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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.
CLEAN WATER ACT REAUTHORIZATION: BUSINESS, ECONOMIC DEVELOPMENT PERSPECTIVE
THURSDAY, FEBRUARY 16, 1995
U.S. House of Representatives,
Subcommittee on Water Resources and Environment,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:15 a.m. in room 2167, Rayburn House Office Building, Hon. Sherwood Boehlert (chairman of the subcommittee) presiding.
Mr. BOEHLERT. This hearing will come to order.
We will spare you the eloquent prose up here. The Ranking Minority Member and I have agreed that we should get right to the business at hand.
Let me call the first panel consisting of: Carol Lindsey, U.S. Chamber of Commerce; Robert Stahl, the American Trucking Association, Stormwater Reform Coalition; Carroll Missimer, American Forest and Paper Association; David Norwine, National Association of Metal Finishers; and Glenn W. Hammer of the Chemical Manufacturers Association.
The statements of all the witnesses will appear in the record in their entirety. We would ask, in the interest of time, and it's going to be a very difficult day because of the floor activity—we're dealing with the National Security measure and will be called out from time to time—we ask that you confine your opening statement to no more than five minutes and we will try to be right to the point in our questioning.
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Let's go in the order that has been announced. First, Carol Lindsey from the U.S. Chamber of Commerce.
TESTIMONY OF CAROL BENNETT LINDSEY, PRESIDENT, OZARK INTERNATIONAL CONSULTANTS, ON BEHALF OF THE U.S. CHAMBER OF COMMERCE; ROBERT STAHL, RISK MANAGER, CHANEY ENTERPRISES ON BEHALF OF THE AMERICAN TRUCKING ASSOCIATION, STORMWATER REFORM COALITION; SKIP MISSIMER, ASSISTANT CORPORATE ENVIRONMENTAL MANAGER, P.H. GLATFELTER COMPANY ON BEHALF OF THE AMERICAN FOREST AND PAPER ASSOCIATION; DAVID NORWINE, VICE PRESIDENT, HAWARD CORPORATION ON BEHALF OF THE NATIONAL ASSOCIATION OF METAL FINISHERS; GLENN W. HAMMER, VICE PRESIDENT, ENVIRONMENTAL, HEALTH AND SAFETY, ASHLAND CHEMICAL COMPANY ON BEHALF OF THE CHEMICAL MANUFACTURERS ASSOCIATION
Ms. LINDSEY. Thank you, sir.
My name is Carol Lindsey and I am President of Ozark International Consultants, located in Fayetteville, Arkansas. This is a small business that consists of four employees and myself. We serve as consultants to 65 business and industry leaders located in the northwest corner of the State. These 65 business and industry leaders are known as the Northwest Arkansas Council. The Chairman of the Northwest Arkansas Council is former Congressman John Paul Hammerschmidt who served on the Public Works and Transportation Committee for 26 years.
We also serve as consultants to the Northwest Arkansas Regional Airport Authority that is preparing to build a $140 million airport to serve the rapidly growing part of Arkansas to enhance the capability of business and industry. Along with the airports, the Northwest Arkansas Council acts as consultants to the Benton, Washington Water Association which is preparing to build a $38 million in tact structure treatment plant and 61 miles of line to provide water to the more rural, sparsely-populated communities and areas in Washington and Benton County. In these two counties, this will aid in the development of jobs for our smaller communities and to bring water to rural areas that have hauled water for centuries for every aspect of their lives.
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We also provide services in the area of wastewater, solid waste, health care, child care, elder care, housing and probably one of the most critical of all, highways. We have never had adequate infrastructure and compounded with the 130 percent growth in the last 30 years, one can see our region has many different problems and priorities.
Let me reiterate here, gentlemen, that I concur, as do the people in northwest Arkansas, that we have a beautiful area that is environmentally-sensitive. We concur with the Clean Water Act, but as we address the last 5 to 10 percent of the things that need to be tested, we find that it's going to probably inhibit rather than enhance.
I'm here today to testify on experience with clean water regulations on be half of the U.S. Chamber of Commerce. I am proud to do so. I am a member of eight chambers. All of us here today represent a broad spectrum of business and industry. We provide the jobs and services that keeps the U.S. economy running.
I want to comment on three areas that greatly concern all of us. One is the lack of flexibility in the midst of ever- increasing rules, regulations and complex permitting processes, without, in our opinion, any corresponding scientifically provable environmental benefit. Two, departure from sound science to highly conservative, if not unrealistic, mathematical methods coupled with adherence to rigid numerical standards. Three, challenges of protecting our environment in general and our water in particular, untying the hands of the scientific community and providing incentives for technologies to produce cleaner water at more economical prices to business, industry, consumer and ultimately, the American taxpayer; and to assist these scientists in getting the technologies into the communities of America to assure continued job creation for our children and our grandchildren.
As we approach the 21st Century, and I enter the twilight of my years, my greatest concern is that if we continue to pass laws and regulations that drive up the cost of providing safe water, particularly to rural and small towns outside an affordable range, forcing this segment of the population to return to drinking untreated water, which in turn will drive health care costs up. It is already stifling the ability of business and industries in certain areas of particularly northwest Arkansas of job creation.
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Do we watch America regress in an area of technology, development, job creation, and thus lowering the income and quality of life for our children and grandchildren? Please, please, make all regulations based in science that is current with a constant eye on the future and ever progressing technologies that are scientifically-based in research and provable.
I shall end my time with stories of people who live in rural areas in northwest Arkansas. First is the couple that have been married for 63 years; they have hauled every drop of water they drink, cook with, bathe and wash clothes with, not because the water nearby is polluted—there is no water. The second story is of a lady who shed tears of joy because she could place her husband, who has congestive heart failure, in a bathtub and use all the water she chooses for the first time in 46 years. Or the young couple with two small children who take water from a stock pond for human consumption. These people are real. They work hard and they pay taxes and all of them have small businesses. The horrible fact is that building water lines to serve these people is mired in the never-ending laws and regulations that puts water that is safe and dependable out of their reach.
Thank you, Mr. Chairman. We look forward to a dialogue on these issues today and would you please allow me to answer any questions you feel necessary.
Mr. BOEHLERT. Thank you very much, Ms. Lindsey. I appreciate your testimony.
We're privileged to have here on our subcommittee your congressman. Mr. Hutchinson, you are recognized.
Mr. HUTCHINSON. Thank you, Mr. Chairman.
I want to, as always, commend you and compliment you for your leadership on the Clean Water Act and on these issues, and also your promptness in starting these things. I hustled as fast as I could getting back.
I am delighted today to be able to welcome Carol Lindsey, one of my constituents. I don't believe the United States Chamber could have selected a better representative today. She has been one of the outstanding leaders in not just northwest Arkansas, but the State of Arkansas in water resources issues. While being one of our State leaders, she has also found time to rear 7 children, 43 foster children, and be the grandmother to 9 grandchildren. Nothing could testify to her dynamism and her energy and her enthusiasm more than that. So we're delighted to have Carol today.
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Ms. LINDSEY. Thank you very much.
[Applause.]
Mr. HUTCHINSON. Mr. Chairman, I look forward to working with you on this very important issue as we seek to find a practical and sensible Clean Water Act.
Thank you.
Mr. BOEHLERT. Thank you very much, Mr. Hutchinson.
Mr. Stahl.
Mr. STAHL. Thank you, Mr. Chairman and members of the committee.
I appreciate the opportunity to testify on the stormwater provisions of the Clean Water Act. Because of the limited time today, I will summarize my written comments to you and pass them out to the members of your committee.
I am Robert Stahl and I am the Risk Manager of Chaney Enterprises, a construction materials supply distributor operating throughout southern Maryland. Chaney Enterprises is a family-owned and operated business founded in 1962. Last year, we operated with approximately 250 over-the-road vehicles at 15 facilities, 500 employees and had revenues of $60 million. Chaney Enterprises is a member of the Maryland Motor Truck Association, the state affiliate of the American Trucking Association, Inc. I appear here today on behalf of the Stormwater Reform Coalition. ATA is an active participant in the Coalition which seeks to develop and implement efficient and equitable stormwater laws.
The four major issues that I would like to concentrate my testimony on here today are: one, that industry has learned that flexible pollution prevention practices do indeed work to reduce the exposure of pollutants to stormwater and should be the foundation of industrial and commercial stormwater programs; second, pollution prevention is most effective when facilityowners and/or operators are provided with innovative incentives to minimize contact with stormwater with industrial, commercial materials and any activities that they generate; third, analytical monitoring, traditional command and control methods, and agency micromanaging of industrial and commercial stormwater discharges are inefficient and are often counterproductive to both public and private resources; fourth, the Phase II regulations should be delayed so that only those classes of Phase II whose regulated discharge impact ambient water quality, actually are captured by such regulations. We are proposing an 8-year permitting extension.
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The Coalition has submitted a proposal for statutory modifications based upon industry's experiences complying with the Stormwater Program since regulations were promulgated in November of 1990. One of the most important facts that we have learned is that natural stormwater is not clean to begin with. As stormwater comes in contact with land and natural objects, it collects heavy metals and other natural pollutants. Thus, regulating the stormwater itself does not in itself guarantee achieving water quality objectives.
Congress must act to provide EPA with the flexibility and the tools to correct the Stormwater Program. Specifically, the Congress should do five things. First, it should exempt all facilities that have no significant contact of industrial or commercial activities or materials to stormwater from permitting. Second, it should provide all facilities that are willing to certify affirmatively that they have undertaken or are in compliance with certain pollution prevention activities, need not be subject to the NPDS permitting process. Third, it ought to exempt small, less than 5-acre construction projects. Fourth, Congress ought to end the permitting burden on small businesses which may not have sufficient staff or resources to justify their inclusion in the Stormwater Permitting Program. Fifth, they must delay the permitting of Phase II sources until they have been studied further, allowing for certain classes to be removed from permitting consideration.
The Stormwater Reform Coalition offers suggested legislation for industrial and commercial operations that address all of the above issues by making minor changes to Sections 402 and 319 of the Act. The legislation exempts from permitting those facilities willing to accept responsibility for their own good housekeeping and pollution prevention activities. This will result in environmental benefit. It will also result in significant savings from permitting authorities, including EPA and other authorized States because it will mean the issuance of fewer permits and less administrative paperwork. Moreover, the legislation provides permitting authorities with hammers for facilities that do not live up to their responsibilities or for facilities that the permitting authority can show have direct or significant impact on water quality. Industrial and commercial facilities will have incentives to develop innovative technologies for controlling stormwater discharges to act, not react.
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Industry is ready to build a partnership with permitting authorities to control pollutants in a site-specific manner that would benefit the region on a watershed-specific basis. Congress must provide the flexibility and some degree of autonomy in order for this to be accomplished.
I appreciate the opportunity to testify and I would be happy to take answers to any questions.
Mr. BOEHLERT. Thank you very much, Mr. Stahl. Also, thank you very much for your emphasis on pollution prevention. I appreciate that.
Mr. Missimer.
Mr. MISSIMER. Thank you, Mr. Chairman and members of the subcommittee.
I am Skip Missimer of the P.H. Glatfelter Company and I am here today on behalf of the American Forest and Paper Association where I serve as Chairman of the Water Quality Committee.
As we indicated in testimony before this Congress, this committee in the last Congress, AFPA believes that the Clean Water Act has been a true success story, one that has resulted in real improvements in our Nation's water quality. Nevertheless, we believe it is appropriate to occasionally reassess program goals and effectiveness.
We agree with your interest in potentially shifting the focus of the Act from a command and control strategy to a prioritized, risk-based strategy in which the regulatory scheme is based on the best science available and where environmental concerns are addressed in a cost effective manner.
Section 304 of last year's bipartisan alternative contained a provision requiring EPA to conduct a risk assessment consistent with EPA-issued guidelines for all substantive rulemakings as well as for guidance documents. We would urge you to incorporate risk assessment and cost benefit analysis consistent with the legislation now moving through the process in the House.
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In our testimony today, we would further like to highlight four specific issues: changes to effluent guidelines; pollution prevention; nonpoint source pollution; and wetlands.
Under the Act, EPA sets limits for point source discharges of pollutants based on three technology standards — best available technology or BAT, best conventional technology or BCT, or best practical technology, or BPT.
As provided by the Act, BAT allows for consideration of economically-achievable technology, but this provision has been implemented by the U.S. EPA with little or no actual consideration of cost. The inclusion of cost benefit and risk assessment principles into these Clean Water Act regulations would insure that the significant sums of money spent to comply with the provisions in the Act would be spent more effectively protecting human health and the environment.
Another important problem is EPA's recent interpretation of the statute which would ignore the BCT cost reasonableness test. Congress recognized the need for economic reasonableness in the control of conventional pollutants in 1977 when it adopted the BCT standard. Unfortunately, in the proposed cluster rule for our industry, EPA ignores the BCT cost test and instead is revising BPT to impose more stringent controls that are not cost effective. Therefore, we would request that the committee consider clarifying in legislation that EPA does not have the authority to upgrade BPT unless the BCT cost test is performed as Congress intended.
Several provisions of the Clean Water Act discourage dischargers from employing pollution prevention techniques and serve to remove or severely limit any operating flexibility for dischargers. First, EPA's antidegradation policy, as recently interpreted, places severe restrictions on any increase in a discharge even if that increase would not violate any water quality standards or effluent limitations and even if the increased discharge would still be within existing permit limitations. We are concerned that an EPA permit writer can become the final arbiter for deciding when a change in the discharge is necessary to promote important economic or social development.
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As a result of this and other potential difficulties, AFPA would like to explore opportunities to make antidegradation more rational while recognizing that there is an important role for maintaining high quality waters.
Second, the antibacksliding provisions of the Act and EPA's antibacksliding policy severely limit the circumstances under which permit conditions may be made less stringent in the future.
Third, any provisions on intake credits must be consistent with a fundamental premise of the Act that each individual discharger is responsible only for the pollutants it contributes to the waters of the United States.
The restrictive nature of these three provisions is also a significant concern with the Great Lakes Initiative, a program that EPA is required to issue as guidance but that EPA proposed primarily as a rule which will mandate that States adopt certain of the Federal provisions verbatim. The Act should be amended to ensure that antidegradation, antibacksliding and intake credit requirements do not prevent new or increased discharges if there is no significant impact on water quality.
The forest products industry has made tremendous progress in controlling nonpoint source runoff from forest practices through the use of best management practices or BMPs. State forestry BMPs have been successful because they are developed on the basis of State-specific characteristics, a bottoms up approach. Section 319 of the current law provides the best framework for addressing this State-based program and should remain unaltered.
The forestry community has a long tradition of practicing compatible wetlands management activities in wetlands. Forest management has been specifically recognized by conservationists as a preferred activity in wetlands because it provides an economic incentive for landowners to maintain and protect wetland functions. Within that context, AFPA generally supports the concepts in H.R. 1330 introduced in the 103rd Congress. More specifically, AFPA believes that any wetlands amendments should include retention and clarification of the silviculture exemption, a rationale wetlands definition, improvements in wetlands appeals processes, and explicit protection of private property rights. We look forward to an opportunity to testify on wetlands issues at your March 7th hearing.
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Thank you very much. I'd be pleased to answer questions.
Mr. BOEHLERT. Thank you very much.
Mr. Norwine.
Mr. NORWINE. Good morning, Mr. Chairman and members of the committee.
