the methods that are available. Senator Baucus. That's not the question I asked. The question I asked is, should we make the attempt to try to deal with that or not even make the attempt? Mr. Lockner. I don't see how you can. Senator Baucus. So you don't think it's worth making an attempt to restore say the loss of the Grand Canyon? Mr. Lockner. I think that's a hypothetical situation. Senator Baucus. I'm asking a hypothetical. I'm asking you to address the hypothetical. Mr. Lockner. I really don't see how you can arrive at those decisions based on the tools at hand today. I just don't know how. Senator Baucus. Should we try to find better tools? Mr. Lockner. I think that's very logical. Senator Baucus. So you think maybe we should make the attempt? Mr. Lockner. To find tools? Senator Baucus. Yes. Should we make the attempt to find tools? Mr. Lockner. To make a realistic assessment of what is really involved here. Senator Baucus. So you do think we should make the attempt to find better tools to deal with this issue? I'm not trying to put words in your mouth, I'm trying to find out where you are. Mr. Lockner. Let's try to focus on the loss of the services involved and I think that's where we really need to turn. Senator Baucus. We're not dealing with that. That's a separate issue. I'm talking about lost intrinsic value. Mr. Lockner. Again, I really haven't given this a lot of thought. I'm not an expert on those issues. Senator Baucus. Mr. Garcia. Mr. Garcia. As my testimony indicated, absolutely, we believe that those are real values, real values the public should be compensated for. There are two issues when a resource is injured. One is primary restoration, bringing that resource back to baseline. The other is compensating the public for the lost use of those resources, both direct and indirect or non- use or passive use. I grant you that it's difficult to quantify those values, but it is possible and has been done. I would also submit that the committee review the Administration's proposal for dealing with injuries to resources, including interim losses and the restoration-based approach that we have advanced in our proposal and which is contained in NOAA's regulations--which does not involve quantification or monetization of the injury. Rather, it focuses solely on how do you restore that injury; how do you restore the injured resource itself, as well as how do you compensate the public for their loss, whether it's a direct use or a passive use. Senator Baucus. I appreciate that. I know it's an extremely difficult issue but in my personal opinion, it's an effort we should undertake, how we deal with this and quantify this. Do you want to speak to that, Mr. Spiegel? Mr. Spiegel. Yes. I'd like to make a quick comment. One of the things this bill seems to do is engage in linguistic detoxification of chemical pollution. Senator Baucus. What does that mean? Mr. Spiegel. Linguistic detoxification means that you detoxify with words but we like to use that phrase basically because it seems like some of my colleagues here feel that allowing levels of contaminants in the environment is acceptable. One of the things I always felt, and I know that the people in my community feel, is you really cannot put a price on clean air, clean water, and clean land. You really can't. It's necessary for our survival, it's necessary for our children's survival. One of the things I've learned is the Indians use a seventh generation ideology which means they look at everything, how it's going to affect seven generations down the road, how it's going to affect not only their children, but all the way down, how it's going to affect the future. I think that when we look at natural resource restoration, and we look at natural resource damages, we should look at it not in terms of is it strictly economics. Would it cost more to clean it up than leave it dirty? Of course. What is reasonable? Is it reasonable to leave elevated levels of contaminants because we don't think we're going to use the natural resource? What about our great, great grandchildren, may they use the resource? Senator Baucus. I appreciate that. My personal view, and I believe this very strongly, that we have a duty to our country to try to find some way to solve this question. Otherwise, a wilderness area, for example, is destroyed or a portion of it is destroyed, the solution will be to try to find alternate hiking days somewhere else and not restore that wilderness or not try to do what we can do reasonably to try to restore it. This is a tough issue. We're getting into nonlogical matters here, but yet very, very important. It's analogous to what is beauty, how do we define beauty? It's very hard to define. Justice Potter Stewart, when asked to define something else, pornography, he said, I don't know but I know it when I see it and beauty is somewhat the same. I think there is some basic, spiritual, something to do with one's soul. It's very valuable when some special natural resources are destroyed--a Glacier Park in Montana. That's a hypothetical but there are some wonderful rivers and streams in this country which have been seriously damaged. Sure, we can measure damage by the lost use, people don't fish or hunt as much or what not but there is another value too, particularly because that river was so beautiful. It's hard to describe and we have to find some way to reasonably deal with that issue. Otherwise, we're not serving our people as well as we can or should. It's hard, I grant you it's hard but I think we have an obligation to do whatever we can to try to address it in the most reasonable way. As I read this bill, it essentially says those areas are off limits. It cannot be compensated, it cannot include those intrinsic values attempting to restore a damaged or lost natural resource. I think that is wrong. Senator Smith. Let me just pick up on that point, Senator Baucus. The whole premise, I believe, of NRD is that we can reduce these things to a dollar amount. Your comment, Mr. Lockner, was right on target, I think in terms of quantification. The premise is that we can quantify it. The truth of the matter is we can't. Senator Baucus. Can or cannot? Senator Smith. We cannot. Senator Baucus. I think we can. There are ways to do it. In fact, right now there are techniques being used by trustees to try to answer that question. I might say too that as we sit at this very moment, the State of Montana is in litigation and has techniques and measurements and so forth to try to answer that question. I grant you it's a hard matter to measure, but I submit ever so strongly, we should try to do our very best to try to find a way and maybe devote our time in a hearing to all the various different techniques and different tools to try to find the best way rather than to categorically dismiss it. Senator Smith. I hear you but again, we're using double standards on quantification. For example, in the area of eminent domain, when you go take granddad's farmhouse and you decide it's worth $50,000, you're going to build a new highway, do you quantify that? Do you get into the loss use, non-use of those people, what's the aesthetic value of that farm? We don't do that. We don't do that at all. So suddenly we come up with this NRD concept here and in the case of natural resource damages, we now fly this quantification standard that we don't apply anywhere else. That's what is wrong with it. When you come out and fully support when we take the old farmhouse and we can say, these people are entitled, there are a lot of people that like to look at that farmhouse, they like to walk on that land, they like to hunt, they like to fish and when you reimburse those people for all of that, then OK, I'll talk to you, but that's not happening. We're applying this standard one way and you cannot quantify it. We've argued about this, we've discussed this. This is the problem. Meanwhile, while we argue it, we're not restoring which is what Mr. Heig said we want to do, to restore these properties to their use where we can all enjoy them. You said, Mr. Garcia, that you can put a real value and I think you mean that. But all right, I want to use the Grand Canyon, what's that real value to me? Who much is it, give me a dollar amount? Mr. Garcia. As I said, it's difficult to quantify. Let me make a point. Senator Smith. That's the point, isn't it, it is difficult. We're trying to quantify it, that's my point here. That's what is so frustrating. Mr. Garcia. We have quantified those values in a number of cases. What I wanted to suggest is that there is an alternative. There is an alternative to rejecting the concept of passive use values, but there is a way of capturing those values. The alternative, again, I submit is embodied in the Administration's proposal. It is a restoration-based proposal. It focuses not on the quantification or the monetization of the injury which leads to litigation, is complicated but can be done, but rather it focuses on how do you restore the injury so the entire inquiry is not what is the value of that resource. Rather, it is how do you compensate the public for the loss of that resource, how do you compensate the public for the loss of the use of that resource without getting into the quantification issue? You develop a restoration plan as we've done a number of times in accordance with NOAA's regulations, in our damage assessment process. We have laid out a proposal for the staff which I think allows the trustees to fulfill their obligation to make the public and the environment whole as a result of an injury--by compensating the public both for the loss of the resource as well as the loss of the use of that resource and to do it without having to monetize the injury. The measure of damage under our proposal is the cost of the restoration project, not the value of the resource. Senator Smith. I don't disagree with you on the restoration. We should restore it and there is some argument about how much certain entities would have to spend to do that, but when you start going beyond that, that's where you get lost use, non-use, that's where you start getting into the dollars. You say it isn't, but it's the money. There are numbers put on these NRD lawsuits, huge numbers, but hundreds of millions of dollars in some of these cases and I don't know where they come up with the figures on lost use and non-use. As I said, somebody on the panel, tell me what is the dollar amount for me not being able to see the Grand Canyon? Mr. Spiegel. Senator, I think the way the argument is being framed here is not exactly the best way to frame it. I think that to sit there and ask people to spit out a dollar amount, to put on a specific resource, I think is the wrong way to frame the argument. Senator Smith. That's what we do. Mr. Spiegel. The way you're framing the argument right now I think it is not positive. I think a positive way to look at the argument and frame it where you can get real debate as to which way we should frame this in the bill is to look at potential use, there are people who are experts in the field. How much would it cost to restore this property, how much would it cost reasonably to safeguard against how people use it? Where I live in Edison, about 70 sites are located right in my general area, and they all drain into the river. There are fishing advisories--you can't fish because the fish have high levels of PCPs. The river is gorgeous, teeming with life. You can't eat the crabs, you can't eat the fish. They don't want you to come in contact with the water. How do you put a number on that? Senator Smith. What about Barbara Williams' lost use, non- use? We're not applying any lost use, non-use to her. What about all the aggravation she's had and the dollars that she's spent in litigation on a Superfund site where everybody admits she shouldn't even be in? Mr. Spiegel. I'm not going to comment on that because I don't know anything about it. Senator Smith. But I'm just using it as an example. The point is we isolate these NRD cases and we say we're somehow going to put a specific number and we do put specific numbers and that's my point. If you look at these cases, they are very specific dollar amounts and nobody can tell me where they come from. I can understand the restoration. We may disagree on the amount but I understand that, that's specific because it cost x number of dollars to be restored. Senator Baucus. Mr. Chairman, I think what we ought to do is use your analogy and give it to a jury because right now when we are trying to wrestle with this issue, first, as you well know, we're only talking about those sites that are on the NPL, a certain threshold has to be met before that's triggered. Then we begin to grapple with what the restoration should be. In this case, it's in the public interest and the trustees here are trustees for the public. So the intrinsic value of a national resource that is destroyed is valued by the public not just a single individual, it's by the public and that I think means the trustees should be held to a very high standard and it also means any determination they come up with is necessarily going to be perhaps a little bit higher in amount of value because we're trying to protect the public interest here as opposed to the private interest. Take the case of a taking, first of all, as a threshold what is not a taking. Once that decision is made, then it goes to the jury usually for damages. The jury is going to sit down and try to figure out what is the damage when the taking has been triggered. They're going to probably take intrinsic value into account. They're going to take a farmhouse, for example, the person can't use his farm anymore, it's not there. What is the economic loss and so on. I'll bet you dollars to doughnuts that jury is also going to think in the back of its mind, the lost intrinsic value to that individual, that is the beauty of the countryside, the value of working the land and so forth. Maybe the answer here is to just turn it over to a jury. People have common sense. They know things pretty well. They can't quantify to the decimal point but they've got a sense here so maybe the answer is let's turn it over to a jury and the jury will determine what the restoration plan will be. I don't think most people want to do that but at least people do include intrinsic values into their conclusions as to what damages should be and we just have to do our best, as difficult as it is, to try to find some way apart from giving it to a jury, for us to develop some process to do the same. Mr. Garcia. I just wanted to make one point and that is we, under our current approach, are restoring injuries to resources including the lost services, use and non-use, without monetizing the injury, so we are doing it without presenting a bill to the responsible party that says here is the value that has been damaged or destroyed. Rather, we are presenting a bill that is for the cost of the restoration project and that restoration project compensates not only for the lost resource but for the lost services, both use and passive and it can be done. We have done it, we're doing it every day. I would submit we would be happy to sit down with your staff and discuss how we have done it. It's embodied in our proposal. You do not necessarily have to monetize the injury; there is another way to do it and you can still capture those passive use values which are true losses and must be preserved. Senator Smith. Truthfully, it is a tough issue and we've all been willing to take it on. It's been basically ducked in the past in this reauthorization, so we're going to try to deal with it, but it's tough. Did anybody else have a final comment? Mr. Spiegel. I just to want to say that EPA currently is already doing this. In my community, they have restored areas that have been damaged by environmental destruction at the three sites. They are engaged in restoration activities to try to minimize the amount of damage to the environment, so it's something that is already occurring. I think if you can somehow strengthen it or quantify it, that's good, but it's already occurring, so it's not something you're talking about an abstract in the future. They're already doing it. Senator Smith. Let me thank you all for coming. Senator Baucus. If I might say, Mr. Chairman, I think it's been a very good hearing and I compliment you on it. In this wonderful form of government we have called democracy, everybody is entitled to their point of view and I want to thank everybody here for vigorously expressing his or her point of view. I think it shows, Mr. Chairman, that we've got some work ahead of us and there are very real differences on this bill, but I think in reading between the lines, it's clear that people do want to resolve it and find some solutions. Thank you. Senator Smith. If members have questions they want to submit, additional questions, they can do that by Monday and you'd have until the following Monday to respond to those questions. The hearing is adjourned. 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Browner, Administrator, Environmental Protection Agency introduction Good morning, Mr. Chairman, and Members of the Committee. I am pleased to have this opportunity to appear before you to describe the Superfund program and discuss legislative reform of Superfund in the 105th Congress. 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. ATSDR studies show a variety of health effects that are associated with specific 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), and increases in chronic lymphocytic leukemia. These findings support EPA risk estimates that show the impacts of these sites on public health. 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. We are also committed to participating in a process by which Republicans, Democrats, the Administration and a broad cross-section of stakeholder representatives work together to build consensus on the elements of Superfund legislative reform. As drafted, the Administration does not believe S. 8 provides the basis for consensus based legislative reform. The Administration is ready to work with you to craft Superfund reform legislation that can attract broad consensus support. Only through a consensus based legislative process can we craft a proposal that is fully protective and delivers on our commitment to the American people to accelerate toxic waste cleanup. By developing a broad consensus based process, we believe we can achieve Superfund reform in the 105th Congress. We are determined that our third try at legislative reform address today's Superfund program, not out of date problems now resolved. The Superfund program is fundamentally different and better. It is faster, fairer, and more efficient--reality, not just rhetoric--than when the legislative debate started 4 years ago. Responsible legislative reform must buildupon initiatives and reforms that have brought about program improvements, and must address remaining legislative barriers to success with an eye toward the 21st Century, in which we can all hope to see less exposure from toxic waste sites for all Americans, and the return of these resources to productive reuse. My purpose today is threefold: (1) to forge an understanding of where the Superfund program is today by sharing with you the substantial 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 a vision and potential components for responsible Superfund legislative reform; and (3) to discuss our concerns with S. 8, which fails to meet our principles for responsible, Superfund legislative reform in this Congress. Finally, the Administration remains concerned over the expiration of the authority to replenish the Superfund Trust Fund. Without the availability of these funds, the Administration will be unable to continue cleaning up sites at the current pace, or guarantee our ability to respond to environmental threats. a fundamentally better superfund program Proof of a faster, fairer, more efficient Superfund program can be found in three simple indicators: first, We have completed cleanup at 423 sites on the National Priorities List, and 485 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 allows us to establish a new cleanup goal of 900 completions by the end of the year 2000, representing approximately two-thirds of the sites on the NPL. Our most recent analysis make us optimistic that we can achieve our goal of a 20 percent reduction, or 2 years, in the total cleanup process time; and second, responsible parties are performing or funding approximately 75 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 and has, in 1 year, offered orphan share compensation of more than $57 million to responsible parties willing to negotiate long-term cleanup settlements; and third, 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 or multiple approaches to groundwater cleanups; EPA's current policy of concentrating on principle threats at sites, not the entire site; and EPA's 15 plus years of implementing the program provided greater efficiencies and lower costs when selecting cleanup options. In addition, through the commitment of EPA, State, and Tribal site managers, and other Federal agencies, EPA has achieved real results for public health and the environment while experimenting with and instituting changes to our cleanup process through three rounds of Administrative Reforms. EPA is committed to further administrative and regulatory (including NCP) improvements in the Superfund program in the years ahead. Our objectives for administrative reforms have been to: <bullet> Protect public health and the environment over the long- term, while lowering the cost of cleanups <bullet> Increase the pace of cleanups <bullet> 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 <bullet> Involve local communities, States, and Tribes in decisionmaking <bullet> Promote economic redevelopment at Superfund sites The success of the Administrative reforms has been demonstrable. In a recent report, the Superfund Settlements Project (SSP), a private organization comprised of industry representatives, published in December 1996, acknowledges 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.'' These positive comments, from a group of large corporations involved in many Superfund cleanups, echo the Agency's recent Superfund Administrative Reforms Annual Report, for Fiscal Year 1996, which details specific program accomplishments. Providing Protective Cleanups at Lower Costs EPA has initiated a number of administrative reforms which promote cleanups that are technologically and scientifically sound, cost- effective and appropriately consistent. These reforms will lower cleanup costs, while assuring long-term protection of human health and the environment. National Remedy Review Board EPA has achieved significant success in creating substantial future cost reductions for parties at complex, high-cost Superfund sites across the country, by creating a national board of technical and policy experts within EPA to review high cost, long term cleanups. This newly established National Remedy Review Board, comprised of both Headquarters and Regional experts is providing targeted review of cleanup plans, prior to final remedy selection, without delaying the overall pace of cleanup. The Board's preliminary analysis indicates it has identified potential reductions in the range of $15-30 million in total estimated future costs for reviews completed during FY96. Using Technology and Science Updates to Save Money Approximately $280 million in future cost reductions are predicted as a result of the Agency's review and updates to previous remedy decisions made in the early years of the Superfund program. These early remedies were based on ``state-of-the-knowledge-and-practice'' available at the time. Where science and technology have advanced and adequate levels of public health and environmental protection are assured, EPA is revising remedies where future cost reductions can be achieved while still preserving appropriate levels of protection, and the current pace of the program. Better Land Use Assumptions in Remedy Selection EPA has improved its cleanup decisions by consistently using reasonable assumptions about current and future land use. Recognizing that land may be appropriate for uses other than residential use can yield a more realistic risk assessment and less expensive remedy. EPA is working with local land use planning authorities, other government officials and the public as early as possible during site investigation to develop reasonable land use assumptions to use in the decisionmaking process. EPA also is making extra efforts to reach out to communities which may have environmental justice concerns to ensure that they are fully informed and able to participate in these decisions. Currently, about 60 percent of EPA's Records of Decision (RODs) include a land use scenario other than residential land use, typically where there is no residential land use onsite or adjacent to the site. Setting Priorities for Cleanups To ensure that available funds are directed to the highest priority response projects on a national basis, EPA established a National Risk- Based Priority Panel (Panel) in August 1995. Prior to this reform, individual Regions established the relative priority of their cleanup projects which were then funded on a first-come, first-served basis. This reform established a national priority system to fund cleanups based on the principle of ``worst problems first.'' The Panel evaluates proposed cleanup actions, looking at the following factors: risks to humans and the ecology; stability and characteristics of contaminants; and economic, social and program management considerations. With the exception of emergencies and the most critical removal actions, cleanup projects are generally funded in order of priority based on the recommendations of the Panel. By early 1997, the panel had ranked projects approaching $1 billion in cleanup costs. Increasing the Pace of Cleanups The completion of 423 Superfund toxic waste site cleanups (as of February 28, 1997) is a hallmark of the improved pace of cleanups. At the Lord-Shope Landfill near Erie, Pennsylvania (the 400th site to be cleaned up), parties used innovative technology to remove contaminants. Tons of industrial wastes had been dumped over 20 years (including organic and inorganic chemicals, solvents, cooling acids, and caustic agents) that resulted in groundwater contamination. Today, the community no longer needs to worry about the safety of drinking water, the impact on farmland near the site, the effect on property values of their homes and businesses, or the possibility of children wandering onto the site and playing among the drums of toxic chemicals. SACM EPA (with the support of the Corps of Engineers and the Bureau of Reclamation and their cleanup contractors) also has implemented reforms which streamlined its rapid action cleanup authority. EPA's Superfund Accelerated Cleanup Model (SACM) accelerates cleanup and risk reduction at sites by consolidating site-assessment into a one-step process. SACM includes the following initiatives: taking early actions while assessing long-term cleanup; using ``presumptive'' remedies where appropriate; initiating enforcement activities earlier; and addressing the worst threats to people and the environment first. SACM reduces cleanup time through a single, continuous site assessment and early action process. Presumptive Remedies The Agency is saving time and money by using standardized or ``presumptive'' remedies for certain types of sites. Presumptive remedies are based on scientific and engineering analyses performed at similar Superfund sites and are used to eliminate duplication of effort, facilitate site characterization, and simplify analysis of cleanup options. EPA issued presumptive remedy guidances for the following: municipal landfill sites; sites with volatile organic compounds in soil; wood treater sites (with an update 2 years later); and a groundwater presumptive response strategy. Regions are reporting significant reductions in costs and time required to complete remedies. A recent Office of Inspector General report focused on an independent review of the use of a presumptive remedy and concluded that ``Use of a Presumptive Remedy increased consistency in decisionmaking by taking advantage of lessons learned at similar sites, and allowed speedup of the Feasibility Study process.'' Promoting Fairness in Enforcement As I have stated, a core principle of the Superfund program is that the parties responsible for contamination should be responsible for the cleanup. EPA's ``Enforcement First'' strategy has assured that responsible parties perform 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. Over the course of the Superfund program's implementation, however, stakeholders have expressed a variety of concerns regarding the fairness of the liability system. Issues related to excess litigation and associated transaction costs, the perceived inequities in the issuance of cleanup orders, the liability of parties contributing small amounts of hazardous substances to Superfund sites, the liability of parties that have limited assets, and the liability associated with the disposal of municipal solid waste, have all contributed to criticisms of the program. Through Administrative Reforms, EPA has addressed these concerns. Recognizing the Orphan Share EPA has fundamentally changed the way it conducts settlements at Superfund sites through implementation of its 1996 ``orphan share compensation'' policy. Under the new orphan share reform, 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 encourages parties to settle, rather than to litigate, and enhances the fairness and equity of settlements. Without a settlement, responsible parties at a site are potentially liable under the Superfund law for the entire cost of the cleanup, including the share that might be attributable to other parties that are insolvent or defunct. EPA's new approach creates a major incentive for responsible parties to agree to perform the cleanup without litigation and the associated transaction costs. In FY96, the Agency offered over $57 million in orphan share compensation to potential settling parties across the United States. Getting the ``Little Guy'' Out Early EPA's reforms are removing thousands of small volume waste contributors from the liability system. PRPs that are liable for cleanup costs have sometimes sued huge numbers of small businesses that had little or no connection to the toxic contamination--sometimes simply by naming every business in the local yellow pages as a defendant in a contribution lawsuit. EPA's reforms have responded to the burden this can place on parties that made a very limited contribution to the pollution at a site by using its settlement authority to remove small volume waste contributors from Superfund litigation. To date, the Federal Government has completed settlements with over 14,000 small volume contributors of hazardous waste at hundreds of Superfund sites. These settlements protect the settling parties from expensive private contribution suits. In addition, EPA has stepped 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. Site Specific Special Accounts Prior to the Administrative Reforms, any funds recovered in early settlements at a particular site were usually deposited in the Superfund Trust Fund, and could not be spent until appropriated. When appropriated, these funds could be spent at other sites. Through the use of Site Specific Special Accounts, EPA is able to direct settlement funds, as well as interest earned on those dollars, to future response actions at a specific site. As of August 31,1996, $226 million in principal, and $35 million in interest, had been set aside for exclusive use at specific sites. Equitable Issuance of UAOs To address the criticism that EPA routinely issues cleanup orders under section 106 of the Superfund law (unilateral administrative orders or UAOs) only to a subset of the parties identified at a particular site, EPA has established a protocol requiring a detailed explanation of the basis for not including certain parties when issuing a UAO. This new requirement will ensure greater equity among parties receiving UAOs, because these orders will be issued to the largest manageable number of PRPs at each site. Piloting Allocations EPA is conducting pilot projects that test a fundamentally different approach to the allocation of Superfund costs (called the allocations pilots) in order to promote fairness in settlements. Allocations are one approach to determine PRPs' share of cleanup costs which may be used to settle their liability with the United States. A neutral party, known as an allocator, selected by parties to the process, conducts an out-of-court allocation. The allocator assigns shares of responsibility for cleanup costs among all PRPs at a site. In concert with an allocation, EPA expects to pay the ``orphan share,'' which includes the shares of parties which are defunct or insolvent. EPA has offered allocation pilots at 12 Superfund sites. EPA is evaluating the pilot projects and has learned valuable lessons about the relationship of allocations to settlement. We have learned, for example, that some PRPs prefer not to participate in a formal allocation process, instead preferring to allocate shares of responsibility among themselves. We have also learned that a single allocation process is inappropriate for all sites, and that any process must be flexible to meet site-specific needs and promote settlements. We hope our on-going evaluation of the allocation pilots will continue to reveal valuable information about the process of conducting allocations. Reducing Costs for PRPs Through Reduced Oversight PRPs incur costs at sites in part because of EPA's need to oversee the quality of cleanup work. Oversight is the process EPA uses to ensure that all studies and work performed by PRPs are technically sound and comply with statutory requirements, regulations, guidances, policies, and the signed settlement agreement. Oversight may include reviewing reports submitted for approval, ensuring interim cleanup milestones are met, or conducting site visits. As the Superfund program matures, parties performing cleanup work have developed a considerable body of experience in conducting response activities at sites. EPA can reduce oversight of such parties while continuing to exercise sufficient oversight to ensure that the work is performed properly and in a timely manner. EPA Regions have initially identified approximately 100 sites where reductions in oversight of ongoing work for cooperative and capable PRPs have occurred or will occur--significantly reducing PRP costs at some of these sites. EPA also may look at opportunities to involve communities in deciding the appropriate level of PRP oversight. Involving Communities and States in Decisionmaking The Agency supports the principle that communities must be involved in the cleanup process from the time a site is discovered to the time it is finally cleaned up. Involving Communities in Remedy Selection EPA is promoting ``consensus-based'' approaches to the remedy selection process by involving community stakeholders in site pilot projects. This effort is intended 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. For example, at the Lower East Fork Poplar Creek Site in Oak Ridge, Tennessee, the cleanup strategy, agreed to in August 1995, reflected the concerns of the local community in the remedy selection process. This included input into a change in cleanup goals. Through a citizen working group established by the Department of Energy, working in partnership with EPA and the State of Tennessee, the citizens' influence on the remedy selection decision averted the expenditure of more than $100 million and helped protect human health and the environment more quickly. Regional Ombudsmen EPA established an Ombudsman in every Region to serve as a direct point of contact for stakeholders to address their concerns at Superfund sites. Prior to this reform, stakeholders raised concerns with Regional personnel, but had no formal mechanism for having their issues elevated. The Ombudsmen now serve as facilitators for stakeholders on concerns that have not been resolved between Regional personnel and the stakeholder through informal means. The Ombudsman reports to a top Regional management official in every Region to assure management attention to issues raised. Improving Public Access to Superfund Information EPA recognized that improving communication with stakeholders and improving access to Superfund information will help the public become more aware of, and informed about, Superfund. EPA is using electronic tools to improve communication, including having sites for both the Office of Emergency and Remedial Response (OERR) and the Office of Site Remediation Enforcement (OSRE) on the Internet, with separate pages devoted to Superfund reform. Each Region also is developing Internet ``home pages'' which will include information on Regional Superfund programs, such as Superfund site lists, site-specific information, successful site cleanup actions, and links to State Superfund activities. State Programs Speed Cleanup of Non-NPL Sites EPA recognizes the important role that State environmental agencies have in encouraging economic redevelopment of brownfields. EPA plans to provide $10 million, earmarked in FY97 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. EPA recently issued a memorandum setting out an interim approach for its relations with State voluntary cleanup programs. The memorandum includes criteria for State voluntary cleanup programs that are enabling EPA and the States to start negotiating a division of labor between EPA and the States in memoranda of agreement (MOAs) as well as ensuring protection of public health and the environment. Nine States have now signed MOAs with EPA regarding sites cleaned up under voluntary cleanup programs. The growing number of States creating and operating voluntary cleanup programs provides a unique opportunity to respond to the brownfields cleanup and redevelopment issues. Greater Power for States in Picking Remedies The goal of this reform is to provide qualified States with an increased role in the selection of cleanup alternatives at sites on the NPL, whenever possible. States selected for this reform enter into ``Participating States'' agreements with EPA, through which the States conduct the remedy selection process, consistent with applicable law and regulations. Participating States supervise the remedy selection process with minimal EPA oversight or involvement, giving the State significantly more control than usual over NPL site cleanups. Selected Federal facilities are achieving similar success through incorporation of a lead agency concept in interagency cleanup agreements. Promoting Economic Redevelopment EPA is promoting redevelopment of abandoned and contaminated properties across the country that were once used for industrial and commercial purposes (``brownfields''). While the full extent of the brownfields problem is unknown, the United States General Accounting Office (GAO/RCED-95-172, June 1995) estimates that approximately 450,000 brownfields sites exist in this country, affecting virtually every community in the Nation. EPA believes that environmental cleanup is a building block, not a stumbling block, to economic development, and that cleaning up contaminated property must go hand-in-hand with bringing life and economic vitality back to communities. The Brownfields reforms are directed toward empowering States, communities, and others to work together to assess, safely cleanup, and sustainably reuse these sites. EPA 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 will further identify, strengthen, and improve the commitments EPA and its colleagues can make to brownfields. Brownfields Pilots are Encouraging Redevelopment The Brownfields Assessment Pilots form a major component of the Brownfields Action Agenda. EPA exceeded its commitment to fund at least 50 pilots by actually funding 76 pilots at up to $200,000 each by the end of 1996. And, just this month, EPA announced the addition of two more pilots, bringing the total to 78. These 2-year pilots are intended to generate further interest in Brownfields redevelopment by bringing together public and private efforts including Federal, State, and local governments and affected communities. The Brownfield pilots will develop information and strategies that promote a unified approach to site assessment, environmental cleanup, and redevelopment. Many different communities are participating, ranging from small towns to large cities. Stakeholders tell the Agency that Brownfields development activities could not have occurred in the absence of EPA efforts. As the National Community Reinvestment Coalition (NCRC) said ``[W]e wholeheartedly support the EPA's Brownfields Economic Redevelopment Initiative. NCRC believes that [EPA's] multifaceted initiative represents a significant step forward by the Administration in working with distressed communities on the local level in their revitalization efforts.'' Getting Sites off the ``List'' Prior to reform, EPA kept track of all potential hazardous waste sites in an inventory known as the Comprehensive Environmental Response and Liability Information System (CERCLIS). Even sites where no further Federal Superfund interest was warranted remained in the CERCLIS inventory. This practice led to unintended barriers to the redevelopment of these properties because sites listed in CERCLIS could be automatically considered risky by some lenders, making it difficult for potential purchasers to secure loans to develop these properties. To avoid this result, EPA redefined CERCLIS, deleting or archiving sites from the active CERCLIS inventory. EPA has archived approximately 30,000 sites (e.g., sites where `no further Federal remedial action [is] planned') from CERCLIS to date, and EPA expects to archive over 2,000 additional sites from CERCLIS per year over the next several years. Deleting Clean Parcels from the NPL Prior to the Administrative Reforms, EPA's policy had been to delete releases from the NPL only after evaluation of the entire site. However, deletion of entire sites does not communicate the successful cleanup of portions of those sites. Total site cleanup may take many years, while portions of the site may have been cleaned up and become available for productive use before cleaning has been completed at other portions of the site. Some potential investors or developers may be reluctant to undertake economic activity at a cleaned up portion of real property that is part of a site listed on the NPL. This reform allows EPA to delete portions of sites, as appropriate, upon the receipt of petitions from interested parties, allowing redevelopment to occur quickly. Four parcels are currently moving through the deletion process. Removing Redevelopment Barriers Based on Liability Concerns EPA is promoting redevelopment of contaminated properties by protecting prospective purchasers, lenders, and property owners from Superfund liability. EPA's ``prospective purchaser'' policy is stimulating the development of sites where parties otherwise may have been reluctant to take action by clarifying (through agreements known as ``prospective purchaser agreements'') that bona fide prospective purchasers will not be responsible for cleaning up sites where they did not contribute to or worsen contamination. EPA issued new guidance in May 1995, which allowed the Agency greater flexibility in entering into such agreements. The new guidance expanded the universe of sites eligible for such agreements to include instances where there is a substantial benefit to the community in terms of cleanup, creation of jobs, or development of property. Of the 50 agreements to date, 60 percent have been reached since issuance of the May 1995 guidance. At the Indiana Woodtreating Site near Bloomington, Indiana, the work performed under a prospective purchaser agreement will prevent contaminants from entering Clear Creek, which is a drinking water source for the city of Bloomington, Indiana. People owning property under which hazardous substances have migrated through groundwater also feared liability under the statute. EPA responded by announcing that it will not take enforcement actions under CERCLA against owners of property under which contaminated groundwater has migrated, but where the property is not also a source of contamination. Further, EPA also will consider providing protection to such property owners from third party lawsuits through a settlement that affords contribution protection. EPA has given reassurance to the lending industry and to government entities acquiring property involuntarily. EPA outlined in guidance what it considered appropriate actions a lender may undertake without becoming a liable party. In September 1996, Congress passed legislation very similar to EPA's policy and guidance on lenders. EPA also is providing assurances (``comfort/status letters'') in appropriate circumstances to new owners, lenders, or developers which assure them that they need not fear incurring Federal environmental liability. The Agency is proud of 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 continues to seek responsible Superfund legislative reform to further improve the program. vision for responsible superfund legislative reform Legislative reform must buildupon the successes and lessons learned through the Administrative Reform effort and provide solutions to the problems that cannot be addressed administratively or through regulatory change. Our goals for legislative reform are consistent with the objectives of Administrative Reforms. We want a Superfund program that protects human health and the environment through cost-effective cleanups which are reliable over the long term and foster economic redevelopment. We want a Superfund program in which those who pollute are held responsible, but allows parties to resolve their liability as efficiently as possible and does not catch inappropriate parties in the liability net. We want a Superfund program in which citizens are encouraged and supported in their efforts to participate meaningfully in the cleanup decisions that affect their lives. We want a Superfund program that supports the continued development of State and Tribal cleanup programs and fosters collaboration between the Federal, State, and Tribal governments to divide up the enormous task of hazardous waste cleanup in this country in sensible, mutually supportive ways. Long-Term, Cost-Effective Protection 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, to the degree practicable. In order to facilitate these goals, the Administration supports addressing statutory remedy preferences and supports treatment for those wastes that are highly toxic and/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. It is important to note that we can see the market impacts of the treatment mandates under current law in the development of new, often in-situ technologies which are giving us more alternatives to incineration, and a decline in the costs of those technologies as they are used increasingly. These changes in the treatment market are part of the reason for the decline in estimated remedy costs I mentioned earlier. Additionally, legislation should not alter our goal of restoring groundwater to beneficial uses. Over half of this nation's population relies on groundwater as 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. ``Smart'' groundwater remediation as EPA has defined it in a series of Administrative Reforms is another major reason for declining remedy cost estimates. 