Segment 1 Of 6     Next Hearing Segment(2)

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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 []. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.







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JULY 11, 1995 (NATURAL RESOURCE DAMAGES UNDER SUPERFUND AND THE OIL POLLUTION ACT OF 1990) [Joint Hearing with Subcommittee on Coast Guard and Maritime Transportation]

Printed for the use of the

Committee on Transportation and Infrastructure


BUD SHUSTER, Pennsylvania, Chairman

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WILLIAM F. CLINGER, Jr., Pennsylvania
THOMAS E. PETRI, Wisconsin
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
WILLIAM H. ZELIFF, Jr., New Hampshire
BILL BAKER, California
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
PETER I. BLUTE, Massachusetts
JOHN L. MICA, Florida
ZACH WAMP, Tennessee
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RANDY TATE, Washington
RAY LaHOOD, Illinois

NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
ROBERT E. WISE, Jr., West Virginia
BOB CLEMENT, Tennessee
ELEANOR HOLMES NORTON, District of Columbia
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PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
BOB FILNER, California
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi

Subcommittee on Water Resources and Environment

SHERWOOD L. BOEHLERT, New York, Chairman

ZACH WAMP, Tennessee, Vice-Chairman
THOMAS E. PETRI, Wisconsin
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WILLIAM H. ZELIFF, Jr., New Hampshire
STEPHEN HORN, California
BOB FRANKS, New Jersey
BUD SHUSTER, Pennsylvania
(Ex Officio)

ROBERT A. BORSKI, Pennsylvania
ROBERT E. WISE, Jr., West Virginia
ELEANOR HOLMES NORTON, District of Columbia
BOB FILNER, California
GENE TAYLOR, Mississippi
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(Ex Officio)

Subcommittee on Coast Guard and Maritime Transportation
HOWARD COBLE, North Carolina, Chairman
BILL BAKER, California
BUD SHUSTER, Pennsylvania
(Ex Officio)

BOB CLEMENT, Tennessee
ROBERT A. BORSKI, Pennsylvania
(Ex Officio)


Proceedings of:

June 13, 1995
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June 20, 1995

June 21, 1995

June 22, 1995

June 27, 1995

July 11, 1995


JUNE 13, 1995

Colman, James C., Assistant Commissioner, Massachusetts Bureau of Waste Site Cleanup, on behalf of the Association of State and Territorial Solid Waste Management Officials (ASTSWMO)

Gimello, Richard J., Assistant Commissioner, New Jersey Department of Environmental Protection, Site Remediation Program, on behalf of the National Governors' Association

    Harding, Russell J., Deputy Director, Michigan Department of Natural Resources, on behalf of the State of Michigan

    Levin, Bennett, P.E., Commissioner, Department of Licenses and Inspections, City of Philadelphia
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    Strock, James M., Secretary, California Environmental Protection Agency, on behalf of the State of California

Thornton, Susan, Former Mayor and Mayor Pro Tem, Littleton, CO, on behalf of American Communities for Cleanup Equity The International City/County Management Association, the Municipal Waste Management Association, National Association of Counties, National Association of Towns and Townships, National League of Cities, National School Boards Association, and the United States Conference of Mayors

    Weichsel, John, Town Manager, City of Southington, CT, and Vice Chairman, Local Governments for Superfund Reform


    Costello, Hon. Jerry F, of Illinois

    Laughlin, Hon. Greg, of Texas

    Martini, Hon. William J., of New Jersey

    Poshard, Hon. Glenn of Illinois

    Zeliff, Hon. William H., Jr., of New Hampshire

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    Colman, James C

    Gimello, Richard J.

    Harding, Russell J.

    Levin, Bennett

    Strock, James M.

    Thornton, Susan

    Weichsel, John


Colman, James C., Assistant Commissioner, Massachusetts Bureau of Waste Site Cleanup, on behalf of the Association of State and Territorial Solid Waste Management Officials (ASTSWMO):

Report, ''Superfund Reauthorization: An Overarching Clean Up Goal-Clean Up Standards-Remedy Selection Resulting in a Streamlined Superfund Program, ''How Clean is Clean Enough''

Report, ''Superfund Cleanup Program-State Authorization/Delegation''
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Report, ''Who Pays for a Superfund Cleanup Program?''