I'm David Norwine, Vice President of Haward Corporation, North Arlington, New Jersey, which company is a member of the National Association of Metal Finishers. Today, I am speaking on behalf of the more than 4,000 job shop metal finishers and another 9,000 captive shop platers in America.
The Clean Water Act is one of America's success stories and the Congress can point with pride to that success. The waters of America are significantly cleaner. EPA's report to Congress states that we are at about 85 percent achievement of the goal of making our waters fishable and swimmable.
NAMF believes that the reauthorization should address the water quality problems that are currently recognized as the primary remaining sources of surface quality degradation, urban and rural, nonpoint sources of pollution. NAMF suggests that Congress should not impose any additional and more stringent requirements on industries that are already heavily regulated by the Clean Water Act. It should be obvious from the EPA data that very little water quality improvement will result from any further incremental reductions in pollutant discharges by point sources simply because point sources are no longer a significant cause of water quality impairment.
Then where is all this stuff we keep hearing about coming from? What is an urban, nonpoint source? A significant study done in Chicago shows that the homemaker is the real culprit. There is four times as much cadmium and 65 times as much lead in your toothpaste as a plater is allowed to discharged; there is 100 times as much nickel in your bath water and your laundry soap as a plater is allowed to discharged. The largest single source of cadmium in the sewer lines is from laundry brightner. A study by the New York City DEP of its 14 treatment plants shows that some 2,400 pounds of copper is received every day with an estimated 61 pounds from industry.
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This industry has been a historical contributor to the progress currently being made in the Effluent Guidelines Program which, along with pretreatment programs, sets discharge standards for the majority of industrial discharges. The process has given rise to a series of recommendations which should be considered by this committee.
Specifically, the recommendations should provide for pollution prevention options that allow industrial facilities to implement advanced pollution prevention, multimedia measures in return for certain incentives. These incentives include extended compliance schedules and measures designed to provide for flexible enforcement if innovations fail to reach anticipated results.
Under the current framework, technology and improvements in detection methods are driving national standards to limits far beyond acceptable levels of environmental risk. Pollution prevention policies and Clean Water Act programs should not look to past command and control approaches as a model, but should be fitted securely in the multimedia, flexible, cooperative, incentive-based approaches that show the greatest premise for enhanced environmental progress and industrial competitiveness.
EPA should not be in the position to mandate pollution prevention measures, including process changes for material substitution. To do so would wreak havoc on the competitiveness of American industry.
NAMF wishes to bring the issue of the scientific validity of current water quality criteria standards to the attention of the subcommittee with the emphatic suggestion that Congress must compel EPA to revamp its development consideration and adoption procedures for water quality criteria. Congress must not allow EPA to use the guidance process coupled with the flog of unscientific complexity to set standards. Such standards, once in place, result in environmentally unnecessary and extremely costly control measures.
NAMF wishes to thank the subcommittee for this opportunity to provide testimony. Our industry has borne a tremendous burden in meeting a variety of environmental statutes. Our members are only rankled when environmental requirements are unsupported by science based on flawed logic, or appeals to emotion.
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We hope that the Congress will use the reauthorization of the Clean Water Act as an opportunity to address new environmental challenges by providing truly flexible pollution prevention, alternative compliance mechanisms, and address the specific limited deficiencies in the existing law that require amendment.
Mr. BOEHLERT. Thank you very much.
Mr. Hammer.
Mr. HAMMER. Good morning. My name is Glenn Hammer. I'm Vice President of Environmental Health and Safety for Ashland Chemical Company. I am appearing today on behalf of Ashland and the Chemical Manufacturers Association.
My comments will focus on two principles for clean water authorization, first, the need to focus on cost effective risk reduction and second, the need for greater flexibility in implementation of the Act. These changes are necessary in order to drive greater innovation and to achieve the most significant improvements to the environment at the most reasonable cost.
CMA member companies represent more than 90 percent of productive capacity for basic industrial chemicals in the United States, In 1994, the U.S. chemical industry was the Nation's largest exporter with estimated exports of over $50 billion. Today, the industry provides $1.1 million high-tech jobs for American workers. Through our Responsible Care Program, CMA is committed to continuing improvement in environmental performance.
The Clean Water Act Programs have reduced and will continue to reduce industrial discharges to our Nation's surface waters. The Act has been a success because it is performance-based, meaning we're told what discharge limits to meet but we're free to develop and implement our own solutions to meet these limits and because the Act's controls are designed to ensure continued improvements to water quality.
The Act's future success, however, is dependent on ensuring the Nation receives the greatest amount of environmental improvement for its expenditures. Billions of dollars have already been spent to meet technology-based requirements of the Act; these efforts have achieved significant water quality improvements. The future racheting down of these technology-based standards may not reflect significant improvement and may be prohibitively expensive.
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As levels of pollutants in waste streams get lower and lower, the cost of removing these pollutants gets higher and higher. For example, setting a technology-based standard at a level that requires removal of the last 1 percent of a particular pollutant may cost as much or more as a technology used to remove the first 99 percent. Continuing to tighten down technology-based requirements in categories simply because a new technology can achieve slightly greater pollution reduction represents technology for technology sake. This is a direction we can well ill afford.
Cost effective risk reduction must be the driving principle behind decisions to impose the next generation of both technology-based and water quality-based requirements under the Act. Currently, this is not the case.
For example, in Section 118 of the Clean Water Act, EPA is in the process of issuing guidance that would require the Great Lake States to adopt extraordinarily stringent water quality standards, antidegradation policies and implementation procedures. This Great Lakes initiative guidance is a clear illustration of the imposition of extraordinarily expensive water quality-based requirements that are more stringent than necessary to protect human health and the environment. In other words, the risk reduction benefits of these requirements do not justify their cost.
Clean Water Act legislation should promotion risk-based priority setting for regulatory action, cost effective management of risk, scientifically sound risk assessments, and the opportunity for public participation in development of all aspects of risk-based decisionmaking.
Reauthorization of the Clean Water Act also provides an opportunity to examine the lack of flexibility that may stand in the way of cost effective risk reduction opportunities. While standards under the Act are performance-based, other provisions of the Act serve as barriers to developing and implementing innovative methods for achieving the Act's objectives.
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For example, the Act provides a handful of various provisions but few of these have provided any real flexibility. Under the innovative technology variance, for instance, dischargers who use innovative technology can obtain compliance extensions. However, the Act establishes so many restrictions on obtaining the variance and so little relief in terms of compliance time that very few variances have ever been sought or granted. Who knows how many innovative approaches to achieving the requirements of the Act, as well as improvements to other environmental media, have been missed because of the Act's lack of flexibility in certain areas of implementation.
Vast sums have been spent to achieve the improvements to water quality that this country has witnessed over the last 20 years. Most of these improvements have come from point source discharges. Because point source now accounts for so little of the remaining problems, any additional controls must be targeted in other areas. Further, any additional controls must take into account the cost and benefits. The future success of the Clean Water Act depends on smart and efficient allocation of resources aimed at achieving the maximum risk reduction for what we are spending.
We believe it is possible to continue to improve the Nation's water quality and do so in a less costly manner. Providing more flexibility in the Act and focusing it on effective cost risk reduction will allow for more rational decisionmaking concerning future improvements to the water quality of the United States over the next 20 years.
Thank you for the opportunity to appear before you today.
Mr. BOEHLERT. Thank you very much.
The final witness is from the Textile Rental Services Association of America, Alan Bubes. Mr. Bubes.
TESTIMONY OF ALAN BUBES, PRESIDENT, LINENS OF THE WEEK ON BEHALF OF THE TEXTILE RENTAL SERVICES ASSOCIATION OF AMERICA
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Mr. BUBES. Thank you, Mr. Chairman.
My name is Alan Bubes. I am President of Linens of the Week, headquartered here in Washington, D.C. Linens of the Week employs approximately 600 people, about half of which are here in D.C. where I also reside where we operate two plants. In Maryland, one of our plants is in Mr. Gilchrest's district in Salisbury, and in Delaware, Virginia, New Jersey and Pennsylvania.
First, I'd like to take this opportunity to thank you for allowing me to appear before the subcommittee today. Not only am I testifying on behalf of Linens of the Week but on behalf of the Textile Rental Services Association of America which is a nonprofit, trade association representing 1100 member companies engaged in textile maintenance and rental services to commercial, industrial and institutional accounts. Major customers of the textile rental companies include hotels, restaurants, hospitals, nursing homes, and manufacturing facilities. In layman's terms, we operate laundries that service sheets, towels, table linen, uniform, entrance mats and many other products to all types of businesses.
Before I begin my testimony, I'd like to say that the Clean Water Act has fulfilled its primary purpose of protecting our Nation's water. Although there is room for improvement, the law should not undergo any major revisions. The reauthorization process should be limited in scope and address only those parts of the law that need to be fixed.
My testimony will focus on my experience with the Clean Water Act as a small business owner. The first part of my testimony will discuss the impact of the CWA's pretreatment program on Linens of the Week and the industry as a whole. The second part of my testimony will address the citizen suit provisions for CWA violations. Finally, I will make recommendations to amend the current law which I believe reflects the views of many on this committee.
The States and industry cannot afford increased government mandates and it is time to introduce risk assessment and cost benefit analysis into the process.
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Under the CWA's Pretreatment Program, industrial laundries such as ourselves will be required by 1998 to pretreat their waste water before it is discharged to publicly-owned treatment works. Linens of the Week does not currently pretreat its water because the local POTWs can handle the discharge. The added regulatory burden of categorical pretreatment standards means that waste water from laundries like mine will be treated twice. The industry believes that requiring such laundries to pretreat waste water before it goes to the POTW is an example of unnecessary and costly Federal requirements that will offer few environmental benefits. The pretreatment standards threaten the viability of smaller companies like Linens of the Week whereas larger companies can absorb the costs of construction of wastewater treatment systems.
We recommend that the Clean Water Act be amended to allow States the authority to exempt certain industries from categorical pretreatment standards if the POTWs can handle the discharge.
The second most cited problem for the industry are the citizen suit provisions for CWA violations. A number of companies receive notice from citizen action groups that they are being sued for alleged CWA violations, many of which are paperwork violations. The third parties that file these suits fail to determine whether the company is negotiating with the city or POTWs to resolve the violation. Companies are forced to spend both time and money to defend themselves against such lawsuits.
We also believe that the EPA encourages municipalities to go beyond the requirements of the Act. In effect, many companies are deemed to be in significant noncompliance for nothing more than paperwork violations. We believe it is time to introduce some reason into this system. The primary purpose of the enforcement is to deter violations, not to punish everyone who makes a mistake.
Most companies are in compliance and are actively pursuing pollution prevention measures. However, despite the best intentions, it is not always possible to be in compliance because of the vast number of burdensome recordkeeping or reporting requirements under the CWA. Citizen suits related to paperwork violations result in no added benefit because the environment is not exposed to pollutants by these type of violations. Such suits are frivolous and are a costly nuisance to companies.
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Having said all this, contrary to what environmental and citizen groups lead you to believe, most companies have excellent working relationships with their POTWs. They work together when a problem arises to find a solution. Sometimes a company will have to install additional equipment to solve the problem; other times, the POTW realizes it can handle the pollutant and tries to adjust to the company's permit limits. Sometimes this is difficult because of the extensive bureaucratic requirements.
In sum, we don't need additional bureaucracy. What industry needs is flexibility under the CW to allow local communities to handle and solve these problems with the industry. The purpose of the Clean Water Act was to ensure the protection of human health and the environment by protecting our Nation's water. The Clean Water Act should strive for compliance by allowing industry and local communities the flexibility to solve problems between themselves.
I'd just like to add that the cost to laundries like ourselves of putting in a pretreatment plant can go anywhere from $100,000 to $1 million per plant and even then, we're not positive that will always get us into exact compliance on every single standard, as well as then the cost of operating the plant goes anywhere from two to three points of our income or your operating statement to dispose of the sludge.
I'd like to conclude my statement by thanking the subcommittee for the opportunity to express the views of our association. Again, we'd like to say we applaud the subcommittee efforts to draft legislation that will both streamline the process and balance the interests of the environment with the interest of the business community.
Mr. BOEHLERT. Thank you very much, Mr. Bubes.
We're going to continue right on despite the fact that there is a vote in progress. The Vice Chair of the subcommittee, Mr. Wamp, dashed out immediately as soon as the bell rang. He's going to vote and come back and take the chair and allow me to go vote. We've got a wager up here, the Chairman and I, to see how fast he'll be back.
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I am privileged to have here today joining us, which indicates his deep concern about this issue, the Chairman of the full committee, Mr. Shuster, and I would recognize him for any comments he may wish to make.
Mr. SHUSTER. Thank you, Mr. Chairman, but I'm here to learn, so let's get on with it.
Thank you.
Mr. BOEHLERT. Okay, fine.
I want to thank all of the witnesses. I would like to say to the Chamber, and I wish, Ms. Lindsey, you would convey this to the Chamber, we wish we'd had the testimony earlier and it's not your fault, I understand that you're the messenger, but we wish we'd had the message earlier so that we could have gone over it prior to today's session.
Let me also say that I appreciate all that you're doing. Mr. Bubes, I agree with you that most businesses are very responsible and good working relationships with their local treatment works. Mr. Norwine, I agree 100 percent with you that the Clean Water Act is one of the great success stories of our time despite some of the moaning and groaning that we hear that would lead one to conclude that in 1972, Congress made the greatest mistake in the history of man. I think it did good deeds for America and I agree with your analysis. I also agree that the American business community is doing a darned good job.
We are effectively dealing with point source pollution. The battle is not over, we've got more to do, but I think we have to concentrate now on something called nonpoint source pollution. Several of you touched on it just briefly. I would appreciate any comments you might wish to share with us because I think we're doing a good job in addressing the problem of point source pollution. We know how to identify it, we know how to deal with it, we've got to have some refinement in this bill, we all know that, but in the last decade, we've spent $60 billion dealing with point source pollution and spent less than $1 billion dealing with nonpoint source pollution and yet that accounts for the majority of the pollution probably we are seeing today. So would someone care to address that? Who wants to be the first?
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Mr. MISSIMER. Mr. Chairman, thank you.
We agree with your comments. As you are well aware, the forest products industry is sort of in a unique position where we have concerns not only on the point source side but on the nonpoint source side as a result of our forestry activities.
We think there is additional work that could be done on the nonpoint source side. It's clear, for instance, in the Great Lakes area that 99 percent of the problems that we have remaining in the Great Lakes area are not from point source discharges. They are from nonpoint sources. So we need to put our money where the problems are. We need to base things on a risk basis and a cost effective tact to get at these problems and solve them.
I think our industry is pretty proud of our record. According to EPA documents, the forest products industry is responsible for only 5 to 6 percent of the nonpoint source pollution in the United States and all of our member companies, as a result of being a member of AFPA, have to subscribe to our forestry principles which includes a nonpoint source provision and all of those companies implement best management practices in all of the States in which they operate.
We think your focus is correct, we think we need to take a closer look at what we can do for nonpoint source.
Mr. BOEHLERT. Anyone else care to share some thoughts on dealing with the problem? Ms. Lindsey.
Ms. LINDSEY. I come from an area that is high in agriculture and in the last 2-1/2 years, we have been working very stringently, particularly with the poultry industry in developing best management practices. Augment that with I think one area we're missing in America today is developing the technologies that allows particularly those areas that deal in nonpoint source the ability to successfully deal with the limits they are asked to do. May I cite two examples?