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. Participants in the process of defining Superfund legislative reform in this Congress will have to balance thoughtfully the desire to be clear and specific to promote transparency and certainty, and the benefits of our current flexibility that permits continuous improvements to be made as our knowledge progresses. Fairness and Reduced Transaction Costs In discussing any proposed legislative changes to the Superfund liability scheme, it is imperative to retain the fundamental principle of holding the polluter responsible 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. The Administration would support liability reform for de micromis parties. Their liability is often less in dollars than the transaction costs they incur in defending against a lawsuit. These are parties contribute truly small volumes 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. Last year before this very committee, we heard from Ms. Williams, who runs a restaurant in Gettysburg, Pennsylvania. She was pulled into litigation at the Keystone Superfund site, not by the government, not by the PRPs brought in by the government, but as a fourth tier of PRPs pulled into the litigation by other responsible parties. We do not believe that a party such as this should be involved in the Superfund process, and we have worked to enter into settlements with these parties to help get them out. A de micromis liability exemption would protect Ms. Williams from other over-zealous PRPs. Last year, EPA began offering orphan share compensation 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 would support legislation creating a separate mandatory spending account for orphan share, so that funds for orphan share do not compete with cleanup dollars. We would also like to address the liability of municipalities and others who generated or transported municipal solid waste. EPA and the Justice Department have embarked on an exercise to address this issue through additional administrative reforms. As the legislative debate proceeds on Superfund reform, statutory provisions that efficiently and fairly address the liability of municipalities and generators and transporters of municipal solid waste should be considered. In addition, we believe that we should address the issue of 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 500 additional cleanups by 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 alike. We have citizens who are disinterested in large-scale NPL cleanups, and keenly interested citizens at smaller scale removal sites. Consistent with our experience, we would like to see Technical Assistance Grants (TAGs) available to citizens at non-NPL sites, in addition to NPL sites. Additionally, the Administration would like to ensure direct input from citizens into the development of assumptions regarding reasonably anticipated land uses upon which remedies 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. Enhanced State and Tribal Efforts In addition to the many changes and accomplishments that have occurred in 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 which have greatly expanded the number of hazardous waste sites cleaned up to protect human health and the environment. Superfund legislation should address greater opportunities for States and Tribes to address a full range of hazardous waste sites for which they have the necessary response capacity, while providing the financial and technical support needed to further improve existing programs. We must recognize that 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 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. Over the last 4 years, States, Tribes, and EPA have been finding their own ways of dividing up the broad universe of contaminated site work. Under this emerging model of customized partnerships, all regulators work together to determine which sites should proceed under what authorities, and under whose lead, seeking to reduce overlap and duplication in favor of more complementary, mutually supportive arrangements. 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 in the CERCLIS inventory. By contrast, States, in many cases by their choice, are in the lead at only roughly 140 of the 1300 NPL sites. However, the more interesting story here is the tremendous variety of arrangements EPA and States and Tribes have worked out to address waste sites. 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 where we are succeeding today in our efforts to organize our collective resources to achieve more protective cleanups by more parties. The types of authorities, resources, and flexibilities best suited to harness the positive forces of a Federal program in a manner which supports the cleanup efforts of States and Tribes and, through their voluntary cleanup programs, private parties, needs to be considered in that context. Economic Redevelopment The Brownfields Economic Redevelopment Initiative has achieved much initial success. The continuing value of the Brownfields Initiative is its evolution and promise for the future. To buildupon 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 has highlighted some of the major elements we believe could be addressed in order to achieve consensus based, responsible Superfund legislative reform. Our intent is to work within the Administration over the next few weeks to develop a set of principles and associated key components for this legislative reform process. These principles will also include the topic of Natural Resource Damages (NRD), which will also be addressed in other testimony before this Committee today. When these principles are complete, the Administration will share this product with your Committee. the superfund cleanup acceleration act of 1997 The Administration has evaluated S. 8, the Superfund Cleanup Acceleration Act of 1997, against many of the same criteria which have guided our Administrative Reform efforts and which describe our goals for legislative reform. I was pleased to see that one of the top priorities of this body is Superfund reform. The early introduction of S. 8 reflects the commitment with which you, Mr. Chairman, have approached the legislation. 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, S. 8 does not reflect the current status of the Superfund program, and fails to recognize the vast changes made to this program in the last 4 years. Inadequate Protection Remedies under S. 8 would not assure protection of human health and the environment over the long term because highly toxic, highly mobile waste would not be treated and because contaminated groundwater may not be cleaned up in most, if not all, cases. Elimination of Treatment for Long-Term Reliability While S. 8 retains a decision process not dissimilar to the current program, in which tradeoffs between cleanup options with respect to a common set of criteria are balanced to select a cost-effective response, the results would be dramatically different. S. 8 eliminates all of the treatment provisions of CERCLA, under which EPA generally seeks to reduce the intrinsic hazards of the highly toxic and/or highly mobile waste constituting the ``principal threats'' at a site. Treatment of highly toxic, 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, should engineering and institutional controls fail at some point in the future. 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, will occur. Despite improvements in our knowledge about how to make engineering and institutional controls work, significant uncertainties related to the long-term management of hazardous waste remain. Worse still, S. 8 establishes a new ``mega'' technical impracticability waiver from the fundamental requirement to protect human health and the environment in addition to the existing (and continued) waiver from applicable or relevant and appropriate requirements (ARAR) waiver for technical impracticability. This ``mega'' waiver can be invoked if ``there is no known reliable means of achieving at a reasonable cost the goals for remedy selection.'' As a result of this finding, the protectiveness goal is eliminated in favor of ``remedial measures that mitigate the risk to human health and the environment.'' Under this process, cost would receive more emphasis in deciding not only the method of protection for a site, (likely to be cheap exposure controls such as fences), but whether to protect at all. S. 8 may leave the real business of cleanup to a future generation, and it reflects concerns with treatment of wastes based on old anecdotes-- not the current program. Contaminated Groundwater Will Not Be Cleaned Up Contaminated groundwater is a problem at over 85 percent of Superfund sites. With over fifty percent of the U.S. population relying on groundwater for their drinking water, the Administration holds firm to the belief that this critical public health and environmental concern should continue to be addressed. I think you would agree that the citizens of this nation want and deserve a safe and reliable supply of water for drinking and household use, industry and agriculture, recreation, and many other beneficial uses, and to know that they will continue to have such a supply available for the generations to come. Despite this, S. 8 would replace the goal under the current program to restore contaminated groundwater to beneficial uses, wherever practicable, with the tragically modest mandate to ``prevent or eliminate any actual human ingestion of contaminated drinking water.'' This goal could be met through treatment at the tap or simply by preventing the use of the water. Though S. 8 does provide for protection of uncontaminated groundwater, it relies too heavily on natural attenuation to provide this protection. Even if actual cleanup of contamination in the groundwater were proposed as a cleanup alternative, S. 8 sets up a burdensome three part test which must be passed to justify its selection. The bill would require: (1) ``a determination regarding the technical practicability of restoration''; (2) a justification that demonstrates that active cleanup can ``substantially accelerate the availability of groundwater for use as drinking water beyond the rate achievable by natural attenuation''; and, in the final analysis; (3) consideration of active cleanup ``on an equal basis'' with institutional and engineering controls. Under S. 8, we may all need to buy our own water treatment plants. S. 8 reflects concerns about groundwater cleanup from the 1980's--not the current Superfund practices. Other Concerns S. 8 also fails to provide specific cleanup and protection standards for surface water, and adds prescriptive language regarding risk assessment, which is a glaring example of how the bill is out of touch with the Superfund program of today. Under the Administrative Reforms, EPA has met with stakeholder representatives from industry, Indian Tribes, environmental groups, and local government and citizen representatives from communities with hazardous waste sites to develop an agenda for technical improvements to the Risk Assessment Guidance for Superfund and to improving stakeholder involvement in the process of conducting a risk assessment which are very different than the technical and risk communication principles S. 8 would dictate by law. Risk assessment is a key area where policy needs to be able to evolve with new scientific understandings and changing stakeholder needs. s. 8 delays cleanups The seminal mission of Superfund is to protect public health and the environment through cleanup. To better accomplish this mission, a reformed Superfund must speed the pace of cleanup. Unfortunately, S. 8 will involve more lawyers in the process and therefore increase the time required for cleanup decisions dramatically, resulting in slower cleanups. Transaction costs will also increase commensurate with delays. ROD Reopeners The provision for ROD ``reopeners'' will cause significant disruption to and delay of ongoing cleanups. The complex thresholds for reopening RODs are based solely on cost savings anticipated, and thus have little to do with modifications of RODs based on advances in science and technology. Delays and disruptions will occur at sites where cleanups are well underway, and have been accepted by the community and PRPs, yet the RODs will be reopened, unless vetoed by the Governor of the affected State. Not only will RODs have to be amended, but consent decrees and interagency agreements that incorporate these RODs would have to be modified as well. This provision will increase, not reduce, transaction costs. Multiple Reviews of Cleanup Decisions In a marked departure from EPA's successful Administrative Reform, which provides a review of costly remedies to see if savings can be made, S. 8 institutes a series of decision points for a ``remedy review board.'' While the Agency's National Remedy Review Board was implemented to promote national consistency in prospective decisions in such a manner that minimizes disruptions or delays, the framework of S. 8 provides for a petition process that affects both prospective and past cleanup decisions, and provides for many disruptions and delays that can only be avoided if there is a finding that the delay is so unreasonably long that it threatens human health and the environment. These provisions do not prevent delays, which may cause increased costs as contamination spreads, nor do they give voice to the communities affected by the site caught up in this process. Overly Prescriptive Risk Assessments S. 8 institutes new risk assessment provisions that can only be described as redundant, expensive, and time-consuming, but without apparent benefit. The requirement for risk ranges of 10<SUP>-4</SUP> to 10<SUP>-6</SUP> and risk distributions and central estimates of average exposed individual risk for each facility only adds wasteful steps to the evaluation process, as a central estimate would fall within either a range or distribution, and a distribution is merely a graphical representation of a range. Additionally, because of the requirement to utilize site-specific information, instead of using valid assumptions, risk assessments will no longer benefit from time and cost savings due to the Agency's experience in performing these evaluations. Instead, risk assessments are likely to be more expensive and take more time under S. 8, delaying the cleanup. While we support appropriate uses of site-specific information in risk assessments, the bill's insistence onsite-specific data for all key variables would be not only time consuming and impractical, but downright impossible for many factors. s. 8 has broad liability exemptions The Administration has several concerns regarding many of the liability provisions of S. 8. The proposed legislation exempts or limits the liability of parties that are viable and liable and should remain responsible for cleanup of their sites. As an example, S. 8 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, S. 8 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. S. 8 also limits the liability of private owners and operators of ``co-disposal'' sites--a position EPA has never endorsed. Under the terms of S. 8, 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 S. 8's orphan share funding provisions. In fact, as S. 8 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 S. 8, a ``co-disposal'' landfill is one at which there ``may'' be a ``substantial portion'' of municipal solid waste. The term ``substantial'' 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 de minimis exemption found in S. 8 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 contributors of very small amounts of waste. The 1 percent cutoff of this provision potentially will exempt parties that have contributed very large amounts of hazardous waste, and may leave very few responsible parties remaining liable. For example, at the Bypass 601 Site in North Carolina, a 1 percent contribution represents approximately 3 million pounds of lead- bearing materials. Only 20 of the approximately 4,000 responsible parties at this site contributed volumes in excess of 1 percent. This is another example of an exemption that violates the principle that parties that are responsible for the contamination should remain responsible for the cleanup. Finally, the liability exemptions and limitations in S. 8, 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, S. 8 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. S. 8 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 S. 8 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 may have been impossible at most sites, as the provision requires court action at the time of the activity. The Allocation Process is Broad and Prescriptive The Administration has a number of concerns with S. 8's 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. S. 8 requires formal and prescriptive allocations at all multi-party sites on the NPL where post-enactment costs are outstanding, even where the parties are exempt under S. 8. In addition, Under S. 8, 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 excluding small volume contributors or parties with an inability to pay, and thus from protecting them from the transaction costs associated with an allocation. As drafted, courts could interpret S. 8 to require EPA to accept ``cashout'' settlement offers. This provision could rapidly turn Superfund into a public works program, with the government undertaking the cleanups. Finally, 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 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, EPA is reevaluating the need for legislation establishing a detailed allocations process. Other Liability Concerns S. 8 imposes a bar on additional enforcement, cost recovery or even private party actions against a party after the issuance of an administrative order, even in situations where an order is used as an interim measure to address an emergency, or where orders are used to achieve portions of work at large or complex sites. Another provision of S. 8 precludes Federal or administrative enforcement action at any facility that is subject to a State remedial action plan. There are no exceptions to this provision for emergencies, threats to human health or the environment, or in cases where the State requests EPA to act. 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 potentially 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. s. 8 provides incomplete support for communities The Administration supports the principle that communities must be involved in the cleanup process from the time a site is discovered to the time it is finally cleaned up. Because one out of four Americans lives within five miles of a hazardous waste site, Superfund is a Federal program that truly has local impacts. Additionally, EPA recognizes and supports the continued growth of State regulated and voluntary programs, and the successes States have achieved in addressing their sites. Community Response Organizations While S. 8 adds many provisions regarding enhanced community involvement, there are significant weaknesses. The bill establishes Community Response Organizations (CRO) to serve as the primary conduit of information to and from the community to appropriate Federal, State and local agencies and PRPs concerning development and implementation of remedial actions. Among the concerns the Agency has with the provisions addressing communities, the CRO provisions limit participation to the remedial action phase of cleanups. We support meaningful community involvement throughout the cleanup process and from the earliest possible opportunity during site assessment and before NPL listing. The Agency supports giving substantial weight to CRO recommendations on future land-use and other significant decisions throughout the cleanup process. The CRO should represent community concerns directly to the Agency, as opposed to the mere requirement for CRO consultation (assuming a CRO exists) on input from the local land use authority. Unfortunately, involvement of this type is absent from the provisions of S. 8. Technical Assistance Grant Limitations Another concern with the community involvement provisions of S. 8 is the implementation of a changed Technical Assistance Grant (TAG) program. The purpose of the TAG program is to provide local citizens with resources to obtain and evaluate technical information. S. 8 requires that if a CRO exists, it is the preferred recipient of a TAG. Aside from the inherent conflicts of interest that may arise from PRP participation in CROs, by requiring that the TAG be awarded to a CRO, the bill eliminates the opportunity for other community-based organizations to access TAG funds. Giving preference to CROs when awarding TAGs is not the way to ensure that the local citizen's groups will bring an equal voice to the table. In addition, S. 8 limits TAG grants to sites listed or proposed to the NPL, limiting community involvement in other facets of the Superfund program (i.e., removal actions and non-NPL cleanups). s. 8 provides incomplete support for states and tribes Problematic State Delegation Process S. 8 sets up an elaborate ``menu'' approach for providing delegation of the Federal program to States, which allows States to pick and choose authorities they would like to undertake. Unlike prior legislative provisions that had EPA support, it raises the potential for increased delays and costs due to uneven divisions of labor and could hamper coordination among Federal agencies. Partial or limited delegations can allow States to undertake portions of cleanup activities or studies, and then require EPA to perform the portions that the State declined to perform, either on a site by site or State by State basis. In some cases, this could lead to implementation delays and higher costs associated with attempting to implement a State plan at the Federal level using different personnel or contractors. It could also create inconsistent approaches, confusion, and could greatly compromise cost recovery if the work is Fund-lead. Even the delegation process itself is problematic in S. 8. The bill provides for no public notice or comment on a proposed approval or disapproval of a State application to take over the program. RCRA, the program most closely related to the Superfund program requires such procedures, however, S. 8 does not. In the case of S. 8, 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. In addition, 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. Limiting Application of State Law One of the most troubling aspects of S. 8's treatment of the role of States in the Superfund program is the effective preemption of State law involving remedy selection. Under S. 8, this occurs when a delegated State attempts to select a remedy more costly than what EPA would have selected, in which case the State must pay the difference in cost and cannot recover the costs through State or Federal cost recovery, even if it would otherwise be covered by their own State cleanup requirements. Aside from the question of costs or resources necessary to duplicate the State remedy process for comparison purposes every time a remedy is challenged, this represents a preemption of the State's ability to select remedies under its own authority, as well as a preemption of the State's liability scheme. Other State Issues Besides the issues listed above, there are other potential problems with the provisions of S. 8. For example, the new State cost share requirements could add $90 to $100 million to the cost borne by the Trust Fund, based on 1994 estimates, and under S. 8, this cost may be increased by State petitions for further reductions. Additionally, early authority to delist sites from the NPL could negatively impact sites where cleanup has not been completed, or at RCRA facilities or other sites with ongoing activities which might give rise to new problems or releases. S. 8 does not recognize Indian Tribes at all. s. 8 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 substantial Brownfields provisions, as well as voluntary cleanup program provisions, within S. 8. However, in reviewing the provisions, several concerns were apparent. Brownfields Grants are Limited One of the major concerns with S. 8's Brownfields characterization grants provision is the exclusion of States from the list of eligible recipients for the program. EPA's experience with the Brownfields Pilot Program has taught us that in the case of many smaller communities, it may make more sense and be more efficient to provide the grants directly to States. Additionally, the limitation on funding per year for these grants may restrict and inhibit the grant recipient from efficiently managing and benefiting from the grant itself. Finally, in the definition of Brownfields, S. 8 improperly excludes sites where removals have occurred, or are planned to occur, and sites deleted from the NPL with ``No Action'' RODs. These sites may be appropriate candidates for redevelopment. In addition, EPA has first-hand experience with prospective purchaser redevelopment of these properties. Voluntary Cleanup Program Concerns The Administration is opposed to provisions in S. 8 regarding voluntary cleanup that would eliminate the authority of EPA and other Federal agencies to respond to releases of hazardous substances whenever a State remedial action plan has been prepared, whether under a voluntary response program, or any other State program. Under S. 8, the mere existence of such a cleanup plan eliminates any Federal authority to respond to a release or threatened release of hazardous substances--even where there may be an imminent and substantial endangerment to human health and the environment. This compromise of public protection is alarming. The provisions of S. 8 could leave us powerless to respond to immediate threats from the worst toxic sites (Voluntary Response Programs are given authority to clean up NPL sites) even where the State's VRP program lacks the resources and expertise to ``qualify'' under the provisions of S. 8. In addition, the level of community involvement provided by S. 8 is questionable. The bill limits the community to an ``adequate opportunity'' for public involvement and does not guarantee participation in all levels of the cleanup process or determinations regarding end uses of the property. Finally, the preclusion of all private and citizen suits belies the apparent commitment in S. 8 to strengthen community participation. other concerns The problems discussed above are not a complete list of problems in S. 8. The bill significantly restricts restoration of natural resources injured as a result of hazardous waste contamination. Further, the 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. The Administration views these and other problems I do not have time or space to mention here as sufficiently numerous and serious to suggest that S. 8 is probably not an effective vehicle by which to forge consensus regarding Superfund legislative reform in this Congress. conclusion The Clinton Administration believes that responsible, consensus based Superfund legislative reform is necessary to remedy some inherent problems in the existing statute. However, any such reform must be based upon an understanding of where the program is today. I have tried in my testimony today to start the process of forging a common understanding of the current Superfund program by describing our accomplishments under the Administrative Reforms. We need to continue this dialog through a consensus building process in which the full array of stakeholders participate so that we can clear away phantom issues that cloud our ability to share a common vision of what the Superfund program of the future should look like. We are prepared to start over, and work together to develop Superfund reform legislation. The Administration is fully committed to participating in such a process and to seeing that responsible, consensus based Superfund legislative reform is enacted in the 105th Congress. Mr. Chairman, thank you for this opportunity to address the Committee. Now we'll be happy to answer any questions you or the other Members may have. [GRAPHIC] [TIFF OMITTED] TH060.361 [GRAPHIC] [TIFF OMITTED] TH060.362 [GRAPHIC] [TIFF OMITTED] TH060.363 [GRAPHIC] [TIFF OMITTED] TH060.364 [GRAPHIC] [TIFF OMITTED] TH060.365 Responses of Carol M. Browner to Additional Questions from Senator Smith Question 1. EPA's administrative reforms are welcome and recognize a need to improve the current program. However, a number of States and private parties say that these reforms, while meritorious, have not been implemented consistently, nor have they achieved the kind of results that your testimony suggests. Are EPA's administrative reforms being implemented consistently by each region? Response. One of the main goals of EPA's administrative reforms is to promote national consistency in the Superfund program. EPA has achieved significant successes through implementation of the reforms to date. For example, through the National Remedy Review Board, a panel of national experts is ensuring that costs are given an appropriate role in remedy selection. EPA's orphan share compensation reform has produced a fundamental and nationally uniform change in the enforcement process--orphan share compensation is now offered at every eligible site to parties agreeing to perform cleanups. The General Accounting Office currently is evaluating development and implementation of the administrative reforms and will soon issue a report that provides additional information about the reforms' implementation on a national basis. Question 2. Is EPA the lead agency for articulating the Administration's position on Superfund. Response. EPA is the lead agency on behalf of the Administration on Superfund reauthorization issues. EPA will continue to work together with other Federal agencies as the Administration addresses Superfund reauthorization issues in the 105th Congress. Question 3. Ms. Browner, page 1 of your testimony states ``the Administration does not believe that S. 8 provides the basis for consensus based legislative reform.'' Are you aware of whether this is a new precondition for negotiations. Response. The Superfund program has been considerably improved and has produced significant accomplishments over the past 4 years. Therefore, Superfund legislation should reflect the current status of the program. EPA does not believe S. 8 reflects the current status of the program, thus, it does not provide the basis for consensus based legislative reform. Question 4. One of your administrative reforms is a remedy review board. I congratulate you on this particular reform. Apparently, in only 12 reviews you have saved over $15 million dollars. However, the decisions of this board, even if they are equally effective and less costly, are not binding on the Region. Why is this the case? Do you support looking at remedies through a remedy review board? Response. In general, EPA policy and guidance recognizes the need for decisions tailored to site-specific circumstances. The National Remedy Review Board (the Board) focuses on achieving cost effectiveness and appropriate consistency with EPA policy and guidance for high cost remedies prior to the development of a proposed plan, but it was never intended to supersede Regional decisionmaking authority. Because National Priorities List (NPL) sites are generally large and complex cleanup projects that require intense study and planning, it is the Regional personnel who are the most familiar with these sites, their cleanup strategies, and other criteria that are essential to sound cleanups (e.g., the preferences of the community). EPA believes that combining the Board's senior policy expertise with the experience and site-specific knowledge of the Regions will result in the most effective remedies. Although the Board's recommendations are not binding, EPA Regional decisionmakers give them substantial consideration when proceeding with a cleanup decision. We expect that Regions will adopt all Board recommendations that are appropriate to the site-specific circumstances, and are consistent with the interests of the local community. EPA is extremely encouraged by the success of the National Remedy Review Board so far. As you know, focusing our efforts on high-cost, high priority cleanups has generated estimated future cost savings of between $15 million and $30 million in fiscal year 1996 alone. The proposed remedy review boards in S. 8 substantially expand authority beyond that of EPA's Remedy Review Board. The involvement of multiple review boards in reopening remedies, proposing alternative remedies and making recommendations to the Administrator appears to interfere with EPA's current policy of delegating decisions to Regional officials and could substantially delay cleanups and undercut community involvement in the remedy selection process. In addition, EPA does not support submitting all potential remedies to the Remedy Review Board. EPA specifically designed the National Remedy Review Board to ensure: that it enhances the remedy selection process; that it avoid delays in cleanup; and that it avoids the alteration of the public's role in remedy selection. Because the Board's review takes place before a remedy is formally proposed, community members and other stakeholders still retain their ability to participate in the remedy selection process through their review and comment of the proposed remedy. Our careful consideration in designing the review process, and the decision to focus on high-cost, high priority NPL sites, has played a large part in the Board's success, and has provided significant estimated fixture cost savings, while minimizing delays in cleanup. This does not mean, however, that the impacts of the Board are limited to the remedies it reviews. Question 5. To address the problem of co-disposal site litigation, Senator Chafee and I thought it made a lot more sense to take the taxes collected from polluting industries, recognize that these sites are a national problem, and get them cleaned up. In your testimony you disagree with this proposal stating that major waste management companies'' (p. 21) would get off the hook. However, in the proposal you made last year, you were willing to waive liability from entities that had fewer than 25 employees and less than $2 million in gross revenue. How is it that you say it is OK to let to let those polluters off the hook, but kick up such a fuss when we try to deal with these contentious co-disposal sites? I am particularly curious about this because when Congressman Sherry Boehlert floated this idea 2 years ago, you said it was a pretty good idea. Response. I have always been opposed to any site carve-out. I agree that the so called ``co-disposal sites'' offer unique problems, and that there are parties that Congress never intended to be caught up in the liability ``net'' (e.g., pizza parlors, beauty salons, homeowners, other small parties with purely MSW). However, I oppose a co-disposal site carve-out because many contributors of large volumes of hazardous waste are exempted; Fund dollars that should be spent at orphan sites are used for providing relief to large viable parties; and defining what is a ``co-disposal'' site is difficult. For example, at just the Delaware Sand & Gravel Site (DE) and the Global Sanitary Landfill Site (NJ), approximately $40 million would be shifted to the Fund in order to provide companies such as E.I. Dupont, Chevron, BFI, and General Motors with liability relief. The Administration has always supported providing relief to those parties that were never intended to be caught up in the Superfund at these co-disposal sites. We can provide these parties liability relief, eliminate the lawyers and the ``contentiousness'' of cleanup, without exempting the large industrial and hazardous waste generators and transporters. The longer we delay the passage of a Superfund bill, the longer the parties that we both want to help are left with little or no relief at all. Question 6. Since May 26, 1995, only 50 sites have been cleaned up and deleted from the NPL. Is this an acceptable pace for toxic waste cleanup? Response. Over the past several years, EPA has made it a priority to improve the Superfund program through a number of initiatives to make it work faster. In 1993, EPA began to focus on Construction Completions as a more representative measure of program accomplishments than deletions. At more than 420 sites (roughly one-third of the sites on the National Priority List (NPL)), cleanups have been completed, and an additional 485 have long-term cleanup construction activities underway. EPA plans to accelerate the program, in conjunction with the President's Superfund budget proposal, so that we can increase our goal for construction completions in the year 2000 from 650 to 900. That represents roughly two thirds of the NPL. EPA believes this will represent an appropriate rate of progress for the program, and is working hard to ensure that cleanups are completed as quickly as possible. In fact, this is one of the principles we have taken into account in evaluating proposals for legislative changes to the program--the need to avoid disrupting or slowing cleanups. Question 7. The issue we keep coming back to when we discuss Superfund is liability. This is the issue that gets lawyers involved and lengthens cleanup and inflates costs. Now we all believe that law breakers should be punished, but, is that the situation we have here? I'm speaking about those sites which we consider co-disposal sites. These are the sites where sometimes hundreds of individuals and companies paid to have their waste safely disposed of only to face lawsuits when the firm handling the site under Superfund turns around and sues them. This doesn't seem fair. Our bill changes that and lets individuals, small business, and other generators and transporters that followed the law out of the Superfund web. What is wrong with that? Response. I agree that the so called ``co-disposal sites'' offer unique problems, and that there are parties that Congress never intended to be caught up in the liability ``net'' (e.g., pizza parlors, beauty salons, homeowners, other parties with purely MSW). However, I oppose a co-disposal site carve-out because many contributors of large volumes of hazardous waste are exempted; Fund dollars that should be spent at orphan sites are used for providing relief to large viable parties; and defining what is a ``co-disposal'' site is difficult. For example, at just the Delaware Sand & Gravel Site (DE) and the Global Sanitary Landfill Site (NJ), approximately $40 million would be shifted to the Fund in order to provide companies such as E.I. Dupont, Chevron, BFI, and General Motors with liability relief. The Administration has always supported providing relief to those parties that were never intended to be caught up in the Superfund at these co-disposal sites. We can provide these parties liability relief, eliminate the lawyers and the ``contentiousness'' of cleanup, without exempting the large industrial and hazardous waste generators and transporters. The longer we delay the passage of a Superfund bill, the longer the parties that we both want to help are left with little or no relief at all. ______ Responses by Carol M. Browner to Additional Questions from Senator Thomas Question 1. Is the prompt and effective cleanup of contaminated sites your highest priority. Response. Specific hearing questions about the Natural Resources Damage program are better addressed by Mr. Terry Garcia, who testified on behalf of NOAA and the Department of Commerce, the Department of Interior, and the Department of Agriculture. The protection of human health and the environment through the cleanup of hazardous waste sites and the restoration of natural resources is a high priority for EPA and the Administration. Question 2. Is it the Administration's position that making NRD liability more predictable and adding more certainty to the cleanup process would impede response actions. Response. Specific questions about the Administration's NRD position are better addressed by the Department of Commerce or other Federal Trustee agency. The Administration's NRD legislative reform position is based upon the following principles: Restore injured resources to baseline; and restore the losses the public suffers from their inability to use the resources from the time of injury until restoration is complete. Question 3. Does the Administration support any reforms to CERCLA's NRD provisions? Response. Specific questions about the Administration's NRD positions are better addressed by the Department of Commerce or other Federal Trustee agency. The Administration supports the reforms contained within the legislative proposal transmitted to the committee in October 1996. ______ Responses of Carol M. Browner to Additional Questions from Senator Allard Question 1. In a handout before the subcommittee from EPA, it was noted that 77.6 percent of all Superfund dollars went to cleanup/ response. The amount indicated is $1,594.7 billion. Below that number are numerous subcategories, could EPA please provide us with funding for each subcategory, along with a more detailed description of each category? Cleanup/Response--$1,594.7 <bullet> Brownfields ($80.9)--Funding used to address abandoned, idled, or under-used industrial and commercial properties where expansion or redevelopment is complicated by real or perceived environmental contamination. <bullet> Feasibility Study ($4.1)--Used to develop and evaluate potential remediation alternatives to clean a hazardous waste site and forms the foundation for the Record of Decision (ROD) which codifies the remedy that is selected to abate ecological and human health risks at a site, and addresses site conditions and proposed future land use. <bullet> RD (RP/Fund) ($60.0)--Remedial design is a CERCLA design that establishes the general size, scope, and character of a project, and details and addresses the technical requirements of the RA selected in the ROD. <bullet> RA (RP/Fund) ($766.5)--Remedial action is performed upon approval of the remedial design and represents the actual construction or other work necessary to implement the remedy selected. <bullet> Early Actions ($300.0)--Incidents where a response is necessary within a matter of hours (e.g., threats of fire or explosion) and time critical removal actions to protect human health and the environment. <bullet> USACE/BUREC ($5.5)--USACE/BUREC contributes to the direct cleanup at many sites. These Federal Partners implement most high cost Fund-financed remedial actions, provide on-site technical expertise, and ensure that project management is consistent between Fund and PRP financed projects. <bullet> Lab Analysis ($36.4)--Management of the process by which site samples are scheduled and analyzed. Includes acceptance of CLP data to ensure consistent and accurate validation of CLP data packages according to established protocols and standard operating procedures, and consistent with established data quality objectives. <bullet> Site Assessment ($78.0)--Assessing ecological and human health risks at sites brought to the Agency's attention by States, Tribes, Federal agencies, citizens, or other sources. Assessment information is used to determine the course of response actions, including removal and remedial actions. <bullet> Response Mgmt ($51.3)--Management of the Superfund program including contract support and NPL listings and evaluation of program implementation activities to determine effect of program policies. <bullet> State/Tribal ($27.7)--Through cooperative agreements, funding to State/Tribal governments is used to assess and cleanup hazardous waste sites in their jurisdictions increasing the resources available for direct cleanup. <bullet> Community Involvement ($19.2)--Community relations activities serve to encourage valuable communication with affected citizens and public participation in the decisionmaking process. Funding helps communities become more involved so that cleanup decisions make the most sense at the community level. Technical Assistance Grants provide citizens with information and support to be active participants in site decisions that affect their communities. <bullet> Federal Facilities ($16.8)--The Superfund Federal Facilities response program supports the cleanup of federally owned or managed hazardous waste sites on the NPL. <bullet> TIO ($5.2)--The Technology Innovation Office contributes to a more cost effective and efficient site assessment and cleanup process by advancing the use of innovative site characterization and remediation technologies. <bullet> CEPPO ($4.1)--The Chemical Emergency Response program supports strong emergency response preparedness. This provides the necessary emergency response capability to address the Nation's worst chemical accidents and hazardous waste releases. <bullet> Salary/Expenses ($136.0)--Salaries/expenses. <bullet> ORD Tech Support ($3.0)--Office of Research and Development Technical Support. Question 2. Is it true that if a State is not satisfied with a Superfund cleanup undertaken by the Federal Government that the State could utilize its RCRA authorities subsequently, to go after the same issue? Response. One of EPA's highest priorities is to foster a productive relationship with States, and to minimize duplication of effort between EPA and the States. In the Superfund program, it is commonplace for EPA and a State to sign a cooperative agreement which identifies the appropriate lead agency for the NPL sites in the State. EPA also enters ``memoranda of understanding'' which give States resources and technical support in developing voluntary cleanup programs. In addition, in September, 1996, EPA issued a guidance which specifically sought to minimize duplication between the RCRA and Superfund programs. Although the law does not explicitly address whether a State may use RCRA authority if it is not satisfied with EPA's cleanup under Superfund, EPA believes that cleanups under RCRA corrective action or CERCLA will substantively satisfy the requirements of both programs. ______ Responses of Carol M. Browner to Additional Questions from Senator Lautenberg Question 1. Oklahoma Sites: Senator Inhofe referred to two sites in Oklahoma that he said had comparable hazardous waste problems, but different cleanup approaches and durations, depending upon whether these were conducted under State or Federal auspices. Please provide information on the two sites, including the pace and cost of cleanup, the nature of the problem at each, etc. Response. Please refer to the attached letter of March 12, 1997 to Senator Inhofe, which outlines the differences between the two cleanups. Question 2. Co-disposal Sites: Please indicate whether EPA has identified the number of NPL sites which could qualify as ``co- disposal'' sites under the definition contained in S. 8 (sites where ``a substantial portion of the total waste disposed of at the landfill consisted of municipal solid waste or sewage sludge that was transported to the landfill from outside the facility''). Please indicate the effect on the program if liability were eliminated for these sites. Please identify the types of parties that might profit from this exemption. What would happen, under S. 8, for example, at a site like the Lipari Landfill in New Jersey. Response. Number of ``co-disposal'' sites It is uncertain how many sites would be considered ``co-disposal'' sites as defined by S. 8 for a number of reasons: S. 8 defines co-disposal sites to be those where a ``substantial'' portion of the waste at the site was MSS or MSW. S. 8 does not define what ``substantial'' means. This creates a great deal of uncertainty in determining how many sites would be considered to have a ``substantial'' amount of MSW or MSS. There could be a large incentive to litigate the issue of how much waste is ``substantial'' and to define it as liberally as possible. For example, if there is a determination that a site has a ``substantial'' amount of MSW or MSS, then all generators and transporters (including the industrial, hazardous waste generators/transporters) at the site will be exempt. However, if at the same site, there is a determination that there is not a substantial portion of MSW or MSS, then only the MSW or MSS generators and transporters are exempt. Obviously, large industrial and hazardous waste generators and transporters will have an incentive to litigate this issue and to make sure that a ``co-disposal'' site has a ``substantial'' amount of MSW or MSS. Additionally, S. 8 expands the definition of MSW to include appliances such as refrigerators, washers, dryers, etc. The