JUNE 20, 1995

    Barth, Richard A., Chairman, President and CEO, Ciba-Geigy Corporation, Ardsley, NY

    Kaplan, Dale, President and Owner, Kaplan Cleaners, Camp Hill, PA, on behalf of the Pennsylvania Chamber of Commerce

    Klingenberg, Arnold, Manager, Solid Waste Legislative and Regulatory Issues, Mobil Corporation, Princeton, NJ, on behalf of the American Petroleum Institute

    Mallen, Michael, General Counsel, Southern Foundry Supply Company, Inc., Chattanooga, TN

    McIntire, Lee, Senior Vice President, Bechtel National, Inc., San Francisco, CA, and Member, Hazardous Waste Action Coalition

    Morningstar, Mary P., Assistant General Counsel, Environmental Law, Lockheed Martin Corporation, Bedford, MA, on behalf of the Electronic Industries Association

    Reilly, Bernie, Corporate Counsel, Wilmington, DE, on behalf of the Chemical Manufacturers Association

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    Spisak, John F., President and CEO, Industrial Compliance, Inc., Lakewood, CO, on behalf of Superfund Reform 1995


    Poshard, Hon. Glenn, of Illinois


    Barth, Richard A.

    Kaplan, Dale

    Klingenberg, Arnold

    Mallen, Michael

    McIntire, Lee

    Morningstar, Mary P

    Reilly, Bernie

    Spisak, John F

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Barth, Richard A., Chairman, President and CEO, Ciba-Geigy Corporation, Ardsley, NY:
Supplemental Statement, July 26, 1995
Responses to questions from Rep. Boehlert

Klingenberg, Arnold, Manager, Solid Waste Legislative and Regulatory Issues, Mobil Corporation, Princeton, NJ, on behalf of the American Petroleum Institute, responses to questions, August 2, 1995

Reilly, Bernie, Corporate Counsel, Wilmington, DE, on behalf of the Chemical Manufacturers Association, responses to questions, August 10, 1995

Spisak, John F., President and CEO, Industrial Compliance, Inc., Lakewood, CO, on behalf of Superfund Reform 1995:

Report, ''Superfund Reform 1995, Principles for a New Superfund Program''

Chart, Cost/Return of Site-Specific NPL Financing

Chart, Annual Costs of the Superfund NPL Program: Direct, Indirect and Hidden Taxes Imposed by Superfund (Non-Federal Facilities)

Chart, Annual Costs of the Superfund Program: Federal and Non-Federal NPL Sites

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News article, ''Superfund Success Unwanted'', The Denver Post, February 26, 1995

JUNE 21, 1995

    Florini, Karen, Senior Attorney, Environmental Defense Fund

    Jackson, Milton, President, Stop Toxic Pollution, Chattanooga, TN

    King, Linda Price, Director, Environmental Health Network, Chesapeake, VA

    Miller, Carl, Former County Commissioner, Lake County, Colorado, and Superfund Coalition Against Mismanagement

    Smith, Velma M., Executive Director, Friends of the Earth

    Tarpoff, Craig, , Alderman, Granite City, IL, and Co-Chairman, Superfund Coalition Against Mismanagement

    Trieste, Marion, President, Saratoga Springs Hazardous Waste Coalition, Inc., Saratoga Springs, NY

    Williams, Patricia Randolph, Counsel and Legislative Representative, National Wildlife Federation

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    Florini, Karen

    Jackson, Milton

    King, Linda Price

    Miller, Carl

    Smith, Velma M.