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Mr. BOEHLERT. Sure.
Ms. LINDSEY. First of all, we have a technology-based incubator associated with the University of Arkansas. One is a gentleman—
Mr. BOEHLERT. We will pause a moment and give credit to Congressman Wamp—6 minutes and 20 seconds, that is a new record for Capitol Hill. The Vice Chairman, Mr. Wamp. That's faster than the subway.
Ms. LINDSEY. That's exactly right.
Mr. WAMP. Thank you, Mr. Chairman. Carry on. I don't know where we are. I'll catch my breath; you carry on.
[Laughter.]
Ms. LINDSEY. May I congratulate you.
Mr. WAMP. Yes, ma'am. Thank you.
Ms. LINDSEY. I'm talking about nonpoint source pollution and particularly as it applies to agriculture. Since everyone I think chooses to eat in this country, I'm pleased to say that in our area, we do provide a great deal of food for Americans.
One of the things we have applied in the last 2-1/2 years has been best management practices in relation to farming, be that poultry, dairy, cattle, hog or whatever. The two things that we were talking about is the technologies that are being developed through our university.
One has to do with pretreatment as it relates to food processing. A gentleman who has developed a process that reduces the BOD levels in a dramatically shorter time and below EPA limits and yet produces quality of water that is almost that of drinking water quality. The problem will be how to get this out on the market because the laws and regulations that are in place today make it exceedingly difficult for new technologies to be placed on the market.
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The second is a gentleman that I, being a country girl raised on a dairy farm, can safely say I never have seen, bioremediation of any carbon-based material in the manner in which he does it. I believe we commonly on the farm called it composting. This is not what this gentleman does. He can take mixed municipal solid waste, any kind of food processing materials, dead animals, grease, any petrol-based material at all, anything that goes into a landfill today, bioremediate it in 12 weeks to a Class I compost suitable for the food chain, thus reducing the waste by 87 percent. The other 13 percent is pasteurized and qualifies for a Class IV not a Class I landfill.
Yet I know as I approach dealing with building an airport, this kind of process will be exceedingly difficult to put on-site. The interesting thing is when you think of composting, you usually think of odors. This produces, in 45 minutes, any pungent odor is absolutely absolved; two, it has no flies, it attracts no birds; and it attracts no furry critters. I don't see how today, with the waste problems we are confronted with, that we cannot help new technologies, particularly as it relates to nonpoint source, out on the market. I would ask you to consider that.
Mr. WAMP [assuming Chair]. Thank you.
I'll take the Chair's prerogative and ask a question of Dr. Missimer if I may, please.
I find it ironic that one of the primary contributors to our landfills are some of the same publications in this country that are so critical of our conservative positions with respect to environmental matters, newspaper companies and publishers. I have found in my district, we have a large paper company on the border of my district, that is trying desperately to make the recycling of paper products cost effective. Through the economies of scale as they grow, they become more efficient but it's yet to be cost effective.
I just wondered from your association's standpoint how realistic are our targets to try to reduce the input to our landfills by the year 2000 and what do you think can be done to make paper more efficient in terms of recycling to make it more cost effective to recycle paper products?
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Mr. MISSIMER. That's a very interesting question. Let me take just a minute to answer that.
I think you're going to see over the next several years, sir, some big changes in what's happening. As you may well know, the American Forest and Products Association met its goal of recycling 40 percent of the paper in this Nation a year early and we set a new goal of recycling 50 percent of the paper. That goal I believe will probably also be met early.
I believe that it is the marketplace which is going to come to the forefront and solve these problems. What we are seeing right now in the marketplace is that the cost of waste paper is literally skyrocketing as we sit here and that's good from the standpoint that it is an incentive, an additional incentive, to take more paper out of landfills and bring it to the facilities where that paper can be recycled.
Mr. WAMP. Do you think there is a legitimate role for the Federal Government through some of its agencies to partner with the private sector in these efforts since the Government, through the Congress, is requesting that these initiatives be met?
Mr. MISSIMER. I don't know that I'm prepared to answer that question definitively. I think my general answer would be that we think the market will drive the process.
Mr. WAMP. Thank you.
I appreciate our Ranking Member also hustling out and hustling back. I'll allow him to ask questions at this time.
Mr. BORSKI. Thank you very much, Mr. Chairman.
Ms. Lindsey, let me start with you, if I may. Have any of your members expressed concern that the unfunded mandates bill that passed the House and the Senate and is currently in conference may result in the private sector bearing a disproportionate share of the cost of the measure such as water pollution as a result of relief provided to State and local governments?
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Ms. LINDSEY. I didn't hear you clearly, sir. Would you restate that for me, please?
Mr. BORSKI. Sure. The question is about the unfunded mandates legislation that we have and the relief that it's giving to State and local governments. Are any of your members concerned that business may be called upon to pay a disproportionate share due to the relief given to State and local governments?
Ms. LINDSEY. Yes, there has been some response to that. I work also very closely with mayors and county judges in my area. I can tell you that in the last 15 years, if you build a water project, your cost is increased by probably 35 percent, realizing in the Ozark Mountains building water lines is more expensive because of the terrain. That's one.
Do I believe it's disproportionate? No, I don't. Again, let me refer back to I think we are behind in this country, and I will stand pat on this, in the fact I think the scientific community that can develop the technologies—for example, the one I was alluding to that does pretreatment, this cost for a pretreatment went from $1,500 a month down to $100 a month and yet the quality of water he was discharging was 100 times better. To me, this is what we need in this country to help provide the answer to clean water for our children, our grandchildren and our industry, business and municipalities.
Mr. BORSKI. Mr. Hammer, let me ask you a question if I may, about something you addressed in your testimony. I'd like you to elaborate on it if you will.
Since most of your members are point source dischargers and have spent a great deal of resources on controlling pollution in those discharges, do you think it's time for States to pursue a more aggressive program for controlling nonpoint source discharge?
Mr. HAMMER. I think over the last few years we have made tremendous progress with the point source piece. I think that's well understood. The nonpoint issue that we have to deal with I do think is the next step that we have to address. I think that our particular industry is ready to do that but we have to look at it based on reasonable risk and cost benefit analysis. I believe if we don't take that route, we're going to find ourselves spending an awful lot of money for very little benefit.
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Mr. BORSKI. Do you have any fear that your industries will wind up spending more money and nonsource will continue on its merry way, if you will?
Mr. HAMMER. I don't believe our industry will be disproportionately penalized.
Mr. BORSKI. Can you tell me, sir, what are the views of your association regarding pollution prevention planning? Would you please provide some examples of companies that have successfully integrated pollution prevention planning into their operations?
Mr. HAMMER. Our pollution prevention planning goes back to the heart of our Responsible Care Program and that is one of the codes of management practice. We believe in pollution prevention as a hierarchy—first, source reduction, and most of our plants in the chemical industry have focused on source reduction for a long, long time. One, it makes sense to do just from a business standpoint and two, I think it's just the right thing to do.
After that, we look at recycling where we can and then finally, we look at trying to treat what is left. I believe that we have taken a lead role in the Nation as far as putting pollution prevention planning into practice.
Mr. BORSKI. Dr. Missimer, do you have sites which will be subject to the Coastal Zone Management, Coastal Nonpoint Source Control Program?
Mr. MISSIMER. Yes, our industry does, yes.
Mr. BORSKI. Is the type of guidance which EPA has developed for the States to use consistent with the type of best management practices which the forest industry is currently using?
Mr. MISSIMER. In many cases, it is more prescriptive than the State-developed BMPs and our general position is that we think that the State BMPs are the direction that we should be going and not the prescriptive things that are coming out of the program.
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Mr. BORSKI. Mr. Chairman, I don't know if you want me to continue, or if you want to ask a few?
Mr. WAMP. Let me ask one and I'll come back to you and we'll just have fun for a minute.
Viability issues, tort reform, many people do not believe that the tort reform provisions in the Contract with America go far enough. From each of your perspectives, I've heard some references earlier in your testimony to liability issues that are lingering that you need addressed. What other tort reform provisions, from your own perspective, do we need to pursue after this initial pass with the Contract with America? Mr. Norwine?
Mr. NORWINE. One of the things in this country that ought to be done in tort reform, and I'm not sure you are able to go far enough, is to fix it so a lawyer may not take a case on a contingency basis. If this provision were ever passed, it would straighten out all kinds of problems. The fear of lawsuit, frivolous lawsuit, concerns every single one of us on this panel, practically every day. We are pursued by agencies, by regulatory groups, by special interest groups with the fear of lawsuit on every single, last thing we do. If we could remove contingency, that would be a wonderful thing for America. It would improve invention, we'd come out with new products, and it would help industry substantially. Shucks, it would take care of our medical problems and our automobile insurance to boot. Yes, we can go a long way in tort reform.
Mr. WAMP. Any other comments?
Ms. LINDSEY. I agree.
Mr. WAMP. What about punitive damage caps, your feelings on caps, or even the concept of taking punitive damage awards and redirecting them to some of the people that are disaffected so that punitive damage claims don't necessarily go to the plaintiff?
Mr. NORWINE. The State of New Jersey is looking at punitive damages right now with a ratio based on 5 to 1 of punitive damages over compensatory damages. If it passes in New Jersey, it may actually become model legislation.
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Mr. WAMP. Mr. Ranking Member?
Mr. BORSKI. Mr. Stahl, if I may come back to you, if I could, in your statement you said that stormwater should be totally voluntary, self-certifying with no monitoring.
Mr. STAHL. I'm not truly advocating a truly voluntary program. This program that I'm advocating is not voluntary by any means. I think what we're looking at is a self- certification program that what we're trying to do is grant incentives to business to do pollution prevention plans by saying if you do a pollution prevention plan and put your best management practices into place, we're not going to require you to go through the permit process.
The second part of that is that is not saying there is not regulatory oversight; there is still regulatory oversight. Anyone can come into your facility from any one of the regulatory agencies, whether from the State level or the EPA, and take a look at your facility and see whether or not you're meeting your compliance.
The other part of that is that if you're not meeting your compliance, then they could go back and force you to go back and get an individual permit.
The third part of it is that you're still subject to citizen lawsuit. So as part of what the Chairman was just saying about tort reform, you're still subject to citizen lawsuit in that situation.
The advantage to this is that you're giving incentives to business to be proactive in this situation and create pollution prevention plans and you're not forcing them, through rules, to be reactive.
Mr. BORSKI. Thank you.
Mr. WAMP. Mr. Oberstar, are you prepared with questions, sir?
Mr. OBERSTAR. Thank you, Mr. Chairman.
I appreciate hearing from this panel. In the years I've served on this committee, these issues seem to be coming around and around again and again. I just want to join with Chairman Boehlert in observing that industry has spent some $130 billion since the Clean Water Act of 1972 cleaning up point sources of pollution. Municipalities have spent about $95 billion of their funds together with the Federal funds cleaning up point sources and all have made a concerted, combined, significant effort and yet we have waters that continue to be degraded by runoff from open land areas whether it's construction sites, farmlands and even some forestry sites.
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I hear the representatives of each of those sectors saying we're only 3 to 4 percent, we're only 4 to 5 percent, but when you add all of them, they add up to 100 percent. I have spent 10 years working on a nonpoint source program that would begin on a voluntary basis with those who are, in the case of agriculture, farmers agreeing to deal with one-fifth of their problem one year, one-fifth the next year, so that over a period of 5 to 12 years at the maximum, a watershed is cleaned up with the participants setting priorities, agreeing on plans, and going to work on control measures.
If they don't, and if they are not acting in good faith, and they don't set a plan or they set a plan and don't comply with it, then the State pollution control agency would be empowered under legislation to take action and force compliance.
We don't come to a realization of the significance of such control measures until an event like cryptosporidium in the drinking water of Milwaukee hits and over 130 people died and it was the most vulnerable among us. That was a preventable tragedy because if there had been control measures, farmland runoff wouldn't have gotten into the drinking water supply.
The focus of this hearing is not principally nonpoint source, and I don't want to dwell on it because that may be addressed at another time, what I want to understand is what this panel thinks is the level we ought to be achieving. Ms. Lindsey said that 60 percent of waters are meeting strict water quality standards. That also means 40 percent are not. We're not achieving the goal of fishable, swimable, in all waters. If a business didn't achieve 40 percent of its objectives, it wouldn't be considered a success.
Rather than talk in percentages, what is the measure of success?
Ms. LINDSEY. May I address that, sir? There is now 70 dairy farmers within one county that has implemented best management practices. That has heretofore never been done and it is an environmentally sensitive watershed, the Illinois River that feeds into Oklahoma. It has changed the way they do it, it has changed the quality of water, it has improved it greatly.
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All too often in northwest Arkansas, you don't have continually flowing streams; they are more commonly called wet weather streams. Anytime there is a sudden burst of rain, the water quality will be bad. I can't help that; that's the way nature is. That 35 percent as a general was the testing that occurred, particularly after sudden burst of rain where there is sudden runoff where there is high levels of nitrogen, but there is high levels of nitrogen found normally in our soil.
The reduction of things that bother us the most is things that apply under the national toxic rule. There is no way in heaven we can meet the national toxic rule because of the metals that are found naturally in our soil. It's acidic soil; when the water runs over it, it bonds with these metals and ever increases them. Mr. Oberstar, that is part of the 40 percent that regardless of what we do, we'll never be able to meet. I cannot dip up a cup of water and pour it back in the Illinois River without technically violating the national toxic rule. I can't discharge our drinking water to a wastewater treatment plant. I would violate the national toxic rule.
Mr. BOEHLERT [resuming Chair]. Thank you very much.
Is there anyone else who would care to comment? Mr. Bubes?
Mr. BUBES. I would think the measure of success should be that the local pretreatment plants can treat the water properly and not necessarily just because of some categorical standards that are set require all industries in a certain industry to have to handle it if there is just no problem with the local plant being able to do it effectively. If they are doing it, then we should all be happy and it's a success story.
Mr. BOEHLERT. Thank you very much.
Mr. Hammer.
Mr. HAMMER. I would just like to give you one small example of success. I'm from Columbus, Ohio and in Columbus we have a very active council there. It's a committee called the Environmental Science Committee which I serve on and we look at problems in the greater Columbus area.
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One of the issues we had was atrazine running off into the drinking reservoir in Columbus. I was just amazed at how much training and education is going on around this issue of pesticide control—less concentration of the applications, buffer zones between the farmland and the creeks. Ashland does not manufacture pesticides but I was amazed at what's going on in that area.
Mr. OBERSTAR. How were those, if I may, Mr. Chairman, practices put into place? What was the framework within which that was accomplished?
Mr. BOEHLERT. I'll give you the benefit of the response to that and then we go to Mr. Horn because we've got to keep this on schedule, Mr. Oberstar.
Mr. OBERSTAR. Not everybody has to answer the question.
Mr. BOEHLERT. Mr. Hammer, you've got a specific question, and we'll have you address it.
Mr. HAMMER. I think primarily it's through training through proper labeling and also getting information out to the agricultural community about how they need to do good farm practices.
Mr. OBERSTAR. And they participated voluntarily, they did it within the context of ARCS?
Mr. HAMMER. They are doing it.
Mr. OBERSTAR. Was the State involved, the State Department of Natural Resources or the State Agricultural Department?