expanded definition of MSW could increase the sites ``carved out'' by S. 8. Effect on program The ``co-disposal'' site provisions in S. 8 are a de facto site carve-out. Thus, approximately \1/4\ of the work currently performed by PRPs (or more depending on the issues raised above) would shift to the Fund. The money that could have been spent on addressing sites that were truly orphan (e.g., no available, viable owners and operators) would be spent on providing a windfall to large commercial generators and transporters of hazardous and industrial waste. Types of parties likely to profit Some of the responsible parties that might benefit from the liability provisions in S. 8 include all generators of materials which happened to be disposed of at a site where MSW was also taken. These parties include: Waste Management, BP America, E.I. DuPont, Chrysler, General Motors, Chevron, Hercules, Zenica Inc. (formerly known as ICI America), Occidental Chemical Corp, and Browning-Ferris Industries (BFI). These represent parties that benefited directly by transporting waste, or parties that were large industrial producers of waste, that benefited from cheap disposal. Examples: At the Global Sanitary Landfill site, the elimination of generator and transporter liability under S. 8 would shift an estimated $30 million in future cleanup costs to the orphan share of the Superfund Trust Fund. Major generators and transporters at the site include Browning-Ferris Industries (BFI), DuPont, and Chevron. Eighty-six thousand citizens live within three miles of this site. Contaminants from the site have reached the aquifer directly beneath the landfill and have impacted nearby wetlands and marsh. The Global Sanitary Landfill site qualifies for the exemption because several municipalities contributed municipal solid waste to this privately owned and operated landfill. Although as much as 75 percent of the waste is municipal solid waste, this waste is not contributing significantly to either the contamination or cost of the cleanup. The commercial and industrial waste generated and transported by many small and large private companies is the chief cause of the dangers posed by the site. Question 3. De minimis Exemption: Does EPA support an exemption for de minimis parties? Are there other sites like the Bypass 601 site, where the majority of parties contributed 1 percent or less by volume, and therefore, would be exempt under S. 8? Response. EPA does not support an exemption for de minimis parties. However, EPA holds strongly to the belief that many of these parties should be given the opportunity to settle their responsibility early in the cleanup process, enabling these parties and others to reduce their transaction costs. Any formal absolutely categorize de minimis parties should provide for a site-specific determination to be made, if appropriate. For certain sites, 1 percent of the volume (as defined by S. 8) could be a very large volume in absolute terms. For example, at the Tonolli Site in Pennsylvania, 1 percent is over 1 million gallons of waste from a single responsible party. At this site, an exemption for contributors of 1 percent or less would exempt a total of almost 40 million gallons of waste. This volume is much larger than the total volume of waste disposed of at some Superfund sites. Finally, if the cutoff for the exemption is so high that it exempts an inordinate numbers of responsible parties, too few responsible parties will remain liable, and the cleanup of the site will be shifted to the Fund. At the Operating Industries site in California, with a cutoff of 1 percent of the total industrial waste (waste containing hazardous substances), only three generator parties, of the approximately 4,000 responsible parties would remain responsible for cleanup of the enormous contamination at the site. These three parties are responsible for only 14 percent of the industrial waste at the site. Question 4. Non-Municipal Owners of Co-Disposal Sites: S. 8 limits the liability of non-municipal owners/operators of co-disposal NPL sites. Please indicate whether any major national waste companies would benefit from this limitation. Please describe the effect of this limitation on the Superfund program. Response. Under S. 8, the aggregate liability of private parties who own or operate a ``co-disposal'' facility is limited to 30 percent of the costs at the site. This provision severely reduces the liability of many large, viable responsible parties. Many of these companies acquired contaminated sites with full knowledge of the contamination. Further, because these companies are in the business of MSW and hazardous waste management, they are often in the best position to prevent the problems associated with contamination. Further, these same businesses are often the most culpable parties at these sites. The public policy justification for elimination of this category of liability is unclear. Question 5. Illegality: S. 8 excludes from its liability exemptions and limitations persons who violated RCRA or other requirements relating to disposal of MSW or MSS. Do you think the exclusion will leave liability intact in most instances? Response. The exception to which you refer is extremely narrow and will have little impact in retaining liability as to those parties who have acted irresponsibly--the ``bad actors.'' S. 8 provides that the exemptions and limitations established in S. 8 would not apply to any person whose act, omission, or status that is determined by a court or administrative body, within the applicable statute of limitation, to have been a violation of any Federal or State law pertaining to the treatment; storage, disposal or handling of hazardous substances, if the violation pertains to the substance or release that caused the response costs to be incurred. The effect of this provision is to divide the world of violators into two groups, those who got caught and those who benefit from the ``rewards'' of exemption or repayment. This provision requires successful court or administrative action to have been taken at the time of the activity (within the statute of limitations of the law applicable at the time of disposal), and does not apply to actions which were pursued under common law (i.e., nuisance) or local law or regulation. Since many of these actions took place (1) before there were Federal laws in place, and (2) when there were very few State laws in place that directly pertained to the treatment, storage, disposal or handling of hazardous substances, this provision would be inapplicable in most cases. Further, since Superfund addresses the results of acts that frequently occurred many decades before cleanup, proof of illegal or culpable behavior may be impossible at most sites. Also for this reason, documentary evidence typically is scarce or non-existent and witnesses are unavailable or have incomplete memories. Further, since activity at Superfund sites occurred many years ago, it may not be clear today what behavior was permitted and what was prohibited by a given law, including State law, even if a prosecution was successful. Question 6. RACs: Please identify the number of times that EPA has indemnified Response Action Contractors (``RACs''), and the cost to EPA of providing such indemnification. In your experience, have RACs been sued so often that pre-emption of State negligence laws is warranted? Response. Prior to the publishing of the Final Indemnification Guidelines in 1993, EPA routinely offered indemnification to its RAC contractors. Sixty-eight contracts contained indemnification provisions and approximately 100 subcontractors were provided indemnification. A small subset of these contractors were authorized to purchase insurance to offset the Governments liability. The cost of providing indemnification was thus the dollars expended on insurance premiums in addition to the cost of defending RAC claims (note that the original indemnification was unlimited in scope until renegotiated following the publication of the Final Guidelines. Fifty five of the 68 contracts have been renegotiated to insert indemnification limits). Since offering indemnification, EPA has been presented with 11 claims for indemnification coverage. Approximately 1.2 million dollars have been paid out for these claims, primarily to pay for defense costs. No judgments have been made against a RAC under 119 provisions; half of the claims were dismissed in court, 2 are still in process. Since 1993 EPA has only offered limited indemnification 4 times. Indemnification was offered where there was inadequate competition and indemnification was cited as a reason for the lack of competition. All other RAC procurements have not included indemnification, although some firms have purchased insurance (as a reimbursable expense) to cover their pollution release liability. This Administration has consistently opposed preemption of State response action contractor laws. EPA has not seen any information about litigation against RACs that would suggest a change in the Administration's position. Question 7. Recycling: Please describe the effect on the program generally if liability were eliminated for generators and transporters who ``recycled'' their waste. Please describe how S. 8 expands the exemption from that seen in previous [Senate] legislative proposals, and the effect of such expansion. Is it correct to state that former ``recycling sites'' pose some of the worst environmental problems? Please provide examples. Response. S. 8 is different than previous recycling provisions in that it expands the definition of ``scrap metal'' to include mining waste. S. 8's definition of scrap metal includes mining tailings, slags, skimmings, and drosses--materials that are products of the mining process. EPA has never supported including this language in the definition of scrap metal. The other provisions in S. 8 are similar to the recycling provisions proposed by the Senate in S. 1834 and in S. 607. At a site that met the criteria established in S. 8, the generators and transporters would be exempt, thus shifting their share of the liability to the Fund. The parties that would benefit from this provision is not limited to small business and individuals, but also large industrial and fortune 500 companies, entities that clearly have the financial resources to pay for their fair share. Since the generators and transporters would be exempt, the owners and operators would have to perform the cleanup at the site. For those sites without viable owners and operators, the cost of cleanup for the entire site would be shifted to the Fund. Since many of the recycling sites owned or operated by small business with limited resources, the recycling site provisions in S. 8 may have the effect of creating another de facto site carve-out. Question 8. Small business: Please describe the potential impact on the program of S. 8's ``small business'' exemption. Please explain whether persons such as those responsible for the methyl parathion problem in Mississippi, and now, Louisiana, might not avail themselves of the exemption. Response. S. 8 would exempt ``small business'' which is defined as those businesses with fewer than 30 employees or less than $3M in annual gross revenues. The ``or'' provision results in an exemption for all businesses that have 30 employees, regardless of its revenues, and an exemption for all businesses with revenues of $3 million or less, regardless of the number of employees. In addition, the exemption would apply even in those situations where the small business is the owner/ operator of the site, has impeded cleanup, has not complied with CERCLA Sec. 104(e) or other applicable laws, or has been uncooperative in allowing EPA to address the contamination. Finally, the exemption would apply even where hazardous substances generated or transported by the business have contributed significantly to the costs of the response or to natural resource damages. Thus, S. 8's ``small business'' exemption is overbroad and would result in many parties being relieved of liability inappropriately. The Administration previously has supported a narrower ``small business'' exemption. The Administration proposal would have exempted those small business generators or transporters who have annual gross revenues less than $2 million, have 25 or fewer employees, have not impeded cleanup, and are not affiliated with any other liable party. Furthermore, the exemption would not apply if the small business had not complied with requests under CERCLA Sec. 104(e) or if the hazardous substances generated or transported by the business contributed significantly to the costs of the response or to natural resource damages. EPA does not have information indicating whether persons involved with the methyl parathion problem in Mississippi and Louisiana would meet the definition of a ``small business'' under S. 8. Question 9. NFIB: Please describe the nature and volume of waste disposed by Barbara Williams at the Keystone Sanitation Company, Inc. Superfund site; and steps taken by the United States to get Barbara Williams, and parties like her, out of the litigation regarding that site. Please describe whether instances of multi-party and multi-tier litigation, such as that occurring at Keystone, are the norm. Please provide examples of instances where EPA has successfully deterred the type of joinder that has occurred at Keystone. Please describe whether S. 8's, or last year's democratic alternative, would have relieved Mrs. Williams from litigation like that at Keystone if her small business contributed waste consisting of materials other than MSW. Please explain whether relief for small contributors, or MSW parties, is in your view a rejection of the ``polluter pays'' principle? Response. Keystone--Barbara Williams Ms. Williams is a fourth-party defendant, involved in this litigation because other companies have brought her into this lawsuit seeking contribution. The United States did not pursue Ms. Williams for its costs, or for cleanup. However, other companies have joined her in this litigation in Federal district court (U.S. V. Keystone Sanitation Company et al., Case No. 1: CV-93-1482 (M.D. Pa.), Chief Judge Sylvia H. Rambo). The United States sued 11 parties (three site owners and eight companies who disposed of industrial waste at the landfill) to recover the costs of cleanup. The United States is also using its enforcement authorities against the same 11 parties to clean up the site. EPA has made and continues to make significant progress in this case to eliminate small parties from the litigation, and implement one of the key administrative reforms. EPA has prepared a settlement with 167 de micromis parties in which these parties will resolve their liability for only $1.00. The settlement is currently pending entry by the court. In November 1994, the court entered an expedited de minimis settlement between the United States and 8 parties, each of whom certified that they brought no more than 6,500 cubic yards of waste to the site. In the spring of 1995, prior to Ms. Williams' joinder, EPA initiated a second de minimis settlement for third-party defendants (using the same volumetric cutoff of 6,500 cubic yards). In September, 1995, the approximately 170 third-party defendants sued approximately 590 fourth-party defendants, including Ms. Williams. Ms. Williams certified that her restaurant sent at most 4,346 cubic yards of waste to the site consisting of food and paper refuse; other responsible parties allege that she sent over 11,000 cubic yards. Mrs. Williams was not a candidate for a de micromis settlement for $1.00 because she certified that she sent more than 1,800 cubic yards of waste to the site. However, the United States is continuing to explore a settlement with the remaining non-de micromis third-and fourth-party defendants. Recently, liaison counsel provided information requested by EPA that allowed the Agency to consider a settlement offer to resolve the involvement of third-and fourth party defendants at the site. EPA is soon to respond to the offer. EPA's Protection of Small Volume Waste Contributors from Litigation EPA has used its settlement authority to protect more than 14,000 small volume contributors. EPA established a policy to provide these de micromis parties (parties that have contributed 110 gallons or 200 pounds of materials containing hazardous substances) with contribution protection through settlements with the United States for the amount of $1.00 (EPA has revised this policy to now settle with these parties for $0 dollars). Further, to reduce the litigation against small volume waste contributors that contributed somewhat greater amounts of waste to the site, and therefore do not qualify for de micromis status, EPA has established guidance to provide de minimis settlements (the Agency established a presumption that a de minimis party is one that has contributed less than 1 percent of materials containing hazardous substances to the site, a presumption that can be deviated from depending uponsite specific circumstances). For a dollar amount based on the volume of waste the party contributed to the site, parties are offered an opportunity to settle their liability early in the cleanup process, thereby receiving contribution protection and avoiding the transaction costs associated with litigation brought by other responsible parties. Countless parties fall within the de micromis category. EPA only offers a de micromis settlement to parties whom are actually being sued, face the concrete threat of suit or have requested a settlement because they expect to be sued and EPA has determined that such an expectation is reasonable. EPA established this policy primarily to deter parties from suing de micromis parties. As to EPA's de minimis settlement policy, as of January 1997, EPA has completed settlements with over 14,000 parties. Legislative Approaches to Relieving Small Volume Waste Contributors and Small Businesses of Liability Where the Party Has Sent Waste Other than MSW EPA cannot assess whether Mrs. Williams' business would qualify for special treatment that would be accorded small businesses under the Administration's past liability proposals or under S. 8 because we do not have information regarding the number of the business's employees or the annual gross revenues. However, the Administration believes that parties who contributed very small amounts of waste should not be caught up in Superfund liability. In the past, the Administration has supported three approaches to reducing the number of small volume contributors and small businesses caught up in Superfund. The Administration has supported an exemption for parties that sent less than 110 gallons or 200 pounds of materials containing hazardous substances. S. 8 expands the definition of de micromis to parties that have contributed up to 1 percent of the waste at a site. The Administration opposes such an expansion because it would inappropriately relieve contributors of substantial amounts of hazardous materials from liability. A second approach, presently EPA policy, is to settle with de minimis parties that have contributed less than 1 percent of materials containing hazardous substances. This is distinguishable from S. 8, in that parties settling under the policy are paying their share of responsibility for a site, but are also resolving their liability and any litigation. EPA seeks early settlement with these parties because such settlements reduce transaction costs for both the de minimis party and other parties. Finally, during negotiations in the last Congress, the Administration proposed exempting some small businesses, those with less than $2 million in gross revenues and no more than 25 employees. The Administration is still open to considering various methods of relieving the burden on small businesses. Relief for Small Volume Contributors or MSW Contributors is not a Rejection of the ``Polluter Pays'' Principle We continue to believe that when Congress enacted CERCLA and SARA, it never intended to hold ``homeowners and pizza parlors'' responsible for disposing of household, or similar wastes. We believe that to do so is patently unfair; and while EPA's policies seek to protect these parties, a ``bright line'' is necessary to provide protection from third-parties seeking reimbursement through litigation or other means. Further, it is unfair for responsible parties to incur litigation costs that would exceed their share of responsibility. As we have indicated, because de minimis parties settle for their share of responsibility at a site, the treatment of these parties is consistent with the ``polluter pays'' principle. Finally, the proposals supported by the Administration provide that where the materials contributed by the party contributed significantly or could contribute significantly to the costs of response or to natural resource damages, or the party has not complied with all CERCLA section 104 information requests, the party would not be eligible for the liability protection. Question 10. Groundwater Remedies: You mentioned in your oral testimony that ``the NRC'' had recently reported that groundwater plumes may indeed be cleaned up. Please provide a copy of this report. Please explain whether S. 8's rules for selecting groundwater remedies take into account findings such as these. Response. The National Resource Council (NRC) report referenced during the testimony was taken from a book entitled ``Alternatives for Groundwater Cleanups,'' which was jointly written by the Committee on Groundwater Cleanup Alternatives, the Water Science and Technology Board, the Board on Radioactive Waste Management, and the Commission on Geosciences, Environment, and Resources. It was published in 1994, by the National Academy Press. The text makes several references to groundwater remediation (pertinent text attached), generally finding that ``cleaning up large portions of these [groundwater] sites is possible, even if limited areas remain contaminated.'' The text supports EPA's efforts to treat groundwater as an important environmental resource, and shows that efforts to provide treatment of contaminated groundwater are generating benefits. Assuring the availability of clean groundwater is a very high EPA priority, as groundwater constitutes 86 percent of the fresh water in the United States. Additionally, over 50 percent of the United States population gets its drinking water from groundwater; in rural areas, 95 percent of households depend on groundwater. Thirty-four of the 100 largest cities in the United States rely completely or partially on groundwater for their drinking water supplies. Despite these facts, S. 8 would replace the goal under the current program to restore contaminated groundwater to beneficial uses, wherever practicable, with the very different mandate to ``prevent or eliminate any actual human ingestion of contaminated drinking water.'' This goal could be met through treatment at the tap or simply by preventing the use of the water. Though S. 8 does provide for protection of uncontaminated groundwater, it relies too heavily on natural attenuation to provide this protection. Even if actual cleanup of contamination in the groundwater were proposed as a cleanup alternative, S. 8 sets up a burdensome three part test which must be passed to justify its selection. The bill would require: (1) an affirmative finding that restoration was technically practicable; (2) a justification that demonstrates that active cleanup can ``substantially accelerate the availability of groundwater for use as drinking water beyond the rate achievable by natural attenuation''; and, in the final analysis; (3) consideration of active cleanup ``on an equal basis'' with institutional and engineering controls. The current provisions of S. 8 make no acknowledgment of the successes EPA has achieved in its efforts to clean up contaminated groundwater, and the benefits such treatment provides. This is a clear difference in premise from the text identified during the testimony, which shows that groundwater remediation is not only possible in many instances, but beneficial. Question 11. Remedy Selection: In your testimony, you referred to a ``63 percent'' figure regarding consideration of land use. Could you please clarify this reference and explain its significance? Response. The 63 percent figure refers to the frequency at which EPA selected a land use ``other than residential'' in its Records of Decision (RODs) for FY95. It should also be noted, however, that multiple uses can be, and in fact are, assumed in the same ROD, if the future land use is uncertain. Based on EPA's review of these RODs, it is evident that EPA assumed a residential land use in only 37 percent of FY95 RODs typically where there was residential use onsite or adjacent to the site. This is a very important response to those who claim that EPA defaults to clean ups for residential use in all cases, or are unaware of the current practices pertaining to remedy selection. Based on an internal analysis of EPA's fiscal year 1995 RODs, containing a potential site universe of 231 sites, 127 involving soil cleanup, the reasonably anticipated land use assumed in those decisions (i.e., 127 sites) were as follows (because of multiple uses as some sites, the total exceeds 100 percent): <bullet> 37 percent (48 sites) assumed residential use. <bullet> 61 percent (78 sites) assumed industrial/commercial use. <bullet> 10 percent (13 sites) assumed recreational use. <bullet> 9 percent (11 sites) assumed use as landfills/waste management units. <bullet> 7 percent (9 sites) assumed the site would remain a military installation. <bullet> 5 percent (7 sites) assumed agricultural use. <bullet> 3 percent (4 sites) were remediated because of ecological concerns. Question 12. Administrative Reforms: Senator Baucus inquired about the number of sites where EPA has ``updated'' RODs. Please provide information about the number of instances, criteria, and results, where ROD's were ``updated.'' Response. Number of Instances As part of implementing the Update Remedy Decisions Reform (Third Round of Superfund Reforms, October 1995), EPA has been tracking the remedy updates made, and their associated cost savings throughout FY96 and in the first quarter of FY97. In FY96, remedies with cost savings were updated at 30 sites, while in the first quarter of FY97, remedies with cost savings were updated at 9 sites. Criteria Modifications to the record of recision (ROD) must still comply with policies regarding remedy selection, treatment of principal threats, preference for permanence, establishment of cleanup levels, applicable or relevant and appropriate requirements (ARARs) waivers, or the degree to which remedies must protect human health and the environment. The goal of the 18 reform is to promote the use of the best science and most appropriate technologies at Superfund sites while limiting the impacts to the pace of cleanups, not to reopen RODs solely on the basis of cost savings. Results For FY96, 30 sites resulted in a total estimated future cost reduction of over $280 million. Of this $280 million, approximately $250 million resulted from remedy updates of the kind identified in EPA's reform guidance (dated September 27, 1996). Approximately 63 percent (19 of 30) of the changes were Explanation of Significant Differences (ESDs) while approximately 33 percent (10 of 30) of the changes were ROD Amendments. Some 50 percent of the changes were EPA- initiated while the remaining 50 percent were initiated by other parties (e.g., PRP, State, etc.). Approximately 63 percent (19 of 30) of the changes related to the soil media alone, while only 20 percent (6 of 30) of the changes related to the groundwater media alone. For the first quarter of FY97, 9 sites resulted in a total estimated future cost reduction of over $28 million. Over 66 percent (6 of 9) of the changes were ESDs, while approximately 22 percent (2 of 9) of the changes were ROD Amendments. About 56 percent (5 of 9) of the changes were EPA-initiated, while the remaining 44 percent (4 of 9) were initiated by other parties. Approximately 67 percent (6 of 9) of the changes related to the groundwater media alone, while only about 22 percent (2 of 9) of the changes related to the soil media alone. [GRAPHIC] [TIFF OMITTED] TH060.377 [GRAPHIC] [TIFF OMITTED] TH060.378 [GRAPHIC] [TIFF OMITTED] TH060.379 [GRAPHIC] [TIFF OMITTED] TH060.380 [GRAPHIC] [TIFF OMITTED] TH060.381 Prepared Statement of Richard Gimello, Assistant Commissioner for site Remediation, New Jersey Department of Environmental Protection introduction Good morning Mr. Chairman. I am Richard Gimello and I am Assistant Commissioner for Site Remediation for the New Jersey Department of Environmental Protection. This testimony is presented on behalf of the National Governors' Association (NGA). NGA has a strong interest in Superfund reform and believes that a variety of administrative as well as legislative and regulatory changes are needed to improve the Superfund program's ability to clean up the nation's worst hazardous waste sites quickly and efficiently. We realize the importance of passing legislation this year, and we want to ensure that the collective interests of the states are considered carefully in the development of a final bill. We recognize that Superfund reform is particularly critical this year because the taxing authority has lapsed. Funding is essential to the continuation of site cleanups, the ultimate objective of the Superfund program. The Governors appreciate the opportunity to review and comment on S. 8. I would like to begin by stating that NGA is very appreciative of the many improvements made in this bill over last year's bill, S. 1285. The Governors acknowledge the vast compromises that this bill reflects and commend the committee for introducing legislation that addresses many state concerns with the Superfund program. We would like to continue working cooperatively with you to develop a final bill that enjoys bipartisan support. We truly believe that this type of support requires the types of moderate compromises that you've made in S. 8. 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. Many states have developed highly successful voluntary cleanup programs that have enabled sites to be remediated more quickly and with minimal governmental involvement. It is important that any legislation supports and encourages these successful programs by providing clear incentives and by ensuring that any minimum program criteria set by the Environmental Protection Agency (EPA) are extremely flexible. It is the view of NGA that voluntary cleanup programs and brownfields redevelopment are currently hindered by the pervasive fear of federal CERCLA liability. We strongly support the provisions in S. 8 that encourage potentially responsible parties and prospective purchasers to voluntarily clean up sites and reuse and redevelop contaminated property, respectively. S. 8 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, it should be able to continue using its emergency removal authority. Any assignment of liability, however, must be consistent with liability assigned under state cleanup laws. state role The impacts of hazardous waste sites are felt primarily at the state and local levels. The Governors are very supportive of the efforts that Senators John H. Chafee and Robert C. Smith have made to strengthen the role of states in this program. We appreciate the inclusion of options for both noncomprehensive and comprehensive delegation in the bill and feel that this allows for maximum flexibility to meet state needs and objectives. We especially support allowing states to operate their programs in lieu of the federal program. States need to be able to apply state applicable standards at any site without any cost differential. We cannot support allowing EPA to withdraw delegation on a site-by- site basis. Withdrawal of delegation should be consistent with the approval or rejection of a state's application for delegation. In addition, EPA should periodically review state performance instead of involving itself in site-by-site oversight. The Governors strongly support a 10 percent state cost share for both remedial actions and operations and maintenance and appreciate the inclusion of this provision in S. 8. However, we do not support any change that would require a state cost share for removal actions. States are not currently required to cost-share removals, and we would like to ensure that this remains the case. In addition, the Governors would like to express concern about the provision for states to petition the Office of Management and Budget (OMB) as a mechanism to deal with any cost shifts resulting from changes in liability. States must have assurance that adequate funding is available and that cost shifts will not be an issue. selection of remedial actions The Governors believe that changes in remedy selection should result in more cost-effective cleanups; a simpler, streamlined process for selecting remedies; and a more results-oriented approach. As you know, allowing state applicable standards to apply at both National Priorities List (NPL) and state sites is an area of great importance to the Governors. We greatly appreciate and strongly support measures to allow state applicable standards and promulgated relevant and appropriate requirements (RARs) 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 S. 8 that provide the opportunity 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. We appreciate the addition of language in S. 8 offering greater protection for groundwater and surface water that is or could be used as a drinking water source and would like to recognize this provision of the bill as an area of significant improvement over last year's bill. The Governors recognize that there are some records of decision (RODs) that should be reopened because of cost considerations or technical impracticability. However, we believe the Governor should have the final decision on whether to approve a petition to reopen a ROD in a state. As we understand the bill, a Governor's decision to reject a petition can be denied by EPA's remedy review board. This is a provision we cannot support. Finally, as we understand Section 134(c)(1), EPA could release a responsible party from any and all future liability, including state and local laws, if a site is cleaned up and deemed available for unrestricted use. This represents a clear preemption of state law that we cannot support. 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 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 are adequately funded so that sites can continue to be cleaned up and so that there will be no cost shifts to the states. Further, we support the concept of an allocation process so that costs are assigned appropriately to responsible parties, but we need assurance that funding will be available for this process, including support for state allocation programs. Finally, 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. We greatly appreciate the addition of language in S. 8 that addresses this issue. 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 same standard of compliance as private parties. We would like to make sure that this is the intent of language in the bill that we have interpreted as allowing state applicable standards to be applied at federal facility sites in the same manner that they apply at non-federal facility sites. In addition, we believe that states should be able to obtain comprehensive delegation for federal facilities and that the self- certification process should be the same as for private sites. We believe this is not the case in S. 8 as written. Our interpretation is that federal facilities may be delegated to states, but that they must use the federal remedy selection process. We do not understand the justification behind this language. In addition, in virtually every other environmental statute, Congress has waived sovereign immunity and allowed qualified states to enforce state environmental laws at federal facilities. A clearer, more comprehensive sovereign immunity waiver should be proposed that includes formerly used defense sites. Several states have proposed language for this waiver. 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. Although this title is greatly improved from last year's bill, there are still a few issues of concern to the Governors. We urge you to strengthen the program by amending the statute of limitations to run three years from the completion of a damage assessment; removing the prohibition on funding natural resource damage assessments from the trust fund; and not eliminating the ability to receive compensation for nonuse damages. miscellaneous The Governors would like to respond to the provision in this title that limits new listings on the NPL to a specific number each year. Although this approach differs slightly from last year's provision to cap the NPL, we still feel that it greatly jeopardizes the intent of the Superfund program--namely, to clean up contaminated sites and protect human health and the environment. Further, by requiring the Governor's concurrence on any new listings, a sufficient and appropriate limitation is placed on new listings. We do not feel that further limitations are necessary. Because of differences in capacities among states, the complexities and costs of some cleanups, the availability of responsible parties, enforcement considerations, and other factors, the Governors are concerned about severe limitations on new listings. We need assurance that there will be a continuing federal commitment to clean up sites under such circumstances. conclusion The National Governors' Association would like to thank you for your hard work on this important program and for providing me with the opportunity to communicate the views of the Governors on Superfund reform. Again, the Governors are very supportive of the direction you have taken with this legislation, and we look forward to working with you to develop a bill that enjoys broad bipartisan support. ______ Testimony of Karen Florini, Senior Attorney, Environmental Defense Fund i. introduction On behalf of the Environmental Defense Fund and its 300,000 members, I want to thank Chairman Smith, Ranking Member Lautenberg, and the other members of the Committee for this opportunity to discuss S. 8, the ``Superfund Cleanup Acceleration Act of 1997,'' amending Superfund. EDF has 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. While EDF supports an improved Superfund program, we believe that S. 8 would weaken rather than strengthen the program. In many instances, the bill's ``cures'' are far worse than the problems they purport to address. S. 8 fails to acknowledge that the Superfund program today is faster and more streamlined than was the case in earlier years. According to EPA, cleanups have been completed (except for ongoing groundwater treatment) at some 400 sites; at nearly another 500, construction is now underway. While many of these cleanups were too long in coming, S. 8 would either retard the pace of cleanups, or make them faster by cutting out essential safeguards. The bill's most objectionable features include provisions: <bullet> Lputting polluters in charge of cleanups without effective government or public oversight, both at Superfund sites and at so- called ``voluntary'' cleanups sites (which may themselves be Superfund sites); <bullet> Lletting costs to polluters trump community health and resource protection in choosing remedies; <bullet> Ldumping cleanup problems on States, regardless of whether they can handle them; <bullet> Lfurther retarding cleanups by reopening hundreds of existing decisions; and <bullet> Lcreating new kinds of corporate welfare by rolling back liability even for many large industrial polluters who dumped waste at certain sites, and by requiring expansive ``polluter paybacks.'' Accordingly, EDF strongly opposes S. 8.\1\ Some of our key concerns are detailed below.\2\ --------------------------------------------------------------------------- \1\ There are certain elements of the bill we do support. These include dropping the existing requirement for matching contributions and allowing up-front payments for Technical Assistance Grants. [SCAA Sec. 301(a), adding CERCLA Sec. 117(f)(3)(A) & (B), p. 70]. \2\ This testimony is by no means exhaustive. For example, EDF also has serious concerns about the Natural Resources Damages provisions in Title VII of S. 8; the structure of the allocation process and the number of sites at which it is mandated; the level of spending authorized by the bill, which is too low to permit the program to meet the additional burdens the bill imposes on it (e.g., orphan shares, allocations, etc.); and the 20% reduction that the bill imposes on the budget of ATSDR, which is charged with assessing public health at Superfund sites. --------------------------------------------------------------------------- ii. s. 8's remedy selection provisions: a recipe for crummy cleanups Among the most critical features of any Superfund bill are the provisions governing what standards actually apply to cleanups, and how specific cleanup decisions are made. S. 8 comes nowhere close to being acceptable on this count. Procedurally, it largely puts polluters in control; substantively, it sets inadequate cleanup standards that are further weakened by a variety of loopholes. Each flaw aggravates the other. A. Putting Polluters in Control of Cleanups. One of the most startling aspects of the bill is its sweeping use of default provisions, including those for default approval of polluter-written cleanup plans. Parties who are potentially liable under the statute (Potentially Responsible Parties, or PRPs) may prepare the Remedial Action Plan (RAP) if they want to do so; if EPA fails to take action within 180 days of the RAP's submission, ``the plan shall be considered to be approved and its implementation fully authorized'' [SCAA Sec. 404, adding CERCLA Sec. 133(b)(5)(F)(ii), p. 121]. Because EPA will have extremely limited resources to review these highly technical RAPs, PRP-written RAPs will be implemented without receiving adequate oversight. PRPs naturally have an incentive to save themselves money; this bill creates no countervailing mechanism through which remedies will be selected that actually protect communities, not just polluters' pocketbooks. Such cleanups will lack public credibility, and deservedly so. To make matters worse, EPA is only allowed to review ``the work plan, facility evaluation, proposed remedial action plan, and final remedial design'' [Sec. 133(a)(1)(C), p. 107]. These limitations could preclude EPA from reviewing important underlying data, rendering effective oversight impossible. It's as if taxpayers were invited to select their own tax bracket, with the IRS getting only 180 days to review the return. And if the IRS does reject a taxpayer's return, there are no penalties the taxpayer just has to prepare another return, which the IRS again only gets 180 days to review! Simply put, default approvals of PRP-written plans are entirely unacceptable, particularly in a program as complex and controversial as Superfund. This ``cure'' is far worse than the delays sometimes occasioned by slow governmental review of cleanup proposals submitted by PRPs. These concerns are especially acute because EPA must allow a PRP to take the lead if the PRP demonstrates financial resources and ``expertise'' [Sec. 404, adding CERCLA Sec. 133(a)(1)(D)(i), p. 108- 109]. Under these provisions, a PRP that hires a consulting firm could take the lead even if the company is under criminal indictment for illegal dumping at the site, or has a history of recalcitrance at other sites. Absolutely no consideration is given to whether the community has any confidence in the PRP. Moreover, even after a cleanup plan is adopted, PRPs can disregard it at will, since PRPs need not get prior approval of RAP modifications. Rather, the bill provides that if a PRP ``has deviated significantly'' from a RAP, EPA notifies the PRP, who at the PRP's option either complies with the RAP or submits a notice for modifying the plan [SCAA Sec. 404, adding CERCLA Sec. 133(c)(1), p. 124]. In short, the PRP is at liberty to depart from the RAP: if it gets caught, it gets to choose whether to comply with the RAP or modify it. RAPs won't be worth the paper they're written on. B. Inadequate Cleanup Standards 1. Overview S. substantive cleanup provisions are extremely weak. The basic cleanup goals are inadequate, and various loopholes undercut even those limited goals. The inadequacies in the goals are critical, because EPA can select only those cleanups that are ``cost effective'' in meeting the narrowly formulated goals [SCAA Sec. 402, amending CERCLA Sec. 121(a)(l)(A), p. 84].\3\ Particularly conspicuous is the absence of a goal of restoring land to productive use where doing so is practical. --------------------------------------------------------------------------- \3\ Although community views are to be taken into account, this applies only in choosing a remedial alternative ``from among alternatives that achieve the goals'' [SCAA Sec. 402, amending CERCLA Sec. 121(a)(1)(D), p. 93]. --------------------------------------------------------------------------- 2. The Overriding Role of Cost Before turning to specific deficiencies in cleanup goals, it must be noted that the bill expressly provides that all goals--even protection of community health--can be overridden based on cost considerations. Specifically, the bill provides that cleanup goals need not be met if doing so is ``technical infeasib[le],'' i.e., if ``there is no known reliable means of achieving at a reasonable cost'' the specified goals [SCAA Sec. 402, amending CERCLA Sec. 121(a)(2), p. 94- 95]. ``Reasonable cost'' is not defined. This open-ended language is particularly outrageous given that the bill severely constrains EPA and public oversight of PRP cleanup decisions, leaving PRPs liberty to construe this term for themselves. In effect, PRP willingness to pay will become the determining factor in determining the stringency of remedies, including the level of health protection provided to communities. Such an approach is especially unacceptable with regard to health protection goals, as it is always possible to especially protect community health through relocation if by no other means. 3. Additional Factors that Undercut Strong Cleanups Several additional factors further contribute to weak cleanups. First, the current preference for permanent treatment is wiped out, even for highly contaminated areas [SCAA Sec. 402, striking CERCLA Sec. 121(b), p. 83]. Instead, the bill expressly provides that institutional and engineering controls ``shall be considered to be on an equal basis with all other remedial action alternatives'' [SCAA Sec. 402, amending CERCLA Sec. 121(a)(5), p. 101]. Taken with the cost- effectiveness requirement, this means that put-up-a-fence remedies will prevail. Adding insult to injury, states may apply their own more- protective standards only by paying the incremental cost [SCAA Sec. 201, adding CERCLA Sec. 130(d)(3)(B)(ii), p. 44-45]. 4. Weaknesses in Specific Goals a. Health: Unprotective Goals Are Exacerbated by Flawed Risk Assessment Provisions.