    Tarpoff, Craig,

    Trieste, Marion

    Williams, Patricia Randolph


    Florini, Karen, Senior Attorney, Environmental Defense Fund, submitted letter from Institute of Chemical Waste Management

King, Linda Price, Director, Environmental Health Network, Chesapeake, VA, Environmental Health Network, reports and articles*

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Trieste, Marion, President, Saratoga Springs Hazardous Waste Coalition, Inc., Saratoga Springs, NY:
Chart, ARARs Used in Formulating Remedial Action Objectives

Proposed Plan, Niagara Mohawk Power Corporation Site, Saratoga Springs, NY, U.S. Environmental Protection Agency Region 2, June 1995

Newsletter, The Saratoga Springs Hazardous Waste Coalition, Spring 1995

Williams, Patricia Randolph, Counsel and Legislative Representative, National Wildlife Federation, ''The Playground that Became a Battleground'', excerpt from February-March 1993 issue of National Wildlife Magazine

JUNE 22, 1995

    Acton, Jan Paul, Assistant Director, Natural Resources and Commerce Division, Congressional Budget Office, accompanied by Dr. Perry Beider

    Clay, Don R., President, Don Clay Associates, Inc., and Former Assistant Administrator, U.S. Environmental Protection Agency Office of Solid Waste and Emergency Response

    Dyckman, Lawrence J., Associate Director, Environmental Protection Issues, Resources, Community, and Economic Development Division, U.S. General Accounting Office, accompanied by Sharon Butler, Evaluator

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    Frost, Edmund B., Esq., Senior Vice President and General Counsel, Clean Sites, Inc

    Johnson, Hon. Nancy L., a Representative in Congress from Connecticut

    Magee, Dr. Richard, Director, Northeast Hazardous Substance Research Center

    Probst, Katherine N., Senior Fellow, Center for Risk Management, Resources for the Future

    Taylor, Jerry, Director, Natural Resource Studies, Cato Institute

    Zeliff, Hon. William H., Jr., of New Hampshire


    Boehlert, Hon. Sherwood L., of New York

    Johnson, Hon. Nancy L., of Connecticut

    Quinn, Hon. Jack, of New York

    Zeliff, Hon. William H., Jr., of New Hampshire

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    Acton, Jan Paul

    Clay, Don R

    Dyckman, Lawrence J

    Frost, Edmund B

    Magee, Dr. Richard

    Probst, Katherine N

    Taylor, Jerry, Director


Clay, Don R., President, Don Clay Associates, Inc., and Former Assistant Administrator, U.S. Environmental Protection Agency Office of Solid Waste and Emergency Response, responses to questions, August 2, 1995

    Probst, Katherine N., Senior Fellow, Center for Risk Management, Resources for the Future, responses to questions from Rep. Boehlert, August 2, 1995

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JUNE 27, 1995

    Browner, Hon. Carol M., Administrator, U.S. Environmental Protection Agency, accompanied by Elliot Laws, Assistant Administrator, Office of Solid Waste and Emergency Response

    Davison, Hon. Robert, Deputy Assistant Secretary for Fish and Wildlife and Parks, U.S. Department

    Goodman, Hon. Sherri W., Deputy Under Secretary of Defense, Environmental Security, U.S. Department of Defense

    Grumbly, Hon. Thomas P., Assistant Secretary for Environmental Management, U.S. Department of Energy

    Johnson, Hon. Barry L., Ph.D., Assistant Surgeon General, Assistant Administrator, Agency for Toxic Substances and Disease Registry, Public Health Service, U.S. Department of Health and Human Services

    Schiffer, Hon. Lois J., Assistant Attorney General, Environment and Natural Resources Division, U.S. Department of Justice


    Browner, Hon. Carol M
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    Davison, Robert

    Goodman, Sherri W

    Grumbly, Thomas P

    Johnson, Barry L., Ph.D

    Schiffer, Lois J


    Borski, Hon. Robert A., of Pennsylvania, submitted a letter from the State of New Jersey, Office of the Attorney General, dated April 27, 1995

Browner, Carol M., Administrator, U.S. Environmental Protection Agency, charts:
Reducing the Superfund Inventory