Mr. HAMMER. I don't know.
Mr. BOEHLERT. I'll tell you what, if anyone would like to amplify on that question, would you submit it in writing and we'll share it with the full committee.
We're never going to get out of here if we don't try to keep on schedule. Excuse me, Mr. Oberstar, but we have to go on.
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Mr. OBERSTAR. We can't have a meaningful exchange if we can't explore these issues.
Mr. BOEHLERT. Quite frankly, I want meaningful exchanges but I also want us to get out before Christmas.
Mr. Horn.
Mr. HORN. Thank you, Mr. Chairman.
Ms. Lindsey, I was impressed by your testimony. You talk about having less micromanagement, not being as prescriptive and getting away from the command and control approaches. I think many of us are looking for some flexibility in regulations rather than the command and control approach.
I think your testimony indicated that one of the problems is EPA's implementation of the Clean Water statute in terms of the rules and regulations, that instead of following sort of a basic thrust of the statute itself, so on page four I noted that you say, ''Regulations under the Clean Water Act and other statutory authorities are not coordinated, creating conflict, duplication and confusion.'' You suggest that we would help solve this problem by getting better regulatory guidance from Congress to the regulators.
What I'd like you to do and the staff at the Chamber is if you could give us a list of things under the Clean Water Act statute which, in your judgment, has been misinterpreted or in the follow-on regulations where those have exceeded what you feel is in the statute, what I'd like to see is specific legislative language which might get the thing back on the track of what people in Congress intended. Certainly the rest of you are welcome to furnish that too. Send it to the Chairman with a copy to me. Since I asked the question, I'd like to follow up on it.
A word here, a word there can sometimes get the show back on the word to solve the problem. So if you would be good enough to do that, why I would be most grateful.
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Mr. Stahl, I was very interested in your testimony, and I found on page seven this statement, ''EPA's current approach holds regulated facilities responsible for all discharge pollutants above and beyond those caused by contact with industrial activities or materials. This is unequitable and inefficient.''
Beyond unequitable and inefficient, I guess I'd ask what do you really mean by that sentence? How would you elaborate on it?
Mr. STAHL. I'm sorry?
Mr. HORN. ''EPA's current approach holds regulated facilities responsible for all discharge pollutants above and beyond those caused by contact with industrial activities or materials.'' Is there anything else I should understand to get at the meaning of that sentence?
Mr. STAHL. I think there is nothing specific in there that you want. I think what I'm trying to say in this sentence is that we're being held accountable for things that aren't necessarily generated by those facilities. What I'm saying is that stormwater in itself can be a pollutant before it reaches our facility. We're thinking of acid rain and other heavy metals that may be naturally occurring in the environment that come down and suddenly a facility is having to take credit for it when it may have been in the stormwater before it reached the facility. That's what we're trying to say there, that is unequitable and inefficient.
Mr. HORN. I think that's a very good point. Let's follow up on that. I think the point was made stormwater doesn't really yield good data to solve the problems on the ground. We get into the problems of collecting and testing the stormwater, where, when and how. What do you think, in your own mind, contributes to this EPA mindset as to how they go about trying to solve this problem and what would you suggest they do? Is it a lack of resources? Is it just overwhelming data that make no sense because of the diversity or is it the institutional mindset? What do you see as the problem?
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Mr. STAHL. I think it's the command and control mindset. I think that in that situation it's a micromanagement mindset. The problem that you're facing is that your other statement regarding the reams and reams of data that they have, they have no way to deal with all of the data that they have generated in this situation, so it's a number of different parts to that. It's both the mindset of command and control, but it's also the amount of data that has been generated.
For instance, when they did this group permitting process, they required all these people in these groups to spend millions and millions and millions of dollars to gather all this data and when the whole thing was said and done, they threw out all the data and did what they wanted to anyhow. That has just been the mindset they've had. It's really a number of different parts.
Mr. HORN. Thank you.
If any of you want to respond, just file it for the record. We'd be glad to have your comments.
Mr. BOEHLERT. Thank you very much, Mr. Horn.
Mr. Poshard.
Mr. POSHARD. Thank you, Mr. Chairman.
Mr. Missimer, I may have misconstrued your role here as a corporate, environmental manager, but does your company, P.H. Glatfelter, purchase any wood products from the public forestlands?
Mr. MISSIMER. Our particular company does not.
Mr. POSHARD. But members of your organization do?
Mr. MISSIMER. That's correct.
Mr. POSHARD. Can you help me out because I think our concentration in this committee this year with respect to reauthorization of the Clean Water Act is in fact going to be what the Chairman has mentioned, a lot of emphasis upon nonpoint source pollution. Are you familiar with the term the U.S. Forest Service uses ''gap phase dynamics'' with respect to their harvesting of wood?
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Mr. MISSIMER. No, sir, I'm not. My emphasis within the company and within AFPA is primarily on point source discharges. I am familiar generally with the nonpoint source issues and the forestry practices, but I'm not a forester.
Mr. POSHARD. Okay.
Mr. MISSIMER. We'd be glad to answer your question in writing.
Mr. POSHARD. Let me pursue it for a moment though because you must have some general knowledge. Gap phase dynamics is the emphasis upon cutting that cuts out small groups of trees of maybe 15 or 20 at a time and then moves over into a cut a quarter of a mile away or 150 yards away and does the same thing as opposed to clear cutting.
What I'd like is the Association's comments to this committee because I know there is so much cutting on public forestlands, as well as the private lands that many of your members obviously hold to provide their wood products. I'd like the association's comments on the effect of gap phase dynamics as opposed to clearcutting with respect to watershed management practices and that emphasis upon nonpoint source pollution control. That is a huge issue in the national forestlands of this country.
Mr. MISSIMER. We'll be glad to get back to you on that.
Mr. POSHARD. I'm assuming that your association holds to the philosophy of multiple use of national—
Mr. MISSIMER. Absolutely.
Mr. POSHARD. Let me ask just a one word answer from all of you really quickly. Our best defense with respect to continuing present policy on nonpoint source pollution control is the emphasis that USDA has given on our conservation reserve program. We established that to get to about 45 million acres initially and we're up to about 38 million and that's the end of the program unless we get a further extension.
Are your organizations actively contacting USDA with respect to continuing that program to get up to the 45 million acres of set aside land?
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Ms. LINDSEY. Yes.
Mr. POSHARD. Everybody?
Mr. NORWINE. I abstain, I'm a city boy.
Mr. POSHARD. That's okay. They account for some things too. Would you? That's important.
Thank you, Mr. Chairman, I appreciate it.
Mr. BOEHLERT. Thank you very much.
Mr. LaTourette.
Mr. LATOURETTE. I thank the Chair.
Just an observation. Mr. Norwine, as I was listening to your testimony, it gave me a horrible image of cadres of homemakers being led away to enter into consent decrees.
My question is to Mr. Hammer. In your testimony, you mentioned the Great Lakes initiative. Those of us in Ohio obviously wait with a great deal of anticipation as well as others in the Great Lakes States to the rulemaking that will occur in March.
The observation and somewhat question to you is, I have discovered, we have discovered, that USEPA since the election has been more than accommodating in meeting with Ohio State EPA officials and municipals and discussing the upcoming rule with an eye towards taking a look at some of the effluent standards and tolerances they have established. My question is have you, particularly the Chemical Manufacturers Association or other industry groups to your experience, found a similar level of cooperation and willingness for input by USEPA as they begin to formulate the rule?
The reason I ask is that a great deal of anxiety existed when the preliminary announcement occurred last year. It's my understanding that some of that anxiety, we're still a little nervous but it has been lessened a bit. Does that meet with your experience as well?
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Mr. HAMMER. I'd like to answer that in two parts. One, I have talked to Ohio EPA and they are getting a lot more interaction with USEPA on this issue. I talked to a young lady a couple of weeks ago.
As far as industry goes, I don't know that it has filtered down yet far enough that we see a big change right now. That may be coming but I don't think we've witnessed it yet.
Mr. LATOURETTE. Thank you, Mr. Hammer.
I thank the Chair.
Mr. BOEHLERT. Mr. Mineta.
Mr. MINETA. Thank you very much, Mr. Chairman.
Let me congratulate you on your continued leadership on this issue and I appreciate the hearings that are being held on this. I apologize to the panel for having missed your presentation.
I'd like to ask Mr. Stahl, you're representing the Stormwater Reform Coalition. Who makes up that coalition?
Mr. STAHL. It's a number of organizations.
Mr. MINETA. Why don't you submit it for the record if I might ask you to do that?
Mr. STAHL. I will submit it for the record.
Mr. MINETA. Because of the limited time, if I might turn to Mr. Hammer, I want to thank the Chemical Manufacturers Association for the help you were with us last year on the super fund bill and appreciate very much the work of the CMA in working on that.
In your testimony, you advocate incentives for new, innovative technology. I'm wondering if you could elaborate on what kinds of incentives you think would result in greater use of new technologies? One of the problems I find, at least I feel, is that the technology of detection is outstripping our technology of treatment. I come from Silicon Valley, so we love to invent things that can discover more products and things. We used to be able to pick out one part per hundred million; now the machines go up to one part per billion, two billion. The problem is that in many instances, those new technologies would establish the standards by which people had to comply.
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I'm wondering what kinds of technologies are you thinking of that can be used more that won't also at the same time come back to bite you in your own heels?
Mr. HAMMER. I can tell you that you hit it right on the head as far as the issue, as far as detection limits getting lower and lower. That certainly creates problems. As you understand, the Clean Water Act is based on technology standards and also water quality-based standards, so it is an issue.
As far as technology treatment goes, I don't think I'm prepared to answer with specifics about what we might be able to use, but there are some things we could do as far as streamlined permitting. This is certainly a problem in most of our areas. If we adopted some type of innovative technology, maybe it could go along with some type of streamlined permitting and maybe some type of variance factor longer than two years because a lot of people don't want to take the chance that they can be in compliance and at the risk of a fine of $25,000 a day, the concern is let's do it the old way and let's not try something new. So I think there has to be more flexibility.
Mr. MINETA. Let me ask the panel generally if someone would be willing to respond, and Mr. Hammer, you might be able to do this on behalf of the panel, I'm wondering whether you would support a pollution prevention planning provision that requires development of plans to reduce pollutants at the source providing—I think this is important—providing that it allows facilities the flexibility to tailor approaches to their own circumstances, that it's not enforceable, that it would ensure adequate protection of confidentiality, and does not impose duplicative or otherwise burdensome paperwork requirements. Any comments?
Mr. HAMMER. I think in our case, I don't think we would be opposed to something like that. We've been practicing pollution prevention now for a number of years. Obviously we would have to see all that's involved but our focus is pollution prevention, source reduction, recycling next step, and then treatment as a last, final alternative.
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Mr. MINETA. Ms. Lindsey.
Ms. LINDSEY. I think that for the Ozarks, it would be ideal because we are constantly seeking new ways to prevent for our watersheds, prevention from nonpoint source and it can come from multiple because we're high tourist. That also happens to be one of the things we have to keep in check. Yes, I think it would be well considered.
Mr. MINETA. Any other panel members want to comment?
Mr. MISSIMER. I think that you've mentioned several key points there which would make a program attractive and that is that it's voluntary and that it's flexibility, that it's facility specific. We'd like to take a look at specific language.
Mr. MINETA. Thank you very much to the panel.
Mr. Norwine.
Mr. NORWINE. New Jersey has such rules right now and they are almost exactly as you laid them out. It does work. The fact that it is flexible, that it is voluntary, some people are able to take a substantial part in this, others cannot. There are some industries which simply cannot adapt to pollution prevention practices and if there is provision for such possibility, then it does work.
Mr. MINETA. Thank you very much to the panel.
Mr. Chairman, I'd like to ask unanimous consent that my opening statement be placed in the record.
Mr. BOEHLERT. Without objection.
[Mr. Mineta's prepared statement follows:]
[Insert here.]
Mr. BOEHLERT. Thank you very much, Mr. Mineta.
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Mr. Petri.
Mr. PETRI. Thank you. I just have a question for my constituent by proxy because Bergstrom is a well known name in my district and what we think of as the home of the paper industry. Glatfelter is now the proud parent, we hope, of Bergstrom.
Mr. Missimer, the Great Lakes initiative which you mentioned I think on page seven of your statement is of a lot of interest to people in Wisconsin and others in the midwest. Many officials from industry, including paper companies, municipalities and the States have expressed their concerns to me about certain aspects of this proposal.
The Council of Great Lakes Governors has expressed concern regarding the issue of guidance versus regulation, an issue that has captured a lot of attention here in Washington. In a statement addressed to EPA Administrator Carol Browner, the Governors reiterated their position that ''Verbatim adoption of EPA's final guidance is not required or desirable, but that States should have flexibility in implementing the program.''
What is your industry's position on this? Do you like the idea of State flexibility or would you rather have a strong standard that is enforced across the board?
Mr. MISSIMER. Congressman, the concern expressed by the Governors and yourself is one that is shared by I believe practically everyone on this panel when it comes to the Great Lakes initiative. As you have correctly stated, there are many municipal officials, some that I have spoken with, David Berger from Lima, Ohio and Mayor Suvakio from Erie, who are very concerned about the impact of the Great Lakes initiative on the economies in their areas.
As you well know, AFPA has many member companies with numerous facilities in the Great Lakes region and we have followed the development of the Great Lakes initiative with a great amount of interest. As you also well know, our company has a recycle paper mill that makes fine printing paper in your district that will be very affected by the Great Lakes initiative. It has been the topic that I have followed personally for over four years.
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It's our industry's position that the Critical Programs Act is clear when it states ''The final product of the GLI is to be guidance.'' The preamble to the guidance contains USEPA's interpretation that ''consistency mandates verbatim adoption of the final guidance.''
We agree with the Council of Great Lakes Governors that verbatim adoption of the guidance is not necessary in order to establish regulatory equivalency. The GLI should be published as a guidance document, not as a Federal rule, and individual States should be allowed to incorporate that guidance into their own water quality standards as they see necessary.
Mr. BOEHLERT. Thank you very much.
Mr. Latham.
Mr. LATHAM. Thank you, Mr. Chairman.
Mr. Hammer, since you're from Ohio and a representative of the chemical industry, and because we had a witness from a big city in your region, not your State, before this committee earlier, that said much of the nonsource pollution problems we're experiencing in our Nation today is attributable to the agricultural industry, and with my representing a large agricultural-producing area and seeing a number of people from cities that have a similar weight problem to me, I took offense to that. So I want to ask you what your industry is doing to help our industries called agricultural producers to address this problem because you produce the pesticides, the herbicides, the fertilizers, and maybe not Ashland Chemical, but the companies you're here to represent. Are you all doing anything and if so, what are you doing to help our industries address this nonsource pollution problem that we're being attacked about?
Mr. HAMMER. You're correct, Ashland does not produce this type of material, but on the other hand, I am familiar with what is going on in Ohio there. I was just amazed at how agriculture is now beginning to learn how to cope with these things. For example, an awful lot of time is being spent now by DuPont and other companies to train and to put out information through labeling, through information in general, to the farmers in our area. That is happening.
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Mr. LATHAM. I've seen reports that people in the cities use per square yard or however you want to measure it, substantially more chemicals in their lawns on a relative basis than our ag producers do. Are your members doing anything toward educating the homeowners in the cities and the suburban areas about their contribution to this problem we're dealing with?