\4\ --------------------------------------------------------------------------- \4\ The bill also fails to address the inherent underlying flaw in risk assessment as it is currently practiced: contaminants are presumed to be safe absent considerable information, both qualitative and quantitative, about toxicity. Current risk assessments also make no pretense at evaluating synergistic effects of multiple contaminants. These deficiencies mean that decisions based on risk assessments are, at best, of uncertain protectiveness. --------------------------------------------------------------------------- S. 8 fails to establish a national uniform cleanup goal that would assure communities around the country of a baseline level of protection. Instead, the bill sets an explicit cancer risk-range goal that spans two orders of magnitude (one in a million to one in ten thousand [SCAA Sec. 402, amending CERCLA Sec. 121(a)(1)(B)(i)(I), p. 85]. The requirement to use a ``cost-effective'' remedy option, along with the fact that cleaning up more-stringently is inherently costlier than cleaning up less-stringently, means that as a practical matter the one-per-ten-thousand standard will always prevail. In addition, the bill's risk-assessment provisions are written in a way that may undercut protection. For example, the bill requires use of ``central estimates'' of risk [SCAA Sec. 403, adding CERCLA Sec. 131(c)(3), p. 104-105]. This tilts risk assessment toward considering the average risk to the average individual and fails to assure protection of those who are highly exposed or highly susceptible, such as children, those with chronic diseases, and others such as subsistence farmers and fishers. Any legislation must expressly require evaluation of risks to groups with higher exposure or susceptibility than average, so as to ensure that cleanup plans-- including those written by polluters--cannot ``overlook'' them. Concerns also arise from the bill's emphasis on evaluating exposures ``considering the actual or planned or reasonably anticipated future use of the land or water resources'' in facility-specific risk evaluations [SCAA Sec. 403, adding CERCLA Sec. 131(b)(1), p. 103]. While it may be appropriate to consider future land use, there are two major problems with the approach taken in S. 8. First, the bill apparently focuses solely on current and future use of the site itself, ignoring the uses of neighboring parcels even though many Superfund sites directly adjoin residential neighborhoods. Superfund must protect the health of site neighbors, not just individuals who will be present on the site itself, given the well-documented ability of contaminants to migrate off-site (e.g., as wind-blown contaminated dust or as vapors). Second, the bill defines a ``reasonably anticipated future use'' as one that the local land use planning authority, in conjunction with the community response organization, determines has ``a substantial probability of occurring based on recent (as of the time of the determination) development patterns in the area in which the is located and on population for the area'' [SCAA Sec. 401, amending CERCLA Sec. 101(41)(B)(i)(II), p. 82]. As discussed below in section II.B.4.d, this is an unworkable standard--and one that may well lead to cleanups that turn out to be inadequate following land-use changes that were plausible but didn't rise to the ``substantial probability'' level. More generally, the role of facility-specific risk assessments is also confusing at best and profoundly disturbing at worst. Under the bill, cleanups are to meet the specific cleanup goals and comply with other applicable laws ``on the basis of a facility-specific risk assessment'' [SCAA Sec. 402, amending CERCLA Sec. 121(a)(1)(A), p. 84]. The bill is silent as to what happens if a PRP's risk assessment purports to find that complying with applicable standards is not necessary in order to meet the cleanup goals. Even apart from these substantive concerns, allowing the validity of applicable standards to be rehashed at every Superfund site is a guaranteed way of delaying cleanups, increasing transaction costs, and infuriating communities. Moreover, the bill provides PRPs with ample opportunities to manipulate risk assessments in a direction that minimizes their cleanup costs. The bill calls for use of ``the most scientifically supportable'' assumptions [SCAA Sec. 403, adding CERCLA Sec. 131(c)(3), p. 105], potentially allowing challenges to default assumptions that are, as a matter of sound public health policy, intentionally crafted to be protective in the face of scientific uncertainty. Likewise, the bill calls for using ``chemical and facility-specific data . . . in preference to default assumptions'' [SCAA Sec. 403, adding CERCLA Sec. 131(b)(3), p. 103]. Even a single data-point, or data of questionable reliability, could be used to replace protective defaults. As a result, risk assessments could seriously understate risks.\5\ --------------------------------------------------------------------------- \5\ In addition, the bill calls for comparisons of ``risks from the facility to other risks commonly experienced by the community'' [SCAA Sec. 403, adding CERCLA Sec. 131(c)(4) p. 105]. The approach ignores critical attributes such as whehter those other risks are also involuntary, allowing PRPs to produce risk characterizations that ignore critical factors. --------------------------------------------------------------------------- b. Environment: A Scientifically Unworkable Standard The bill's stated environmental goal is protecting ``ecosystems from significant threats to their sustainability'' [SCAA Sec. 402, amending CERCLA Sec. 121(a)(1)(B)(ii), p. 85], and sustainability is defined as ``the ability of an ecosystem to continue to function within the normal range of its variability absent the effects of a release of a hazardous substance'' [SCAA Sec. 401, adding CERCLA Sec. 101(42), p. 83]. The bill thus puts on the government the burden of demonstrating that particular contaminants threaten ecosystem sustainability. That burden is likely to prove unmanageable in many instances, not only because of the scarcity of federal and state resources, but also because of current limits of scientific knowledge. As a result, resources will be written off during Superfund cleanups not because they truly lack value, but because there is not enough evidence to demonstrate their impact on sustainability. c. Groundwater: An Illusory Goal of Resource Protection Although the bill nominally protects uncontaminated groundwater as a resource, this is illusory. Four provisions of the bill undercut the no-contamination provision: <bullet> LFirst, the ``reasonable cost'' loophole [SCAA Sec. 402, amending CERCLA Sec. 121(a)(2)(B)(i), p. 95], which will allow PRP- written cleanup plans to declare that avoiding contamination is too expensive; <bullet> LSecond, the ``natural attenuation'' loophole, bill's provision that expressly allows natural attenuation where it won't interfere with anticipated future use [SCAA Sec. 121(a)(4)(C), p. 97], despite the inherent uncertainties of predicting when groundwater will be needed;\6\ --------------------------------------------------------------------------- \6\ Even assuming agruendo that natural attenuation may sometimes be appropriate, the bill conspicuously fails to include appropriate safeguards, such as thorough characterization of all contaminants, ongoing monitoring to assure that attenuation occurs as expected, and designation of fall-back approaches if attenuation fails or if the water is needed earlier than was originally anticipated. --------------------------------------------------------------------------- <bullet> LThird, the bill's express proviso that engineering and institutional controls ``to be considered on an equal basis with all other remedial action alternatives'' [SCAA Sec. 121(a)(5), p. 101]; and <bullet> LFourth, the bill's express proviso allowing point-of-use treatment devices [SCAA Sec. 121(a)(4)(D)(iv)(II), p. 99-100].\7\ --------------------------------------------------------------------------- \7\ Point-of-use systems (whether at individual homes or at municipal facilities) simply let contamination continue to spread unchecked, forcing public and private well owners to either conduct costly testing in perpetuity or gamble that their wells won't be hit by a contaminated groundwater plume. Should such contamination occur, it will persist for dozens or hundreds of years. While point-of-use devices may be the only practical option in some circumstances, they should be the last, not the first, resort. Moreover, At-tap treatment systems force homeowners to obtain and install replacement filters periodically, a chore many families lack time to add to their busy schedules. --------------------------------------------------------------------------- The upshot will be that PRPs will be able to claim that preventing contamination is too expensive compared to waiting until the water cleans itself up, forbidding its use, or sticking a filter on the tap. In short, the bill fails to protect groundwater as a resource for future generations. In essence, under the natural attenuation loophole, clean groundwater is allowed to get dirty in the hope that it will clean itself back up before the water is needed. This approach implicitly assumes that it is possible to reliably project (i) long-term groundwater flows, (ii) long-term attenuation patterns, and (iii) future groundwater needs. In actuality, each of these is uncertain at best; taken together, they amount to Congressional endorsement of gambling with groundwater. Decision makers can only reliably predict future groundwater movement, and future groundwater needs,\8\ for a handful of years at a stretch. Absent the rare case where natural attenuation can confidently be predicted to restore groundwater within an equally short time frame, these ``remediation'' techniques should be used only if no others are available. These provisions are especially objectionable because they would apparently ``trump'' state groundwater laws that require protection of uncontaminated groundwater as a resource (i.e., without having to be specifically identified as a future source of drinking water within a particular time). --------------------------------------------------------------------------- \8\ The ``delisting'' provisions of section 134 [p. 130] are ambiguous, but it is far from clear that PRPs would be responsible for securing alternate water supplies if groundwater covered by an attenuation remedy is needed earlier than initially anticipated. --------------------------------------------------------------------------- Finally, by weakening Superfund's groundwater cleanup provisions, the bill undercuts important incentives for currently managing wastes in a way that protects groundwater. Anyone familiar with the current hazardous-waste regulatory system is painfully aware that innumerable wastes, though hazardous in fact, are not now regulated as hazardous. Superfund's aggressive groundwater cleanup requirements help prompt responsible behavior today, and need to be maintained. d. The Missing Goal: Restoring Land to Productive Use An especially notable weakness of the goals is the one that simply isn't there: restoring land to productive use when doing so is feasible. Moreover, the interplay of several provisions will operate to discourage returning land to productive use. As noted above, in the absence of a land-resource goal, the requirement to use a cost- effective remedy and the proviso that institutional and engineering controls ``shall be considered to be on an equal basis with all other remedial action alternatives'' [SCAA Sec. 402, amending CERCLA Sec. 121(a)(5), p. 101] means that put-up-a-fence remedies are likely to prevail. The fundamental problem is the bill's heavy emphasis on containment-based remedies--remedies that inherently limit a site's potential availability for future redevelopment. Even assuming that such remedies effectively protect health if appropriately maintained, they restrict the community's flexibility to use that land over time: if a site is capped with contamination in place, that cap must then be maintained in perpetuity. Doing so generally rules out excavation and construction activities. While containment-based remedies may make sense in a limited set of circumstances, they should not be the remedy of first choice given that they deprive communities of future flexibility in using the site. For instance, suppose a particular community wanted to be able to use a site that is now a Superfund site and, like most Superfund sites, not currently used--for an industrial park following a cleanup. Surrounding properties are also industrial, but no developer has expressed a specific interest in redeveloping that particular site. The PRPs have proposed a cleanup under which the site would be capped, with the cap maintained for the indefinite future, thus (supposedly) avoiding human exposure. The PRPs argue that such a plan is consistent with the land uses allowed to be considered under Sec. 121: the actual use (here, no current use); the planned use (here, no current plans exist); or the ``reasonably anticipated future use,'' defined as one that has a ``substantial probability of occurring'' (here, none specifically identified). Further, suppose that capping the site is substantially cheaper than to treating or removing the contaminated materials. In such a scenario, the cap would apparently be selected as a cost- effective remedy that meets the bill's narrowly defined goals. At the end of the process, however, the community would be left with a permanent dead zone that cannot be put to productive use. The PRPs may be better off, but the community has not shared those benefits.\9\ --------------------------------------------------------------------------- \9\ As noted above, the ``community acceptability'' criterion for remedy section [SCAA Sec. 402, amending CERCELA Sec. 121(a)(1)(D), p. 93] does not alleviate this problem, because those criteria are to be used in selecting between remedies that meet the goals. In any event, individual criteria are not permitted to predominate in choosing from among alternatives. --------------------------------------------------------------------------- The scenario spelled out here may well prove to be the rule rather than the exception. Many Superfund sites are abandoned industrial properties. Only rarely will a developer have proceeded far enough that a potential redevelopment will be the ``planned'' use for a site following cleanup. Similarly impractical is the criterion that a particular use has ``a substantial probability of occurring.'' Rather than this convoluted and unworkable approach, the bill should establish an explicit objective of returning land to productive use where technologically and economically feasible. That approach will provide communities with the flexibility they need to grow and prosper through redevelopment for years and decades into the future. Such redevelopment often occurs in ways that may not be easily ``anticipated'' and even a few years ago would not have been viewed as having ``a substantial probability of occurring.'' For example: <bullet> LThe New York Times recently described significant urban redevelopment that was not envisioned, and indeed was sometimes marginally legal, under the City's zoning regulations (but occurred nonetheless and reportedly has proven largely beneficial).\10\ --------------------------------------------------------------------------- \10\ K. Johnson, ``Where Zoning Law Failed, Seeds of a New York Revival. New York Times, p. 1, April 21, 1996. --------------------------------------------------------------------------- <bullet> LSimilarly, the Christian Science Monitor has reported on the growing phenomenon of ``infill development.''\11\ A recent article cites efforts underway in San Jose, California; Portland, Oregon; Boulder, Colorado; and Minneapolis--St. Paul, where ``[t]he idea is to shift growth to the inner part of a city, using vacant or underdeveloped areas for new housing and businesses.'' --------------------------------------------------------------------------- \11\ D. Sneider, ``To Halt Sprawl, San Jose Draws Green Line in Sand,'' Christian Science Monitor, April 17, 1996. --------------------------------------------------------------------------- <bullet> LMore generally, significant portions of the U.S. experienced more than 25% population growth in their metropolitan areas in the single decade following Superfund's enactment in 1980.\12\ --------------------------------------------------------------------------- \12\ A few statistics help illustrate how dramatically land uses change in a few decades. Urban areas in America have expanded from 15.5 million acres in 1960 to over 56.6 million acres in 1987. U.S. Dept. of Agriculture, Economic Research Service (1991), Major Uses of Land in the United States: 1987, p. 33, Agricultural Economic Rep. No. 643. During the first decade following Superfund's enactment, the population in the Western U.S. grew by 22.3%, an increase of nearly 10 million people. United States Bureau of the Census (1994), Statistical Abstract of the United States: 1994 (114th Edition), p. 27. The state of California alone accounted for 25% of the total national growth, increasing its population by over 6 million; its urban land area grew from 4.2 million acres to over 5.2 million acres. U.S. Department of Agriculture (1991), Major Uses of Land in the United States: 1987, p. 33. On a more localized basis, the 10 years after Superfund became law saw the Los Angeles' metropolitan area population expand by 26% (3 million people), while the Phoenix metropolitan area increased by almost 40%, and the Las Vegas metropolitan area increased by 61.5%. U.S. Bureau of the Census (1994), Statistical Abstract of the United States: 1994, Fig. No. 42. Many smaller cities of the region also showed substantial expansion, with cities such as Reno, Modesto, Sacramento, and Tucson all experiencing growth between 25% and 40%. Ibid. See also, Testimony of EDF on Superfund Reauthorization before the House Committee on Transportation and Infrastructure's Subcommittee on Water Resources and the Environment, June 21, 1995. --------------------------------------------------------------------------- In short, S. 8's narrow approach to future land use invites, and even forces, communities to be short-sighted. This may save PRPs money, but the costs thus saved are shifted to our children. 5. The ``Voluntary'' Cleanups Loophole for Superfund Sites Under S. 8, site-specific state remedial action plans (RAPs) override all CERCLA enforcement authorities [SCAA Sec. 103, adding CERCLA Sec. 129(a), p. 18]. Apparently, such RAPs need not even be issued under a qualifying state voluntary response program [SCAA Sec. 102, adding CERCLA Sec. 128, p. 15],\13\ but rather can be any document designated by any state as a RAP--regardless of whether there has been any public participation whatsoever in development of that RAP, regardless of whether there have been any effective state review of a polluter-written RAP, regardless of whether RAP will be protective, regardless of whether the RAP is actually being complied with, and even regardless of whether the state has the legal or practical capacity to enforce the RAP. Once a state RAP exists, EPA is barred from acting even where a site presents an imminent and substantial endangerment to health or the environment (save by using the Fund, without cost-recovery). This approach is indefensible. Apparently, even current Superfund sites (i.e., those already listed on the National Priorities List), as well as sites proposed for NPL listing, can be thus removed from Superfund's ambit. --------------------------------------------------------------------------- \13\ In order to obtain technical assistance funds from EPA, state voluntary programs must meet certain criteria such as ``adequate opportunities for public participation, including prior notice and opportunity for comment in appropriate circumstances, in selecting response actions,'' and ``oversight and enforcement authorities or other mechanisms that are adequate to ensure that voluntary response actions will protect human health and the environment [SCAA Sec. 102(b), adding CERCLA Sec. 128(b)(2), (4), p. 15]. However, this provision is independent of the CERCLA override in section 129. To add to the confusion, states apparently may self-designate as having a qualifying voluntary response program; there is no mechanism for EPA review of whether state program actually has the required elements, nor any opportunity for public participation in determining the adequacy of a state program. Furthermore, the ``as appropriate'' qualifier for public participation means that the level of public participation is left to the State's whim. --------------------------------------------------------------------------- There are no substantive standards whatsoever for state RAPs. Unless a state opts to establish regulations, each site's plan will be issued an ad hoc basis with no baseline standards to assure the safety or adequacy of cleanups,\14\ meaningful public participation, judicial review, or any other safeguard. Tens or hundreds of thousands of sites may be dealt with on an ad-hoc basis, making effective public oversight completely impossible even apart from the fact that the bill makes no provisions for community technical assistance. And meanwhile, Superfund's authorities are banished. --------------------------------------------------------------------------- \14\ The only exception is that NPL and NPL-proposed sites must ``implement applicable provisions [CERCLA] or of similar provisions of State law in a manner comporting with State policy'' so long as the remedy protects health and the environment as specified in Sec. 121 [SCAA Sec. 102(b), adding CERCLA Sec. 128(c), p. 17]--provisions that are non-protective, as discussed above. Moreover, nothing requires compliance with CERCLA's public participation mechanisms. --------------------------------------------------------------------------- We strongly oppose these sweeping and unjustifiable limits on Superfund authority. While carefully crafted liability relief for prospective purchasers may well be desirable (assuming community participation rights are assured), wholesale roll-backs of Superfund authorities for a large but amorphous range of sites are indefensible. They are also unnecessary: the private market is increasingly providing mechanisms for moving forward brownfield redevelopment today, with Superfund in place.\15\ --------------------------------------------------------------------------- \15\ See for example, Coffey, ``Environmental Firms Assume Cleanup Risks,'' Seattle Daily Journal of Commerce, 02/11/97 [Retrieved from ttp://www.djc.com/data/news/19970211/10020180.htm 2/27/97]. The article describes a ``radically different approach to soil and groundwater cleanups that is slowly catching on in the environmental industry. A handful of firms are guaranteeing cleanup costs for their clients and, in some cases, providing definite dates for when the cleanup work will be finished.'' The article continues, ``Not only are these companies promising to bring sites up to [Washington] Department of Ecology standards within a certain amount of time, they also are assuming the financial risks involved if the schedules for site closures can't be met. This new approach is being hailed as the missing link needed to get the state's hundreds of abandoned contaminated properties, or ``brownfields,'' cleaned up and redeveloped.'' Similarly, conferences with titles such as ``Realizing Profits in Brownfields,'' which advertise a ``unique opportunity for all parties involved with Brownfields properties to locate and initiate their next profit making real estate deal,'' are increasingly common. [Flier for conference scheduled for April 10-11, 1997, Philadelphia, PA]. --------------------------------------------------------------------------- iii. shutting the public out: weaknesses in s. 8's public participation provisions Numerous provisions of S. 8 undercut meaningful and effective public participation in cleanup programs, such as the state delegation provisions of Title II (and, as discussed in section II.B.5 above, the ``voluntary cleanup'' provisions of Title I). Moreover, the explicit public participation provisions in Title III have a number of weaknesses. And ultimately, of course, public participation is meaningless if the bill's key provisions on the quality of cleanups are inadequate. In addition to the problems noted below, S. 8 fails to strengthen public participation adequately. Specifically, it fails to require EPA to provide reasonable public notice and a public hearing (if requested) before critical steps in the cleanup process, including undertaking the health assessment, preliminary assessment and site investigation; and completing the facility work plan. S. 8 also fails to provide for the creation of state-wide organizations to ensure wide dissemination of information about toxic sites in a community-friendly manner. Creating citizen-run state-wide organizations would be an important step toward ensuring that those living next to or on toxic dump sites have the necessary tools at their disposal to make sound judgments about the future of their communities. A. Shutting the Public Out of State Delegation Decisions Under S. 8, states can obtain delegation of one or more of 5 categories of authorities\16\ [SCAA Sec. 201(a), adding CERCLA Sec. 130(a)(2), p. 32-34]. EPA has 60 days to approve or disapprove a petition for delegation (120 days for 8 states without RCRA corrective action authority) [SCAA Sec. 201(a), adding CERCLA Sec. 130(c)(3)(A), p. 39]. If EPA doesn't act in that time, the delegation petition is approved by default [Sec. 130(c)(3)(B), p. 40]. --------------------------------------------------------------------------- \16\ These include investigation/evaluation; alternatives development/remedy selection; remedial design; performance of remedial action; information collection/liability allocation. EPA cannot delegate research and development, or issuance of community Technical Assistance Grant [Sec. 130 (a)(8), p. 36]. --------------------------------------------------------------------------- Conspicuous by its absence is any provision for public participation in EPA review of state program adequacy, and the ridiculously short time limits preclude meaningful participation in any event. To make matters worse, once a state obtains delegated authority, EPA's hands are largely tied absent state concurrence even if the state is failing to act and thus delaying cleanup at the site, or if state actions are not protective [SCAA Sec. 201(a), adding 130(e)(5), p. 54].\17\ S. 8's delegation provisions are thus doubly deficient. --------------------------------------------------------------------------- \17\ Otherwise, EPA may act only upon determining that ``an emergency * * * poses an immediate and significant danger'' [SCAA Sec. 201(a), adding 130(e)(4)(C), p. 54]. This is a new statutory standard of uncertain meaning that will give rise to litigation and retard swift preventive action. --------------------------------------------------------------------------- B. Shutting the Public Out through Inadequate Technical Assistance Provisions Under S. 8, Technical Assistance Grants (TAGs) are limited to a $100,000 cap, with no exceptions [SCAA Sec. 301(a), adding CERCLA Sec. 117(f)(7)(B), p. 72] even though many of the remedies likely to be selected under the bill will be institutional controls or natural attenuation remedies for which long-term community oversight would be needed. In addition, TAGs are limited to sites listed on or proposed for the NPL, or on a State Registry [Sec. 117(f)(5), p. 70].\18\ TAGs cannot be used for collecting field samples [Sec. 117(f)(8)(B), p. 73], so if PRPs take inadequate samples, the community will lack resources to collect appropriate samples. --------------------------------------------------------------------------- \18\ The term ``State Registry'' is not defined, but some states have very limited registries. In addition, nonlisted sites are limited to 1/8th of all TAGs [Sec. 117(f)(6)(B), pp. 71-72]. --------------------------------------------------------------------------- Moreover, the ``preferred'' recipient of a technical assistance grant is the ``Community Response Organization,'' if any [Sec. 117(e)(5)(A), p. 66].\19\ This restriction may exclude local environmental or community groups with a greater need for, or ability to use, a TAG. --------------------------------------------------------------------------- \19\ CROs will have 15 to 20 members including local residents, local medical personnel, public interest groups, local governmental officials, and local businesses. ``Local residents''--but not necessarily those most heavily affected by the site--are to comprise at least 60% of the members [Sec. 117(e)(6)(C) & (D), pp. 67 & 68]. --------------------------------------------------------------------------- Finally, it appears that the funds made available for TAGs may be grossly inadequate. The authorization for Technical Assistance Grants is only $15 million through 2002 [SCAA Sec. 906, adding CERCLA Sec. 111(t), p. 258]. On average, that's $11,500 per site an amount clearly insufficient, particularly given the widespread availability of re-openers for many sites with already-decided cleanups. (This provision appears to be inconsistent with another under which 2% of annual appropriations, or roughly $28 million annually, may be used for TAGs [SCAA Sec. 301, adding CERCLA Sec. 117(f)(6), p. 70].) C. Shutting the Public Out of Cleanup Decision Revisions\20\ --------------------------------------------------------------------------- \20\ Even for future cleanup decisions, S. 8 unjustifiably provides differential access to decision makers. Specifically, although PRPs who prepared a cleanup plan or are implementing a cleanup can get the plan reviewed by the Remedy Review Board, the community is not able to initiate Board review [SCAA Sec. 404, adding CERCLA Sec. 133(a)(5)(E)(ii), p. 118]. White the PRPs are able to meet with the Board, the community is not [Sec. 133(a)(5)(E)(v), p. 120]--even though the Administrator is required to give ``substantial weight'' to the Board's determination as to whether the remedy meets the cleanup requirements, is feasible, and is reasonable in cost [Sec. 133(a)(5)(E)(iv) & (v)(II), pp. 119-120]. Such differential access is unjustifiable. --------------------------------------------------------------------------- As discussed in section IV.B below, provisions for widespread reopening of existing cleanup decisions essentially eliminate opportunities for meaningful public participation. Given that review boards are to complete their review within 180 days \21\ [SCAA Sec. 406, adding CERCLA Sec. 135(b)(2)(A), p. 134], communities will not be able to participate meaningfully. This is particularly true at sites where no Technical Assistance Grant is currently in effect. Even where TAGs are already in place, the flood of simultaneous petitions will make it impossible for the limited number of community-oriented technical experts to provide effective support at the large number of sites where reopener petitions are likely to be filed.\22\ --------------------------------------------------------------------------- \21\ The Administrator may extend this period ``for good cause.'' \22\ As noted in section IV.A., EDF strongly opposes the ROD reopener provisions on a variety of grounds beyond public participation concerns. --------------------------------------------------------------------------- Similarly, as discussed in section II.A above, PRPs are at liberty to ignore RAPs until EPA catches them at it--and then have the option of changing the remedy or of conforming to the original one. Such provisions for after-the-fact changes to cleanup decisions render community participation little more than a mirage. D. 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 is located. [SCAA Sec. 802, adding CERCLA Sec. 105(i)(3), p. 253]. Similarly, State can block any administrative cleanup order under Sec. 106 by failing to concur within 90 days (orders automatically expire after 90 days without state concurrence) [SCAA Sec. 103, adding CERCLA Sec. 129(a), p. 18]. While it may be appropriate to give states ``first dibs'' on cleanups at sites that will be appropriately addressed through state action, this provision goes 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 only upon affirmatively determining that the State will conduct an adequate, timely cleanup absent the listing or 106 order. iv. superfund slowdown A. Slowdowns Through Weak and Ambiguous Cleanup Provisions Though styled the ``Superfund Cleanup Acceleration Act,'' S. 8 ironically contains a host of provisions that will delay cleanups by introducing confusing (and weak) new standards for cleanups, as discussed in section II.B above. For example, the bill is replete with new terms that invite lengthy argument, e.g., whether assumptions used in the risk assessment are ``the most scientifically supportable;'' whether a particular projected land use has ``a substantial probability of occurring based on recent development patterns''; whether particular substances pose ``significant threats to [ecosystems'] sustainability.'' Cleanups will be delayed while these and other new terms are endlessly debated. B. Slowdowns from ``Re-opener'' Petitions S. 8 also expressly invites the filing of petitions to reopen (and weaken) existing cleanup decisions, potentially several hundred of them, with attendant diversion of resources from ongoing cleanup efforts. These reopener provisions are as unnecessary as they are poorly constructed. EPA already has ample discretionary authority to consider requests to modify existing cleanups decisions where particular circumstances warrant. The bill's reopener provisions are unwieldy and unworkable.\23\ Within 90 days of the bill's enactment, the implementor of a current cleanup decision may petition to substitute an alternate remedial action. The petition must be granted if the proposal satisfies Sec. 121 and meets certain cost thresholds [SCAA Sec. 406, adding CERCLA Sec. 135(b)(3) & (4), pp. 137-141]. For pre-construction sites, the cost threshold is $1.25-$2.5 million, depending on cost and type of cleanup [Sec. 135(b)(3)(B) & (4)(B), pp. 137 & 140], but no threshold applies ``if the petitioner demonstrates that technical data generated subsequent to the issuance of the [ROD] indicates that the decision was based on faulty or incorrect information'' [Sec. 135(B)(3)(D), p. 139].\24\ --------------------------------------------------------------------------- \23\ Re-opener petitions are to be reviewed by ``remedy review boards'' comprised of ``independent technical experts within Federal and State agencies'' with cleanup responsibilities [Sec. 135(b)(1), p. 134, referencing Sec. 133(a)(5)(E), p. 118-120]. \24\ Factors that may be raised in such petitions include future land use [SCAA Sec. 135(b0(3)(c), p. 138]; it is not clear what if any role the community would play in determining future land use. --------------------------------------------------------------------------- Hundreds of existing cleanup decisions may be eligible for reopening; at the least, PRPs will be able to flood EPA with petitions that will have to be reviewed to see if they in fact cross the cost thresholds, much less meet the other criteria. The associated resource drain will slow cleanups across the board; make it all the more likely that EPA won't be able to meet the 180-day turnaround for new RAPs thus triggering default approvals; and encourage PRPs to drag their heels in carrying out an existing cleanup at a particular site in hopes of getting it revamped. Moreover, the generous opportunities given to PRPs to force EPA to reopen decisions and apply this bill's weaker standards forms a dramatic contrast with the lack of analogous reopeners when Superfund's standards were strengthened in the 1986 amendments. There, the bill as enacted expressly provided that the new standards ``shall not apply to any remedial action for which the Record of Decision was signed, or the consent decree was lodged, before date of enactment,'' while RODs signed within 30 days of enactment were required to meet the new standards ``to the maximum extent practicable.''\25\ --------------------------------------------------------------------------- \25\ This provision, enacted as section 121(b) of the Superfund Amendments and Reauthorization Act of 1986, was not codified but appears as a note to 42 U.S.C.A. 9621. Pub. L. No. 499, 99th Cong., 2d Sess. 100 stat. 1613, 1678. --------------------------------------------------------------------------- Simply put, S. 8's re-opener provisions should be dropped. v. the npl cap: dumping cleanups on communities and states 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 cannot add more than 100 sites to the Superfund National Priorities List until 2001, and then 10 sites/year thereafter [SCAA Sec. 802, adding CERCLA Sec. 105(i)(1)(A), p. 251-252]. 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. 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.\26\ --------------------------------------------------------------------------- \26\ 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, L``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.''\27\ --------------------------------------------------------------------------- \27\ 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.''\28\ --------------------------------------------------------------------------- \28\ ``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.\29\ 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. --------------------------------------------------------------------------- \29\ 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 they 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. overly broad liability ``reforms'': corporate welfare by another name There is no dispute that Superfund's existing liability system has often been abused by some 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 clearly has ample authority to provide contribution protection to settling parties. Even if legislation on this point were viewed as desirable, S. 8 goes 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. Overly Broad Exemption for ``Co-disposal'' Sites: Letting Large Industrial Polluters and Dump Owners Off the Hook S. 8 repeals polluter-pays liability for generators and transporters of wastes at hundreds of ``co-disposal'' sites at which industrial wastes were dumped along with municipal trash [SCAA Sec. 501(b), adding CERCLA Sec. 107(q), p. 148]. 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 30% of cleanup costs (or the cost of closure) [Sec. 501(b), adding CERCLA Sec. 107(t), p. 150]. B. Overly Broad Exemption for ``Small'' Businesses While EDF does 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. 150]. 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. 149 (exception to exemption for de minimus contributors)). C. Overly Broad Exemption for ``Recyclers'' Including Mineral Wastes In another unfortunate example of ``corporate welfare,'' the partial exemption for certain recyclers inappropriately includes ``metal byproduct[s] (such as slag, skimming or dross)'' in the definition of scrap metal [SCAA Sec. 510(a), adding CERCLA 101(48)(A)(ii), p. 214, and SCAA Sec. 510(b), adding CERCLA Sec. 107(w), p. 215]. While it may be appropriate to craft a narrow liability exemption to encourage the collection of post-consumer recyclables i.e., materials that otherwise become part of the municipal waste stream slags and drosses are industrial by-products that come nowhere close to fitting within that rationale. D. ``Polluter Paybacks'' That Compete Directly with Cleanup Dollars Although parties who have already received cleanup orders must carry out the cleanup, they get repaid for all costs attributable to a party whose liability is limited [SCAA Sec. 502, adding CERCLA Sec. 112(g)(1) & (2), p. 157]. 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. 157-158], and must be made within a year [Sec. 112(g)(6), p. 158-159]. In addition, parties to an allocation are entitled to be promptly reimbursed for any costs they incur attributed to an orphan share [SCAA Sec. 503, adding CERCLA Sec. 136(o), p. 192-193]. This language creates a legal entitlement, as contrasted with discretionary authorization 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 moneys remaining in the Superfund are inadequate, one of three unacceptable 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. vii. conclusion Thank you for this opportunity to present our views. We would welcome an opportunity to work with you in crafting a Superfund reform bill that protects public health, particularly children and other vulnerable groups; preserve community land and water resources; holds polluters, rather than taxpayers, responsible for clean-up costs; assures meaningful community participation in Superfund decisions, while making the program more efficient and streamlined, and reinstating the Superfund Trust Fund taxes. ______ Prepared Statement of Linda H. Biagioni, Vice President, Environmental Affairs, Black & Decker Corporation Thank you Mr. Chairman and members of the Subcommittee for inviting me to testify on this important matter. My name is Linda H. Biagioni and I am Vice President for Environmental Affairs at The Black & Decker Corporation. In recent years I have also served as Chair of the Environment Management Council of the Manufacturers Alliance for Productivity and Innovation, a policy research organization with 500 members from among the leading manufacturers in America. I am currently Chair of the International Environment Forum of the World Environment Center, a global, non-profit organization whose purpose is to create bridges between participants from industry, government, and academic and non-governmental organizations to contribute to sustainable development worldwide. My professional training is in the field of chemistry. I am not a lawyer, but Superfund has taught me a great deal more about litigation and about this law than I ever expected to know. The Black & Decker name is one of the most widely known brands in the world. Headquartered in Towson, Maryland, Black & Decker manufactures and markets products and services in more than 100 countries and is the world's largest producer of portable electric power tools, power tool accessories, residential security hardware, and electric lawn and garden tools. It is also the largest global supplier of engineered fastening systems to the automotive and other markets we serve. Our household products business is the North American leader and a major global competitor in the small electric appliance industry, and our plumbing products business is one of the three largest faucet manufacturers in North America. Black & Decker also produces products as diverse as golf club shafts and glass container making equipment. We employ several thousand people at more than 30 manufacturing facilities in 16 States in the United States and at Black & Decker Service Centers throughout the country. Black & Decker's manufacturing operations are not heavy industry, and with one exception Black & Decker is not the owner, operator, or a predominant generator at any Superfund National Priorities List site. Nevertheless, because of our well-known name and the perception that we are a deep pocket, we have been forced to devote very substantial resources, in the range of tens of millions of dollars, to what often should be relatively straightforward or low priority environmental problems. A large part of our expenses and energies in this field have also been spent on litigation in connection with private cleanup sites that are not on the National Priorities List and with our insurance carriers over their contractual obligations to cover Superfund cleanup expenses. I am pleased to participate in this Hearing because I believe that, for Black & Decker and for many other American businesses, the existing Superfund law frequently misdirects our energies and our resources. The problem of cleaning up old hazardous waste sites is important, but existing law causes us to proceed too slowly on many serious sites, while at the same time causing us all to spend too much time and money on low-priority environmental concerns and far too much money on legal proceedings. While the EPA has made increasingly vigorous efforts to reform Superfund by administrative action, apparently with some success, the most important failings of the Superfund law and program can only be cured by Congress. Black & Decker has no Washington office and no full-time lobbyists, but we have devoted significant efforts to Superfund reform for the last several years, working with the Superfund Action Alliance, the National Association of Manufacturers, and other trade associations to promote comprehensive improvements in this law. Frankly, we are quite disappointed and frustrated by the failure of the 103d and the 104th Congresses to resolve these urgent issues. We hope the 105th Congress can find the middle ground and finish reauthorization this year, before electoral politics once again polarizes all discussion of this issue. From what we can see, the Senate is off to a good start in 1997. Superfund has been identified as a high-priority objective by the Majority Leader, and the Members and staff of the Environment and Public Works Committee from both parties appear to be moving forward constructively. We hope that the early introduction of S. 8 by the Majority, followed closely by the introduction of S. 18 by the Minority, will set the stage for prompt action. Our own reading of S. 8 leads us to believe that it is a balanced and thoughtful attempt to resolve the crucial problems that bedevil the Superfund program. We understand that it reflects the months of negotiations between Majority and Minority staffs and the Administration last year. We commend the Committee and its staff for their diligent efforts to craft a workable approach that can attract bipartisan support. Like every interested party in this process, we would of course prefer certain changes in S. 8, and I will mention a few of them in this testimony. But the desire for a more perfect bill should not obscure the fact that overall, S. 8, just as currently written, would be a vast improvement over existing law. We believe it deserves careful consideration by every Member of this Subcommittee, and prompt action to make whatever changes are necessary and reauthorize the law. The two areas that I will address in some detail are the liability scheme and the remedy selection criteria. In each of these areas, the existing Superfund law is seriously flawed and needs immediate repair. liability reform With respect to liability reform, let me say at the outset that Black & Decker accepts that it should bear a reasonable portion of clean-up costs where it contributed hazardous substances to a disposal site that has become an environmental hazard. We also recognize the necessity for the business taxes that support the Superfund, and we urge their reauthorization as a reasonable means of financing the Superfund clean-up program. Black & Decker has not advocated an across- the-board repeal of retroactive liability. Moreover, we recognize that in some contexts the strict liability system has a salutary effect in facilitating cleanup; for example, to reinforce the viability of the allocation system proposed in S. 8. But the price of the current retroactive strict joint and several liability system is simply too high. This Subcommittee has heard extensive testimony over the past 4 years about the adverse consequences that flow from the existing liability scheme, and I will not repeat those facts here. It is sufficient to say that in practice the structure of the current law delays cleanups, misdirects the focus of responsible party activities, and generates enormous transaction costs. The liability title of S. 8 would significantly reduce those costs. First, it would free a great many small contributors from the legal tangle of strict joint and several liability. The exemptions for 1 percent (1 percent) de minimis parties, de micromis parties, generators and transporters of materials sent for recycling, municipal waste, and certain small businesses, along with the limitations on liability for municipalities, will remove the threat of liability for thousands of parties at hundreds of Superfund sites. The small quantity exemptions are particularly appropriate because their volumetric contribution is virtually always of minimal environmental significance, and their participation in the planning and management of the site is non- existent. These changes alone will eliminate an important part of the aggravation associated with Superfund for Black & Decker. We accept the necessity of