Superfund Trust Fund: 70% Goes Toward Cleanup

The Impact of Funding on Project Starts

Johnson, Barry L., Ph.D., Assistant Surgeon General, Assistant Administrator, Agency for Toxic Substances and Disease Registry, Public Health Service, U.S. Department of Health and Human Services, responses to post hearing questions
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Schiffer, Lois J., Assistant Attorney General, Environment and Natural Resources Division, U.S. Department of Justice, charts:
Superfund Cleanup Process

Private Parties Pay for Most of Today's Cleanups

JULY 11, 1995

    Chasis, Sarah, Senior Attorney, Natural Resources Defense Council

    Davison, Robert P., Deputy Assistant Secretary for Fish and Wildlife and Parks, U.S. Department of the Interior

de Saillan, Charles, Assistant Attorney General for Natural Resources, State of New Mexico, on behalf of Attorney General Tom Udall, and the National Association of Attorneys General

Greenwood, George E., Senior Partner, Managers of Steamship Mutual Underwriting Association Limited, on behalf of the International Group of P&I Clubs, and Chairman, Pollution Subcommittee, accompanied by Lloyd Watkins, Secretary and Executive Officer, International Group, and Luke Readman, Partner of Thos. R. Miller & Son (Bermuda), Managers, United Kingdom P&I Club

    Hall, Douglas K., Assistant Secretary for Oceans and Atmosphere, National Oceanic and Atmospheric Administration, U.S. Department of Commerce, accompanied by Craig O'Connor, Special Counsel for Natural Resources
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    Hausman, Jerry A., MacDonald Professor of Economics, Massachusetts Institute of Technology

    Hobbie, Richard H., III, President, Water Quality Insurance Syndicate, on behalf of the American Institute of Marine Underwriters

    Kopp, Raymond J., Senior Fellow and Director, Quality of the Environment Division, Resource for the Future

McHugh, Martin J., Director, Office of Natural Resources Damages, New Jersey Department of Environmental Protection, on behalf of the Association of State and Territorial Solid Waste Management Officials (ASTSWMO)

McKnight, Kevin L., Manager, Environmental Remediation Projects, Aluminium Company of America (ALCOA), on behalf of the Coalition for Legislative NRD Reform

Schiffer, Lois J., Assistant Attorney General, Environment and Natural Resources Division, U.S. Department of Justice, accompanied by John Cruden, Acting Assistant Attorney General

    Stewart, Richard B., Professor, New York University School of Law


    Ewing, Hon. Thomas W., of Illinois
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    Mineta, Hon. Norman Y., of California

    Traficant, Hon. James A., Jr., of Ohio


    Chasis, Sarah

    Davison, Robert P

    Greenwood,George E

    Hall, Douglas K

    Hausman, Jerry A

    Hobbie, Richard H., III

    Kopp, Raymond J

    McHugh, Martin J

    McKnight, Kevin L

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    Schiffer, Lois J

    Stewart, Richard B

    Udall, Tom, delivered by Charles de Saillan


Hall, Douglas K., Assistant Secretary for Oceans and Atmosphere, National Oceanic and Atmospheric Administration, U.S. Department of Commerce:

Response to question from Rep. Boehlert

Chart, Estimated Expenditures: Natural Resource Damage Assessment Regulations, Oil Pollution Act of 1990

Responses to questions from Rep. Traficant

Hausman, Jerry A., MacDonald Professor of Economics, Massachusetts Institute of Technology, article, ''Contingent Valuation: Is Some Number Better than No Number?'', Journal of Economic Perspectives, by Peter A. Diamond and Jerry A. Hausman, Vol. 8, Number 4. Fall 1994

Hobbie, Richard H., III, President, Water Quality Insurance Syndicate, on behalf of the American Institute of Marine Underwriters, Executive Summary, Comments on Proposed Regulations for Natural Resource Damage Assessments Under OPA, Economic Analysis, Inc
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McHugh, Martin J., Director, Office of Natural Resources Damages, New Jersey Department of Environmental Protection, on behalf of the Coalition for Legislative NRD Reform, response to question from Rep. Mineta

Schiffer, Lois J., Assistant Attorney General, Environment and Natural Resources Division, U.S. Department of Justice, charts, Compendium of Federal Natural Resource Damages Cases Under CERCLA-Pending Natural Resource Damage Assessment Matters, responses to post hearing questions from Rep. Baker