Mr. HAMMER. I can't speak for the industry in general on this but I know in the last few years when I had my lawn fertilized, I was given information about the chemicals that were going down and there were little signs posted around the yard, so I know that I'm certainly more educated now and I am in the business and my next door neighbor who is not obviously is a lot more educated now. So I think things like this are beginning to happen out here and the information is beginning to get down to the people. It takes an awful long time. It's just not something that can happen overnight. This is really a mindset of change with people and some people are more willing to do it quicker than others. I think it's going to take some time but I think the process is in place.
Mr. LATHAM. What I'm trying to do is remove the mindset that this problem is solely an agricultural producing problem and you agree with that, I take it?
Mr. HAMMER. Yes.
Mr. STAHL. Mr. Latham, I am not a member of the Chemical Manufacturers Association, but I would just like to say as someone who farms and owns a farm in southern Maryland that the agricultural community has made great strides in concordance with the chemical industry. A lot of the chemicals that the chemical industry manufactures today allow for farmers to prevent pollution from leaving their farms. A lot of the chemicals that have been created in the last 10 to 15 years have allowed farmers to do things a little bit differently. Some of the things that the chemical industry has done to help Harry Homeowner to produce is they have reformulated a lot of the chemicals to a much, much lower concentrated version. You'll notice a lot of them on the shelf today in a much lower, concentrated version because they did realize there was a problem there.
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Mr. LATHAM. Mr. Hammer, I want to ask you also in your paper you cite the lack of flexibility standing in the way of cost effective risk reduction, and then you address a fundamental problem, as you call it, of variances and the fact that very few variances have been granted. Can you tell us why there have been few variances granted and give us an example?
Mr. HAMMER. I think the primary reason why it is so difficult to apply for the variance, get the variance, and then not jeopardize yourself for being out of compliance. In other words, if you're going to be subjected to $25,000 a day fines, you want to make sure what you're putting there, whether it's new technology or what, is going to work. There is not a long time that you have to make sure that what you've installed is going to meet compliance.
Mr. LATHAM. I'm trying to find out who is failing to give the compliances for the new technology?
Mr. HAMMER. I think in this case, it would be the EPA on particular sites that have requested this variance. There have been very few variances granted. I don't know how many of them have been submitted, I can't answer that question, but I can tell you in some cases where we have pollution prevention programs, multimedia, it stymies us because we're concerned about any additional pollutant loading to the wastewater is going to be out of compliance. This is, again, a different type of variance, but it's one that is real.
Mr. LATHAM. Thank you, Mr. Hammer and Mr. Stahl.
Thank you, Mr. Chairman.
Mr. BOEHLERT. Thank you, Mr. Latham.
Mr. Martini.
Mr. MARTINI. Thank you, Mr. Chairman.
This is more of, I think, a question for my own edification on this issue. I've heard a lot since being a member of this committee and a new member, and these issues are somewhat new to me in some respects.
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We've heard a lot about nonsource pollution and stormwater reform and stormwater pollution. I guess the question is in urban areas to industries that have the business locations in urban areas, I'm not sure I understand the coalition between how stormwater or drainage water in the streets—how would the private sector or private business in an urban area be held accountable for stormwater pollution? I understand the gentleman's last question in the agricultural areas, the drainage off water hitting fields that are heavily fertilized and that water draining off; I just don't understand the relationship in terms of a private sector business in an urban area with nonsource stormwater pollution, how they could be held accountable. I know that might be a very simple question.
Mr. STAHL. Congressman, I believe I'd like to answer that and say that is part of the problem, that we are being held accountable to a lot of things. Generally, it's just because of your SIC Code, your standard industrial code. Just because you are a chemical manufacturer, for instance, your entire facility may be enclosed inside a building in a very urban area and nothing with your facility touches any stormwater whatsoever,b ut because you are in a certain standard industrial code, you have to meet certain effluent criteria. It could be totally oblivious to what you actually do or whether or not you actually touch stormwater.
Mr. MARTINI. I guess that's what I'm trying to find out. How does stormwater come into contact with the discharge of water that might come out of your facility? It shouldn't happen.
Mr. STAHL. It doesn't.
Mr. MARTINI. I understand how municipalities are held accountable for stormwater because storm systems fail, et cetera, and they drain into rivers, so I understand that, but I don't understand how a chemical manufacturing business, for instance, that has a discharge pipe that technically might go into a river, how that would be polluted with stormwater.
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Mr. HAMMER. If you have a plant that has a production area and outside that production area, you have a parking lot and you have roof drains on the building that go to the parking lot, then that is stormwater running off of there. It could be there from some type of air that had come over from a few miles back, acid rain or what have you, and it gets in there and becomes contaminated. So you really have to go in and isolate these areas and then look at the water running off the roof to make sure there is no contaminants there.
Mr. MARTINI. Thank you very much.
Mr. BOEHLERT. Thank you, Mr. Martini. You've hit on a very sensitive point and that's something this committee is going to have to deal with very carefully because I think all the panelists have made a good point in response to your question.
For the purposes of a question, Mr. Borski?
Mr. BORSKI. Thank you, Mr. Chairman.
Dr. Missimer, Mr. Hammer and Ms. Lindsey, each of you discussed the issues of risk assessment and cost benefit analysis. I have some pretty technical questions in those areas and I would very much appreciate it if I could give you the questions and ask you to submit for the record your answers as soon as possible.
Mr. MISSIMER. I'd be happy to do that.
Mr. BORSKI. Mr. Chairman, an observation, if I may. I know this is a very difficult job you have trying to move these hearings along. Mr. Oberstar was exceeding the five- minute rule which is a rule of the committee. My suggestion is you might consider in the future the possibility of having a second of questions for members who are so inclined.
Mr. BOEHLERT. You're the first one in the second round. I'll recognize Mr. Oberstar next.
I understand that and I take it in the spirit, I take it in good spirit, but the fact of the matter is we've got 12 witnesses, and we're giving each of them five minutes; we have 28 members of the subcommittee; and if each of them takes five minutes, if you do all this arithmetic I don't know what your New Year's Eve plans are but I don't want to spend it in this room. So I take your offer with good spirit.
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Mr. BORSKI. Particularly for the junior members who are sitting around here waiting for their time, I have no problem whatsoever with the five minute limitation, but again, I would suggest you may consider in the future the possibility of a second round.
Mr. BOEHLERT. Point well taken. In the spirit of bipartisanship, that's exactly what we will do.
Mr. Horn for the second round?
Mr. HORN. I'd simply, Mr. Chairman, like to file these questions for the record. They are directed to some specific members and if they wouldn't mind sending us an answer, we'd be grateful.
Mr. BOEHLERT. Thank you very much.
I want to thank all the panelists for your fine testimony. We really appreciate it and we would welcome your follow-up to the specific questions that were proposed to you by Mr. Borski and Mr. Horn.
Now for panel number two: Mr. Robert De Santo for the American Road & Transportation Builders Association; Mr. William W. Rogers, The Associated General Contractors of America; Scott McElwee of the Associated Builders and Contractors; and Sat Tamaribuchi, National Realty Committee.
As I've said previously, your statements will appear in the record in their entirety and we would appreciate if you would, in the interest of time, summarize your statements in approximately five minutes and we will try to confine the questions from each member of the dias here to five minutes and we will go from there.
For the first panel, those questions that are outstanding, we will mail them to you in writing and request the response in writing.
Thank you so much.
Mr. De Santo, you may proceed.
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TESTIMONY OF ROBERT S. DE SANTO, CHIEF SCIENTIST AND DIRECTOR OF ENVIRONMENTAL PLANNING, DE LEUW, CATHER & COMPANY ON BEHALF OF THE AMERICAN ROAD & TRANSPORTATION BUILDERS ASSOCIATION; WILLIAM W. ROGERS, CHAIRMAN, WILLIAM W. ROGERS COMPANY ON BEHALF OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA; SCOTT McELWEE, McELWEE-SCARBOROUGH CONSTRUCTION ON BEHALF OF THE ASSOCIATED BUILDERS AND CONTRACTORS; SAT TAMARIBUCHI, SENIOR DIRECTOR, ENVIRONMENTAL ISSUES, IRVINE COMPANY ON BEHALF OF THE NATIONAL REALTY COMMITTEE
Mr. DE SANTO. Thank you, Mr. Chairman.
Good morning, Mr. Chairman and members of the subcommittee.
My name is Robert S. De Santo and I am Chief Scientist and Director of the Environmental Planning Sector at De Leuw, Cather & Company. I've been Chief Scientist at my firm for the past 17 years and in that capacity, I've spent much of my time developing methods for assessing natural and human environmental impacts associated with complex transportation projects. I am an undergraduate with a degree in Biology from Tufts University and a doctoral degree from Columbia University. I'm here this morning representing the American Road and Transportation Builders Association.
We are pleased to have the opportunity to share with you our views of how the Clean Water Act should be changed to eliminate unnecessary burdens on the transportation- construction industry of the United States while continuing to preserve and restore the quality of our Nation's waters.
Let me take a moment to tell you something about the organization I am representing. The American Road and Transportation Builders Association is a federation of over 4,000 construction companies, professional engineering firms, construction equipment manufacturers, materials suppliers, public agencies, universities and other organizations engaged in transportation construction activities throughout all parts of the United States. Established in 1902, it's the only United States trade association that represents specifically the full spectrum of organizations constituting this major industry.
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With increasing budgetary pressures at all levels of government in the United States, we believe that it is more critical than ever for our Nation to extract as much value in terms of both economic and environmental benefits as possible from each dollar of investment. Unfortunately, the Clean Water Act, as it currently is structured and interpreted in agency regulatory actions, does not allow that to occur.
The reauthorization of this very important statute provides an opportunity to increase significantly the magnitude of economic and environmental returns we can realize on our investments in the future.
From the perspective of the transportation construction industry, there are a number of areas in the Clean Water Act that do not work well and which need revision. These include provisions that protect wetlands, regulate stormwater discharges, establish water quality standards, and govern nonpoint source discharges. We have submitted a detailed written statement for the record, including recommended specific amendment language. However, let me summarize orally our principal points.
With respect to wetland reform, we believe the most important area in the Clean Water Act in terms of needed reform involves wetlands. We think the wetlands protection provisions of the Clean Water Act should be modified as follows. There are seven suggestions.
The first is criteria for wetlands delineation should be clarified in law. Such criteria should require that all three parameters of wetlands—the hydrology, the hydrofidic vegetation and the hydric soils—be present in order for a wetland determination to be made.
Second, wetlands should be classified into categories based on their relative values and functions which they serve. Regulation of discharges, of dredged or fill material into wetlands should be based on these categories, that is, for example, highly-valued, environmentally-sensitive areas that provide a full range of wetland values and functions should be more strictly regulated than they are currently. On the other hand, requirements for wetlands of lesser or marginal value or function and value should be relaxed.
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Third, new regulations governing wetlands should be prohibited until the current National Academy of Sciences study is complete. In the interim, use of the 1987 Federal Manual for Wetland Delineation should provide the required guidance.
Fourth, the Environmental Protection Agency's unilateral and absolute authority under Section 404(c) to veto permits issued by the Corps of Engineers or by States that have assumed the Section 404 permit program should be terminated.
Fifth, the practice of mitigation banking should be encouraged as a means of slowing the rate of wetland conversion in the United States while allowing high priority economic development activities to occur in some categories of wetlands.
Sixth, statutory deadlines should be established for completion of decisions on Section 404 permit applications. We believe that 90 days after submission of complete applications is a reasonable time period.
Seventh, and last, exemptions currently contained in the Corps of Engineers regulations for pilings and related structural supports should be incorporated into the Act.
A second category relates to stormwater discharges. Under current law, most small stormwater discharges are out of compliance with the stormwater provisions of the Clean Water Act, even though EPA has not promulgated any regulations to guide such compliance.
Therefore, we recommend that the Act be modified as follows in two areas: the October 1, 1994 statutory deadline for promulgation of at least 5 years to enable a reasonable regulatory development process to occur with full input from the regulated industries; and second, isolated construction projects that result in the disturbance of fewer than 5 acres of land should be excluded from the definition of discharge as associated with industrial activity, as EPA attempted to do by rule in 1990.
Water quality standards is another area of our concern. Section 303 of the existing Act requires State agencies to consider the importance of waterborne transportation development when drafting or revising water quality-based criteria and standards for particular bodies of water within their jurisdiction.
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ARTBA suggests that Congress adopt an amendment that would also require consideration of the need for land-based transportation improvements when water quality criteria and standards are written. Such a provision would give land-based transportation development the same stature as navigation channel construction under this provision of the Act and thereby constitute an acknowledgment of the significance of these improvements in interstate commerce, national security and other important functions.
Relative to nonpoint source regulation, although Section 402(p) of the Act currently requires propertyowners to obtain permits for the discharge of stormwater from transportation construction sites, as well as completed projects, Section 203(f)(2)(c) appears to suggest that the EPA Administrator should view runoff from both construction sites and the sites of completed facilities as nonpoint source discharges.
Therefore, we recommend that Congress clarify whether construction-related stormwater discharges should be regulated as point sources or nonpoint source discharges.
In summary, we advocate modification of the Clean Water Act in a manner that will allow proper balancing of environmental protection goals with those dealing with continued economic growth. We believe that the points I've just summarized provide a sound framework for achieving that balance and we are absolutely committed to the need for us to work together to provide the type of environmental stewardship which is needed to meet these important challenges.
That concludes my statement, Mr. Chairman, and I would be pleased to try and answer any questions that might arise.
Mr. BOEHLERT. Thank you very much, Dr. De Santo. I want you to know that we too want to expedite the permitting process. It's unconscionable the time that it takes, and secondly, we are waiting with a great deal of interest the report from the National Academy of Sciences which is due out next month. So we should have what we both want very soon.
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Mr. Rogers.
Mr. ROGERS. Good morning, Mr. Chairman and members of the subcommittee.
I'm a construction contractor from Lexington, Kentucky and a member of the Associated General Contractors of America. AGC is a national association of over 33,000 construction industry businesses, including 8,000 of the Nation's leading general contracting firms. AGC appreciates the opportunity to present its position on an important subject, the reauthorization of the Clean Water Act.
There are three topics of direct significance to the construction industry in this law which I will address today: state revolving fund, stormwater permits, and wetland regulations.
The Clean Water Act, in AGC's opinion, is the most successful environmental statute Congress has ever enacted. Since enactment of the law in 1972, water quality has improved significantly over 50,000 miles of waterway. The foundation for this success is the Construction Grants Program and the SRF Program. AGC is proud of the role the construction industry has played in building these facilities.
EPA, in the 1992 survey of national capital needs for wastewater treatment facilities, showed that $137 billion will be required over the next 20 years to meet water quality standards. In addition, States have identified an additional $22 billion in needs which do not meet EPA's documented criteria but nevertheless, are real. Total needs have increased $53 billion since the last survey was completed in 1990.
Many systems are beginning to approach the end of their useful lives and will need either modernization overall or replacement. A recent survey by a consulting firm, Apogee Research, projected that capital expenditures for replacement of existing wastewater facilities may be as much as $59 billion between now and the year 2000.
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Also, new water quality projects to control nonpoint source pollution and to correct combined severe overflow problems which some have estimated will cost over $100 billion and will compete with more traditional projects for the limited available funds.