participating in the cleanup of sites where we were a significant generator. But the necessity, because of joint and several liability exposure, to participate actively on clean-up committees at sites where Black & Decker has de minimis status is disproportionately expensive and a frustrating headache. For the greater-than-one-percent responsible parties who remain liable for National Priorities List sites, the allocation system proposed in S. 8 promises to be an enormous improvement over the current litigation-laden approach to allocation. The explicit provisions for orphan-share funding should also greatly facilitate settlements on terms that responsible parties will consider reasonable. S. 8 would be fairer to responsible parties if it expanded the orphan share to cover fully the unallocable shares, not just shares of known insolvent parties and parties whose liability is capped or eliminated by the bill. But even as written S. 8 will ameliorate much of the unfairness inherent in the current system. There is one aspect of the liability system that S. 8 does not address: as written, the small-party exemptions and the allocation system only apply to National Priorities List sites. Other sites, which have been the subject of a tidal wave of private litigation, would still be governed by the inequitable retroactive strict joint and several liability provisions of the existing law. We believe that for these sites the best solution to liability reform is to return this lawmaking power to the States. S. 8's provisions for expanded State responsibility and the proposed limitations on the number of sites that can be added to the National Priorities List reflect a congressional desire to transfer to the States as much of the hazardous waste cleanup responsibility as possible. As part of this objective, Congress should also turn over to the States the crafting of the liability scheme for non-NPL sites. It could accomplish this result by limiting the application of Section 107(a) to National Priorities List sites and other sites where the Federal Government has either conducted or ordered remediation or restoration activity under Superfund. Almost all States currently have Superfund-type legislation with similar, though not identical, liability provisions, so the short-term impact of this change would be relatively small. But over time, State legislators could decide for themselves the extent to which they believe that retroactive strict joint and several liability, with or without various exemptions, is appropriate. Without this change, the reforms in S. 8 will fail to address a large segment of the litigation that the existing law generates. Again, our desire for changes to the proposed liability title of S. 8 does not detract at all from our enthusiasm for S. 8 as compared to the status quo, and we urge Congress to proceed as quickly as possible to mark up this title and enact the needed reforms. remedy selection Selection of the most appropriate remedy for each site is the heart of the Superfund program. The choice of remedy determines what benefits will be achieved, how much will be spent, and what it will be spent on. When Superfund was enacted in 1980, Congress gave the EPA little guidance on how to determine the desired cleanup levels and how to relate those levels to cost and technical feasibility constraints. The Agency, itself relatively inexperienced in these matters, borrowed a variety of existing legal standards, some of which were designed for very different contexts, to fill this gap. Then in 1986 Congress codified those standards and added others, creating a series of arbitrary rules requiring a preference for permanence and treatment, compliance not only with applicable State and Federal laws but also with ``relevant and appropriate regulations,'' and a groundwater requirement that has been read to mean that, with few exceptions, all potentially usable groundwater at Superfund sites must meet drinking water standards in the ground as soon as possible. These inflexible remediation standards have contributed significantly to the misdirection of resources into remedial activities that produce little or no benefit to public health or the environment. In reality, Superfund sites vary widely in the nature of the risks they present and in the nature of the geological, land use, locational, and other circumstances that fundamentally shape what remedial technologies can usefully be employed. In many cases, the EPA and State personnel know full well that the remedies they are now requiring have little practical utility, but they are driven by the requirements of the Act to impose them anyway. S. 8 fundamentally changes this approach by dropping most of these arbitrary requirements. It directs the EPA and the States to focus on the real risks to public health and the environment posed by each site using site-specific data wherever possible, and to ameliorate those risks and meet the protectiveness standards within the bounds of technical practicability and reasonable cost, taking into account reliability, effectiveness, public acceptability, the nature of existing land and water uses and the nature and timing of reasonably anticipated future uses. In particular, the role of cost considerations in remedy selection is, with a few exceptions, appropriately addressed in S. 8. Cost is one of several co-equal factors to be balanced in the good judgment of the Agency in selecting the remedy. It is not an overriding consideration, and there is no mandate to choose the most cost-effective solution, but neither is it a subordinate or irrelevant factor in remedy selection, as is so often the case under the present law. Unfortunately, S. 8 does not appear to carry through fully with this risk-based approach with respect to groundwater. While it is true that, unlike soil, groundwater moves and that in the long run many aquifers are interconnected, the same intellectual inquiry and the same criteria should apply to remediation of groundwater as apply to other media and other exposure risks; namely, what real risks to existing and reasonably anticipated uses of the resource can be identified, and what remedial measures should be employed to ameliorate those risks within the bounds of technical practicability and reasonable cost. The notion that certain natural resources should be preserved for their own sake independent of any measurable risk to human health or the environment or entirely without regard to cost or feasibility considerations is a prescription for irrational expenditure of funds, whether public or private. We urge the Subcommittee to take a hard and skeptical look at inflexible rules for remedy selection, whether with respect to groundwater or any other medium. Finally, the provisions in S. 8 for the review of remedies already selected for Superfund sites under the existing law are a crucial element of remedy selection reform. Having learned from more than a decade of experience that our existing remedy selection criteria are not well suited to the task, it would be foolish not to direct the EPA to reconsider previously selected remedies, at least where significant cost savings could result from applying the new criteria that this Congress establishes. While we cannot recover funds already misspent, there is no reason to extend the mis-expenditure into the future. The EPA has recognized this fact in its recent administrative reform on ``relooking at existing remedies.'' The provisions for objection by the State Governor in case of unreasonable delay provide additional, though perhaps not necessary, protection against abuse. comprehensive reform As it should, S. 8 also addresses brownfields, State roles, community participation, Federal facilities, natural resource damages, government contractors and funding. None of those issues has a particular impact on Black & Decker, but each of them deserves your attention as part of a coherent reshaping of this program. Attention should also be directed to those elements of the program that will grow in importance in the future, such as long-term operation and maintenance costs, delisting, and site reuse. As I mentioned, Black & Decker is participating actively in the Superfund Action Alliance, which recently adopted the attached ``Superfund Fundamentals,'' a set of principles that address many of these concerns. We believe that the SAA Superfund Fundamentals are practical, well-reasoned policy recommendations, and we encourage the Congress to use them as a guide in its work on Superfund reauthorization. concluding comments In conclusion, let me reiterate the important point: it is time for Congress to act. We need to get past polarization and on to consensus and compromise. The years of serious criticism of the existing Superfund program from virtually every segment of the political spectrum have damaged its credibility and periodically paralyzed its progress. While the EPA's administrative reforms have helped in some respects, only Congress can correct crucial deficiencies and put the Superfund Program back on track. The Superfund Program needs a new congressional imprimatur, public support, and assured funding. I hope that this Subcommittee and the 105th Congress can finally succeed in this effort where the 104th Congress and 103d Congress could not. I commend the Subcommittee for its work and thank you again for this opportunity to present our views. ______ Superfund Action Alliance superfund fundamentals The 105th Congress has the opportunity to pass legislation that will accelerate cleanup of Superfund sites across the country. After 4 years of deliberation on Superfund reauthorization, this is the time to make comprehensive reform happen. The following document outlines some of the key provisions that need to be included when Superfund is reauthorized. Remedy Selection <bullet> Human health and the environment must be protected by Superfund response actions which balance reasonable cost and technical feasibility and which accelerate the progress of remediation. <bullet> Remedy selection should reflect actual and reasonably anticipated future uses of land and water resources, taking into account the nature and timing of that use. <bullet> The remedy selection process should be simplified and performance goal-driven. <bullet> Site-specific risk assessments should be used to guide selection of remedies rather than generic relevant and appropriate standards (RARs) and preferences for permanence and treatment. <bullet> Substantive applicable state standards should be considered and their implementation balanced by such factors as reliability, community views, cost, technical feasibility, short-term risk, effectiveness. <bullet> In selecting remedies to protect usable groundwater or remediate contaminated ground water needed for drinking in the future, due consideration should be given to the nature and timing of the use of the groundwater and the cost and technical feasibility of remediation. <bullet> Consistent with timely protection of health and the environment, the benefits of reform should be available at existing sites. <bullet> Early and informed local community involvement should be encouraged and supported with technical resources where needed. Liability <bullet> Superfund's liability system should be reformed to maximize the flow of resources to cleanup, not lawyers. <bullet> Reforms that eliminate inequities and reduce transaction costs, including allocation mechanisms that ensure cooperative parties are not forced to pay more than their own share of cleanup costs, are critical. <bullet> Liability limitations or exclusions for any group should be contemplated only as part of the meaningful Superfund reauthorization described in this paper. <bullet> Liability limitations or exclusions granted any party should be assumed by the Fund and not reallocated to other parties at sites. Brownfields <bullet> The revitalization of cities is a critical national issue worthy of efforts by, and funds appropriated to, a number of federal agencies. Efforts to redevelop brownfields cannot, and should not, be funded from the Superfund cleanup fund but instead should represent a broader national effort. <bullet> Finality is important. Reluctance by U.S. Environmental Protection Agency to issue a statement indicating work is complete and liability extinguished, and the inability of states to do so in lieu of the Federal Government, have discouraged property owners (potential ``sellers''), developers and other potential buyers from investing in brownfields. Liability protection for prospective purchasers is also necessary. <bullet> Incentives should be provided to encourage states to develop and enhance voluntary cleanup programs which reflect due consideration for current and future use of resources. State Role <bullet> Devolution of Superfund authority to the states is desirable, and the appropriate roles of the Federal and State governments at future remediation sites should be addressed in reauthorization. <bullet> It is important that each Superfund site have a ``single master'' overseeing remediation in order to encourage cleanup by providing certainty and eliminating duplication. Funding <bullet> Superfund's business taxes should be dedicated to cleanup of NPL sites, and the program's administration funded from the existing Trust Fund surplus as well as general revenues, just like the Clean Air and Clean Water Acts. <bullet> Consistent with future NPL cleanup needs, limits should be placed on the duration and amount of tax responsibilities. <bullet> Taxes for Superfund must be accompanied by legislative reform that improves the program. Both the legislative reforms and the examination of taxes must be consistent with fundamentals outlined in this paper. Natural Resources Damages <bullet> It is important to clarify the scope of natural resource damage claims and to limit them to restoration of services provided by injured public resources. <bullet> NRD restoration plans should be cost-effective, based on ecosystem/population impacts, and achievable over a reasonable period of time. <bullet> NRD liability should apply equally to private and public PRPs. ______ Superfund Action Alliance 3M Aerojet Allied Signal Inc. American Automobile Manufacturers Association American Car Rental Association American Crop Protection Association American Iron & Steel Institute American Textile Manufacturers Institute American Trucking Associations AMP Inc. Apex Environmental, Inc. Association of American Railroads Associated Builders and Contractors, Inc. The Bankers Roundtable Bayer Corporation Bethlehem Steel Corporation Biotechnology Industry Organization The Black & Decker Corporation BP America, Inc. Browning-Ferris Industries Burlington Northern Sante Fe Chemical Manufacturers Association Chevron Corporation Chrysler Corporation Ciba Specialty Chemicals The Dow Chemical Company Dresser Industries, Inc. DuPont Electronic Industries Association Environmental Industry Association The Flexible Packaging Association FMC Corporation Ford Motor Company General Electric General Motors Georgia Pacific Gulfstream/Stablex Harris Corporation Hazardous Waste Action Coalition Hercules Incorporated Hoechst Celanese Corporation Hughes Electronics Independent Lubricant Manufacturers Association Institute of Scrap Recycling Industries The Int'l Assoc. of Environmental Testing Laboratories The Int'l Assoc. of Independent Tanker Owners Lockheed Martin Corporation LTV Steel Company Mobile Corporation Monsanto Company Motorola National Association of Convenience Stores National Association of Manufacturers National Automobile Dealers Association National Electrical Manufacturers Association National Realty Committee National Rural Electric Cooperative Association National Steel Corporation Northrop Grumman Corporation Olin Corporation Petroleum Marketers Association of America Philips Electronics PPG The Raytheon Company Rohm and Haas Company Society of Independent Gasoline Marketers of America Union Carbide Corporation Union Pacific United Technologies Corporation Westinghouse Electric Corporation WMX Technologies, Inc. Zeneca Inc. ______ Responses of Linda H. Biagioni to Additional Questions from Senator Smith Question 1. Ms. Biagioni, our bill includes an allocation process which attempts to fairly determine how much a company is responsible for at a toxic waste site. It allows small business and individuals out of the process, but larger companies would stay in most cases. Do you think the allocation process in S. 8 would reduce the litigation which surrounds the current Superfund process? Response. Definitely yes. The Superfund Fundamentals adopted by the Superfund Action Alliance state that ``Reforms that eliminate inequities and reduce transaction costs, including allocation mechanisms that ensure cooperative parties are not forced to pay more than their own share of cleanup costs, are critical.'' As I noted in my written testimony, the establishment of an allocation system would be ``an enormous improvement over the current litigation-laden approach to allocation.'' Moreover, the exemptions for small businesses and for all de minimis contributors will dramatically reduce the number of parties, often to a much more manageable level, at many National Priorities List [NPL] sites. Together, these two changes, which have been supported in concept by Members from both political parties and by the Administration for several years, hold great promise for rapid and efficient resolution of the ``who pays how much'' question at multi--party NPL sites. Question 2. You stated in your testimony that you were uncomfortable with the groundwater cleanup provisions contained in S. 8. Could you please expand on these comments. Response. The Superfund Fundamentals state that ``In selecting remedies to protect usable groundwater or remediate contaminated groundwater needed for drinking in the future, due consideration should be given to the nature and timing of the use of the groundwater and the cost and technical feasibility of remediation.'' One important result of enacting S. 8 would be the elimination of several inflexible rules on remedy selection in the current law that prevent the EPA from acting on a rational evaluation of the risks presented by an NPL site and the relative desirability of possible remedies to ameliorate those risks. Unfortunately, with respect to groundwater, certain provisions in S. 8, such as the language about protecting ``uncontaminated groundwater,'' seem to impose equally inflexible new rules on remedy selection, undercutting the inclusion of natural attenuation as an acceptable remedy and ignoring the real feasibility limits on our technological capability to remove contaminants. We have learned over the past decade that for various contaminants the expenditure of large sums for active groundwater pump-and-treat systems does not produce significantly faster remediation than would reliance on natural processes. Black & Decker believes that the overall approach to evaluation of the remedial alternatives in S. 8, based on the balancing of factors set out in the bill, should be applied to groundwater remediation as well. Question 3. Ms. Biagioni, currently it is common that industrial sites are cleaned up to residential standards, even if it is known that the site will be zoned industrial in the future. Is it possible to justify cleanup standards based on future-use site-risk? Response. The Superfund Fundamentals state that ``Remedy selection should reflect actual and reasonably anticipated future uses of land and water resources, taking into account the nature and timing of that use.'' Black & Decker believes that it is irrational to expend funds to clean up hazardous waste to levels in excess of those necessary to safely allow the foreseeable human uses and environmental functions of the affected properties (whether or not they are formally designated as part of the ``site.'') Limitations on future use can and normally are reinforced with zoning restrictions and deed restrictions, thus necessitating the involvement of government officials and the public in any change from the anticipated future uses and placing the burden of further cleanup that may be necessary on those who wish to use the property in a manner that was not foreseeable at the time the remedy was selected. S. 8's overall remedy selection scheme takes a rational approach to this matter, and we support that approach. As noted in response to Question 2, this approach is equally applicable to groundwater, and the same policies should apply. Question 4. You stated in your testimony that you thought this bill required a more moderate approach to Superfund reform. Do you know of any reasons why any member of this Committee, or the Senate for that matter, should not be a cosponsor of this legislation? Response. As I noted in my written testimony, ``[T]he desire for a more perfect bill should not obscure the fact that overall, S. 8, just as currently written, would be a vast improvement over existing law.'' While we recognize that Superfund reform is an extremely complex, multi--faceted subject, we believe that S. 8 is a balanced bill that carefully addresses the central issues of Superfund reform in a manner that largely reflects the consensus of the affected communities. We hope that the Committee will be able to proceed soon to mark up S. 8 to refine and reinforce that consensus. After 6 years of hearings and debates on Superfund reform, Congress should move quickly to a bipartisan consensus on legislation to accomplish this vital objective this year. Response of Linda H. Biagioni to an Additional Question from Senator Lautenberg Question. Your written testimony indicated that you are affiliated with the Superfund Action Alliance. Were you testifying on behalf of Black & Decker or were you also testifying on behalf of the Alliance? Does the Alliance endorse the positions taken in your testimony? Response. As the membership list attached to my testimony indicates, the Superfund Action Alliance is a broad--based organization representing a large number and wide variety of businesses and trade associations who agree on the necessity for prompt Superfund reform. The Alliance has been in existence for some years, but it has only recently taken substantive positions on specific elements of Superfund reform. Black & Decker has been an active participant in the Superfund Action Alliance and participated in the process of formulating the Superfund Fundamentals. Beyond the Superfund Fundamentals, however, Black & Decker's testimony was not formally endorsed by the Alliance. It reflects our own experience as a company that has been named as a responsible party at a number of sites, but with one exception is not the owner, operator, or a predominant generator at any NPL site. Other members of the Alliance might have given greater priority to other issues. ______ Prepared Statement of Barbara Williams, Owner of SunnyRay Restaurant, Gettysburg, PA Welcome to how Superfund ``works'' for the people of the Gettysburg-Hanover Area of Pennsylvania, specifically the ``Keystone Landfill.'' <bullet> 1982--Local residents and the Commonwealth of Pennsylvania were aware of offsite residential water supply contamination. The Commonwealth of Pennsylvania allowed dumping to continue at the site. <bullet> 1984--Environmental Protection Agency (EPA) Field Investigation. <bullet> 1987--Site placed on the National Priority List of Superfund Sites. Pennsylvania-Division of Environmental Resources and US-Environmental Protection Agency allowed dumping to continue at the site. <bullet> 1990--Site ceased to accept waste because it was filled to capacity. <bullet> 9/27/93--EPA filed suit against site owners and 11 original/generator defendants. <bullet> 8/30/94--The original/generator defendant site owners, NOT THE EPA, filed suit against 180 small businesses, boroughs and school districts. <bullet> 10/5/95--The third part defendants, NOT THE EPA, filed suit against over 550 other small businesses and individuals. <bullet> 2/5/97--EPA discovered buried waste outside the area listed for capping. Cleanup was delayed again. <bullet> Current Keystone Status: The site cleanup has not started YET. No one is out of the lawsuits YET. I sincerely thank the chairman and members of the committee for inviting me back. I am Barbara Williams. My business is SunnyRay Restaurant in Gettysburg, Pennsylvania. I have been a member of the National Federation of Independent Business (NFIB) since 1982. Joining NFIB was one of the best business decisions I have ever made. Every small business needs all the help it can get. NFIB has been my coach and cheerleader. You cannot beat teamwork like that. Speaking of teams, I want to thank my staff. They know that I am fighting to save their jobs. Some of these great people have been with me since I opened almost 16 years ago. I am proud of the tremendous job they do. I am grateful for their loyalty. I am a fourth party defendant at Keystone. I have been sued by my friends and neighbors. Why did they do this? Because the only options they were given by their attorneys was to either pay the exorbitant amount of money that the first and second parties had sued for, or to sue others in order to lessen the amount they would be forced to pay for settlement. My being brought into this suit defies common sense. I have recycled for years. I have used the trash hauler that was approved and permitted by my borough government. I am told that my trash was then dumped into the Keystone landfill, a site permitted by the Commonwealth of Pennsylvania. I would appreciate someone explaining how I have become liable even after I obeyed all State and local regulations. What was I supposed to do with the food scraps? What have I disposed of that is not found in every household? I am being sued for $76,253.71. That is a lot of money to me, more money than I pay myself a year. The continuing cost of legal representation is not included in that figure. I want clean air and water for myself and the generation that will follow me. I am not the enemy of the environment. My trash is not the problem. Small businesses are not the enemy of the environment. I am here to tell you again that your wonderful idea of cleaning up our country's environment through the EPA and CERCLA does not work in the real world. Your intentions were not followed. You legislated for results. You got bureaucracy, regulations and litigation. Legions of environmental attorneys, not environmental solutions, were created. I fight not only the unjust burden of this lawsuit, but the injustice of a landfill on the Superfund National Priority List--10 years, and still NO CLEANUP HAS STARTED. I have no graphs or charts, no auditors reports. I am not here to toss about facts, figures and percentages. I do not intend to enter the fray over the number of sites cleaned, the time it takes to clean them or even to debate the number of billions spent on litigation and administration. All day could be wasted on whose figures are correct. I believe we can all agree on this: TOO MUCH TIME. TOO MUCH MONEY. TOO FEW RESULTS. I want to tell you how Superfund impacts lives in south central Pennsylvania. This area has many extremely frustrated people for many reasons. People who live in the area of the landfill are physically sick, frustrated and still waiting for the promised cleanup from 10 years ago. People who recently bought and built houses in the area and are just now finding out their neighbor is an uncleaned Superfund site and they are livid. I would like to share some quotes from Mary Minor, a Hanover Pennsylvania women, who has fought to have the pollution problem resolved long before the EPA was involved. She has lived daily with the effects of pollution and the stress of waiting for the promised cleanup. <bullet> ``Living near a Superfund site is very stressful.'' <bullet> ``Stress is a global disease.'' <bullet> ``Stress and the mind and body's responses can shatter individuals, communities, entire societies.'' <bullet> ``Dealing with agencies and institutions who have power over people and are most often non-responsive or inefficient only exacerbates the stress, resulting in psychophysiological health effects.'' <bullet> ``We cannot afford this as a society.'' <bullet> ``It is unjust for these problems not to be resolved.'' <bullet> ``Everyone in our communities suffer.'' These remarks were taken for the paper There Is No Away, presented at the International Conference on the Effects of Hazardous Waste on Human Health and the Environment in Atlanta, Georgia. Take it from me, the third and fourth party defendants in the Keystone case are extremely stressed and frustrated and we are still waiting for a solution. Please remember the more than 700 third and fourth party defendants are not businesses which regularly produce hazardous or toxic waste. We are in this suit not because of what we discarded, but because of how much waste someone has estimated we threw away. We simply and legally put out the trash according to local and State regulations. CERCLA is unfair because it imposes strict liability on the public without any real notice as to what we should or should not put in the trash. I am told that ball point pens are hazardous waste. However, I still have not purchased a ball point pen with directions for hazardous waste disposal. Present CERCLA prohibits disposal of hazardous substances, but there is no evidence that any third or fourth party defendants sent hazardous substances to the site. Our guilt is based on an expert's report which assumes some hazardous material is in all garbage, but there is no real evidence. We simply put out the garbage. And even though that is not what CERCLA was aimed at, we are told we are guilty and expected to meekly write our checks without even being given total and complete indemnification against further claims for additional money. For small businesses this suit can be devastating. It is an uninsured loss. After years of premiums for liability and umbrella liability policies, we are told we are not covered for our attorney fees or for possible settlement costs. The money for settlement is considered a penalty so it will not be deductible as a business expense. Small businesses will have to make enough money to pay this on top of our other bills and payroll. Allow me to introduce you to some of my fellow defendant: restaurants, like myself, campgrounds; apartment owners; antique shops; furniture stores (not furniture manufacturers); motels; laundromats; dress shops; pizza shops; department stores; trailer parks; convenience stores; ice cream shops; book stores; pet shops; flower shops; groceries; theaters; delis; and gift shops. We are small business owners. Another example is the Vietnam Vet who's dream was to own a neighborhood tavern. But now he is fighting the government that he not long ago fought for. We, our employees, and our children live with this cloud over us every day. A child should not have to worry about what's going to happen to her family's business. A 9-year old, Sierra Bair of Hanover Pennsylvania, in her letter to President Clinton says, ``My family owns restaurants and they serve food not hazardous stuff. Since when is food bad for us. Isn't it a shame so many are getting punished for a few.'' Why is this happening? What are we doing to our children? Do you think they will want to grow up and own a small business after they have seen their parents' hopes and dreams destroyed. Our legal battle has been a never-ending expensive roller coaster ride. And the ride is not over yet. Everyone is still paying local and liaison attorneys. So here we are: The landfill is not cleaned up and the litigation goes on. Now it is the time to change. If we do not change our actions we will never change our results. When I testified last April, I was encouraged by your statement that you understood our situation and were resolved to remedy it. That hope was reinforced when I read S. 8. I am very pleased to see that S. 8 addresses many areas I was concerned about: municipal solid waste, small business defendants and co-disposal landfills. I believe you listened and responded. It means a great deal to learn that our voices were heard. I believe that you know how critical the wording of this bill is. The best example is that current and former Members of Congress have told me that they did not write CERCLA to force people like myself and my fellow third and fourth party Keystone defendants to pay cleanup costs for Superfund sites. Yet the law, or its interpretations by the courts, and the EPA now hold us liable. In the small business exemption section, should ``30 employees'' be amended to read ``30 employees or the full time equivalent of 30 employees?'' I would emphasis the importance that the bill continue to read ``employees or'' NOT be changed to read ``employees and 3,000,000 gross revenue.'' I would respectfully request that the manner of proving $3 million gross revenue be explained. Will the definition of Municipal Solid Waste begin more lawsuits? It appears plain to me that your intentions are to resolve the issues that have been used to allow litigation to take precedence over cleanup. But my concern is that others will not see it so clearly. I am concerned that there will always be a well-meaning EPA official who believes he knows better than you what you meant when the law was written or an attorney upset to see his potential life's work evaporating before his eyes. My fear is that these officials will challenge the authority and intentions of Congress and the President; that some judge somewhere will listen and rule that you did not write the law to say what you meant, and their course of action will continue indefinitely. I would also like to see work on public awareness and education. If we continue the same action, how will we ever get different results? What, if any, incentive is there to industry business, science, education and research to creatively reduce, eliminate or resolve the problem of pollution? I believe we have the creative minds and entrepreneurial spirit that could revolutionize the technology of clean air and water. The public and businesses need to be encouraged and educated, not penalized for obeying existing laws--as we are being penalized for operating legally. I have been told that I am too old to be naive enough to believe that the system works. If the nay sayers who tell me I am wasting my time are right, if one American citizen crying out against injustice cannot make a difference, if regulations are more important than rights and results, then sadly we do no longer live under a government of the people, by the people and for the people--and the thousands who have given their lives to protect this grand experiment of government truly died in vain. When Lincoln came to Gettysburg he expressed concern for our system of government . . . of the people, by the people, for the people shall not perish from the earth. My concern is that we are perilously close to losing the government Lincoln described, not because of outside enemies but because of an ever-growing, all-powerful bureaucracy. You are our hope. Thank you. [GRAPHIC] [TIFF OMITTED] TH060.406 [GRAPHIC] [TIFF OMITTED] TH060.407 [GRAPHIC] [TIFF OMITTED] TH060.408 [GRAPHIC] [TIFF OMITTED] TH060.409 Prepared Statement of Karen O'Regan, Environmental Programs Manager, City of Phoenix, AZ Chairman Smith and members of the Subcommittee, the International City/ County Management Association, the National Association of Counties, the National League of Cities, the National Association of Towns and Townships, the U.S. Conference of Mayors, the Municipal Waste Management Association, and the American Communities for Cleanup Equity respectfully submit this testimony on S. 8 and ask that it be made part of the hearing record. Collectively, our organizations represent thousands of cities, towns, and counties across the United States. Hazardous waste sites impact the health of our citizens and the environmental and economic viability of our communities. As a result, we are well qualified to provide the Subcommittee with a truly representative view of how local governments and their citizens have been affected by Superfund and to offer some suggestions as to how the program may be improved. My City is a member of the International City/County Management Association and has been substantially involved with formulating the ICMA and Phoenix's Federal and State Superfund policy. We are currently involved in reforming the State of Arizona's Superfund program and have faced many of the same challenges being addressed at the Federal level. Despite the competing interests of different Arizona stakeholders, we are developing a growing consensus on a fair and streamlined cleanup program. Like many other local governments, the city of Phoenix has many Superfund roles. At various sites, we are a generator of municipal solid waste and an owner and an operator of a co-disposal site; a water provider charged with protecting drinking water aquifers; expected to represent our citizens on local hazardous waste concerns; asked to offer up streets and rights-of-way for wells and remedies; and charged with revitalizing brownfields and blighted areas. We also experience economic and environmental impacts because there are four Federal Superfund sites and nearly a dozen state Superfund sites within or adjacent to the city of Phoenix. Many of those sites are large areas of regional groundwater contamination that have caused closure of drinking water wells. In our many roles, the city of Phoenix has, since passage of the original Superfund statute in 1980: <bullet> paid approximately $20 million for response costs at Federal and state Superfund sites; <bullet> been a plaintiff in Superfund cost recovery actions regarding two landfills; and <bullet> commented on numerous proposed Superfund remedies onsites within our borders. While these experiences were not enjoyable, they did give us ideas of what the most pressing needs and concerns of local governments are with respect to Superfund and how to resolve them. We have reviewed S. 8 and would like to offer suggestions, beginning with its proposed liability scheme. liability relief Across America, unjustified litigation is saddling local governments with expensive legal cons and exposing us to millions of dollars of threatened liability simply because we owned or operated municipal landfills or sent garbage or sewage sludge to landfills that were also used by generators and transporters of hazardous wastes. This problem has severely affected hundreds of communities and school boards and their citizens. Many of us have seen our budgets for essential services threatened and reduced. Simply put, local governments are in a unique situation that justifies statutory relief. Local governments are required to provide waste collection and disposal services for public health purposes and as a service for our citizens. It is also undisputed that Municipal Solid Waste contains, at most, a de minimis amount of Superfund hazardous substances. Most local governments are drawn into Superfund because of the past co-disposal of municipal trash with more toxic industrial hazardous waste. There is a strong consensus in support of the position that local governments should be provided relief. We appreciate the attention that has been given to this issue by the Subcommittee and believe the municipal liability provisions outlined in S. 8 are a step in the right direction. After the date of enactment local government generators and transporters--as well as private parties--will be relieved of costs incurred attributable to all municipal solid waste and sewage sludge activities and any waste activities at co-disposal sites. In addition, local government owners and operators at co-disposal sites would receive a liability cap based on population. We appreciate the committee's efforts to address our concerns, and the proposals in the bill are positive steps. However, there are some shortcomings in the liability relief proposal that will leave some local governments exposed to significant liabilities and many others bearing significant transaction costs. The following are our overall comments: <bullet> Limiting the application of the local government owner and operator and generator/transporter relief provisions to costs incurred after the date of enactment leaves local governments open to potentially large payments and transaction costs related to clean up expenses incurred prior to the date of enactment. For example, if a PRP incurred costs to clean up a site and is now suing local governments for recovery, the bill provides no relief from liability exposure. This means that the exposure of generators and transporters could be significant and in the case of owners and operators, much greater than 20 percent. For instance, the city of Phoenix's estimated response costs already incurred at two co-disposal sites it owned or operated is at least $17 million. Although the city has recovered some of those costs through litigation, none of the costs incurred will be credited toward the 20 percent cap. Recommendation: For these reasons, any liability relief that is provided to local governments for activities related to municipal solid waste and sewage sludge should include relief for costs incurred prior to the date of enactment that have not yet been settled. We hope that any local government liability relief provisions will be structured to provide certainty and limits on the amount of liability. For example, a cap or some type of limit on local government generator and transporter liability for cleanup costs incurred prior to the date of enactment of the bill and crediting cleanup costs already incurred by local government owner and operators against the 20 percent cleanup cap, would go a long way to alleviate.transaction costs and provide effective relief for local governments. We will be happy to provide the Subcommittee with further information on these suggestions for possible options to achieve effective liability relief for local governments. <bullet> The conditional nature of the relief for Subtitle D facilities is also troubling. S. 8 would make the Subtitle D liability cap at co-disposal sites unavailable to a facility that was not operated in ``substantial compliance'' with local laws and permits. Nor would a local government receive liability relief if it violated regulations related to vector control. Recommendation: We suggest that the language be crafted in a more specific manner to ensure that local governments are not penalized. The legislation should ensure that the cap will not be subject to minor infractions having no impact on public health and safety or the integrity of the environment. <bullet> Under S. 8, local governments who were owners and operators of co-disposal sites would be asked to pay up to 20 percent of the cleanup costs, while private industries who generated hazardous waste that many times caused the contamination at these sites would be asked to pay nothing. Local governments, who often had to accept the hazardous waste at their landfills, do not believe that such a liability scheme is properly balanced. Recommendation: We suggest that you develop an allocation system, with a percentage for the private generators and transporters of hazardous waste at sites owned or operated by municipalities. We hope that the committee will ensure that whatever liability relief program is enacted into law is workable within the financial limits of the trust fund and the demands of the cleanup program. This will warrant that sites are cleaned up in an effective and timely manner. Finally, an area of importance to local governments not addressed in the legislation is the potential liability arising from municipal ownership and operation of public sewer systems and related treatment works. Citizens generally take for granted the existence of a functional, convenient sewer systems; indeed, most people believe they have a right to such systems. Accordingly, municipalities and other public bodies provide these facilities to protect the public health and welfare of the community. The operation of a sewer system can require a municipality to maintain and repair hundreds of miles of unseen, underground pipeline. Because the underground grid of pipes making up sewer systems can be so extensive and because it is essentially invisible, detection of leaks or releases from the system can be difficult. In addition, because a municipality cannot police every sewer drain connection, it has limited control over the type of materials illegally disposed into the system. Nevertheless, local governments became liable for releases of hazardous materials, which were improperly discharged to the receiving sewers in the first place or for discharges from POTWs in excess of permitted limits caused by improper industry discharges to the sewers. For instance, the Washington Suburban Sanitation Commission was found by a Maryland Federal court to be liable for leaks from its sewer pipes of hazardous substances that were improperly disposed of by a dry- cleaner. This finding of liability was made despite the fact that the disposal of the hazardous substances into the sewer was prohibited by the Sanitation Committee. These are recurring liability problems that need to be addressed by the legislation. Recommendation: We believe S. 8 should extend the same liability relief to owners and operators of publicly owned treatment works as it does to municipal owner and operators of co-disposal sites. remedy selection The current system frequently discourages parties from implementing timely source control and containment because of the threat that impossible measures such as fill aquifer restoration will be required. By demanding the impossible, we frequently fail to get the reasonable. Cleanup standards should be site-specific, where appropriate, and based upon actual or reasonably foreseeable risk. Where more relaxed cleanup standards are used, permissible property uses should reflect the level of cleanup. Institutional standards should also be considered to supplement risk-based decisions. S. 8 endorses many of these concepts; however, we are concerned that the bill's focus upon treatment at the point of use does not adequately protect the groundwater resource. We urge the Subcommittee to require containment of contaminant plumes when drinking water is threatened. As growth continues, and water supplies become even more precious, we will need to rely upon aquifers with water of lesser quality. Allowing migration of contaminants into lesser quality aquifers will only increase local governments' treatment costs when that day arrives. In addition, the proposed Remedy Review Board appears to have broad powers, and without further information on its members and structure, we have reservations about the need for another regulatory body. We are concerned that this Board would overturn agreements reached after years of negotiations and undermine hard-fought remedy selection decisions made by stakeholders, including citizens and local governments. We propose instead that an Advisory Board be established to provide guidance on remedy selection and monitor the Superfund program on a national basis. We urge that local governments be a mandatory part of any advisory or Remedy Review Board. brownfields Revitalization of brownfields is a critical issue for local governments around the country. We applaud the efforts made in this bill regarding brownfields revitalization. Many urban centers contend with environmental, public health, and economic threats posed by abandoned and contaminated industrial and commercial properties. The grants proposed in the bill are critical to assisting local governments remediate and reuse brownfields sites, and enhance and promote redevelopment activities. However, grants are only a piece of the brownfields puzzle. Because many communities want to encourage private investment activities, other incentives, including Federal tax incentives, should be considered. We look forward to working with the community to further refine these proposals. community participation Local government officials are the elected representatives of the communities