Stewart, Richard B., Professor, New York University School of Law:
Report, ''Evaluating the Present Natural Resource Damages Regime:The Lawyers' Perspective''
Memorandum, CVM and the Extent to which Applicable Law Mandates its Use in Assessing Natural Resource Damages


    American Institute of Chemical Engineers, statement

    American Institute of Merchant Shipping (AIMS), Ernest J. Corrado, President, statement

    Associated Builders and Contractors, statement

    Associated General Contractors of America, Stephen E. Sandherr, Executive Director, Congressional Relations, statement
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    Bunn, Richard L., President and CEO, UGI Utilities, Inc., statement

    Citizens Against Toxic Exposure, statement

    Food Industry Environmental Council, statement

    Huddleson, Edwin E., III, Counsel, Volpe, Bosky, and Lyons, statement on behalf of the Equipment Leasing Association of America (ELA)

International Association of Fish and Wildlife Agencies, Gary J. Taylor, Legislative Counsel:
Report, ''The Economic Benefits of Hunting in the United States in 1991'', September 1994*
Report, ''The Economic Contributions of Bird and Waterfowl Recreation in the United States During 1991'', March 1995*
Report, ''The 1991 Economic Impact of Sport Fishing in the United States''*
    International Association of Independent Tanker Owners (INTERTANKO), statement

    Norwegian Shipowners' Association and the Swedish Shipowners' Association, Austin P. Olney, Attorney, LeBoeuf, Lamb, Greene and MacRae, letter, July 24, 1995

    State of New York, Department of Health, letter, August 14, 1995

U.S. General Accounting Division, Peter F. Guerrero, Director, Environmental Protection Issues, Resources, Community, and Economic Development Division, statement
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    *May be found in subcommittee file.


TUESDAY, JUNE 13, 1995

House of Representatives,

Subcommittee on Water Resources and Environment,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to call, at 10:05 a.m., in Room 2167, Rayburn House Office Building, Hon. Sherwood L. Boehlert (chairman of the subcommittee) presiding.

    Mr. BOEHLERT. Good morning and welcome to the first in a series of hearings that the Water Resources and Environment Subcommittee will hold on the reauthorization and reform of Superfund. This will be the first of a minimum of four hearings—more than likely, five.

    Today, we will hear from representatives of State and local governments who have experienced the Superfund program as both liable parties and leaders of site cleanup programs. As I believe today's testimony will illustrate, the key to solving Superfund's most glaring problems lies with increasing the role of State and local interests in the cleanup of hazardous waste sites that now dot our Nation.
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    The Superfund program is fundamentally flawed. I don't think anyone can argue with that. And it will take fundamental changes to this program to meet the public's legitimate expectations and concerns.

    Over the last 15 years, the Superfund program has been a sinkhole for billions of dollars in both public and private funds. Of the 1,309 sites that have been placed on the National Priority List, only 292 have been placed on the Construction Completion List—292—at an estimated cost of almost $30 billion: $12 billion from the Federal Government, $7 billion from the parties affected and $10 billion in litigation expenses.

    Superfund simply is not meeting our Nation's environmental or economic objectives. As a society, we are spending billions of dollars annually on the Superfund program with only marginal improvements in public safety and the quality of our environment.

    Last year, both the House and the Senate came very close to passing comprehensive Superfund reform legislation—legislation that enjoyed the support of the vast majority of this committee and the Committee on Commerce. Though last year's package was not perfect, I believe last year's experience bodes well for the development of Superfund legislation in the 104th Congress.

    We can develop a Superfund program that dramatically increases the pace of site cleanup while saving hundreds of millions of dollars. Unfortunately, under the current program, over one-third of all resources are being spent on transaction costs, money that does not clean up anything for anyone but, instead, is assumed in legal fees.
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    More Superfund dollars must be spent on remediation, not litigation.