AGC believes that Congress established the correct mechanism for addressing these needs in 1987 by creation of the SRF Program. This program has placed the authority for addressing water pollution problems where it belongs which is at State level. States work in cooperation with local governments providing easier and less costly administration. This has led to 50 percent faster completion rate and a lower project cost as compared with traditional construction grants programs. Because funds are provided to local governments as loans to be repaid, there is an incentive for localities to be innovative, reduce costs, develop appropriate user fees, and operate the system more efficiently.
Many States are experimenting with leveraging options to increase the amount of funds that will be available for meeting wastewater needs. The goal of the SRF Program is to become self-supporting through the repayment of loans to local governments. Eventually, this will happen. However, the funding provided to the SRFs thus far is not sufficient to make the program self-supporting at this time. Loan repayments have not yet begun to flow back into the SRFs in amounts sufficient to continue the necessary level of investment to make progress against the evergrowing needs. Because of the growing gap between the amount of funds being invested in wastewater facilities, and the increasing needs, now is not the time for the Federal Government to lessen its commitment to clean water funding.
For this reason, AGC calls on Congress to authorize annual funding of $3 billion for the SRF Program for the next five years. Each $1 billion invested in the construction wastewater facilities generates 52,00 new jobs. More importantly, wastewater treatment creates opportunities for economic development in communities by allowing new industries and new homes to locate there. The facilities are fundamental elements of the Nation's infrastructure.
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At this time, when many of our global competitors are recognizing the importance of infrastructure as a vital foundation on which future economic growth is based, the United States must provide the needed capital investment to remain competitive.
Mr. BOEHLERT. Mr. Rogers, could you try to summarize?
Mr. ROGERS. Yes, sir.
I want to direct some attention also in the Clean Water Act to stormwater permitting which we think needs to be reviewed, revised and considered as an appropriate thing for use for the United States.
Secondly, the EPA has taken on responsibilities in other areas in wetlands which needs to be overhauled.
Thank you.
Mr. BOEHLERT. Thank you very much. I think you've touched on some areas of common agreement.
Mr. McElwee.
Mr. MCELWEE. Good morning, Mr. Chairman and honorable members of the subcommittee.
My name is Scott McElwee with McElwee-Scarborough Construction Corporation. Our company, based in Gibbsborough, New Jersey, builds wastewater treatment facilities as well as other heavy construction projects.
I'm pleased to be here today to testify on behalf of the Associated Builders and Contractors. ABC is a national trade association representing approximately 17,500 contractors, subcontractors, material suppliers, and related firms from across the country from all specialties in the construction industry. Our diverse membership is bound by a shared commitment to the merit shop philosophy of awarding construction contracts to the lowest, responsible bidder regardless of labor affiliations through open and competitive bidding. With 80 percent of the Nation's construction workers choosing not to be represented by a union, ABC is proud to be their voice.
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At this time, I would like to take the opportunity to commend you and the members of the subcommittee for undertaking such a comprehensive look at the Nation's water infrastructure needs.
ABC believes inadequate and insufficient wastewater treatment facilities represent a large segment of the clean water problems facing our Nation today. According to the Environmental Protection Agency, there is a need for over $100 billion to meet current wastewater treatment demands and this will likely continue to rise.
Unfortunately, the $18 billion funding level committed to in the 1987 Act to capitalize State revolving funds has not been met over time. ABC believes the Federal Government must meet its original commitment and support the $2 billion funding level through 1995 and maintain it until 2000 to accomplish that goal.
All States have established the legal and procedural mechanisms to administer new loan programs and are now eligible to receive State Revolving Fund capitalization funds under Title VI. Some with prior experience using similar financing programs moved quickly, while others had difficulty in making the transition from the previous grants program to one that requires greater financial management expertise for all concerned.
Moreover, many States have complained that the SRF Program is unduly complicated by Federal rules, some contained in the statute, others in EPA guidance, even though States were intended to have greater flexibility.
Small communities in States with large rural populations are having the largest share of problems with the SRF Program. Many small towns did not participate in the previous grant program and consequently are likely to require major projects to achieve compliance with the law. Yet these communities often lack an industrial tax base and thus face the prospect of very high per capital user fees if their citizens are required to repay the full capital cost of sewage treatment products.
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According to the testimony from the General Accounting Office, SRFs will only meet about one-third of the State's funding needs and will generally be unable to meet the needs of disadvantaged communities. States simply have not been provided enough time or seed money to sufficiently capitalize their revolving funds. There are also many small communities which do not have the capital base necessary to support a revolving loan fund.
In addition, there are a number of other serious and growing threats to clean water which we believe can be addressed by funding a continued water program. Combined sewer overflows, for example, are a significant problem in over 1,000 cities nationwide. Billions of dollars are needed to clean up previously overlooked and outdated systems. Nearly 1200 municipalities have combined sewers where domestic sanitary sewage, industrial waste, infiltration from groundwater, and stormwater runoff are collected and treated together. The cost of controlling CSOs is potentially very high. EPA's estimate is $41 billion and local governments say that resources are not available for programs of that size.
ABC supports the idea of allowing localities greater flexibility to consider the cost of site-specific factors when designing CSO control strategies. ABC also supports continued Federal funding to further capitalize State revolving funds for the construction of wastewater treatment facilities and other environmental infrastructure projects.
Clearly, our clean water needs are vast and the Federal Government must maintain a significant level of participation. Shifting resources to State revolving funds to provide a self-sufficient program and a stable revenue source is a productive use of Federal funds. Requirements for State revolving funds should be as uncomplicated as possible to facilitate an accessible and efficient program.
ABC advocates repeal of the hopelessly outdated Davis- Bacon Act. The Davis-Bacon act imposes an unfunded Federal mandate upon State and local governments. At the very least, it's burdensome requirement should not be applied to clean water projects.
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In conclusion, Mr. Chairman, ABC strongly supports the efforts being made by the Transportation and Infrastructure Committee and by this subcommittee to ensure that our Nation's water quality is improved. We believe that with full funding and repeal of the Davis-Bacon Act, our water infrastructure needs will begin to diminish and our Nation's water quality will dramatically improve.
On behalf of the Associated Builders and Contractors, I again want to thank you and the members of the subcommittee for the opportunity to testify here today and I will be happy to answer any questions you may have.
Mr. BOEHLERT. Thank you very much, Mr. McElwee.
I think there is general agreement on this subcommittee and the full committee also that we've got to do more in terms of the SRF, the State Revolving Fund, and I would hope you would be pleased by seeing what we're doing with respect to the principal subsidy concept because we recognize there are many small communities that simply can't afford to borrow and pay back at even an attractive rate, so we're trying to find a way to subsidize that.
Mr. Tamaribuchi.
Mr. TAMARIBUCHI. Good morning, Mr. Chairman and members of the subcommittee.
I'm Sat Tamaribuchi, Senior Director of Environmental Affairs at the Irvine Company, a real estate company that is a recognized leader in creating planned communities, including the Nation's largest planned community in California.
I am speaking today on behalf of the National Realty Committee. NRC members are leading owners, advisers, builders, investors, lenders and managers of real estate across the country. We are larger companies that take a long- term view of environmental and economic issues.
I want to focus my testimony today on urban stormwater runoff. Because there are no Federal resources available to pay for stormwater controls, the costs are borne by the private sector. NRC member companies and their tenants are taxed or assessed by local governments to pay for much of these costs under the current program. Let me give you three examples of why the real estate community is concerned about existing and perspective stormwater regulation.
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One, in Charlotte, North Carolina, a stormwater fee of $35 per acre of impermeable surface area per month is assessed on commercial property. Residents also pay a fee. These fees have tripled many water bills.
Two, stormwater permits are required for industrial activities based on their standard industrial code. I am aware of one situation where current law required six permits for one building, five for the tenants and one for the owner.
Three, grading and construction activities must obtain a separate permit even though the stormwater runoff is discharged into a municipal storm drain system that must also obtain a permit.
We recognize that tremendous progress has been made in controlling point source discharges and we want to build on that achievement. However, attaining water quality standards is not feasible for stormwater and other nonpoint source discharges. This is because stormwater discharges very dramatically based upon local watershed conditions and precipitation amounts. Collection and treatment facilities must accommodate maximum flows to ensure that water quality standards will be attained.
Because stormwater controls have the potential to become one of the most costly Federal mandates every imposed, we strongly urge the committee to take action to ensure that it and other provisions of the Clean Water Act are subject to risk assessment and cost effectiveness analysis.
In order to assess the current level of knowledge about urban stormwater runoff and the cost of best management practices, the National Realty Committee and the National League of Cities commissioned a report that reviewed relevant documents prepared by EPA and other agencies and surveyed numerous metropolitan areas across the country. The report is attached to our written statement.
It's most significant conclusions are as follows. One, urban stormwater runoff problem has been overstated because it is frequently described using old or overgeneralized data. Secondly, urban runoff problem is a small source of pollution compared to other nonpoint sources, less than 4 percent in some categories of receiving waters.
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Vast differences in hydrology, soils, vegetation, precipitation patterns, and land uses argue against national urban stormwater discharge standards.
Finally, the application of national end-of-pipe standards for urban stormwater discharges would be extremely costly and yet would result in little if any water quality improvement. The 1992 American Public Works Association survey concluded that the cost of controlling urban stormwater runoff could be over $400 billion in capital expenditures and $500 billion for annual operations and maintenance in order to attain numeric, effluent discharge standards.
In light of these concerns, NRC makes the following recommendations for revising Section 402(p). First, we would suggest that urban stormwater discharges be regulated under new nonpoint source provisions rather than under the national pollution discharge elimination system. The NPDS Program is designed to address point sources of discharge, regulating stormwater discharges as point sources leads to unnecessary and extremely costly requirements.
Second, the stormwater permit requirements must be feasible and technology-based. Third, establish a watershed management approach rather than a project-by-project approach to water pollution. The watershed approach will identify real water quality problems and will ensure that local solutions are cost effective on a watershed basis.
Fourth, establish a phased and progressively focused stormwater program which requires that obvious program problems be addressed first.
Finally, all urban stormwater discharged into municipal stormwater discharge systems should be a part of a jurisdiction-wide permit.
I appreciate the opportunity to provide NRC's views on urban stormwater runoff. NRC and its members look forward to working with the committee to develop balanced and effective programs for stormwater control.
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Mr. BOEHLERT. Mr. Tamaribuchi, thank you very much for that testimony. I especially appreciate your recommendation that we approach the watershed management issue rather than a project-by-project endeavor. We're going to do that. It won't surprise you to learn that I represent the New York City watershed area, so I have a particular interest in this. I think we can deal with the problem in a very constructive manner that will be a win-win situation for the City of New York and the 8 to 10 million people the water system serves, and for the watershed towns that provide the water. So thank you for that recommendation.
Mr. Borski.
Mr. BORSKI. Thank you, Mr. Chairman.
The bill introduced last night by Chairman Shuster authorizes $2 billion per year for fiscal years 1996 through 2000 for the State revolving fund. Mr. McElwee, I think in your testimony you suggested $2 billion was the right number. Mr. Rogers, I think you called for $3 billion.
Mr. ROGERS. $3 billion.
Mr. BORSKI. Is $2 billion adequate?
Mr. ROGERS. Well, there was a shortfall last year as you may know and we'd like to make up that. The funding has been $2.6 to $2.8 billion all along.
Mr. BORSKI. What will happen if we're at $2 billion a year?
Mr. ROGERS. What is the opportunity? Well, the SRF funds need to be introduced to more money because there is definitely the need out there as I expressed; $3 billion would hardly cover the waterfront at this point. It certainly would help. It is working and I understand about $1 billion has come back into the funds since the program was initiated in 1987.
Mr. BORSKI. Mr. Rogers, what is the basis for your statement that EPA is considering expanding stormwater requirements to virtually all construction sites in the country? Is there a proposed rule of which I am unaware?
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Mr. ROGERS. There was a discussion I think in EPA to lower the level from 5 acres to 1 acre which essentially would cover all of America's construction except some residential construction. That would be an overkill in our view.
Mr. BORSKI. Mr. McElwee, can you explain what you mean by relying on market incentives rather than pursuing taxes to induce environmental conformance? Do you have any specific suggestions in mind that you want to share with us?
Mr. MCELWEE. Not at this time. I think I'd like to defer to my association to answer that question.
Mr. BORSKI. All right. Perhaps they could respond to us in writing. It would be appreciated.
Mr. McElwee, would you estimate how many jobs there are nationally in construction of wastewater treatment plants and other construction projects relating to meeting the Clean Water Act?
Mr. MCELWEE. How many jobs there are now?
Mr. BORSKI. Yes, sir?
Mr. MCELWEE. I don't know how much money we're spending on water and wastewater, but I have done some research on the effects of Davis-Bacon and I think I came up with for each million dollars of construction, 10 jobs per year would be generated.
Mr. BORSKI. Do you or your association have any specific recommendations on how to make the most efficient use of available Federal funding for clean water programs and how to stretch limited resources as far as possible?
Mr. MCELWEE. Not at this time. I don't have that information, no.
Mr. BORSKI. No further questions, Mr. Chairman.
Mr. BOEHLERT. Thank you very much, Mr. Borski.
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Let me just point out that the Chairman introduced a bill last night providing $2 billion for SRF, the State Revolving Fund, and all of us agree that is not as much, including the Chairman, but I would like to point out that the conservative Republicans have upped the Administration's ante by $400 million. The President's budget only includes $1.6 billion, the point being that there is general agreement up here—I can't find a dissenting voice—in support of more money for the State Revolving Fund Program. The only problem is we don't know quite where to find it.
Mr. Horn.
Mr. HORN. Thank you very much, Mr. Chairman.
I notice that in Mr. McElwee's testimony, the Associated Builders and Contractors advocate repeal of Davis-Bacon. Is that also the view of the Associated General Contractors of America and the American Road and Transportation Builders Association?
Mr. ROGERS. AGC of America has taken the position and it is part of our policy that Davis-Bacon is not an effective tool in the industry. We are for repeal.
Mr. HORN. You are for repeal?
Mr. ROGERS. Yes.
Mr. HORN. How about Mr. De Santo?
Mr. DE SANTO. I just consulted with staff and we do not have a position on that at this time.
Mr. HORN. Okay, you do not have a position.
Mr. DE SANTO. That may not reflect the feeling of the membership. I'm not familiar with the details of their position.
Mr. HORN. Mr. McElwee, I take it all of your workers are unorganized, nonunion, as I read your testimony or are some unionized?
Mr. MCELWEE. We don't discriminate with respect to labor affiliation. Some of our workers may be carrying their union cards and some may not. We don't discriminate, so across our industry, that typical job site may have a mixed job site including both workers that are represented by a union and those that aren't.
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Mr. HORN. I'm sort of fascinated by the Davis-Bacon discussion because the whole purpose of it when it was established in the 1931–1932 period in the middle of the Depression was to keep those with lower wage rates undercutting the wage rates of urban cities in the north primarily from coming in and grabbing all the jobs and taking away work from people that had gone through apprenticeship programs, journeymen, and so forth. I'm just wondering what do you see wrong with the way Davis-Bacon is administered by the Department of Labor? Describe to me some of the problems that seem to bother you.
Mr. ROGERS. Are you asking the Associated General Contractors?
Mr. HORN. All of you.