directly accountable to citizens. Our role in the decisionmaking process should be commensurate with our representative status. S. 8 does not recognize local governments' authorities for the determination of reasonably anticipated uses of land and water resources. For example, S. 8 establishes the Community Response Organization (CRO) as the conduit of information between the community and the Federal and state regulators and PRPs. The CRO serves as the representative of the local community during the remedial action planning and implementation process. Yet, representatives of local governments are designated as only one of many groups included for membership on the CRO. Local governments do not oppose the CRO, but we are concerned that the bill establishes the CROs as the only formal mechanism for local governments to participate in the decisionmaking process. Recommendation: Local governments should have a separate and distinct route for input on decisions affecting their communities. S. 8 requires that the Administrator ``shall consult with the [CRO] in developing and implementing the remedial action plan.'' However, there is no language indicating that local governments represent the affected the community. Recommendation: S. 8 should be amended to require the Administrator to directly consult with the affected community as represented by the local government in developing and implementing the remedial action plan. conclusion In conclusion, the Superfund program must ensure that sites are cleaned up quickly and effectively without threatening the economic viability of our communities. To achieve those goals, the Superfund program must provide adequate funding for site remediation and establish cleanup standards that are protective of human health and the environment. This will ensure that sites are not continuing problems for communities in the future. Further, it will ensure that local governments will not be left with sites that are not remediated, contributing to an already overwhelming brownfields problem. We appreciate the opportunity to comment on the bill. We thank you for giving attention to local government liability relief. We hope that any reauthorization will include effective liability relief for local government activities related to municipal solid waste, sewage sludge and publicly owned treatment works incorporate the recommendations that we raised in our testimony. We again thank you for your attention to this matter and we look forward to working with you and your staff on this matter. ______ Responses of Karen O'Regan to Additional Questions from Senator Smith Question 1. S. 8 includes a remedy review board with more power than that created by the EPA. In your statement, you say that you believe that local governments should have a role in this process. Do you support the use of remedy review boards that are included in S. 8? Response. As stated in my oral and written testimony, local governments have reservations about the broad authority apparently given to the proposed Remedy Review board in S. 8. Without additional information on its structure, members and scope, the local governments that I represent have reservations about the need for yet another regulatory body. Those local governments are also concerned that this Board could overturn agreements reached after years of negotiations, and undermine hard-fought remedy selection decisions made by stakeholders, including citizens and local governments. We propose instead that an Advisory Board be established to provide guidance on remedy selection and monitor the Superfund program on a national basis. We also urge that local governments be part of any Advisory or Remedy Review Board. Question 2. It is my understanding that there is legislation moving through the Arizona legislature to modify the State hazardous waste cleanup statute (hearings were held in February) which: (1) repeals joint and several liability; (2) limits small business and de minimis contributor liability; and (3) provides that any PRP who voluntarily accepts its cost allocation will have 25 percent of its cleanup cost paid for by the Water Quality Assurance Revolving Fund--a fund derives from taxes on hazardous waste disposal, industrial discharge fees, corporate taxes and landfill tipping fees. Do you agree that parties should only be held responsible for their own waste, not the pollution caused by someone else? (In other words, not subject to joint and several liability). Included in S. 8 is an allocation system that would similarly have the effect of eliminating joint and several liability. Do you agree that this should result in much less litigation than under the current system? Response. Senate Bill 1452 and related amendments, which reform Arizona's Water Quality Assurance Fund (WQARF), were developed through a long and arduous consensus-based process by a state-wide Groundwater Task Force and Legislative Study Committee. The legislature plans to adjourn by April 18 of this year and we expect additional revisions prior to final passage. Draft Senate Bill 1452 repeals joint liability in favor of allocated proportionate share liability; has special settlement provisions for ``qualified'' small businesses and those facing financial hardship; and, subject to certain criteria, provides a 25 percent early settlement discount to Responsible Parties who accept their share of cleanup costs based upon the Arizona Department of Environmental Quality's allocation. I have attached a brief Fact Sheet prepared for Arizona legislators which provides an overview of the bill's major components, and would be pleased to provide the Committee with additional information on the bill. Currently, WQARF's primary revenue source is a statewide per gallon assessment on water purveyors, which includes municipalities and irrigation districts. This assessment is charged to our citizens on their water bills. The next major revenue sources for WQARF are the State's general fumd and cost recovery actions, followed by miscellaneous fees on pesticide /fertilizer/ landfill registrations, interest on the fund, hazardous waste fees, and several discharge permit fees. Currently, corporate taxes do not fund WQARF, although that funding source is proposed under Senate Bill 1452. Like Congress, Arizona stakeholders have debated whether parties should be subject to a proportionate or fair share liability scheme instead of joint and several liability. The fairness of joint liability was hotly contested both this year in the Task Force and during last year's legislative session. The removal of joint liability was only agreed upon by many of the participants if, and only if, adequate, dedicated funding for the WQARF program is concurrently provided for in the law. A municipal coalition representing cities in the Phoenix metropolitan area took the position that, if joint liability were to be removed, the WQARF program funding level would need to be greatly increased to provide funding for the resultant orphan shares (i.e. shares of responsibility attributable to unknown or non-viable responsible parties). As a result of the proposed WQARF reforms, including the elimination of joint liability, the current annual funding level for WQARF is proposed in Senate Bill 1452 to be raised from around $3 million to an annual amount of about $18 million. Under the consensus version of the current WQARF bill, the additional funding will be provided by earmarking existing corporate income tax revenues, which are not currently a WQARF revenue source. With respect to a national local government position on the Federal Superfund liability scheme, local governments understand that joint liability can be criticized as not necessarily fair; however, it is an effective enforcement mechanism to ensure that remedial activities and orphan shares will be funded. We are concerned that if joint liability is eliminated, and adequate funding for orphan shares is not provided, cleanups may not be accomplished, further exacerbating environmental and public health problems associated with Superfund sites. Therefore, many cities would only support the removal of joint liability if adequate, dedicated funding for orphan shares is provided for in the Federal Superfund statute. The second part of your question asks if an allocation system will result in less litigation than the current system. As you know, the proposed Arizona WQARF reform bill proposes an allocation system with incentives for early settlement and disincentives for litigation. For example, parties that settle early with ADEQ based upon the agency's determination of their share are entitled to a 25 percent early settlement discount. Conversely, all parties, including the State, who choose to litigate rather then accept the allocation, can be held responsible for all attorneys' fees and litigation costs. While the proposed system has not been tested, the varied and numerous stakeholders hope that it will streamline and clarify what has been a contentious, slow, and undefined process. Question 3. It is my understanding that a committee of the Arizona Legislature that recently reviewed the State hazardous waste cleanup law recommended that all the revenues from the State Water Quality Assurance Revolving Fund be dedicated solely to the hazardous waste program. As you may know, even though Superfund is funded with corporate taxes, and although the Superfund trust fund has a surplus of $3 billion, the effect is that these moneys are being utilized to balance the Federal budget. Do you agree with the Arizona committee's recommendation that tax revenues collected for hazardous waste cleanup should actually be used for that purpose? If so, shouldn't we also do that in regards to Superfund? Response. The parties that have been reforming WQARF have generally agreed that the State Superfund program needs to have adequate funding which is dedicated to WQARF program activities, including administration of the program, site characterization activities, legal support, removals and remedial activities, and other WQARF-related activities. We believe that the Federal Superfund should also have adequate funding dedicated to performing all of the necessary Superfund activities. ______ Senate Bill 1452--WQARF Program Amendments Senate Bill 1452 is a comprehensive overhaul of the Arizona Water Quality Assurance Fund (``WQARF'') program, also known as the Arizona Superfund program. It is the product of the ongoing work of the Groundwater Cleanup Task Force (appointed by the Arizona Department of Environmental Quality ``ADEQ'' and the Arizona Department of Water Resources ``ADWR'') and the Joint Select Committee on WQARF (appointed by the Legislature pursuant to Chapter 290, 1996 Laws a/k/a HB 2114). SB 1452 represents significant headway toward a true consensus on WQARF reform; however, it must be viewed as a ``work in progress.'' Some important issues are yet to be resolved. However, the SNRAE amendment embodies the following key elements of a developing agreement: <bullet> Permanent elimination of joint liability for hazardous substance cleanup; <bullet> Non-litigation procedures for determining the fair share of each responsible party, with incentives for quick settlement and disincentives to litigation; <bullet> Relief for qualified, small businesses that cannot afford to pay even their fair share of cleanup costs; <bullet> Dedicated funding ($18 million annually--$3 million from existing dedicated sources and $15 million from corporate income tax collections) for ADEQ site investigation, responsible party identification, remedy selection, and orphan shares; <bullet> Limitation on the State's ability to bring lawsuits under Federal law, to the extent inconsistent with State law; <bullet> Prioritization of sites with greater emphasis on risk to human health; <bullet> Enhanced community involvement and public participation at all stages of the cleanup process; <bullet> Flexibility and common sense in determining appropriate cleanup methods; <bullet> Removal of regulatory & liability barriers to transport and use of remediated water; <bullet> Inspection and remediation or abandonment of wells contributing to groundwater contamination; <bullet> Ongoing review of the WQARF program by a new WQARF Advisory Board and periodic Program Authorization Review (``PAR''). The Groundwater Cleanup Task Force and the Joint Select Committee on WQARF believe that the revisions proposed SB 1452 will result in a more fair and effective WQARF program. The stakeholders will continue to work through the details to implement GCTF and Joint Select Committee recommendations. We urge your support of SB 1452. ______ Prepared Statement of Terry D. Garcia, Acting Assistant Secretary for Oceans and Atmosphere, National Oceanic and Atmospheric Administration Good morning, Mr. Chairman and Members of the Committee. I am Terry Garcia, the acting Assistant Secretary for Oceans and Atmosphere for the National Oceanic and Atmospheric Administration (NOAA) of the Department of Commerce. I am here today representing the interests of the U.S. Department of Commerce, the U.S. Department of the Interior (DOI), the U.S. Department of Agriculture (USDA), the Department of Defense, and the Department of Energy in their role as natural resource trustees. I would like to reassert for the 105th Congress the Clinton Administration's steadfast commitment to protecting and restoring the Nation's valuable natural resources. My testimony begins by reviewing recent progress made by the trustees toward restoring natural resources under the existing laws and rules governing damage assessment activities. I will then highlight reforms to the natural resource damage (NRD) provisions of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) that this Administration proposes. The final portion of my testimony will focus on provisions in the Superfund Cleanup Acceleration Act of 1997 (S. 8) that would impede the efforts of State, tribal and Federal natural resource trustees to protect and restore the Nation's natural resource heritage. CERCLA was enacted to address the legacy of hazardous substance contamination created by over 100 years of harmful disposal practices in this country. The statute provides important authorities not only to protect human health, but also to protect and restore this Nation's natural resources. These natural resources represent a critical component of our Nation's commerce--and the foundation of our future. Harm to the public's natural resources from years of improper handling and disposal of hazardous substances at sites throughout the country persists to this day. Losses to society and the U.S. economy from the public's inability to use and enjoy natural resources are potentially enormous. Over 76 million Americans enjoy birdwatching, photography and other nonconsumptive uses of wildlife, contributing $18 billion a year to the economy. Annually, 50 million anglers contribute nearly $70 billion to the Nation's economy. Moreover, these and other citizens gain an enjoyment, serenity, and sense of community and national pride from unspoiled natural resources that transcend such economic impacts. The original drafters of CERCLA made a commitment to the American people that waste sites would be cleaned up and natural resources restored. The natural resource damage provisions of CERCLA allow us to reclaim our environment and restore those natural resources that have been degraded or destroyed by years of harmful hazardous waste disposal. CERCLA provides that natural resources that have been lost as a result of the disposal of hazardous waste into the environment will be restored for the people of the United States. To curtail the ability of trustees to be fully effective in their efforts is to deprive the people of this Nation of the right to have their natural resources fully restored to health and productivity. Hazardous substances can be toxic to fish and wildlife at extremely low concentrations. Common effects of hazardous substances include death, cancer, impairment of reproduction, disruption of normal fetal development, impairment of growth, reduction of central nervous system functions, and impairment of normal behavior patterns essential for survival. Very low concentrations of dissolved zinc or copper in water are highly toxic to developing fish larvae. Some of the more serious contaminants in the environment are those that persist for long periods of time and buildup in the tissues of fish and birds. For example, the bioaccumulation of dioxins, PCBs, and DDT can disrupt delicate hormonal systems and prevent normal reproduction. Relatively low concentrations in soil or sediment can accumulate and increase in concentration up through the food chain, causing harm in higher level animals. Effects can extend far beyond individual organisms, resulting in the collapse of populations, food chains, or even entire ecosystems, as the substances are transferred from one level of a system to another over long periods of time. With these potential losses at stake, and knowing how strongly Americans feel about protection of their natural resources, CERCLA's NRD provisions should only be revised if the changes strengthen the trustees ability to ensure effective restoration of the public's natural resources. Significant progress has been and is being made by State, tribal, and Federal trustees toward restoring natural resources injured by hazardous substances. By working within the U.S. Environmental Protection Agency's (EPA) remedial process, trustees have reached agreements with responsible parties to restore habitat and injured resources at more than 25 hazardous waste sites as part of negotiated comprehensive government settlements. For these sites, trustees have been able to obtain small restoration projects that provide significant cumulative benefits for natural resources. Trustees have also obtained settlements and advanced restoration as a direct result of natural resource damage assessment activities. I'd like to highlight some of the restoration that has occurred since we last testified before this Committee: <bullet> Baytown, Texas. Restoration is complete at the French Limited Superfund Site, where a sand pit was used to dispose of enormous quantities of sludge and sediment contaminated with polychlorinated biphenyls, polycyclic aromatic hydrocarbons and other organic compounds between 1966 and 1971. Chemical residues from the pit contaminated groundwater and subsoils near the site, injuring trust resources such as migratory birds and crabs. Working within the EPA cleanup process, Federal trustees reached a settlement with the responsible parties to restore a marsh that would provide for the replacement of natural resources that had been injured, destroyed or lost. To achieve this end, the responsible parties worked cooperatively with the city of Baytown, Texas, to create a 60-acre wetlands reserve, including: 40 acres of saline to brackish marsh; 10 acres of forest land containing freshwater pools; and 10 acres of stream channels. Natural resources that previously used the area for food and shelter are returning to the restored marshland and local residents can now use the restored area for nature walks and fishing. <bullet> New Castle County, Delaware. A restoration plan has been completed for the Army Creek Superfund site, where a sand and gravel pit was used as a landfill for municipal and industrial wastes during the 1960's. Untreated groundwater was discharged into Army Creek, a tributary of the Delaware River, to prevent additional contamination of private drinking water wells. Working within EPA's remedial process, trustees protected natural resources during the cleanup and reached a settlement that provided for recovery of injured natural resources, including migratory birds, anadromous fish and their habitats. Two offsite habitat enhancement projects are proposed in the restoration plan: the first involves improving and restoring fish and wildlife habitat in Lower Army Creek through modification of an existing water control structure; and the second project involves the acquisition and rehabilitation of approximately 60 acres of marsh and upland habitat to compensate for the loss of similar upland acreage. <bullet> Tacoma, Washington. Efforts continue to restore and enhance habitat for fish and wildlife injured by years of pollution in Commencement Bay. Two seasons of planting have been completed at the Middle Waterway Shore Restoration Project, converting 4.7 acres of industrial uplands to a mix of clean, replanted upland habitat, intertidal salt marsh and intertidal mud and sand habitats. The goals of this project were to create productive and diverse estuarine habitats for fish and wildlife and to provide a model for the use of volunteer assistance in carrying out coastal restoration. In October 1995, volunteers planted over 600 native upland trees and shrubs as part of this effort. In October 1996, an additional 300 trees and shrubs were planted by natural resource trustees. <bullet> New Bedford, Massachusetts. Cleanup is ongoing in New Bedford Harbor and the trustees are moving forward aggressively with restoration efforts. The trustees have issued a Restoration Plan/ Environmental Impact Statement for restoration actions not directly dependent on the progress of the cleanup and have undertaken an extensive outreach effort to solicit public input. The plan was developed by the trustees in cooperation with local citizens, businesses, academic institutions, State and local governments and non- profit organizations. It identifies 12 preferred restoration actions to restore a broad range of natural resources and human uses throughout the New Bedford Harbor environment. The trustees are proposing restoration priorities that include marshes and wetlands, recreational areas, water quality, fish and shellfish, and endangered species, and expect project implementation to begin within the next 6 months. <bullet> John Day River, Oregon. Restoration of the John Day River is ongoing in response to the February 1990 spill of 3,500 gallons of hydrochloric acid into this river in north central Oregon. A final restoration plan has been issued that identifies 12 potential restoration projects for improving spawning and rearing habitat for both resident and anadromous fish. In addition to the restoration funding provided under the settlement, the trustees have successfully solicited matching funds for habitat restoration from the Bonneville Power Administration, the Forest Service and the Nature Conservancy. Two projects currently underway will improve spawning and rearing habitat for salmonids by reducing erosion and the buildup of sediment in the river, increasing streamside vegetation and restoring the natural pond and riffle characteristics of the streams. <bullet> Lake Charles, Louisiana. Natural resource trustees and Conoco are formalizing two agreements that will enhance habitats for fish and wildlife to compensate for natural resource injuries associated with a March 1994 release of ethylene dichloride into the Clooney Island Loop area of the Calcasieu Estuary. A cooperative effort between trustees and Conoco will result in the creation and long-term protection of more than 200 acres of habitat on former farmland in the Hippolyte Coulee-Black Bayou area. More than 60,000 1-year old native tree saplings have recently been planted to restore habitat that provides sanctuary to many wildlife and fish species. Conoco is also voluntarily funding a Louisiana State University study to evaluate the success of the restoration project. <bullet> Salmon, Idaho. As part of a 1995 natural resource damage settlement for the Blackbird Mine case, responsible parties agreed to restore the water quality in Panther Creek to support all life stages of salmonids by the year 2002. Pending restoration of water quality onsite, the responsible party is pursuing offsite compensatory restoration under the provisions of the consent decree. Specific reaches of stream have been identified for habitat improvement through livestock exclusion. The responsible party is now negotiating with land owners to exclude cattle from seven miles of potentially excellent habitat for salmon and other fish in the Snake River basin. In addition, detailed plans for restocking and improving habitat in the Panther Creek watershed are under review for immediate implementation once water quality improvement is confirmed by monitoring. <bullet> Central California Coast. Significant progress has been made to reestablish common murre colonies in the areas where colonies were extirpated or severely injured by the 1986 Apex Houston oil spill. Decoys and other attractants have been deployed at historic breeding sites: Murres have landed and have already bred at these sites. The common murres will be monitored to further refine and evaluate the recolonization effort. As part of this restoration effort, work began in 1995 to purchase old growth forest as nesting habitat near current populations of marbled murrelets. Trustees are in the process of negotiating a purchase with the property owner. To accelerate restoration, Federal trustees have adopted several administrative changes aimed at expediting the restoration of injured natural resources. These include new natural resource damage assessment regulations and proposed amendments to CERCLA's natural resource damages provisions. In 1994, the Department of the Interior finalized revisions to the CERCLA natural resource damage assessment regulations. The new regulations require trustees to focus their assessment work and base their claims on a publicly reviewed plan for restoring injured resources to their baseline condition (i.e., the condition that would have existed in the absence of the release). In January 1996, NOAA issued final natural resource damage assessment regulations under the Oil Pollution Act of 1990. The OPA rule extends the restoration-based approach of the 1994 CERCLA regulations. Before trustees present a claim for an oil spill under the OPA rule, they must develop a plan not only for restoring baseline, but also for restoring the services lost in the interim until baseline is re-established. The OPA rule specifies that for the vast majority of oil spills, the trustees will no longer assess monetary damages for interim losses based on economic values. Responsible parties then have the option of either implementing the plan or funding the trustee's implementation of the plan. This new paradigm is being used for the North Cape oil spill, where natural resource trustees and the responsible party continue to work cooperatively to assess the effects of the spill and to determine appropriate restoration actions for Rhode Island's coastal environment. Four teams of experts have examined impacts to salt pond communities (fish, shellfish and vegetation), marine communities (lobster and surf clams), birds, and human uses (charter boat fishing, tourism and recreation). The restoration planning efforts of these teams are nearing completion, and a draft restoration plan will be released for public review and comment in late spring of 1997. The Department of the Interior is working to further improve the assessment process during the ongoing biennial review of the CERCLA regulations. DOI is currently evaluating public comments and expects to issue a proposed rule by January 1998. The Department is examining how the mechanics of up-front restoration planning for interim losses can be adjusted at hazardous waste sites to minimize the cost of assessment work while at the same time ensuring that such work produces reliable results. The Department is also carefully reviewing the injury determination provisions of the regulations, which establish specific injury thresholds that must be met before trustees can pursue a claim. The Department is conducting an extensive technical review to determine how these provisions should be revised to reflect the current level of scientific knowledge. These developments demonstrate that State, tribal, and Federal trustees are making progress toward restoring natural resources harmed by releases of hazardous substances. As confirmed by the recent General Accounting Office (GAO) report ``Status of Selected Federal Natural Resource Damage Settlements,'' trustees across the Nation are using funds recovered from responsible parties for restoration. The GAO report also notes that restoration takes time and is often delayed by many factors beyond the control of the trustees. Nevertheless, the Federal trustees have been working hard to effect changes that accelerate the restoration of injured resources. the administration's proposal for natural resource damages under cercla Last October, the Administration forwarded to this Committee, and other committees with jurisdiction, a proposal for reforming the natural resource damage provisions of CERCLA (Administration proposal). Federal trustees carefully considered criticisms of NRD that had been raised during previous reauthorization efforts. Our proposal for reform is specifically designed to shift the emphasis away from spending money on litigation and toward restoring injured natural resources. The proposal also contained changes that are based on our practical experience with the natural resource damage assessment and restoration process. These reforms are designed to improve the NRD programs by providing greater clarity concerning restoration, by assuring more timely and more orderly presentation of claims and by discouraging premature litigation. NOAA and the other Federal trustees encourage you to consider this proposal as the foundation for reform of Superfund's NRD provisions during the 105th Congress. The Federal trustees believe that revision of CERCLA's NRD provisions should be based on the following principles: <bullet> Restore injured resources to baseline; and <bullet> Restore the losses that the public suffers from the impairment of natural resources from the time of injury until restoration is complete. The Administration proposal embodies these principles and was intended to achieve two critical goals: strengthen the focus on restoration; and reduce the costs associated with damage assessment claims by eliminating or reducing unnecessary litigation. Specific reforms include: Adopt the Restoration-based Approach Developed in The Natural Resource Damage Assessment Regulations: The Administration's proposal shifts the emphasis of CERCLA damage assessment efforts toward restoration and away from arguing over the value of, or method for, calculating economic damages. This fundamental shift will avoid litigation and expedite the restoration of injured resources. The proposal contains definitions for primary restoration (return to baseline) and compensatory restoration (replacement of resources and services lost pending return to baseline) that parallel the concepts used in the natural resource damage assessment regulations promulgated under the Oil Pollution Act of 1990. This approach should eliminate disagreements over the valuation of natural resources by refocusing on CERCLA's overriding goal of restoring injured natural resources and establishing the cost of restoration as the primary measure of damages--not the monetary value of the lost resource. Reduce Uncertainty and Ensure the Orderly Presentation of Claims: The current statute of limitations provisions have created a lack of certainty both for responsible parties and for natural resources trustees. To preserve claims, natural resource trustees have been forced to file natural resource damage claims before the completion of restoration planning or prior to effective coordination with EPA. To address this uncertainty, the Administration's proposal contains provisions that would require a claim for damages to be presented within 3 years from the date of completion of a damage assessment by a trustee in accordance with the regulations, or the completion of a restoration plan adopted after adequate public notice. In addition, it ensures that claims can be filed in an orderly sequence, by specifying that a natural resource claim may be brought after an initial action to recover response costs. These revisions would clarify the sequential claims issue to reduce premature filings, protect against claim splitting, and provide time for effective restoration planning, thus preserving important public trust rights. Require Fair and Cost-Effective Restoration: The trustees agree that restoration should not be gold plated and our proposal requires a cost-effectiveness test to maintain that priority. ``Cost-Effective'' is defined as the least costly activity among two or more restoration measures that provide the same or comparable level of benefits. In addition, the Administration proposal constrains compensatory restoration to replacing only those services that were lost as a result of the release under consideration, thereby providing protection against open-ended liability for responsible parties. These changes mirror the definition of cost-effectiveness in the CERCLA and OPA regulations, and ensure that the American public is adequately compensated for their losses while responsible parties are protected from unreasonable demands for restoration. Provide for Judicial Review of Restoration Plans Based on an Administrative Record: The present standard for judicial review of natural resource damage assessments under CERCLA is unclear, providing an incentive for all parties to keep their information confidential. In the absence of clear guidance, trustees have generally assumed that their assessments will be used as evidence at trial and will not be afforded great deference. Consequently, the incentive is for trustees to keep their assessment studies confidential except to the limited extent that disclosure to parties is required in litigation discovery, and for private parties to delay providing information during litigation, rather than during the assessment process. This approach has generated more costly assessments, increased transaction costs, and inhibited the open review and debate that the trustees would like to foster. The Administration's proposal recommends the designation of a lead administrative trustee to establish a publicly available administrative record to guide the selection of a restoration plan. This is coupled with provisions to limit judicial review of the restoration plan to review of the administrative record with an ``arbitrary, capricious or contrary to law'' standard of review. The process would be facilitated by new regulations for public participation in the development of the administrative record. Providing for judicial review of an administrative record would enhance public participation; increase certainty, predictability and trustee coordination; support the focus on restoration-based claims; reduce litigation costs; and allow adequate time for proper assessment and restoration planning. Impose Requirements on the Performance of Damage Assessments: The Administration's proposal would require damage assessments to be performed, to the extent practicable, in accordance with regulations and generally accepted scientific and technical standards and methodologies. The proposal also recommends that injury determination, restoration planning, and quantification of restoration costs be based on facility-specific information to the extent practicable. These revisions codify the approach currently used by natural resource trustees to conduct damage assessments. This provision is designed to ensure the validity and reliability of assessment results. Other changes to CERCLA's NRD provisions recommended by the Administration are designed to facilitate the process for both trustees and responsible parties. These changes include: improved coordination between damage assessment and remedial activities; restrictions on the use of damage recoveries; and contribution protection. The Association of State and Territorial Solid Waste Management Officials, the National Governors' Association, and the National Association of Attorneys General have voiced support for revisions similar to those contained in the Administration's proposal for reforming CERCLA's natural resource damage provisions. natural resource damage reform and the superfund cleanup acceleration act of 1997 (s. 8) The Federal natural resource trustees applaud the efforts of this Committee to move the Superfund reauthorization debate forward and appreciate the thought and hard work that went into drafting S. 8. While there are provisions in S. 8 that reflect the concerns of the natural resources trustees, the Administration believes that S. 8 does not present an acceptable basis for achieving bipartisan consensus on Superfund Reform. Several of S. 8's provisions would severely impede the efforts of the natural resource trustees to protect and restore the Nation's natural resource heritage. We strongly urge the Committee to substitute the Administration's proposal for the natural resource damage provisions contained in S. 8. Our specific concerns with S. 8 are as follows---- S. 8 Precludes Restoration of Non-Use Values. Non-use values are real, though difficult to measure. For example, non-use values are based on knowing that a river exists, that our children will be able to swim and fish in that river in the future, and that the river will continue to be an integral part of our natural environment. S. 8 provides that there shall be no recovery for impairment of non-use values. This provision limits the ability of trustees to restore the full value of injured resources by prohibiting the consideration of the full range of values in determining restoration actions. The Administration sees no reason to exclude the non-use component of resource values. If CERCLA imposes a cost-reasonable standard for restoration recoveries, the Administration feels that all components of value should be represented in applying the cost-reasonable test. To exclude non-use values, as specified in S. 8, means that the public will not be fairly and fully compensated for loss of resources. Restrictions on The Recovery of Interim Loss: CERCLA currently prohibits recoveries for hazardous substance releases where the damage occurred wholly before December 11, 1980 (i.e., the injury occurred and the resource recovered before 1980). S. 8 appears to prevent the recovery of any interim loss at sites where injury first occurred prior to 1980, regardless of the magnitude of those losses or whether those injuries persist today. If interpreted in this way, S. 8 would dramatically restrict the recovery of interim losses at sites where the injury started prior to 1980 and continues to this day, benefiting responsible parties at some of the biggest sites of contamination, and blocking compensation for loss of public resources. The Administration's reform proposal contains a better approach to restricting the recovery of restoration costs for pre-1980 losses. Cost Effective Instead of Cost ``Reasonable'' Restoration. S. 8 would only allow trustees to restore injured natural resources if the restoration project has a ``reasonable cost,'' and does not define ``reasonable.'' This provision apparently assumes that the existing protections against the use of excessively expensive restoration option are inadequate. However, the D.C. Circuit recently reached exactly the opposite conclusion in Kennecott Utah Copper Co. v. Department of the Interior, holding that the trustees' obligations under damage assessment regulations to evaluate a range of alternatives in a public process, and to consider cost-effectiveness, are enough to ensure that appropriate projects will be selected. Instead of introducing a new ``cost reasonableness'' requirement that will need to be defined through litigation, and that may prevent or delay needed restoration, the Administration urges the adoption of a cost-effectiveness standard for evaluating restoration alternatives. Installment Payments Based on Restoration Needs, Not on Duration of Injury. S. 8 requires that responsible parties be allowed to pay for natural resource restoration over time, based on ``the period of time over which the damages occurred.'' Trustees often agree to installment payments in negotiated settlements to reflect a responsible party's limited ability to pay or the time that will be needed for restoration. However, the amount of time over which the damage to resources occurred should not be considered in a payment schedule. conclusion The natural resource trustees are firmly committed to implementing CERCLA's directive to restore injured natural resources in a timely and efficient fashion. This Administration has been working diligently to implement administrative changes that would facilitate the process for responsible parties and trustees while advancing the mission of fully restoring natural resources for the use and benefit of the American public. The efforts of State, tribal and Federal trustees are starting to show real restoration results across the country. The Administration's proposal for reforming NRD addresses many concerns that were voiced during previous reauthorization discussions, as well as provisions that would clarify and expedite the natural resource damage assessment process. S. 8's natural resource damage provisions, by contrast, would severely impede the efforts of State, tribal and Federal natural resource trustees, and deprive communities of their right to full restoration of the natural resources that support their economies and their way of life. Thank you for providing me with the opportunity to present the Clinton Administration's position on reforming CERCLA's NRD provisions. The trustees look forward to working with this Committee to develop a proposal that truly will strengthen the natural resource damage assessment and restoration provisions of CERCLA so that all affected constituencies can support Superfund reform in the 105th Congress. I will be pleased to answer any questions that you might have. ______ Responses of Terry D. Garcia to Additional Questions from Senator Smith Question 1. Last November, the GAO issued a report on selected Federal natural resource damage settlements. According to the report, as of July 1, 1996 of the $33.8 million awarded for NRD settlements at 62 sites, only approximately 19 percent (about $5 million) has been spent on damage assessments, planning or restoration. Thus, most of the money was just sitting waiting for something to spend it on. Can you explain why these moneys have been lying dormant? Response. Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), natural resource trustees are required to use recovered damages only to restore or replace injured resources or to acquire the equivalent. The GAO report ``Superfund: Status of Selected Federal Natural Resource Damage Settlements'' (November 1996) presented the following results: As of July 1,1996, in addition to the settlements for the five largest cases, settlements had been reached at 62 sites, resulting in $33.8 million in awards to Federal trustees. Of the $33.8 million awarded, about 80 percent had been collected. Of the collected funds, about 19 percent had been allocated for performing damage assessments, planning, or restoration. One site had been restored, and seven were in various stages of restoration. The trustees' use of the remaining 81 percent of the collected funds was awaiting the completion of restoration plans or other activities, such as cleanups or settlements with other responsible parties at the same site. GAO's report objectively characterizes the time-consuming obstacles that trustees encounter when a restoration action is needed subsequent to clean up. As the report states, these time-consuming factors may include: <bullet> waiting for final selection of a remedy; <bullet> waiting for implementation of a cleanup before onsite restoration proceeds; <bullet> the need to collect information for restoration planning that wasn't procured through the remedial process; <bullet> the need to conduct separate public review and permitting processes for restoration activities; <bullet> the need to plan and design restoration projects; and <bullet> the actual collection of damages from responsible parties. Despite these obstacles, there are numerous examples of restoration projects that are proceeding. Here are two: New Bedford Harbor: The trustees have evaluated and solicited public review of offsite actions to restore lost human uses. This represents a small percentage of the total restoration effort that will be conducted, but onsite restoration must await implementation of the remedy at this NPL site. Blackbird Mine: While awaiting selection and implementation of the remedy at this NPL site, the Trustees are focusing on offsite projects that will benefit the endangered chinook salmon by removing livestock from 7 miles of prime salmon habitat in the Salmon River basin. This represents a small portion of the restoration package, but only planning can be done for the onsite work until the water quality in Panther Creek is restored. The GAO report clearly shows that the trustees are diligently pursuing meaningful restoration with funds recovered from those who injured the resources. Recovered moneys have not been used for any purposes other than those allowed: restoration, replacement or acquisition of the equivalent injured natural resources. Trustees are carefully managing the use of recovered funds to ensure that moneys are applied in a way that is consistent with the legislative intent to protect and restore natural resources for future generations of Americans. Question 2. I am concerned That NRD restoration may overturn remediation decisions. For example, natural attenuation and biodegradation are two promising techniques for dealing with groundwater contamination [for which currently there are no effective cleanup solutions. I can foresee a situation where The remediation and the restoration decisions could be contradictory. Is this an acceptable situation? Response. Trustees do not ``overturn'' EPA decisions. CERCLA's coordination requirement, which applies to both EPA and the trustees, was designed to provide safeguards against inconsistencies or conflicts between remedial and restoration decisionmaking. Memorandums of understanding are in place or are being negotiated to ensure effective coordination between EPA and the natural resource managers on remedial decisions. In most EPA regions, there are biological technical assistance groups (BTAGs) composed of scientists from resource management agencies which work closely with EPA when EPA conducts ecological risk assessments. For example, NOAA has placed a staff person in each one of the coastal EPA regional offices to work with Superfund project managers on a day-to-day basis, and biologists from the Department of the Interior have long been involved in the BTAGs advising EPA. However, restoration decisions and remediation decisions, while clearly related, are not necessarily identical. The goal of remediation is to protect the public and the environment from being harmed or threatened by releases or potential releases of hazardous substances. To reach this goal, remediation focuses on reducing the risks posed by hazardous substances releases. The goal of restoration, on the other hand, is to return natural resources that have already been harmed by hazardous substance releases to the State they would have been in if the release had not occurred. At sites such as NPL sites, where remediation is already focusing on the necessary measures to reduce risk, restoration focuses not on risks associated with exposure to hazardous substances but rather on the condition of natural resources. Close coordination between EPA and the natural resource managers helps ensure that the risks to both human health and ecological resources are evaluated thoroughly during remediation and that EPA designs a remedy that eliminates, reduces or controls risks to human health and the environment. The elimination, reduction or control of risks caused by contamination, however, while usually stopping additional natural resource injuries directly caused by hazardous substances, does not necessarily redress past injuries to natural resources. Additional actions, whether onsite or offsite, sometimes are necessary and appropriate for restoration. Generally, these additional actions not only serve a different goal but are also of a different type than remedial actions. For example, they may involve reseeding plant life or restocking fish. This type of restoration simply complements EPA's remedial actions. At sites where EPA is selecting a remedy under CERCLA and the NCP, trustees have no authority to second-guess EPA's decision on cleanup. However, as recognized by the Court of Appeals in the recent Kennecott decisions, trustees separate decisions on restoration may, in some circumstances, lead to actions to address contamination that the remedial action has left in place. See Kennecott Utah Copier v. DOI, 88 F. 3d 1191, 1218-19 (D.C. Circuit 1996). Effective natural resource restoration requires that this authority be preserved for trustees. Nevertheless, it would be an unusual development for a trustee action to address contamination left in place by a remedial action because of existing constraints on trustee activities. For example, under the CERCLA natural resource damage assessment regulations, in selecting a restoration alternative trustees must consider a range of restoration alternatives, including natural recovery, and must justify their selected restoration plan after considering the respective cost, benefits, degree of consistency with response actions, and degree of technical feasibility posed by each alternative. If EPA were unable to justify taking certain actions to remove contaminants from the groundwater, it is unlikely that a trustee would be able to justify taking the same actions as restoration. The most likely result would be that the trustee would rely on natural recovery to restore the groundwater to its baseline condition and then seek compensation for the losses, if any, that the public incurs pending completion of natural recovery. Question 3. I am interested in understanding what happens in instances where a trustee and The EPA disagree over cleanup levels. If a party undertakes a cleanup satisfying EPA's standards, or settles with the EPA and has a convenant not to sue, the trustee could overide the EPA remedy and file an NRD claim? If EPA does a cleanup, or determines that no cleanup is necessary, The trustee cannot require additional cleanup for natural resources. Response. For reasons stated in our response to Question 2, coordination between EPA and the trustees to ensure that the remedy adequately addresses ecological risks makes it unlikely that EPA would choose a cleanup level that fails to satisfy the trustees concerns about residual contamination causing injuries to natural resources. If, despite full coordination and consultation, EPA and the trustees cannot agree on the appropriate cleanup level to eliminate, reduce or control unacceptable risk from hazardous substances, the EPA-selected cleanup level is implemented. It is EPA's job to pick protective cleanup levels, remedies that protect human health and the environment, and to ensure the reduction of risk to acceptable levels. Subsequent to the cleanup, the NRD claim focuses on actions necessary to restore or replace resources that were injured by contamination. CERCLA directs trustees to act on behalf of the public to restore, replace, or acquire the equivalent of injured natural resources. Trustees would be neglecting their fiduciary responsibilities if they did not pursue actions that would restore or replace the public's natural resources. If the continuing presence of contaminants after cleanup affects natural resources, in choosing a restoration plan the trustees could face the same constraints as EPA in selecting restoration actions, including technical feasibility and cost effectiveness. ______ Prepared Statement of Larry L. Lockner, on Behalf of the American Petroleum Institute The American Petroleum Institute (API) strongly supports reform of the Superfund program. Comprehensive reform of Superfund is important to accomplish during this Congress; a mere refunding of the program is insufficient. API members believe that S. 8, the ``Superfund Cleanup Acceleration Act of 1997,'' incorporates many important and necessary reforms to the program. It is an appropriate vehicle to continue the Superfund reform process. Petroleum companies--as community members, as potentially responsible parties (PRPs), and as taxpayers--will be greatly affected by the changes that Congress elects to make to the Superfund program. Moreover, the petroleum industry has a unique perspective with regard to Superfund. It is estimated that the petroleum industry is responsible for less than 10 percent of the contamination at Superfund sites; yet the industry has historically paid over 50 percent of the taxes that support the Trust Fund. This inequity is of paramount concern to API members and has caused the industry to focus on those elements that affect the costs of the program and the authorized uses of the Trust Fund. When Superfund was enacted in 1980, Congress envisioned a program that would cost $1.6 billion and be complete within 5 years. Almost 17 years later, however, billions have been spent, but relatively few sites on the National Priorities List (NPL) have been cleaned up. The program appears to be without end. API members are pleased that the Senate bill would reduce the number of sites to be added to the NPL and commend the sponsors for taking this important step. Limiting new additions to the NPL ensures a more reasoned Federal program with reduced future funding requirements. Additionally, we support the bill's provisions that would delegate Superfund remedial authority to the States at non-Federal NPL sites. In general, the States have well established programs and have demonstrated capability at cleaning up sites. 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 liability/funding reform, remedy selection, natural resource damages as well as exploration and production wastes. 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. At this point, we do not know how much the liability reform outlined in S. 8 will cost. For example, under the liability provisions contained in S. 8, 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' and operators' liability would be capped at such landfills. In addition, de micromis, de minimus parties and others would be exempt. 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. As the largest group of taxpayers to the Fund--which is expected to cover most of the future costs of the Federal Superfund program--API members cannot conclude their evaluation of the legislation without fully understanding these cost ramifications. 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 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. Thus, API offers the following comments on several additional reform provisions. remedy selection reform API members have long advocated remediation standards that are site-specific and risk-based. 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. Specifically, API members support the provisions in S. 8 that would: <bullet> Eliminate the preference for permanence and treatment (a major factor in delay of cleanups); <bullet> Establish a protective risk range of 10<SUP>-4</SUP> to 10<SUP>-6</SUP> for all remedies; <bullet> Establish facility-specific risk evaluations; <bullet> Allow PRPs to prepare facility evaluation work plans for sites; <bullet> Establish the reasonableness of cost as a remedy selection criterion; <bullet> Give consideration to future land and water use; <bullet> Consider all remedial alternatives on an equal basis, including engineering and institutional controls; and <bullet> Streamline the current remedy selection process. API also endorses the use of the remedy selection balancing criteria and is pleased to see that S. 8 would establish the reasonableness of cost as a remedy selection criterion. In selecting a remedy, the incremental benefits of the remedy should justify any additional costs. The balancing criteria are the keystone of the remedy selection process, and API thinks that all remedy selection procedures and applications should be subject to them. The bill would also allow the use of ``applicable'' Federal and State laws and State standards in selecting remedial alternatives. In our view, ``applicable'' laws should be subject to the balancing factors and technical practicalities; 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 the balancing criteria. Finally, the bill requires protection of uncontaminated groundwater and restoration of contaminated groundwater. It needs to be made clear that the requirement to protect or restore groundwater is subject to the balancing criteria and considers natural attenuation or biodegradation. API's detailed comments on the remedy selection provisions contained in S. 8 are outlined in an attachment to this testimony. natural resource damages (nrd) API is an active member of the Coalition for Legislative NRD Reform and strongly supports the coalition's positions and testimony they may submit. API believes that legislation should confirm and clarify existing statutory limitations on liability for natural resource damages. API's five core principles with respect to NRD reform would: <bullet> Reestablish the focus of the NRD program on restoring the functions of public natural resources in the most cost-effective manner; <bullet> Eliminate liability for damages in excess of the reasonable costs of restoration (i.e., so-called ``lost use'' and ``non-use'' damages); <bullet> Clarify NRD limitations adopted in 1980 to provide <bullet> prospective application of NRD, <bullet> a $50 million cap on recoveries, <bullet> prohibition of double recovery; <bullet> Repeal the rebuttable presumption by requiring the courts to treat NRD claims in the same manner as other damage claims; and <bullet> Require consistency between the environmental component of remedy selection and the NRD program. API is pleased that many of these provisions are addressed in the bill. We are concerned, however, that the bill does not clarify the strict $50-million cap on recoveries that Congress intended when CERCLA was originally enacted. exploration and production waste 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. Congress should clarify that these wastes are excluded under Superfund. conclusion In summary, API commends members of the Subcommittee for their efforts to craft and to advance meaningful Superfund reform. 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. We would like to provide additional comments to staff as we continue our review of the bill ______ Attachment: Comments on Remedy Selection Provisions protection of human health <bullet> 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 <bullet> The bill allows for the application of more stringent State standards. States should have the flexibility to impose--where appropriate--less stringent State standards. <bullet> States may apply more costly remedies at delegated NPL sites but should not be able to recover incremental costs from PRPs, other agencies, or the Fund. <bullet> 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. <bullet> New State laws that may create standards with general applicability should be subject to a rulemaking process. land and water use considerations <bullet> In determining reasonably anticipated future land use, the appropriate local authority should consult with the broadest spectrum of stakeholders including facility owners and operators as well as potentially responsible parties. <bullet> Governmental units would determine the reasonably anticipated future use of water resources. A broad group of stakeholders including CROs and PRPs should be consulted in this process. groundwater <bullet> The bill would require protection of uncontaminated groundwater that is suitable for use as drinking water by humans or livestock. The term livestock should be deleted because it would require regulation of extremely saline groundwater that could not be consumed by humans. <bullet> The bill also needs to make clear that the requirement to protect uncontaminated groundwater or restore contaminated groundwater is subject to the balancing criteria and considers natural attenuation or biodegradation. <bullet> The bill requires contaminated groundwater to be restored if technically practicable. Does technical practicability include cost considerations? judicial review <bullet> Provisions should be made that would allow pre-enforcement judicial review. risk assessments <bullet> The bill establishes requirements for facility-specific risk evaluations. Such requirements are supported by API members. <bullet> 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. <bullet> Additionally, the bill should make clear that PRPs have the right to conduct risk assessments in States with comprehensive delegation authority. rod reopeners <bullet> 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. presumptive remedial actions <bullet> A PRP should have the right to conduct a risk-based response action in lieu of a presumptive remedy. future use of a facility <bullet> 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 5 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. ______ Responses of the American Petroleum Institute to Additional Questions from Senator Smith Question 1. One of the criticisms raised about S. 8 is that 180 days is an insufficient amount of time for EPA to decide whether to approve or disapprove of a cleanup plan prepared by a PRP. Do you agree? Would a delay longer than this be an acceptable practice in private industry? Response. API believes that the 180-day provision for Agency review of a cleanup plan is reasonable. The focus of S. 8 is to streamline and to improve the efficiency of remediation. Limiting EPA's review of cleanup plans to 180-days helps achieve this goal. Since EPA is involved in reviewing each step of the remediation planning process (including the work plan and facility evaluation) prior to review of the remedial action plan, API believes that a 180-day review period is sufficient. Moreover, cleanups reviewed by the Remedy Review Board are subject to a 180-day (or longer) review period in addition to the EPA 180-day review period. To extend the review any longer would unduly delay the remediation process. Question 2. You have stated that S. 8 should be modified to address the issues of exploration and production wastes. Could you expand on that position. Response. API members believe that the statutory language relating to exploration and production (E&P) waste should be clarified during Superfund reauthorization. E&P waste currently is exempt by reason of its exemption from RCRA subtitle C regulation. After an extensive study, EPA confirmed the exemption because generally such waste is high in volume but low in toxicity and poses little or no threat to human health and the environment when properly managed. The current regulation of E&P waste and waste sites under Federal and State authority is effective and efficient. State oil and gas regulators have developed programs to address abandoned E&P sites. Additionally, the Interstate Oil and Gas Compact Commission, working with EPA, has developed guidance for these State programs. The complexity of the manner in which the exemption is stated has raised litigation issues at a number of sites, and clarifying the law would help minimize such litigation. As a practical matter, without the E&P waste exclusion under CERCLA, existing regulatory agencies and emergency response authorities would be overwhelmed by the reporting of routine operations already controlled by State programs. We would be happy to meet with you to discuss the intricacies of this issue and API's position. Question 3. Do you believe that the allocation system in S. 8 will help to eliminate some of the unnecessary litigation at these sites? Response. The allocation system in S. 8 creates so many litigation disincentives that it would, as a practical matter, virtually eliminate PRP litigation challenging the allocation. While we believe that excessive litigation could impede the cleanup process, we do not agree that all litigation is unnecessary. The judicial system provides checks and balances to Agency action by ensuring that the allocation process is applied equitably. Penalties which have the practical effect of prohibiting PRPs from exercising their right to seek judicial review should be eliminated. Question 4. I would like to get your position on the ROD reopener provisions contained in S. 8. Do you think that these provisions are too expansive and will result, as some would suggest, in virtually every ROD being reopened? Response. APl believes that the ROD reopener provisions in S. 8 are already subject to numerous checks and balances. Rods can only be reopened if specified cost saving are achieved and the ROD satisfies the remedy selection criteria in S. 8. Moreover, State Governors can veto a ROD reopener if they think such an action will cause unreasonable delay and adversely affect human health and the environment or cause a disruption of planned future use of the site. In fact, in our opinion, there may be circumstances where the ROD reopener provisions need to be made more flexible. [GRAPHIC] [TIFF OMITTED] TH060.428 [GRAPHIC] [TIFF OMITTED] TH060.429 [GRAPHIC] [TIFF OMITTED] TH060.430 [GRAPHIC] [TIFF OMITTED] TH060.431 [GRAPHIC] [TIFF OMITTED] TH060.432 [GRAPHIC] [TIFF OMITTED] TH060.433 [GRAPHIC] [TIFF OMITTED] TH060.434 [GRAPHIC] [TIFF OMITTED] TH060.435 [GRAPHIC] [TIFF OMITTED] TH060.436 [GRAPHIC] [TIFF OMITTED] TH060.437 [GRAPHIC] [TIFF OMITTED] TH060.438 [GRAPHIC] [TIFF OMITTED] TH060.439 [GRAPHIC] [TIFF OMITTED] TH060.440 [GRAPHIC] [TIFF OMITTED] TH060.441 [GRAPHIC] [TIFF OMITTED] TH060.442 [GRAPHIC] [TIFF OMITTED] TH060.443 [GRAPHIC] [TIFF OMITTED] TH060.444 [GRAPHIC] [TIFF OMITTED] TH060.445 [GRAPHIC] [TIFF OMITTED] TH060.446 [GRAPHIC] [TIFF OMITTED] TH060.447 [GRAPHIC] [TIFF OMITTED] TH060.448 [GRAPHIC] [TIFF OMITTED] TH060.449 [GRAPHIC] [TIFF OMITTED] TH060.450 [GRAPHIC] [TIFF OMITTED] TH060.451 [GRAPHIC] [TIFF OMITTED] TH060.452 [GRAPHIC] [TIFF OMITTED] TH060.453 [GRAPHIC] [TIFF OMITTED] TH060.454 [GRAPHIC] [TIFF OMITTED] TH060.455 [GRAPHIC] [TIFF OMITTED] TH060.456 [GRAPHIC] [TIFF OMITTED] TH060.457 [GRAPHIC] [TIFF OMITTED] TH060.458 [GRAPHIC] [TIFF OMITTED] TH060.459 [GRAPHIC] [TIFF OMITTED] TH060.460 [GRAPHIC] [TIFF OMITTED] TH060.461 [GRAPHIC] [TIFF OMITTED] TH060.462 [GRAPHIC] [TIFF OMITTED] TH060.463 [GRAPHIC] [TIFF OMITTED] TH060.464 Responses of Charles de Saillan to Additional Questions from Senator Smith Question 1. Does the Chief Executive of your State, Governor Gary Johnson (R-NM) agree with the positions articulated in your statement? Response. The positions articulated in our statement are fully consistent with the positions taken by New Mexico Governor Gary E. Johnson. In formulating our positions, we have consulted with the New Mexico Environment Department, and the New Mexico Office of the Natural Resources Trustee, both Executive agencies that report to the Governor and that are headed by Governor Johnson's appointees. While Governor Johnson has not reviewed the Superfund legislation with the same level of detail that we have in the Office of the Attorney General, he has taken very similar positions on most issues. His positions are stated in his February 29, 1996 letter to Senators Bob Dole and Thomas Daschle. A copy of the letter is enclosed herewith. Governor Johnson's appointee as Secretary of the New Mexico Environment Department, Mark Weidler, has also taken very similar positions. Secretary Weidler's positions are stated in his November 3, 1995 letter to Senator Pete V. Domenici. A copy of that letter is also enclosed. In addition, the positions articulated in our statement are consistent with the National Governors' Association Policy on Superfund. A copy of that Policy is also enclosed. Question 2. You raise concerns in your testimony about the technical impracticability sections of S. 8 as it relates to groundwater. Please explain to me what is wrong with using point of use treatment where it is technically impractical to clean up groundwater? Response. Point-of-use devices, such as activated carbon filters, are often ineffective in treating drinking water. Studies have demonstrated numerous problems with such devices. For example, chlorine or other organic chemicals in source water can result in undetected ``breakthrough'' of contaminants from the filter into drinking water. Filters may also provide a medium for the growth of disease-causing bacteria. Moreover, in order to work properly, the devices must receive regular maintenance such as replacement of the filter. Experience has shown that homeowners often do not properly maintain the filters. See generally, Benjamin W. Likens, Jr., Robert M. Clark & James A. Goodrich, Point-of-Use/Point-of-Entry for Drinking Water Treatment 173- 195 (Lewis Publishers 1992) Part of our concern stems from the undue emphasis on point-of-use devices that the bill would create in the statute. Such devices should be used, if at all, only as a temporary measure or as a last resort when nothing else is possible--as is the case under current law. An express statutory reference to such devices as a technique for addressing contaminated groundwater makes their use much more acceptable, notwithstanding their limited effectiveness. The bill strongly implies that if groundwater remediation is technically impracticable--based on modelling or projections--then installation of point-of-use devices is all that is necessary. Implementing agencies will need to take this statutory provision into consideration, as will reviewing courts. The provision no doubt will be seized upon by attorneys for responsible parties seeking--as some do--the cheapest way out. It will be more difficult for EPA and State environmental agencies to require cleanup of contaminated groundwater or, where cleanup is impracticable, to require a more protective but more expensive alternative such as hooking residents up to a municipal water supply. Our concerns over the emphasis on point-of-use devices are heightened by other provisions in the bill that we fear would render containment of contaminated groundwater, rather than treatment, the norm. As stated in our testimony, the bill would eliminate any preference for treatment of contaminated groundwater; it would require containment remedies to be considered on an equal basis with treatment remedies; it would limit the goal for protection of groundwater to preventing or eliminating ``actual human ingestion'' of contaminated groundwater; it would eliminate MCLG's and even MCL's as groundwater cleanup standards; it would allow a determination that groundwater cleanup is technically impracticable based on modelling and projections, without any effort to remediate the groundwater or even to reduce contaminant levels; it would place unnecessary emphasis on natural attenuation, dilution, dispersion, and biodegradation. Question 3. When do we draw the line in natural resource cleanups and who makes that decision? Let me use an example: let's say you have a stream where sediments may have been deposited 20 years ago, but since that time there have not been any new releases, yet the natural resources have not fully recovered. One alternative to deal with the stream contamination is to dredge the stream which would kill everything there in the hope things would recover. Or do we let nature take its course and let the stream continue to naturally recover? Who makes that decision? Response. Under the Department of the Interior (DOI) natural resource damage assessment regulations, the trustee agency or agencies consider a range of alternatives for restoration of injured resources. 43 C.F.R. Sec. 11.82(c). In the hypothetical situation you posit, these alternatives might include dredging the stream to eliminate all further releases; enhancement of the injured resources to speed up their natural recovery; acquisition of equivalent resources to compensate the public for the lost resources; no action; and various combinations of the foregoing. Under the DOI regulations, the trustees would consider, among other things, the technical feasibility of each alternative; the relationship of the expected costs and the expected benefits of each alternative; the cost-effectiveness of each alternative; the potential for additional injury resulting from the proposed alternative; the natural recovery period of the injured resources; and the ability of the natural resources to recover without any action. 43 C.F.R. Sec. 11.83(d). The trustees would seek public comment from interested persons, including the responsible parties, on the various alternatives. 43 C.F.R. Sec. 11.81(d) (2). Based on these considerations, and public comment, the trustees would select the most appropriate restoration alternative. 42 C.F.R. Sec. 11.82(a). Question 4. Apparently, out west there are high natural concentrations of elements such as arsenic, mercury and lead (I understand that the most productive uranium mining district in the country is in New Mexico) that can leach out when touched by water. Is this taken into consideration in determining water standards in your State? Have there been instances where remedies have mandated cleanup of groundwater to levels lower than background? Response. New Mexico has localized occurrences of relatively high levels of naturally occurring arsenic in some of its groundwater. Naturally occurring lead and mercury are less common. Lead and mercury are relatively insoluble in water at normal pH, and thus rarely create water quality problems. New Mexico does take background levels of contaminants into consideration in determining appropriate cleanup levels. The regulations issued under the New Mexico Water Quality Act set standards for contaminants in groundwater and surface water. The regulations provide that ``[i]f the background concentration of any water contaminant exceeds the standard . . . pollution shall be abated by the responsible person to the background concentration.'' New Mexico Water Quality Control Commission Regulations Sec. 4101 (B). There have been no instances in New Mexico of remedial actions that mandated cleanup to standards below background levels. Response of Charles de Saillan to an Additional Question from Senator Lautenberg Question. On behalf of NAAG, are you aware how many States have Superfund statutes, and of those that do, how many of these have liability schemes that are retroactive? How many are strict? How many are joint and several? Response. Because ``Superfund statute'' is not a precise term, it is not possible for us to provide a definitive number of States that have enacted such laws. By our count, at least 38 States have laws providing for the cleanup of hazardous substances similar to CERCLA. Several other States have features similar to CERCLA in their water quality or hazardous waste management statutes, which we have not included among the 38. Of those 38 States with Superfund-type cleanup laws, some 26 have laws that provide for strict, joint and several, and ``retro-active'' liability similar to CERCLA. The laws of 36 States--all but Illinois and Michigan--provide strict liability. The laws of 36 States--all but California and Iowa--apply liability to preenactment disposal. The laws of 31 States provide for joint and several liability, either by statute or common law; the laws of Alabama, Arizona, Arkansas, California, Illinois, Tennessee, and Utah expressly preclude joint and several liability. The laws of several other States limit joint and several liability, most frequently by allowing proportionate liability if the responsible party can demonstrate a reasonable basis for apportionment, which is not unlike the current CERCLA scheme. In addition, many States with no State Superfund laws rely on water quality laws or hazardous waste management laws to require cleanup. Many of these laws include strict, joint and several, and ``retroactive'' liability. The New Mexico Water Quality Act, N.M. Stat. Ann. Sec. Sec. 74-6-1 to 74-6-17, is an example. Furthermore, several States that place limitations on liability under their own statute rely on the Federal CERCLA statute to obtain cleanup. For example, the California Hazardous Substance Account Act, Cal. Health & Safety Code Sec. Sec. 25300 et seq., does not provide for joint and several liability or liability for preenactment disposal. Consequently, California relies heavily on the liability provisions of CERCLA, and has brought numerous cost recovery actions under CERCLA. We base this information on an EPA study entitled, ``An Analysis of States Superfund Programs: 50-State Study 1993 Update,'' and on informal surveys conducted by State attorney general staff. We request that this letter, the enclosed letters from Governor Gary E. Johnson and from Secretary Mark Weidler, and the enclosed National Governors' Association Policy, be included as part of the hearing record. We appreciate the opportunity to provide this information to the Subcommittee. If you have any further questions, do not hesitate to contact our Office. I can be reached by telephone at (505) 827-6939 or by telefax at (505) 827-4440. [GRAPHIC] [TIFF OMITTED] TH060.468 [GRAPHIC] [TIFF OMITTED] TH060.469 [GRAPHIC] [TIFF OMITTED] TH060.470 [GRAPHIC] [TIFF OMITTED] TH060.471 [GRAPHIC] [TIFF OMITTED] TH060.472 Prepared Statement of Rich Heig, Senior Vice President, Kennecott Corporation My name is Rich Heig, and I am Senior Vice President for Engineering and Environment of Kennecott Corporation. I appreciate having the opportunity to appear before this Committee on behalf of Kennecott, and express our views on S. 8, the ``Superfund Cleanup Acceleration Act of 1997''. There is a lot that we like about this bill. Kennecott supports a balanced reform of Superfund, designed to correct the program's many problems--problems that have led to little cleanup, and a tremendous amount of litigation. Superfund reform should have as its goal, expedient cleanup based upon good science, and should include natural resource damages (NRD) provisions that clearly focus on restoration of services. S. 8 is a positive step toward this goal. Kennecott Corporation is headquartered in Salt Lake City, Utah, and provides management services to various Kennecott affiliates. Kennecott companies include the third largest producer of copper metal, and the third largest producer of clean burning, low sulfur coal in the United States. The operations of Kennecott Utah Copper Corporation near Salt Lake City have produced more copper than any other mine in history, and are a significant supplier of gold, silver, and molybdenum, with employment for more than 2,300 Utah residents. Over the last 10 years, Kennecott Utah Copper has invested more than $ 2 billion in modernizing its mining and processing facilities. Our new smelter, when operating to full design capacity, will be the world standard for reducing SO<INF>2</INF>. In addition to Utah, Kennecott companies have base and precious metal operations in the States of Alaska, Nevada, South Carolina, and Wisconsin, and coal mines in Colorado, Montana, and Wyoming. Kennecott is very familiar with the inefficiencies of the existing Superfund law, and since 1990 has undertaken proactive cleanup measures at Kennecott Utah Copper's Bingham Canyon Mine. Mining in the Bingham Canyon area can be traced to the 1860's when a number of lead and silver mines and mills became active. In the 1920's, Kennecott consolidated various holdings and began the mining of copper. Early miners, along with the rest of society, did not have the benefit of modern technology and understanding of environmental values in their practices of waste management. We believe the results of Kennecott's proactive approach speak for themselves. Over the past 5 years, Kennecott has expended over $230 million for remediation. Twenty-five (25) million tons of historic mining wastes have been properly disposed. Over 5,500 acres have been reclaimed for wildlife habitat and recreational uses. Significant progress has been made in containing and controlling affected groundwaters. This has all been accomplished to EPA and State of Utah specifications. These efforts have not been easy under the current Superfund law which lacks flexible mechanisms to accomplish proactive and voluntary cleanups. After years of attempting to negotiate a formal comprehensive consent decree to address the cleanup work, negotiations failed. In January 1994, Kennecott Utah Copper sites were proposed for Superfund listing, despite having spent over $85 million on cleanup at 14 source sites (with cleanup completed at seven of those sites). To avoid the negative ramifications of a Superfund listing, Kennecott mounted an extensive challenge to the proposed listing. All the while, Kennecott proceeded with cleanup activities and discussions with EPA to develop a non-traditional Superfund approach to address the numerous cleanup activities. A site visit by Environmental Protection Agency (EPA) Administrator Carol Browner and her staff, combined with recognition of Kennecott's successful cleanup efforts and ongoing commitment, resulted in a Memorandum of Understanding (MOU) established in September 1995. In the MOU, Kennecott, EPA, and the State of Utah agreed that the Superfund listing of the Kennecott sites would be deferred if Kennecott completed certain specified cleanup programs and studies--most of which were already underway. Kennecott's goals for its environmental cleanup program include expeditiously reducing real risks by characterizing the problems fully and efficiently, considering both proven and innovative solutions, and utilizing those technologies that are readily implementable and cost- effective. This has been done on a parallel track with regulatory and legal discussions, and, at the same time, continuing full and open communications with the affected communities. This approach has minimized transaction costs, and continues to avoid the negative effects of a Superfund listing on a viable operating facility and the adjoining communities. Kennecott continues to work with EPA and the State in completing these projects, including, a remedial investigation and a feasibility study for groundwater contamination, an ecological risk assessment, and completion of source control and elimination efforts. Kennecott appreciates the foresight, and we believe, good judgment exercised by Administrator Browner in adopting this approach to Kennecott's cleanup activities. The results achieved by Kennecott Utah Copper, acting as an environmentally pro-active company, are in sharp contrast to Kennecott's experience at other Superfund sites, such as the Ekotek NPL site located in North Salt Lake. Over $19 million has been spent since 1989, approximately half of which went to EPA oversight costs and legal fees, and the final cleanup remedy is yet to be implemented, even though the potentially responsible parties (PRPs) are eager to proceed. Kennecott Utah Copper also has experience with the natural resource damages provisions of Superfund. In the midst of all the Superfund cleanup activity, the NRD Trustee for the State of Utah maintained a $129 million action for natural resource damages for contaminated groundwater. An initial settlement was rejected by the Federal court, and the parties entered a second round of negotiations. It was difficult to develop a settlement of the NRD Trustee's lawsuit prior to any remedial determination on the groundwater. Kennecott needed a resolution that would not require it to pay for a cleanup twice--once for NRD damages, and once for a Superfund cleanup remedy. Ultimately such a settlement was reached. The settlement required Kennecott to complete source control measures already begun as part of Kennecott's proactive cleanup and to pay $9 million in damages, primarily for increased costs of municipal water delivery and future lost use resulting from restoration activities. Additionally, Kennecott established a letter of credit currently valued at $35 million to be held in trust to restore municipal water services that would have been provided by the groundwater. If Kennecott develops a qualified program to provide municipal quality water, either as part of the Superfund remedy or as part of the NRD settlement, it can utilize the letter of credit to help fund that effort. How the final remedial action and NRD settlement will be coordinated has not yet been determined. Kennecott's Superfund experiences have led to the following conclusions: <bullet> As currently structured, Superfund is slow, costly and cumbersome. It does not provide a simple mechanism, at either the Federal or State level, for voluntary cleanups, such as that undertaken at Kennecott Utah Copper. <bullet> Trustees are authorized by Superfund to recover natural resource damages resulting from releases by PRPs without being limited to actual lost values, and without a reasonable cap on ultimate liability. <bullet> The criteria for cleanup standards has often been based on overly conservative or unrealistic risk assessments, without regard for reasonably anticipated land or water uses. <bullet> The remining of historic mining sites has been hindered by Superfund's retroactive, joint and several liability provisions. Kennecott is, therefore, pleased to see the efforts being made by the sponsors of S. 8 to amend and bring about the much-needed reform of Superfund. Toward that goal, we would respectfully ask the Committee to consider the following comments in their deliberations on this bill. title i--brownfields revitalization This Title includes a provision to assist States to establish and expand voluntary response programs. Kennecott believes that provision should be made for voluntary cleanups as part of the Federal program. PRPs should be encouraged to undertake voluntary cleanups, whether or not a site is listed or proposed for listing as a Superfund site. Voluntary cleanups can significantly reduce the costs and delays of Superfund, and be completed in a manner acceptable to EPA or the States. title iv--selection of remedial actions Kennecott supports the remedial action provisions of Title IV that require the selection of remedies that are cost-effective, that are based onsite-specific conditions and risk assessments, and that consider reasonably anticipated future uses of land and water. Kennecott also supports those provisions that allow for the consideration of natural attenuation and biodegradation in groundwater remediation, that recognize institutional and engineering controls, and that eliminate the preference for permanence and treatment. title v--liability Kennecott supports the provisions in Title V to fairly allocate response costs at non-Federal sites, including the mixed funding for orphan shares. We recommend a provision be added that would allow remining of historic mining sites for the economic recovery of metals or minerals without the imposition of Superfund liability for past releases. Because of the size and nature of these sites, remining may be the only practicable approach to a cost-effective cleanup. title vii--natural resource damages S. 8 recognizes the need to reform the cleanup and remedy provisions of Superfund. This includes the need to have a rational approach to determine how clean is clean. This approach should be based on reasonable risk assumptions in light of current and reasonably anticipated land and water use scenarios. In order for the remedy and liability reforms of Superfund to succeed, the objectives of the NRD program must work harmoniously with those provisions. The improvements to be gained in the cleanup provisions will be lost if NRD Trustees, under the guise of restoration, can still require payment for additional cleanup beyond that necessary to achieve protection of human health and the environment. While Kennecott and the State of Utah NRD Trustee were able to reach a compromise that so far allows Kennecott to avoid a double cleanup, this type of result could be formalized for all NRD claims, rather than left to an NRD Trustee's discretion. NRD should not be a secondary or substitute cleanup program. Superfund reform legislation should clarify the role of the NRD program by clearly limiting NRD damages to restoring the public uses provided by the natural resource that were lost or impaired by the release of hazardous substances. It also includes defining injury in terms of actual injury to measurable and ecologically significant functions provided by the resource that were committed or allocated to public use just prior to the time an injury occurred. Restoration programs should be cost effective and reasonable, based upon actual restoration needs, and damages should be spent on restoration. To be cost effective, the cost of restoration should not exceed the benefits of the restoration activity. Surplus or punitive recoveries of past lost use or non-use damages should be eliminated. The NRD Title of S. 8 is a good beginning from which to address these concerns. In particular, we concur in the elimination of non-use damages, and the elimination of assessment costs for studies using the contingent valuation method (CVM). However, we believe CVM should be eliminated altogether as a damage calculation methodology. We agree that regulations should be required to take into consideration the ability of a natural resource to recover naturally, as well as the availability of replacement or alternative resources. We also believe it would be appropriate to clarify that natural recovery should also be applied to reduce the amount of the overall recoverable damages. Kennecott offers the following suggestions to clarify the provisions of Title VII: <bullet> The limitation on double-recovery now appears to be less protective than the existing prohibition. The proposed language seems to limit the existing prohibition on double recovery only with respect to the same person and to the same injury. This could allow two different Trustees to obtain damages for different injuries to the same natural resource caused by the same release of hazardous substances. <bullet> The NRD program should continue to include a reasonable limitation on liability. The existing $50 million cap should be included in any Superfund reform, and should pertain to the entire area affected by the release of hazardous substances. <bullet> The recovery of NRD damages should be clearly limited to releases occurring after 1980. <bullet> Not only should EPA be required to take into account potential resource injury that could result from remedy selection, there also should be a bar to recovery of NRD damages resulting from the selected remedy. <bullet> The NRD provisions limiting judicial de novo review of restoration plans should not eliminate de novo adjudication of damage claims. <bullet> There should be a precise statute of limitations that runs from the time the Trustee knew, or should have known, of the injury. <bullet> The authority of trustees to issue Section 106 orders should be clarified to ensure that trustees and EPA are not using different standards of what is necessary to protect the environment, and to ensure that trustees do not use Section 106 orders to bypass statutory provisions governing NRD claims. In conclusion, Kennecott believes that S. 8 offers several positive improvements to the Superfund program. We appreciate this opportunity to testify and offer our suggestions for additional improvements to Superfund. ______ Responses of Rich Heig to Additional Questions from Senator Smith Question 1. Mr. Heig, you state in your testimony that it was because of your voluntary cleanup efforts that the Bingham Canyon project was successful. Are the voluntary cleanup provisions in S. 8 that would provide for more State control and the ability to provide finality, an improvement to the current system? Response. Title I of S. 8 provides in Section 102 for ``qualifying State voluntary response programs,'' and defines the elements of such programs. Further, in Section 103, S. 8 provides finality to response actions completed under a State program, as well as requiring State concurrence with Federal Section 106 orders within 90 days after issuance. Kennecott supports these provisions, and believes they represent a significant improvement over the existing system in Superfund. Volunteer response programs would act to eliminate or minimize litigation, reduce costs, and result in quicker cleanups to the benefit of all. As noted in our testimony, Kennecott also recommends that the volunteer response provisions in S. 8 be extended to the Federal program. The benefits to be gained under a State program would be equally valuable to the Federal program, and would be complementary to other cooperative initiatives recently undertaken by EPA. Question 2. Your statement demonstrates that there is a strong need to coordinate remediation efforts and NRD claims. Do you believe that the changes made by S. 8 in this regard are an improvement? Response. Yes, a number of changes made by S. 8 improve coordination of the cleanup and NRD provisions of CERCLA. Specifically, S. 8 improvements to the NRD program include: <bullet> Eliminating non-use damages; <bullet> Elminating recovery of assessment costs for CVM studies; <bullet> Requiring response actions and restoration measures to ``not be inconsistent'' with one another and to be implemented in a coordinated and integrated manner; and <bullet> Requiring natural recovery of a resource to be considered in injury and restoration assessments. Nevertheless, for the remedial and NRD programs to be implemented as effectively as possible, further changes should be considered: (1) to avoid conflicting standards between remedial authorities and NRD trustees that essentially result in dual cleanups; and (2) to avoid duplicative damages and transaction costs. (1) Avoid Conflicting Standards Essentially Resulting in Dual Cleanups It is Kennecott's understanding that at a CEQ meeting on January 27, 1997, to discuss the Section 106 Executive Order 13016, Administration officials asserted that trustees have cleanup responsibilities in addition to EPA's cleanup responsibilities. The example given was that EPA might require the cleanup of contaminated sediments to a level necessary to protect human health and the environment, but that trustees might decide additional cleanup is necessary. This results in what some proponents of NRD reform refer to as the ``Cleanup 1 and Cleanup 2'' scenario. Essentially, ``Cleanup 1'' is EPA's required cleanup to a level protective of human health and the environment; ``Cleanup 2? is a trustee's required cleanup to a level beyond that necessary to protect human health and the environment and possibly beyond that necessary to restore the services provided by the resource in question. (See, ``Superfund's Natural Resource Damages Program Should Not Be a New Cleanup Program, ``Attachment 1.) Without coordination, problems addressed by S. 8 in the cleanup program ultimately may be shifted to the NRD program. There are a number of instances where uncoordinated application of conflicting standards will result in wasted resources. The attached document, entitled ``NRD Site Examples'' (Attachment 2), illustrates various cases where the differing remediation and NRD goals will result in potential double cleanup expenditures, the very issue Kennecott attempted to avoid in structuring its NRD settlement. The proposed S. 8 requirement for coordination of response and restoration measures is a good beginning to avoid these unfair results. However, this mandated coordination should not become a means for the NRD restoration to drive the remedy based upon cleanup goals that are inconsistent or more onerous than remediation goals. This is particularly important where NRD trustees seek restoration at ``cleanup'' levels beyond those required by EPA (or any similar to the proposed revisions contained in Title IV of S. 8). For example, EPA, as well as provisions of proposed Title IV, are working toward a sustainable ecosystem approach to remedy selection. Conversely, some NRD trustees are seeking restoration to address any contaminants causing a measurable adverse impact on the chemical, physical