    I entered this process with a completely open mind on Superfund reform. There is nothing inherently wonderful about retroactive liability. If we can repeal retroactive liability and adequately fund cleanups without raising taxes or placing the public at greater risk, we should consider it. Although I have to acknowledge I have not seen any realistic plan to do so, and I doubt if there is one that can be easily developed. Last time I checked, Houdini had died.

    We must have more sensible remedy selections. We must provide relief to de micromis as well as diminimus contributors of toxic waste. We must reduce the enormously expensive litigation that is the hallmark of the existing program; and, most importantly, we must give State and local officials greater authority and flexibility to administer the Superfund program.

    During the 104th Congress, the devolution of decision-making to the local level has been an important and a consistent theme. I believe the Superfund program is an ideal candidate for greater State control.

    As we will hear today, many States have already demonstrated the ability to clean up hazardous waste sites more efficiently and effectively than their Federal counterparts.

    As those of you who followed last year's debate on Superfund know, many of the most far-reaching changes to the administration's Superfund program, H.R. 3800, originated in this subcommittee. The membership of this subcommittee remains committed to making needed reforms in the Superfund program and will be actively involved in developing the House Superfund reauthorization program.
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    The Superfund program is broke, and we must take bold steps to fix it.

    Now, to our panelists. Let me start by apologizing because I am going to have to take leave to go over to the Senate. The Base Realignment and Closure Commission is now having opening hearings at this very hour, and I am one of the leadoff witnesses to testify in support of retaining Rome Laboratory, which is one of the world's premier research and development facilities in Rome, New York.

    I will turn over the hearing to Mr. Gilchrest, and we will proceed with the opening statement from the Ranking Member, Mr. Borski of Pennsylvania.

    Mr. BORSKI. Thank you, Mr. Chairman. I want to congratulate you on holding these hearings on Superfund, a program that badly needs to be fixed this year.

    I am disappointed that we have to hold these hearings this year, however. We could have and should have fixed Superfund last year. EPA administrator Carol Browner had worked with a broad-based coalition last year to give us the tools to work with, but we failed. That coalition agreement still gives us an outstanding starting point for our work this year.

    Let's make it clear. The Superfund program that we are trying to fix is in far better shape now than it was several years ago. It is even in better shape than the program that was the subject of 12 hearings that I chaired before the Subcommittee on Investigations and Oversight in 1991 and 1929.

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    Administrator Reilly, first, and now Administrator Browner have put Superfund on the right course within the limits of what can be done without legislative changes. Just 3 weeks ago Administrator Browner announced a third round of program reforms in the areas of prospective purchaser guidance, groundwater contamination, greater consideration of future land use and expedited settlements for de minimis parties.

    With private parties having contributed more than $10 billion to the cleanups, 283 National Priority List sites have had cleanup completed. Remedies have been selected at almost three fourths of the NPL sites, and construction activity has begun at more than 60 percent of the sites.

    There is still no question, however, that the Superfund program needs a major overhaul that can only be accomplished through changes in the statute. We can use the principles from last year's coalition agreements to build on the progress that EPA has made in the past few years.

    Mr. Chairman, it is not enough to say that Superfund does not work. We must develop workable solutions that will result in faster cleanups at less cost.

    There has been widespread criticism of the Superfund program, much of it justified, but few suggestions on how to develop a workable, practical alternative. The coalition agreement was a notable exception.

    By overhauling the remedy selection procedures to encourage more industrial development and by creating a system for allocation of liability, that bill would have gone a long way towards solving our Superfund problems. It clearly represented the best chance we had in years to make positive improvements in the Superfund program. We need workable, practical solutions. We must not try to impose rigid, ideological solutions that do not work in the real world.
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    In these hearings I will want to hear more from our witnesses than just the problems that the existing Superfund program has. Everyone has admitted the need for change. The question that remains is how to change Superfund so it works, so that the sites are cleaned up, so that the costs are reduced, so equity and fairness remain in the program and so that the health and the environment of the American people is protected.

    A solution that relies solely on cutting back the number of cleanups, regardless of the health consequences, is not acceptable. In the same way, a solution that does not reduce the transaction costs or help attract investment to downtown urban areas is not acceptable either.