Mr. ROGERS. First of all, it's primarily administered by the States rather than the Federal Government. The Department of Labor passes on that authority to most States and we see many States who have the authority or the charge to go out and do labor surveys not adequately doing those surveys. In many cases, wage rates are established that far exceed the rate in the area or rights in the area sometimes as much as twice as much.
Mr. HORN. So in other words, if you're doing construction in an area beyond the suburbs that gets more rural, what you're saying is either at the State or Federal level they take the urban rate and apply it to that particular job scale?
Mr. ROGERS. For example, I have seen the Evansville, Indiana union rates applied in a southernmost county in Kentucky on the Tennessee line, labor being $14 to $15 a hour as opposed to what those folks down there make, $6 or $7.
Mr. HORN. In other words, what is upsetting you is you feel they do inadequate wage surveys. They are not looking at the area in which you're constructing things, they are simply taking the nearest one they seem to have data on?
Mr. ROGERS. That's the biggest problem. The paperwork requirement is certainly a problem as well.
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Mr. HORN. But in terms of a particular contract, everyone is going to have to meet those particular wage minimums, is that not correct?
Mr. ROGERS. That's correct.
Mr. HORN. Fairly treated?
Mr. ROGERS. That's correct.
Mr. HORN. It's that labor will be paid more when Davis- Bacon applies because they are using an urban rate probably which they shouldn't be doing; they should be doing an actual wage survey in the suburban or rural areas, wherever the construction is occurring. It's the escalation of that rate that seems to bother you.
How would it benefit the contractors if you didn't have Davis-Bacon? You'd have lower paid workers. In southern California, which I represent, you have mostly illegal aliens and you'd be lucky if they're getting the minimum wage.
Mr. ROGERS. Well, water seeks its own level. Contractors would have to pay a wage which would attract labor to the job which would be far below the Davis-Bacon rates in many areas. Therefore, the owner would be impacted and certainly the taxpayer is impacted negatively and it would be reduced cost of that project.
Mr. HORN. Let's say you're operating in urban America, we all recognize wage rates are higher there through various factors—higher cost of living, organized labor contracts, whatever—would you want to pay people less than they are used to getting for normal work in urban America when you operate in urban America?
Mr. ROGERS. Of course we're talking about public works, there's a lot of private work out there too. The private work, we pay whatever we have to pay to employ that labor. When we go to the public works job, we elevate those wage scales up to that level and then we bring them back to the private sector and lower them back down. That's very difficult to do and very difficult to manage. It's not necessary in our industry at all.
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Mr. HORN. Any other comments on that?
[No response.]
Mr. HORN. Just one last question, Mr. Chairman, if I might.
I was interested in the comment that you made, Mr. Rogers, that for construction activities of more than 5 acres, it's the owner of the land where the project is being built who should be developing stormwater pollution prevention plans.
If I was the owner of the land, I wouldn't have the slightest idea what construction activity on that land would do to stormwater or any other water. I would imagine you might have a substantial use of water in some types of construction. Why should the burden be on the owner and not on the contractor who knows what the use of water is as to how that will affect that particular site?
Mr. ROGERS. I think there are two questions here. The first one is the owner synonymous with the developer. The developer would hire a professional and in the process of laying out the subdivision or the industrial development, would be required to plan the stormwater runoff problem.
Secondly, I don't think that the contractor has the ability to do that or the professionalism to do that. He would be required to go out and hire professionals to come in and map out the strategy for that work. That would run up the cost as part of the construction process.
As contractors, we know what we have to do for the most part on major projects to protect the stormwater runoff by building small retention ponds, using screens and other devices, and it works, but it's not the major projects where the problem is. It's smaller projects.
Mr. HORN. Anyone else want to comment on that?
Mr. DE SANTO. I would certainly concur and take the opportunity to say that as a consultant on such projects, I have often found myself in the position of advising an owner or a contractor as to what they could or couldn't do and 99 or 95 percent of the time, it's a matter of common sense. The contractors know what to do if they are given clear direction as to the objective of the lawn. But the added expense and formality of the bureaucracy that's imposed upon such processes is exorbitant and basically unnecessary if a line of communication and common sense can be enforced.
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Mr. HORN. You represent three national associations. Have you dealt with a standard way to approach this on particular types of construction and shared that with your membership?
Mr. DE SANTO. From my point of view, again, as a consultant within this industry, particular linear projects, there are very well known best management practices and procedures written and otherwise, and certainly that information is communicated.
What is formalized in the Clean Water Act and other environmental control acts is documentation of that procedure and if challenged, the need to defend the positions in a litigious debate. It becomes expensive and time-consuming.
Mr. HORN. Thank you, Mr. Chairman.
Mr. BOEHLERT. Thank you very much, Mr. Horn.
I'd like to ask all the panelists just briefly as a concluding question for this panel, to comment on the concept of mitigation banking which I think makes an awful lot of sense. I know it's not being used nearly as much as it should be. Would any of your care to address the subject of mitigation banking?
Mr. De Santo.
Mr. DE SANTO. Thank you. I certainly am extremely and personally interested in that aspect of environmental stewardship. I think it's fundamentally an absolutely essential concept. I think the fundamental difficulty is trying to manage the environment measuring natural and scientific phenomena and assigning value to them. It's a human value against the context of political decisions. In other words, humans are guiding our priorities and those are based very often on subjective judgments, hopefully founded in good science. The problem is, we have often bad science and the inability to meet around the table determining what are the real functions and values of a resource. That addresses the question of banking.
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You can get a group of scientists and debate endlessly the value of a particular piece of land, wetland or otherwise. A judgment has to be made; there has to be some level of arbitration in land banking. It's quite successful in the south and southwest and an abysmal failure in the northeast. Unfortunately, we are not often governed by laws, we are more often governed by personalities. It's a matter of trying to write laws that guide personalities. I don't think it's solvable but landbanking is a very important concept; it shouldn't be given up or abandoned. It's not an absolute answer; it requires thoughtful reflection.
Mr. BOEHLERT. Thank you very much.
Mr. TAMARIBUCHI. I'd just like to add that we have been doing mitigation banking on our properties since 1988 and are continuing on that process for wetlands. I think it is an excellent approach particularly if you can tie it to a general permit, again taking the watershed approach and identifying what the total wetlands values are within the watershed and prioritizing those values and then identifying what areas can be mitigated in that wetlands bank.
We are, in fact, in the process of working with the Corps in trying to establish a general permit on our watershed. So we certainly support that effort.
Mr. BOEHLERT. Thank you very much.
Mr. Gilchrest has joined us.
Mr. GILCHREST. Thank you, Mr. Chairman. I apologize for being late.
I'd like to ask Mr. De Santo and Mr. Tamaribuchi a question. Mr. De Santo, you said mitigation banking has been an abysmal failure in the northeast. Can you give me an example of why?
Mr. Tamaribuchi, could you give us some reasoning why you think it's been a success in your area?
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Mr. De Santo.
Mr. DE SANTO. A failure in the northeast because it doesn't exist. That is, the concept exists and there are undoubtedly regulatory agencies such as the Corps of Engineers who would welcome the opportunity—as an observer, I'm saying this—to explore it.
The problem that I have found in my practice in the northeast is the reluctance of environmental agencies to trust the process fearing that you are then opening a floodgate.
Mr. GILCHREST. Which environmental agencies, EPA, Fish and Wildlife?
Mr. DE SANTO. All agencies which seek to preserve resources rather than necessarily—I consider myself an environmental conservationist but not an environmental preservationist.
Mr. GILCHREST. A conservative conservationist.
Mr. DE SANTO. There is a difference between conservation and preservation and I'm saying it fails, land banking, wetland banking, any resource banking fails if the agency or the interest group opposing it has a very fundamental preservation attitude.
Mr. GILCHREST. So you're saying the concept of mitigation banking is a good one, it's just that it hasn't been implemented properly in the northeast. If it were implemented, would you say it would be a good way to preserve watershed management and should it be a State program? Should the State come up with a policy for mitigation banking? Should it be Federal?
Mr. DE SANTO. You asked in my opinion multiple questions. I think it should be a state program because that will encourage invention. If it's a Federal program, it discourages invention and it encourages the belief that one size fits all. Maybe that's a rather unorthodox view.
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Mr. GILCHREST. No, I agree with you. I think the fact is that the State really needs to take up some sense responsibility for these areas and very often local governments and even State governments say, well, the Feds will take care of that, so I'm not even going to think about it. So I think it's time that everybody begins thinking about it.
Because I'm worried about the green light, Mr. Tamaribuchi, could you give us your perspective on that?
Mr. TAMARIBUCHI. In our case, I think that part of the reason why mitigation banking has worked is that it's a matter of personalities. I think that many of the people we're working with at the Fish and Wildlife Service and the Corps of Engineers in our area are very supportive of the idea and therefore are working with us on that. They are, I guess, willing to interpret flexibility into some of the regulations that Dr. De Santo was referring to.
I think one of the major problems with implementing this program really is this whole idea of sequencing and the alternatives analysis. We have a couple of areas that literally have cost us $100,000 to do the alternative analysis to come to the conclusion that yes, what we're doing in the mitigation bank is much better than the habitat that needed to be avoided. The sequencing program doesn't allow a level playing field in considering alternatives for wetlands. That's a fundamental problem that I think discourages mitigation banking.
Mr. GILCHREST. Thank you very much.
Mr. BOEHLERT. Thank you very much, Mr. Gilchrest.
Thank you to all of the panelists. We really appreciate it.
The third and final panel of the day consists of Dr. Richard Kuchenrither with the Water Environment Federation and Kermit L. Prime, Jr., from the National Society of Professional Engineers. Mr. Prime, I want you to know that we have a professional engineer on our staff, Mr. Marcus Peacock, so kindred spirits. We're guided in the right direction.
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Wait, I'm just advised we have two professional engineers on staff. If you stay much longer, we might hire a couple of more.
[Laughter.]
Gentlemen, your statements will appear in the record in their entirety. We would appreciate it, in the interest of time, if you could summarize so that we could get right to the pertinent questions.
Dr. Kuchenrither.
TESTIMONY OF RICHARD D. KUCHENRITHER, SENIOR PARTNER, BLACK AND VEATCH AND PRESIDENT-ELECT, WATER ENVIRONMENT FEDERATION; KERMIT L. PRIME, JR., P.E., REGIONAL VICE PRESIDENT, BOYLE ENGINEERING CORPORATION ON BEHALF OF THE NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS
Mr. KUCHENRITHER. Thank you, Mr. Chairman.
My name is Dick Kuchenrither and I'm the President-elect of the Water Environment Federation. I'm also the Senior Partner with a consulting engineering firm of Black and Veatch headquartered in Kansas City, Missouri.
The Water Environment Federation is a nonprofit, technical organization concerned with the preservation and enhancement of our Nation's water resources. Our 41,000 members include engineers, scientists, wastewater treatment plant operators, regulators and academicians. WEF members are the practitioners that have been involved directly in implementing the current Clean Water Act and protecting and restoring water quality throughout the United States.
Based upon our experience in working with the existing Act, we have identified five priority areas we believe need to be addressed through reauthorization. These include: one, priority-setting for water quality problems; two, using sound science as a basis for all water quality programs; the need for support of water quality research; management of water quality on a watershed basis; and fifth and finally, continued Federal financial assistance. Let me briefly comment on each of these five areas.
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First, priority setting, there is little doubt that correcting our known water quality problems exceeds our capacity to pay for them. Just as in our personal lives, however, we have to distinguished between needs and wants. We must do the same in the water quality management in the United States. Through priority setting we can establish what our needs really are. We believe that further cost effective progress can only be made by setting and following well- defined priorities. We believe that a new national environmental policy should be added to Section 101 that requires all environmental priority-setting to be based on risk assessment; state of art, scientific information with independent peer review; evaluation of cost effectiveness; promotion of pollution prevention; and consideration of cross- media impacts.
We also want to specifically clarify that risk assessment and cost benefit analysis should be only as a basis for targeting our resources. They should help bring progress to the program, not paralysis. In the past, not all of our important water quality decisions have been based on sound science. We believe that the use of anything but sound science to establish water quality requirements results in what we call unfounded mandates.
To ensure that individual program components are based on the best available scientific information, we believe that the reauthorized Clean Water Act should include, among other things, provision for an independent peer review process similar to the one that was utilized in the development of EPA's bioassays regulations.
If we are to prioritize our investments and avoid unfounded mandates, we will need sound, scientific information. This information can only come from water quality research which brings me to our third point, the need for basic and applied research which is a cornerstone of all water quality programs in the United States.
The level of Federal support for water quality research has declined dramatically from $67 million in 1980 to less than $5 million today. Much of those funds are used to support the development of regulations. The lack of adequate research and research funding is hindering our ability to make further progress in preserving water quality and preventing pollution.
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Our research deficit is also hurting our ability to participate in the growing global environmental technology market, hindering our ability to take advantage of our previous multibillion dollar investment in water quality in the United States.
The Water Environment Federation would recommend that Congress make water quality research a priority item through the reauthorization of the research provisions of the Clean Water Act. Better coordination of water quality research and increased support for cooperative research mechanisms such as the Water Environment Research Foundation.
Our fourth concern deals with the need for watershed management and planning. Watershed protection is currently addressed in the United States by a patchwork of narrowly focused legislative and regulatory programs. The professional community recognizes that further progress will depend on our ability to address many pollutant sources and adverse environmental conditions which fall outside the traditional water quality management planning area. These include runoff from farms, fields and city streets, hydrologic changes, habitat destruction, and atmospheric deposition.
Full water quality restoration requires a holistic approach that considers all sources and ecological stressors. The watershed approach allows for a comprehensive and integrated approach to protecting our Nation's water resources. This approach has diverse support as demonstrated by the Water Quality 2000, a coalition of 83 Federal, State and local governments, industries, professional and scientific societies as well as environmentalists.
The Water Environment Federation strongly recommends that the Clean Water Act be amended to encourage water quality management on a watershed basis.
The last item I would like to comment on today is Federal funding to meet municipal water quality needs. Billions of dollars have been invested to date to help Federal, State and local governments meet national clean water goals. EPA's latest needs assessment has shown that almost $150 billion will be needed to meet current program requirements. Although currently local governments pay much of the cost for this basic public health infrastructure, we believe that in many cases, continued Federal funding is needed as a part of the partnership between Federal, State and local governments.
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WEF has long supported Federal financial assistance for clean water programs. Reauthorization of the Clean Water Act should include continued Federal funding for compliance with enforceable requirements of the Act. The amendments should also provide for financial assistance and regulatory flexibility for small communities.
In conclusion, I would like to say that the Clean Water Act has served us well and has been successful in restoring many of our Nation's lakes, rivers and shorelines. However, our experience has shown that the Act is in need of some fine- tuning. Addressing the five issues that I have mentioned, along with reauthorization of the Act itself, will put us in a position to meet our clean water goals as we move into the 21st Century. Using the resources of the Clean Water Act experience of our 41,000 members, the Water Environment Federation is anxious to work with Congress and other interested parties in helping to develop a consensus for the reauthorization of the Clean Water Act.
Mr. BOEHLERT. Thank you very much, Mr. Kuchenrither.
Mr. Prime.
Mr. PRIME. Thank you, Mr. Chairman and members of the committee.
I am Kermit Prime and I am a Regional Vice President of Boyle Engineering Corporation. I am based in Orlando, Florida. I'm a licensed professional engineer and a member of the National Society of Professional Engineers on whose behalf I testify today.