or biological environment (See, 43 C.F.R. Sec. Sec. 11.14(v) and 11.15; IS C.F.R. Sec. Sec. 990.30 and 990.51(c)), regardless whether contaminants left in place following remediation impair the ability to restore the services provided by the resource to the public. This issue could be addressed by including a restoration standard in S. 8 based on restoring the measurable and ecologically significant functions of the natural resources that provided services to the public. (2) Avoid Duplicative Damages and Transaction Costs Kennecott did not face an NRD issue involving multiple trustees at the Bingham Canyon site; however, this is not true for many sites. As Kennecott noted in its testimony, efforts at addressing this issue in S. 8 appear to unintentionally eliminate existing protections against double recovery. S. 8 includes a good addition designed to prevent a trustee from recovering damages not only under CERCLA, but also under other laws. However, the modification in S. 8 appears to apply only to the same ``person'' and could be misconstrued to allow a party that has first recovered damages under another law to proceed with recovery under CERCLA. Consequently, this provision should be clarified to preclude recovery of duplicate damages by more than one trustee for injuries to the same resource caused by the same release(s) of hazardous substances. It should also preclude recovery of the same damages under multiple laws, regardless if the claim is brought first under laws other than CERCLA. Question 3. Would you have progressed as far as you have at the Bingham Canyon site, if that facility had been placed on the NPL? Are the cleanup provisions in S. 8 and improvement to this problem? Response. Kennecott believes the cleanup efforts at the Bingham Canyon site have progressed further and more quickly than would have been possible had the site been listed on the NPL. As you are aware, the traditional Superfund process hinders the ability to quickly achieve cleanup. Under the approach utilized by Kennecott with the oversight of EPA and the State of Utah, of the 20 sites (source areas) initially identified, Kennecott has completed cleanup at 10, cleanup is in progress at 8 other sites, and 2 sites were determined not to require additional work. To date, the percentage of costs spent on actual cleanup at Kennecott sites is still over 90 percent and at times exceeds 95 percent. These percentages are likely to remain close to this level, particularly given EPA's recent policy that makes the Kennecott sites eligible for reduced oversight costs. Spending over 90 percent of costs on actual cleanup is not likely to be achievable at an NPL site. Key to the success of the proactive approach utilized by Kennecott has been the ability to proceed quickly while utilizing community participation, and to focus efforts on removing potential sources of contamination through area by area removal actions. If Kennecott were required to conduct all of its cleanup activities under the process found in the cleanup provisions of S. 8 (Title IV), it is not clear that the results would be as efficient and effective as they have been to date. However, assuming that the provisions of Title IV do not eliminate the ability to address contamination through accelerated removal actions, some of the provisions appear to be beneficial. For example, Kennecott is conducting a remedial investigation and feasibility study (RRFS) relative to groundwater contamination (and is initiating a separate remedial investigation regarding a different area of groundwater contamination.) A number of changes proposed by S. 8 that could benefit the continued efficiency of achieving a cost-effective remedy include: <bullet> Remedial actions based on the current, planned, or reasonably anticipated use of the surface water, groundwater, or land; <bullet> Providing that a remedial action using institutional and engineering controls be considered on an equal basis with other remedial action alternatives; <bullet> Requiring consideration of natural attenuation or biodegradation; <bullet> Emphasis on allowing PRPs to develop work plans; <bullet> Preference for using facility-specific data; and <bullet> Comparison of risks posed by the facility to other risks commonly experienced by the local community. Additionally, the ``results-oriented approach'' contained in Title VIII, requiring procedures to minimize the time required to conduct response actions, expedite facility evaluations and risk assessments, limit engineering studies and require streamlined oversight, appears to be a constructive approach for timely response actions in comparison to the typical Superfund process. However, the ability to quickly and efficiently conduct a cleanup should not be encumbered with additional procedures unless existing procedures are eliminated. Again, these procedures, even if expediting, should not impede the ability to conduct timely removal actions to address the majority of the contamination at a site if appropriate. Question 4. As you know, President Clinton recently issued an executive order which would allow the Department of interior, or any other Department to issue orders under Section 106. You state in your testimony that this section should be clarified so that there is consistence among the Departments about what is necessary to protect the environment. How would you modify S. 8 to address these issues under Section 106? Response. The executive grant of Section 106 authority to Federal NRD trustees was unnecessary to fix any problems in CERCLA's cleanup program. Yet, with this new grant of Section 106 authority comes the concern that the problems of CERCLA's cleanup program will not only be magnified five times, but that the authority granted to Federal NRD trustees by Section 106 may encourage trustees to blur distinctions between cleanup and NRD. Consequently, the simplest means to address the concerns raised by Executive Order 13016 is to modify Section 106 by limiting the delegation of Section 106 authority to those agencies that have had the authority for the last 16 years--the Environmental Protection Agency and the National Coast Guard. This approach would avoid potential problems that can result from the broad duplicitous delegation of Section 106 authority to five additional Federal agencies which are also NRD trustees. This approach also would alleviate the improper use of Section 106 authority as a pretense for Section 107 NRD purposes and the magnification of problems already identified in the implementation of Superfund. Even all of EPA's Administrative reforms will have little impact on other agencies not bound by those policies. At a minimum, if Federal NRD trustees are allowed to retain Section 106 authority, such authority should be clearly limited to emergency situations and be unavailable if the trustee is also a PRP at a site. These minimal limitations are discussed further below. discussion Giving trustees Section 106 authority raises many concerns about fairness, particularly where in many instances, the Federal trustee may also be a PRP at the site in question. The concerns that some trustees might use this new power improperly are not suspicious rhetoric. The Administration has made a number of alarming statements about the purpose of the Executive Order. For example, when the Administration issued the Executive Order, public statements indicated that the authority is directed at cleanup [Cleanup 2] of ``natural resources that support hunting, fishing, tourism and recreation in local economies.'' This is the objective of the Administration's stated NRD program of ``restoration'' for injured natural resources that support hunting, fishing, tourism and recreation in local economies.\1\ CEQ's Twenty-Fifth Anniversary Report furthers this notion when it states: --------------------------------------------------------------------------- \1\ See, Administration August 28, 1996, Press Release ``Protecting All Communities From Toxic Pollution;'' and June 20, 1995 Testimony of Asst. Sec. Oceans Atmosphere, National Oceanic and Atmospheric Administration, before the Subcommittee on Commerce, Trade, and Hazardous Materials, House Commerce Committee. ``Superfund moneys are not available, however, to fund natural resource restoration, and thus the natural resource damage programs have had more limited support than EPA's remedial program. To enhance the program authority of natural resource agencies that now lack access to the Superfund, Executive Order 13016 provides these agencies with authority to issue administrative orders to compel responsible parties to perform --------------------------------------------------------------------------- response work.'' Moreover, an EPA official indicated that the new authority will enable trustees to compel PRPs to conduct natural resource damages assessments.\2\ That is not what Section 106 authority is intended to address. --------------------------------------------------------------------------- \2\ Interview with Assistant Administrator for Solid Waste and Emergency Response, Superfund Report, October 2, 1996. --------------------------------------------------------------------------- If the authority granted by the Executive Order is improperly utilized for purposes of Section 107 NRD, the few procedural and substantive safeguards provided by Section 107 could be circumvented, including: <bullet> Evasion of a PRP's rights to an Article III court hearing where the trustee must prove its case; <bullet> Circumvention of the retroactive and monetary limitation on liability that currently exists under Section 107; <bullet> Avoidance of statute of limitations and the prohibition on double recovery; and <bullet> Bypassing the requirement that a trustee prove that the PRP's release was the cause of the actual injury. Furthermore, where a trustee improperly utilizes Section 106 authority, the Superfund is at risk for recovery of response costs by those subject to improperly issued orders. Part of the concern for misuse of the authority lies in the minimal standard for issuing Section 106 orders. The current standard for exercising Section 106 authority is the existence of an ``imminent and substantial danger to public health and welfare or the environment'' from the ``actual or threatened release of a hazardous substance.'' \3\ While, to the average reader, this standard appears to apply only in emergency cases, it has been indulgently construed so the standard is more a catch phrase than a criteria for issuing 106 orders. For example, ``imminent'' endangerment exists if ``factors giving rise to it are present, even though harm may not be realized for years.''\4\ Similarly, the definition of ``release'' has been applied broadly by some courts to include ongoing, passive ``releases'' from a source that was disposed of historically. --------------------------------------------------------------------------- \3\ Under Section 106 of CERCLA, 42 U.S.C. 9606, EPA's main avenues to compel PRPs to conduct removals, studies or remediation include issuing a Unilateral Order (UAO) or making a referral for a judicial enforcement action. A judicial referral under Section 106 could result in an order compelling compliance and exacting penalties. If the PRP refuses to conduct a response action pursuant to a UAO, EPA could conduct a fund-financed response action. The EPA could then recover its costs and may be able to recover punitive damages up to three times the amount of the cost of the cleanup as well as seek penalties up to $25,000 per day. 42 U.S.C. 9606 and 9607. Now those authorities appear to have been granted to five Federal trustees. Even if a Federal NRD trustee issued a UAO beyond the scope of authority granted by Section 106, a PRP would be placed in an extremely difficult position to refuse the order at the rib of penalties and treble damages. \4\ See, United States v. Conservation Chemical Co. 619 F. Supp. 162 (W.D. Mo. 1984). ``Substantial'' endangerment exists ``if there is reasonable cause for concern that someone or something may be exposed to risk of harm by release or threatened release of hazardous substance if remedial action is not taken, keeping in mind that protection of public health, welfare, and environment is of primary importance.'' Id. --------------------------------------------------------------------------- With such a flexible standard, Federal trustees should, at a minimum, be limited to utilizing Section 106 authority only in true emergency situations. Limiting the trustees' use of Section 106 authority to emergency situations requires either (1) a clarification of the ``imminent and substantial endangerment'' standard applicable to all agencies with authority under Section 106 or (2) modification of the standard relative to NRD trustees' Section 106 authority. For example, to modify the Section 106 standard with respect to the authority of NRD trustees, the authority should be eliminated for historically contaminated sites. Those sites should already have been identified for CERCLA response if such was necessary. Emergency authority is more applicable to current or future incidents caused by current or future conduct. Furthermore, a trustee should be prohibited from exercising Section 106 authority where the trustee is a potentially responsible party. In that situation, if an emergency response needs to be undertaken, the trustee can undertake the removal itself and seek to recover response costs from other parties if appropriate, or the trustee can rely upon EPA or the Coast Guard to exercise Section 106 authority. Kennecott respectfully requests that as part of its response to this question, Attachments 3 and 4 be incorporated and considered. Attachment 3 contains the comments of several companies, including Kennecott, concerning the Implementation of Executive Order 13016. Attachment 4 contains the comments prepared by the Chemical Manufacturing Association (CMA) that are referred to in Kennecott's comments contained in Attachment 3. Question 5. You state that at the Ekotek NPL site, you have spent $19 million on legal fees and oversight costs since 1989 (8 years), yet no cleanup remediation has been implemented. Do you believe that the changes proposed in S. 8 would have avoided this problem? Response. The Ekotek Site is a former used oil recycling center in Salt Lake City, Utah. In 1988, EPA took over the site and in 1989 the Ekotek Site Remediation Committee was formed to respond to EPA cleanup orders and conduct emergency removal. The site contained many leaking drums and tanks, oil sludge ponds and other materials left behind when the owner, Ekotek, Inc., abandoned the site and declared bankruptcy. Over the life of the Committee it has been made up of some 400 of 3,000 potentially responsible parties at the site and is currently at 60 as a result of settlements. To clarify, although final remediation cleanup at the site has not occurred, approximately $10 million of the $19 million was spent by the Committee on the emergency removal, including EPA's response and oversight costs. Several of the changes proposed in S. 8 may have resulted in benefits to the overall process and costs at the Ekotek site. <bullet> Title I--Brownflelds In 1996, the Ekotek Site Remediation Committee (Committee), requested EPA to consider the Ekotek site as a candidate for the Brownfields Pilot Programs nationwide. The Committee believes the site would be a good candidate for Brownfields as a means of encouraging its redevelopment once remediation is completed. Although the Committee has not received a response regarding the Brownfields request, Kennecott would not want to see any future opportunity for Brownfields treatment eliminated because S. 8 excludes NPL sites. Even if the final remediation is conducted by responsible PRPs, the benefits to be gained under Brownfields that limit the liability of a prospective purchaser and encourage development of the property into a new viable commercial facility will be of great benefit to the neighboring community. <bullet> Title IV--Remediation It appears that many of the concepts of the proposed remediation provisions of S. 8 potentially could have avoided some of the delays and expenses incurred at the Ekotek site. For example, EPA's proposed remedy at the site included a pump and treat requirement for groundwater contamination related primarily to hydrocarbons. The Committee expended considerable time, effort and money to establish a technical case showing that the proposed pump and treat remedy for groundwater at the site was not cost-effective, would pose more of a threat to uncontaminated groundwater and the groundwater could be effectively remediated through intrinsic bioremediation. These same concepts relative to groundwater are formally addressed within the remedial groundwater provisions of S. 8. If the remediation provisions had been in place at the time of the RI/FS and remedy selection process it is possible that the proposed pump and treat remedy would not have been selected by EPA as the initial proposed remedy and much of the time, effort and money expended on rebuffing that proposal would have been saved. The difference between EPA's initial proposed pump and treat remedy and the intrinsic bioremediation remedy is approximately $4-6 million based on the Committee's estimates. Although unknown at the time to the Committee, the proposed remedy for the Ekotek site was one of the remedies reviewed by the Administration's Remedy Review Board. Following the Board's review and consideration of comments received by interested parties, EPA Region VIII selected the alternative that included intrinsic bioremediation for the groundwater. Additionally, the second major component of the proposed remedy called for thermal desorption (incineration) of contaminated soils. The Committee sought a containment remedy for the contaminated soils, with removal of hot spots rather than the incineration remedy, as a cost-effective method of addressing the contamination and while remaining protective of human health and the environment. Ultimately, the selected remedy is the containment option. The overall cost difference between the two soils remedies is estimated by the Committee to be $10 million. The Committee was pleased that at the end of the day EPA chose the more cost-effective yet protective remedies urged by the Committee. There are, however, a number of contingencies tied to the implementation of the selected remedy that could result in increased remediation costs in the future, notwithstanding the efforts of the Remedy Review Board. <bullet> Title V--Allocation The ability to fairly allocate liability at a site like Ekotek is important if the overall unfairness of Superfund with its strict joint and several liability is not otherwise addressed. The parties carrying the primary responsibility at the Ekotek site did not own or operate the site. Whether large or small, many of the PRPs sent only used motor oil to the site for recycling into useful products. It is possible the site would qualify as a ``mandatory allocation'' site under S. 8, and as such, allocation of the response costs could have been fairly allocated among the parties. However, any allocation process must necessarily take into consideration the toxicity of parties' wastes at a site. At Ekotek, some parties sent substances contaminated with PCBs. The cleanup costs associated with PCB contamination have the potential to increase the cleanup costs at the site by several million dollars. At some sites, including Ekotek, the 1 percent threshold for a liability exemption could result in large numbers of PRPs and waste volumes fiL1ling in the exempt category. At a mandatory allocation site, it appears that the exempt category would be covered by orphan share funding. However, it appears that at requested or permissive allocation sites, this exempt share would be unfairly distributed to the remaining PRPs. For example, the total volume of hazardous substances sent to the Ekotek site is estimated at between 30 and 50 million gallons. One percent is 300,000 to 500,000 gallons, and it is estimated that all but a few dozen of the thousands of Ekotek PRPs would fall into the exempt category with at least 50-60 percent of total site gallonage exempted. <bullet> Title VIII--Accelerated Remediation ``Results-Oriented Approach--The time for the completion of the RD/ RA process for Ekotek (assuming only 60-day review period by EPA on submittals) has been projected to take another 3.3 years, making the total response time at the site approximately 13 years. Given the length of time lost between the removal action and the issuance of a final ROD and the final remediation, accelerating the time to complete the remedial planning process would help to reach the final cleanup more quickly and presumably avoid delays and additional costs. Queston 6. 1 would like to ask you about the issue of remining, which is not addressed in S. 8. Could you explain what remining consists of why it is prevented by Superjund's joint strict, several and retroactive liability system, and why it could be environmentally beneficial for former mining sites? Response. By the term ``remining'' we mean the recovery of mineral values from historic mining sites by extraction, beneficiation, or re- processing of the remaining in situ ore and/or residual materials. Early mining and mineral processing methods were not as efficient as those employed today, and, consequently, mineral values were not always fully recovered. In some instances operations closed prematurely because of downturns in the market or lack of adequate capital. With modern equipment and technology, it may now be technically and economically feasible to reenter some historic sites and recover those values left behind. Minesites by their nature are located at naturally occuring concentrations of minerals, often the metals identified as hazardous by Supcefund, and, as such, some historic sites have been candidates for the CERCLIS list. The CERCLA list contains a number of historic mining- related sites. Under the existing law, if a miner acquires a historic mining site, with contamination from historic operations (e.g., groundwater contamination), the miner can become a PRP subject to the joint, several and strict liability provisions of Superfund. The added burden of litigation, oversight, and other Superfund costs would likely overwhelm the economic incentives to remine the site. If the miner could acquire or enter the site to reprocess waste materials and recover additional minerals without becoming strictly liable for contamination caused by historic operations, some of the contamination sources could be eliminated. Remining not only results in the recovery of valuable minerals or metals but also allows the residual materials to be managed with modern technology and practices that are protective of the environment. Remining would be conducted with the oversight and safeguards of current regulatory controls that act to protect air and water quality during operations, and require reclamation of the disturbed areas before final closure. [GRAPHIC] [TIFF OMITTED] TH060.482 [GRAPHIC] [TIFF OMITTED] TH060.483 [GRAPHIC] [TIFF OMITTED] TH060.484 [GRAPHIC] [TIFF OMITTED] TH060.485 [GRAPHIC] [TIFF OMITTED] TH060.486 [GRAPHIC] [TIFF OMITTED] TH060.487 [GRAPHIC] [TIFF OMITTED] TH060.488 [GRAPHIC] [TIFF OMITTED] TH060.489 [GRAPHIC] [TIFF OMITTED] TH060.490 [GRAPHIC] [TIFF OMITTED] TH060.491 [GRAPHIC] [TIFF OMITTED] TH060.492 [GRAPHIC] [TIFF OMITTED] TH060.493 [GRAPHIC] [TIFF OMITTED] TH060.494 [GRAPHIC] [TIFF OMITTED] TH060.495 [GRAPHIC] [TIFF OMITTED] TH060.496 [GRAPHIC] [TIFF OMITTED] TH060.497 [GRAPHIC] [TIFF OMITTED] TH060.498 [GRAPHIC] [TIFF OMITTED] TH060.499 [GRAPHIC] [TIFF OMITTED] TH060.500 [GRAPHIC] [TIFF OMITTED] TH060.501 [GRAPHIC] [TIFF OMITTED] TH060.502 [GRAPHIC] [TIFF OMITTED] TH060.503 [GRAPHIC] [TIFF OMITTED] TH060.504 [GRAPHIC] [TIFF OMITTED] TH060.505 [GRAPHIC] [TIFF OMITTED] TH060.506 [GRAPHIC] [TIFF OMITTED] TH060.507 [GRAPHIC] [TIFF OMITTED] TH060.508 [GRAPHIC] [TIFF OMITTED] TH060.509 [GRAPHIC] [TIFF OMITTED] TH060.510 [GRAPHIC] [TIFF OMITTED] TH060.511 [GRAPHIC] [TIFF OMITTED] TH060.512 [GRAPHIC] [TIFF OMITTED] TH060.513 [GRAPHIC] [TIFF OMITTED] TH060.514 [GRAPHIC] [TIFF OMITTED] TH060.515 [GRAPHIC] [TIFF OMITTED] TH060.516 [GRAPHIC] [TIFF OMITTED] TH060.517 [GRAPHIC] [TIFF OMITTED] TH060.518 [GRAPHIC] [TIFF OMITTED] TH060.519 [GRAPHIC] [TIFF OMITTED] TH060.520 [GRAPHIC] [TIFF OMITTED] TH060.521 [GRAPHIC] [TIFF OMITTED] TH060.522 [GRAPHIC] [TIFF OMITTED] TH060.523 [GRAPHIC] [TIFF OMITTED] TH060.524 [GRAPHIC] [TIFF OMITTED] TH060.525 [GRAPHIC] [TIFF OMITTED] TH060.526 [GRAPHIC] [TIFF OMITTED] TH060.527 [GRAPHIC] [TIFF OMITTED] TH060.528 [GRAPHIC] [TIFF OMITTED] TH060.529 [GRAPHIC] [TIFF OMITTED] TH060.530 [GRAPHIC] [TIFF OMITTED] TH060.531 [GRAPHIC] [TIFF OMITTED] TH060.532 [GRAPHIC] [TIFF OMITTED] TH060.533 Statement of the Association of State and Territorial Solid Waste Management Officials (ASTSWMO) The purpose of this statement for the record is to reflect the views of the Association of State and Territorial Solid Waste Management Officials (ASTSWMO) regarding the reauthorization of the Comprehensive Environmental Response, Compensation and Liability Act (commonly referred to as Superfund) during the 105th Congress. Specifically, we understand that the Senate Superfund, Waste Control and Risk Management Subcommittee held a hearing on March 5, 1997 on S. 8. We respectfully request that this statement be included as a part of the record for that hearing. ASTSWMO is a non-profit association which represents the collective interests of waste program directors of the nation's States and Territories. Besides the State cleanup and remedial program managers, ASTSWMO's membership also includes the State regulatory program managers for solid waste, hazardous waste, underground storage tanks, and waste minimization and recycling programs. Our membership is drawn exclusively from State employees who deal daily with the many management and resource implications of the State waste management programs they direct. As the day-to-day implementors of the State and Federal cleanup programs, we believe we can offer a unique perspective to this dialog. Since we share in Congress' and the public's desire to achieve effective and timely cleanup of our nation's contaminated sites and the restoration of injured resources, associated with these sites, ASTSWMO has marshaled the comprehensive experience of our membership to provide our unique perspective to the debate surrounding Superfund Reauthorization during this first session of the 105th Congress. We would like to begin by commending Senators Chafee and Smith on the many modifications made to S. 1285 in producing S. 8. It is evident that the Senators sought to introduce a bill which would reflect compromises from their own positions in an effort to produce a viable, workable starting point for the 105th congressional Superfund debate. We look forward to working with the Committee throughout the debate. brownfields revitalization We are pleased that the Senators have chosen to recognize the clear importance of Brownfields by allowing it to occupy the first title of S. 8. Brownfields comprise the vast majority of sites which are currently being remediated by State agencies. The majority of sites classified as Brownfields will never be placed on the NPL. Currently, the biggest impediment to effectively remediating and redeveloping Brownfield sites is the inability of State agencies to provide for releases of liability from both State and Federal laws. While we support concepts such as providing Superfund liability protection to bona fide prospective purchasers, lenders, and fiduciaries, we believe the real key to solving our country's Brownfields problem is to allow the State Waste Agencies to grant releases of Federal liability once a site has been cleaned up to State standards under a State program. We can no longer afford to foster this illusion that State authorized cleanups may somehow not be adequate to satisfy Federal requirements. Over thirty States have enacted Voluntary Cleanup programs and 42 States have adopted State Superfund programs. These programs have remediated over 3,000 sites and the number is growing. It is imperative that any Brownfields legislation clarify the State-Federal roles and potential liability consequences under the Federal Superfund program. We believe S. 8 has accomplished this task. We would recommend however, one modification to the provision as written. In situations which are deemed emergencies and where the State requests assistance, we believe the Federal Government should be able to address the site and if necessary hold the responsible party liable. Emergency actions should be the only exceptions to the releases from Federal liability. We are also pleased to see that S. 8 recognizes the importance of Voluntary Cleanup programs and enables States to receive Federal funding for both the establishment and maintenance of already highly successful programs. We would caution that the funding criteria should remain as flexible as possible in order not to unintentionally disrupt working programs. However, we are concerned that a number of States which are pursuing innovative approaches, such as privatization of cleanups, may not qualify. The funding criteria should encourage innovation not constrain it. We would also recommend that legislative history for this bill direct EPA to distribute grants for voluntary cleanup programs through their normal grant processes, i.e., through the EPA regions, and that EPA shall not be allowed to attach additional burdens onto State grant recipients in the guise of ``accountability''. Lastly, we believe the explicit provision requiring local governments to comply with State laws in order to receive Federal grants is a well-thought out provision and will serve to avoid much confusion in the long run. Ultimately, these sites are State sites and will have to be remediated under State auspices and according to State laws. state role Maximum flexibility is a necessity when dealing with fifty vastly different State programs. S. 8 appears to have accomplished this goal by allowing States to be both delegated and authorized the Federal Superfund program or to retain the status quo if the State so desires. Some States will desire delegation of all sites within their borders, others may only apply for one or two sites, and States in the early stages of development may seek delegation for only parts of the remediation process. The Committee did well to recognize the unique needs of State programs and to provide a wide array of options for assuming the lead at Federal Superfund sites. State programs have grown remarkably in sophistication and we are therefore pleased that S. 8 has chosen to streamline the Federal Superfund program by allowing States to utilize their own laws when implementing the Federal Superfund program. The only way to truly capitalize on the benefits of the State Superfund programs and to transfer the many innovations which have been adopted at the State level to the Federal Government is to allow States to be authorized to implement the Superfund program. Authorization will also provide the needed consistency which is currently lacking within States due to the implementation of two Superfund programs within State borders: the Federal program and the State program. States would like the opportunity to implement one program at all sites which fall within their State borders. That is why, while we are pleased with the authorization provision, we cannot support provisions which would require the State to pay the difference should their laws be more stringent than the Federal Superfund program. We can see no reason why Federal sites should be held to a lesser standard when all other sites within the State must meet State standards. As of today thirty States either have or are in the process of promulgating State cleanup standards. States have answered the question of ``how clean is clean'' and this answer should apply to all sites within the State borders. Another cost saving technique which has been added to this title which we support is the ability of States to receive funding for conducting emergency and time-critical removals. State Waste Managers have long contended that they can perform these functions for less cost than EPA, essentially leveraging more ``bang for the buck''. Simply put, States are physically closer to the removals which occur within their own borders than either representatives from U.S. EPA regions or headquarters. This is a common sense change. We are also pleased that S. 8 streamlines the program by providing a fixed State cost share, namely 10 percent of remedial action costs and 10 percent of operation and maintenance costs. The current cost share system has served only to exacerbate the tension which exists between State Waste Agencies and the U.S. EPA. Under the status quo the financial incentives for EPA and the States are diametrically opposed when considering final remedies for a site (States desiring more capital intensive remedies and EPA seeking remedies with lower capital costs and higher operation and maintenance costs). State Waste Officials believe this is a fair and well-reasoned position. We strongly recommend that it should be explicitly stated in statute that States should not be required to cost share on removal actions in order to provide the needed direction to EPA in this area. We are concerned, however, that as we alleviate the current tensions between States and EPA on the issue of State cost share that we are merely redirecting these tension into a new area namely withdrawal of delegation/authorization. As written, S. 8 allows EPA to withdraw delegation/authorization on a site by site basis rather than on a programmatic basis. This essentially creates a site by site veto authority by EPA should EPA program managers disagree with a State selected remedy. We support the concept of withdrawing delegation/ authorization from a State which is consistently failing to implement the provisions of the Superfund program in a sound manner, but to allow EPA field managers the ability to second guess State field managers on a site by site basis appears to be antithetical to the stated goals of S. 8. remedy selection As we indicated earlier, over thirty States are either in the process or have promulgated cleanup standards/models. The States have not waited for the Federal Government to promulgate national cleanup standards, but instead have moved out ahead. We are pleased that S. 8 recognizes the work which has occurred at the State level and maintains the provision for State applicable standards to be factored into the Federal remedy selection process. Where State goals and standards have been established, they should be applied consistently at all sites subject to CERCLA liability in that State regardless of the lead agency. This includes not only NPL sites but brownfield/voluntary cleanup sites and Federal facilities. A uniformly applicable cleanup process will eliminate the often paradoxical inconsistency found where similar sites in close proximity are cleaned up to different levels for reasons which have little to do with the actual risk posed. It provides an expectation of consistency to responsible parties, nearby residents and other stakeholders involved in the cleanup process. In States which have not developed goals and standards, EPA should continue to use the risk range established in the NCP. State Waste Managers do support the concept of eliminating RARs-- relevant and appropriate requirements in favor of a process where States will promulgate all relevant standards, criteria and requirements in a separate rulemaking for use in the remedy selection process. We believe this will streamline the remedy selection process and provide a greater level of certainty to responsible parties and to the public. We also support the determination of future land use early in the remedy selection process prior to the calculation of site specific cleanup levels. This is a positive change which has been implemented by most State Superfund programs and should serve to promote the redevelopment of existing industrial areas rather than encouraging industrial development in currently non-industrial areas. We also agree with the elimination of the current preference for permanence in the CERCLA statute. Neither EPA nor the majority of States are implementing permanent remedies and it is time that the statute reflected reality. States are selecting remedies which are protective of human health and the environment, cost-effective and implementable. That said, ASTSWMO does recommend that institutional controls and other designated restrictions necessary to implement a particular remedy be made legally enforceable, run with the land, and be binding among all parties to implement the restrictions. Financial responsibility mechanisms should also be identified to provide for the perpetual maintenance of these sites in case the responsible parties are unable to do so. Last, we also agree with the six factors proposed to balance the remedy selection process, i.e, the reliability of the remedial action in achieving the protectiveness standard over the long term; any short term risk to the affected community; the acceptability of the remedial action to the affected community; the implementability and technical feasibility of the remedial action from an engineering perspective and the reasonableness of cost. We believe that when all the remedial alternatives have been evaluated, the remedies which meet all applicable standards, are protective of human health and the environment and which fall within the risk range should be considered and the least costly remedy selected. The cost of implementing the alternative, including long-term monitoring and operation and maintenance must be considered. ASTSWMO believes that assessments of costs should reflect as realistically as possible the costs of perpetual monitoring and maintenance. The application of the cost effectiveness test should be applied to all sites equally with no consideration given to whether it is a fund or responsible party lead site. When the cost of achieving the target risk cleanup level results in costs which are disproportionate to the risk reduction benefits an economic waiver should be available. While we support the above mentioned provisions as outlined in S. 8, we ultimately believe the remedy selection process should be conducted by qualified States using State law and procedures. We believe this is the only true mechanism for providing citizens and responsible parties a measure of consistency. Consequently, we question the provision in Section 133(a)(I)(B) which appears to trump the authorization provisions outlined in Title II of this bill. We respectfully request clarification of this provision. We have three other questions/comments concerning the remedy selection procedures as outlined in S. 8. First, we question how the Committee plans to define a remedial action which is deemed protective if it protects an ecosystem from significant threats. What definition is the Committee using for ``significant threats'' and how will this definition relate to CERCLA natural resource damages provisions? Second, we question the construct of the remedy review boards as outlined in S. 8. Specifically, will these remedy review boards apply to sites which have been delegated/authorized to a State and in the case of authorization/delegation, who will be in charge of the review board the Governor or the Administrator? Also, who will pay for the States' time to participate on these review boards? Last, why did the Committee find it necessary to preempt State law by releasing NPL sites which are cleaned up to unrestricted use from both Federal and State liability. Does this assume the sites were cleaned up to State standards and who will make this determination will a State concurrence be required? More importantly, States are not part of the problem when it comes to returning sites to productive use. It is not State liability laws which are keeping sites from being redeveloped. This is a Federal statute and only Federal liability should be addressed in this statute. ASTSWMO opposes this provision. liability As State Waste Managers, our principal concern is ensuring the timely and effective cleanup of contaminated sites. The current liability scheme may not be entirely equitable to some responsible parties, but in the past it has provided a stable source of funding. Equity must also be extended to protect those Americans living near, and suffering the effects of, contaminated waste sites. Reforms are needed and we believe those outlined in title V of this bill will serve to address many of the statute's current inequities without disrupting the flow of cleanups. For example, in 1993 State Waste Managers developed and adopted a proposal advocating the carve out of municipal solid waste landfills from the Federal Superfund program. We do not view this as a ``compromise solution'', but rather a smart move from a practical implementation perspective. State Waste Managers have found these sites to be ill-suited for the current Federal Superfund liability program. Municipal Solid Waste Landfills are, for the most part, large sites which involve numerous responsible parties, served a broad societal function, and have a presumptive remedy associated with their remediation, i.e., capping. We support your decision to carve these sites out of the current Superfund liability program, however, we question the scope of the term ``co-disposal'' landfill as outlined in S. 8. We would be happy to work with you to develop an acceptable definition of co-disposal site. We also concur with your decision to more clearly define and more actively utilize the liability relief tools of de micromis and de minimus settlements. Ultimately, we caution that any final liability scheme which may be accepted by the Committee must ensure sufficient funding to adequately cleanup sites to a level which is protective of human health and the environment and ensure the continuation of the States' ability to enforce their own laws and to provide for no cost shifts to State governments. The nation's Governors have outlined a series of criteria for revision of the CERCLA liability scheme, and we recommend that the Committee evaluate these proposals by those criteria. federal facilities Our overall comment regarding the Federal facilities section of S. 8, is that Federal facilities should not be treated any differently than other Superfund sites. The Federal Government should be held to the same standards as other responsible parties and therefore, State applicable standards should not be waived at these sites. In addition, we believe States should be able to be both authorized and delegated to implement remedy selection at Federal facilities. Therefore, we recommend that States be allowed to self-certify for either delegation or authorization for Federal facilities sites as is specified for non- Federal sites There is no reason why the streamlining and cost savings of the Superfund program which has occurred at the State level should not be transferred to the Federal Government at Federal facility sites. natural resource damages Of all the titles in S. 8, we believe this title is the most markedly improved from S. 1285 and we commend Senators Chafee and Smith for acknowledging the importance of restoring our country's injured natural resources. This title is extremely important to State Waste Programs as the majority of States currently utilize the Federal CERCLA Natural Resource Damages provision rather than State law at non-NPL sites. In general, while S. 8 places new restrictions on trustees, it will still enable trustees to continue to provide a level of primary restoration for injuries to natural resources caused by these sites. However, we question the Committee's desire to eliminate non-use damages and the intended definition of ``reasonable cost'' and request that the Committee consider adding the component of ``timeliness'' as a factor when evaluating restoration alternatives. While we recognize the Committee's desire to provide flexibility in the payment of damages, we are concerned that the trustees have sufficient funds available to initiate restoration work at the earliest possible time and to be able to complete the restoration of injured resources and the services they provide to the public. ASTSWMO has three primary recommendations for further improving the natural resource damages process. First, the issue of scheduling payment of damages as well as other issues raised by both industry and trustees could be addressed through one overarching revision to the title: a provision that requires the integration of NRD into the cleanup process. While S. 8 already reflects the Committee's desire to coordinate restoration and response, this movement toward integration could be carried further in order to ensure that NRD is routinely considered not only at the remedy selection stage, but during the investigative stage of the site cleanup process. Integration of NRD assessment into the remediation process reduces transaction costs and liability by enabling the collection of NRD information during the site investigation and identifying restoration options that can be made part of the remedial action. An integrated process will promote prompt resolution of NRD issues as part of the overall settlement at a site, facilitate timely and efficient restoration and address most of the industry and trustee concerns that have been raised throughout the Superfund debate. Second, we believe the statute of limitations should be clarified in order to significantly improve the program, prevent unnecessary litigation and provide certainty to both the trustees and responsible parties, and compensate the public in a timely manner. We understand the current tensions between responsible parties and regulators and the need to balance the interests of both. Responsible parties want assurances that the NRD assessment process will have an end point. However, the trustees need sufficient time to be able to perform thorough assessments in order to accumulate as much pertinent information as possible before filing a claim. One possible solution which could meet the goals of both interests is the following: upon the signing of a ROD, a trustee will have 3 years to begin a natural resource damage assessment and upon completion of the assessment, the trustee will have 3 years to file a claim. We believe this may serve to meet the needs of both parties as well as the public, and to streamline a highly ambiguous area of the law. Third, in order for trustees to meet the goals of achieving cost- effective restoration methods, it becomes even more crucial for trustees to have access to the fund for assessing these sites. If the prohibition of using the fund for assessments is lifted, trustees will have the resources readily available to accomplish these assessments in a more timely manner, ultimately benefiting the responsible parties, the public and the environment. miscellaneous ASTSWMO supports the requirement to obtain Governor concurrence in order to list a site on the NPL. This ensures that the NPL is used as a strategic tool for cleaning up sites. We are concerned, however, with the Committee's desire to limit the listing of NPL sites to a specific number per year. We do not believe this provision is necessary as the Governor's concurrence requirement will limit the number of sites placed on the NPL to those meriting such treatment (note: in 1996, 50 percent of the sites EPA proposed for listing did not receive a Governors' concurrence). Also, EPA's internal listing process is very time-intensive. We believe with the Governor's concurrence provision and EPA's own listing backlog, a cap is not necessary and may serve to undermine State enforcement efforts. conclusion Again, we commend the Senators on a bill which incorporates many of the State Waste Managers' recommendations and we look forward to working with you as the Superfund debate continues. 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