We provided you with written testimony for the record, so I will summarize verbally only what we consider to be the most important points.
Before I get too far into the details of the State revolving funds, let me take a moment to refresh your memory regarding how communities finance their wastewater treatment projects. When a unit of local government seeks to build a wastewater facility, they rarely have the cash on hand to do that. They usually sell bonds for 20 or more years to finance the project and then pay the bonds back with revenues from the system. Over the 20-year period, the interest actually paid can easily be two or more times the original capital cost of the project. Depending on the rate of interest paid, this is why the State revolving loan funds at interest rates significantly below the market rate can easily have a financial impact on local government equal to or better than a 50 percent grant that covers only the initial capital cost of the project.
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Congress has several opportunities to further enhance the already successful State Revolving Loan Fund. We strongly support these points. Perhaps the most important recommendation that I can make today is that Congress should direct EPA and the Department of Treasury to actually pay Federal capitalization grants to the States on a negotiated, periodic, cash basis rather than through letters of credit. EPA currently conveys SRF appropriations to the States through letters of credit in lieu of cash. This disbursement method restricts the States from maximizing their leverage on the Federal capitalization grants.
A second recommendation that would not necessitate new appropriations is to amend the Act to further facilitate private-public partnerships. In many cases, a low interest loan may make privatization financially feasible. Congress should provide a statutory definition of a public purpose treatment works that would place it on par with the publicly- owned treatment works, then Congress and EPA should extend the same regulatory programs to these privatized systems as currently applies to the POTWs.
The third recommendation is that Congress should authorize and appropriate a minimum of $2 billion annually to meet the original categories of need set forth in the 1972 Act. The new expectations placed on States and localities in the 1987 amendments and the potential additional categories under consideration now will require Congress to further increase authorizations and appropriations beyond that $2 billion level.
We also have some recommendations to make in the area of programmatic and administrative adjustments to the SRF Program. First, Congress should eliminate the provisions of the Clean Water Act that subject facilities receiving SRF financed loans to the same requirements that were placed on the recipients of construction grants. While these requirements may have been appropriate for the Construction Grants Program, they are definitely inappropriate for a loan program where local government is required to pay back the loans. Also, they are often duplicative of State- and local- managed efforts.
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Congress should also eliminate the current restrictions on the use of SRF funds to pay for the cost of land, easements and rights-of-way. Also, Congress should consider extending the loan amortization period from 20 years to 30 years or the expected life of the project, but only for certain small, needy communities. We do not believe extension of the amortization period should apply to all of the SRF loan recipients but only those meeting a carefully-crafted definition of needy.
My final comment addresses grants. NSPE is opposed to returning to the EPA Construction Grants Program. Such a step backward is also inconsistent with efforts by this Congress to reshape government programs so they operate efficiently. In addition, we are also opposed to negative interest loans as they are simply an indirect form of issuing a grant. Recognizing that a grants program may be the only source of fundings for only the most disadvantaged of the small communities, NSPE urges you to enhance the existing Federal programs that currently provide grant and loan assistance to needy communities such as through the Department of Agricultural Rural Utilities Services. Do that rather than establish a new grants program within EPA.
I appreciate this opportunity to testify and I'll be happy to answer any questions.
Mr. BOEHLERT. Thank you both very much for the excellent summaries and for the comprehensive nature of your completed statement.
Mr. Borski.
Mr. BORSKI. Thank you, Mr. Chairman.
Mr. Kuchenrither, you mentioned in your testimony that there is a global environmental technology market. How big is that market and what is its annual growth rate?
Mr. KUCHENRITHER. Sir, I don't exactly know the size of the market or its growth rate. All we know is our key point is we've made a tremendous investment in water quality in the United States since 1972, billions of dollars. We enjoy the best water quality, I believe, in the world for an industrialized nation. There are other emerging countries that have severe water quality problems and we need to be able to take advantage of that market. In the present situation, we're not able to. The market is huge; there is no doubt about that.
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Mr. BORSKI. Do you know how many American jobs are directly related to environmental technology development, manufacturing installation and maintenance?
Mr. KUCHENRITHER. No, sir, I don't.
Mr. BORSKI. On page four of your testimony, you state that ''Risk assessment and cost benefit analysis should be used to help make decisions on where to target scarce resources and not to delay needed action.'' Would you please elaborate on how these tools have been or risk being used to delay needed action and identify ways to avoid such use or misuse?
Mr. KUCHENRITHER. I think one, risk assessment is definitely becoming a much more important element of decisionmaking in that 50 years ago we were worried about killing people with our water and wastewater through cholera epidemics. We solved that problem and then we switched our emphasis to ecological things—fishable, swimmable. Secondary treatment took care of that. Now, we're into the chronic concerns that require the use of risk assessment to establish where do we invest our dollars.
Risk assessment is in its real infancy and in some instances where it's been applied, for example, development of the sludge regulations that came out several years ago, the first attempt by EPA to do that, it was flawed and they had a tremendous problem with it, but to their benefit, they stuck by their guns and they were able to accept public input and we were able to rectify that. It took a lot of research and a lot of data that I spoke to to make the risk assessment method work.
I don't think that there is not parties that I know that intentionally delay projects through risk assessment but just there are tremendous data needs to make that approach work.
Mr. BORSKI. Thank you, Mr. Chairman.
Mr. BOEHLERT. Thank you very much.
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Mr. Horn.
Mr. HORN. I'd like to also commend both of you as witnesses. You have marvelously organized testimony here that is very helpful to legislators. Maybe we ought to send it out to all our witnesses because it is very clear and you tell us exactly what you want to do.
I must say, Mr. Kuchenrither, I was really surprised on page six about the data you provide us, ''For example, EPA funding for basic water quality research fell from $67 million in 1980 to less than $5 million today. Much of the remaining research funds are used to support development of regulations. Lack of adequate research and research funding is hindering our ability to make further progress in preserving water quality and preventing pollution.''
Do you have the feeling that either the Administration hasn't asked for the money, Congress has cut this? I'm not sure and I'm going to check into it, but what is your feeling as to why we've had that drop in support for science in this area?
Mr. KUCHENRITHER. The majority of those historical dollars came through the Clean Water Act and I think portions of the Construction Grants Program and the funding therein. I think that is why it's dropped off. Those are certainly startling statistics to us too. It's interesting that again most of that most of that money that is spent on research today is used to develop regulation.
Mr. HORN. That's what I'm wondering. Are we moving from chemists to lawyers? Is that where the money is going?
Mr. KUCHENRITHER. Yes, sir, absolutely. We're doing water quality research today to answer legal questions.
Mr. HORN. After tort reform, maybe there will be even more lawyer-chemists.
It seems to me that is something we need to deal with and I think the committee ought to take a very careful look at it. What has this meant? Does this mean we're really in guess science rather than hard, good science as you're advocating? What kind of science are we getting out of there?
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Mr. KUCHENRITHER. In many instances, we're struggling. We're doing the best with what we have. In many instances, the development of new water technology is left to the private sector which is struggling financially and has limited investments to make in research and development, whereas offshore, we see in England, for example, where water companies are privatized and in France, tremendous investments in research and development going on there that in fact is making it difficult I think for many firms in the United States to compete.
Mr. HORN. Should our firms in America be doing what the privatized firms are doing abroad?
Mr. KUCHENRITHER. I think in terms of research if they had the dollars, yes, sir. The firms or research agencies, National Science Foundation, Water Environment Research Foundation, those people should again be doing the research to capitalize on the investment we've already made.
Mr. HORN. What other sources of funding in this area are available besides the Clean Water Act as a scientist?
Mr. KUCHENRITHER. I'm sure there is a myriad of direct funding, direct grants, but I think there are things you could do in terms of potential tax credits or something like that to help stimulate research and development and develop technology.
Tort reform will go a long way because when people experiment with a new technology and it fails, then the question is who pays and that's where at one time EPA played a major role that they don't play anymore.
Mr. HORN. That's very helpful.
Thank you, Mr. Chairman.
Mr. BOEHLERT. Thank you very much.
Mr. Gilchrest.
Mr. GILCHREST. Mr. Prime, I was looking at your summary of recommendations and if I could just ask you to generally comment on things, for example, you oppose set aside of SRF funds for special purposes, you think we ought to eliminate the Davis-Bacon Act, you don't like negative interest loans and the idea that you enhance existing programs to take care of that, direct EPA and Department of the Treasury disbursement grants on a cash basis I guess to the States and I assume that's sort of in a block grant type of thing?
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Mr. PRIME. That's what we're proposing. Currently, once you appropriate and authorize the expenditure of the funds, the dollars may not actually go to the States for two or three years after your actions. If they were waiting for that money until they actually expended it locally, and that's how it now works, they have no way to invest that money or to pledge that against State-issued bonds and leverage the money. Actually, there are techniques that can be used through the financial system to leverage maybe 3 to 1. They are talking now about 2 to 1 leveraging and most of that is coming from local contributions. You can do it with clever financial techniques that are legal and safe and get 3 and 4 to 1 leveraging on those funds if they are given the cash up front.
Mr GILCHREST. You have another here that's interesting, oppose deferment of loan repayments until after three years of project completion. It seems your list here is in reaction to a Federal program that has to a large extent become overweighted with lawyers or bureaucrats and become extremely inefficient as far as the dollar being spent and the production of sewage treatment plants or cleaning up of problems with water quality.
Mr. PRIME. Yes, sir. The theme that is common through these recommendations is efficiency and getting the most constructed now before inflation increases the cost. Do it now while the dollars are cheaper than they are ever going to be again.
Mr. GILCHREST. I guess we're looking at a whole new national perspective on how to distribute funds for much needed projects. Say you're looking at a small community, I have a town in my community that might be made up of about 500 people and they are not near enough to be hooked up to another sewage treatment plant. Every single septic tank in that community is failing.
In your way of doing things, then the State ought to be given the money I guess in a block grant and then they would distribute that to what they considered needy communities that could not pay even a negative interest loan but be honest and say they need a grant, let's fund it and give them the grant?
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Mr. PRIME. No, sir. Under that recommendation is where we would recommend you use the Federal Utility Service—it used to be the Farmers Home Administration. They have currently, and have over a 20-year history, that's very successful of dealing with small communities of that type and they have combined loan and grant programs. The Administration's 1996 budget actually is trying to reduce the amount of money going into that program and we're suggesting to you that is the appropriate place.
Mr. GILCHREST. In other words, a program like that which apparently up to this point has not been funded enough to meet the needs of that particular community because they have 100 projects out there and on an annual basis, they might be able to fix, at least in the State, maybe four or five, so those guys are waiting 10 or 15 years down the road. You're saying that program works efficient, they ought to be funded to a higher amount than they are now?
Mr. PRIME. Outside of the EPA program that is used nationwide. Treat them as the exception that they are and let the EPA focus on this much more efficient delivery system which will generate multiple times the leverage on the funds that you invest.
Mr. GILCHREST. Do you have a dollar amount for what used to be the Farmer's Home Administration, Federal Utility Service?
Mr. PRIME. I'm going from memory here, but I believe it was $590 million last year and it's being cut to something of the order of $500 million. We think something between $500 and $1 billion would be appropriate.
Mr. GILCHREST. Thank you.
Mr. BOEHLERT. Thank you very much.
Mr. Kuchenrither, could you give me a success story on watershed management, better water quality at a lower cost.
Mr. KUCHENRITHER. A short story?
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Mr. BOEHLERT. Yes. It would have to be a short story and this will be the last question of the hearing.
Mr. KUCHENRITHER. There are several. One in particular is in the State of Maine where a starch processing industry is going to be required to make a multimillion dollar investment in wastewater treatment facilities and there would be no detectible impact in the receiving stream based upon this multimillion dollar investment.
The State Department of Environmental Protection recognized that making just a fraction of that investment instead of making a multimillion investment, they will make a $200,000 investment upstream in terms of best management practices with nonpoint sources and there will be a tremendous improvement in water quality. In fact, that is what the State has followed through on. It's that kind of initiative I think and creative thinking that the new Clean Water Act needs to empower the States to do to come up with creative solutions. Under the old Act, we would have spent the $2 million and gotten no improvement.
Mr. BOEHLERT. I hope to have an example for you too because the New York City watershed, the City of New York is under an order to construct a filtration plant that would probably cost in the neighborhood of $6 to $8 billion and obviously New York City would prefer not to spend $6 to $8 billion if it didn't have to, they don't have that just lying around in the petty cash fund, and there are some who say no, you don't have to do that, the way to solve the problem is just cease all activity in the watershed area which is the area I happen to represent. The communities don't particularly want to have their obituary written for them.
So I've got a win-win situation. I'm going to support New York City's waiver request so that they don't have to proceed with that multibillion dollar project in return for hopefully a commitment from them to spend just a fraction of what it would cost to operate that multibillion dollar facility upstate and working with the watershed towns. To me that is a win-win situation. That's the type of thing I'm talking about.
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Mr. KUCHENRITHER. It's another excellent example I'll store away.
Mr. BOEHLERT. Thank you very much.
Thank you both very much, Mr. Prime and Mr. Kuchenrither.
The next meeting of this committee will be Tuesday the 21st, the same room at 2 p.m. We will have EPA and the USDA with the Federal point of view.
This hearing is adjourned.
[Whereupon, at 1:05 p.m., the subcommittee was recessed, to reconvene at 2:00 p.m. on Tuesday, February 21, 1995.]
[Insert here.]
TESTIMONY
FEBRUARY 16, 1995
Bubes, Alan, President, Linens of the Week on behalf of the Textile Rental Services Association of America
De Santo, Robert S., Chief Scientist and Director of Environmental Planning, De Leuw, Cather & Company on behalf of the American Road & Transportation Builders Association
Hammer, Glenn W., Vice President, Environmental, Health and Safety, Ashland Chemical Company on behalf of the Chemical Manufacturers Association
Kuchenrither, Richard D., Senior Partner, Black and Veatch and President-elect, Water Environment Federation
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Lindsey, Carol Bennett, President, Ozark International Consultants, on behalf of the U.S. Chamber of Commerce
McElwee, Scott, McElwee-Scarborough Construction on behalf of the Associated Builders and Contractors
Missimer, Skip, Assistant Corporate Environmental Manager, P.H. Glatfelter Company on behalf of the American Forest and Paper Association
Norwine, David, Vice President, Haward Corporation on behalf of the National Association of Metal Finishers
Prime, Kermit L., Jr., P.E., Regional Vice President, Boyle Engineering Corporation on behalf of the National Society of Professional Engineers
Rogers, William W., Chairman, William W. Rogers Company on behalf of the Associated General Contractors of America
Stahl, Robert, Risk Manager, Chaney Enterprises on behalf of the American Trucking Association, Stormwater Reform Coalition
Tamaribuchi, Sat, Senior Director, Environmental Issues, Irvine Company on behalf of the National Realty Committee
PREPARED STATEMENT SUBMITTED BY A MEMBER OF CONGRESS
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Mineta, Hon. Norman Y., of California
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Bubes, Alan
De Santo, Robert S
Hammer, Glenn W
Kuchenrither, Richard D
Lindsey, Carol Bennett
McElwee, Scott
Missimer, Skip
Norwine, David
Prime, Kermit L
Rogers, William W
Tamaribuchi, Sat
Stahl, Robert
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Next Hearing Segment(3)