    Finally, Mr. Chairman, let me say that while the Superfund program must be fixed and it should be done this year, we must have a program that has as its primary goal the protection of public health and the environment. Our solution should be aimed at encouraging urban investment, at reducing transaction costs and at faster cleanups of Superfund sites at less cost. But our ultimate goal must be the protection of the American public.

    Thank you, Mr. Chairman.

    Mr. GILCHREST. [presiding.] Thank you, Mr. Borski.

    The Chair will call on people in the order that they arrived at the hearing, and the next person is the gentleman from California, Mr. Mineta, for an opening statement.
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    Mr. MINETA. Thank you very much, Mr. Chairman.

    This morning the committee begins its efforts to reform and reauthorize the Federal Superfund program, and I want to thank Chairman Boehlert for his active support of the program as well as this effort to look at the total Federal Superfund program and his leadership. And I want to thank you, Mr. Gilchrest, for all of your involvement and interest in both the Clean Water Act as well as the Superfund legislation.

    There is no other environmental law that is in such desperate need of our time and attention. Superfund has generated controversy since its inception, as you pointed out, Mr. Borski. The early years were marked by inefficiencies, back room deals and allegations of corruption, so this led lead to the comprehensive amendments in 1986.

    Some of those amendments resulted in a greatly improved program. Others have proved to be cumbersome and inefficient. Our task is to preserve those elements of the law which are effective and to change those which need improvement.

    Last Congress, the House produced a comprehensive reform proposal which would have accomplished that goal. The basic concept of polluter pays was preserved. If somebody causes an environmental problem, they should be responsible for cleaning it up. It seems simple, yet there are many who would seek to do away with individual responsibility and require the general taxpayer to pay for someone else's pollution.

    However, while preserving the concept of polluter pays, the proposal last year would have created a system of arbitration to put in place a much fairer and less costly allocation of cleanup responsibility. If a party participated in the new allocation process, liability could be limited and proportional to the environmental responsibility. If a party refused to participate, then the full tools of strict joint and several liability could be used to assure that a party is to be held responsible for its pollution contributes.
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    Advocates of the repeal of the present liability system argue that the current system is unfair and that repeal of retroactive liability would be fair. But how is releasing someone from responsibility for the pollution, which is known to have been caused by that person, and forcing the taxpayer to pay considered to be fair? How is rewarding recalcitrance fair to parties who resolve their liability? How is it fair to the States if polluter pays is repealed, thereby eliminating this important source of funding and causing increased taxes or reduced cleanups?

    Advocates of the repeal of the current system of allocating responsibility argue that the savings in transaction costs will contribute to the lost revenue. Unfortunately, even if there are substantial savings, those savings in private party dollars will not translate into increased public funds. Neither the Federal Government nor the States will have sufficiently increased resources to compensate for the loss of private party dollars.

    Now, this committee should approve legislation which will change the way in which cleanup remedies are selected. We should simplify the remedy selection process through the use of more uniform responses. Legislation should also assure a more uniform level of protection of human health and the environment than that which exists today.

    We also need to assure that the level of cleanup at a site reflects the realistic expectations for the use of the site following the completion of the cleanup. The expected use of the land in determining the level of cleanup is just as important in Superfund as is the expected use of the water in setting standards under the Clean Water Act. In this instance, the least effective environmental statute could learn a valuable lesson from the most effective one.
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    Superfund reform will not be easy, but if the parties are willing to accept responsibility for their actions in a fair and reasonable way and if Congress can agree on a more efficient and effective method of determining acceptable methods of cleanup, then Superfund reform can be accomplished as early as this year. However, if parties insist on denying responsibility for their actions and insist that the general taxpayer assume private party responsibilities, then prompt reform of a flawed program will be a long and arduous task.

    So, again, Mr. Chairman, to you and to Chairman Boehlert, I want to say thanks for your efforts, and I would also like to thank Mr. Strock for taking the time from his own busy schedule to participate in these hearings and to add to the deliberations before us.

    Thank you very much, Mr. Chairman.

    Mr. GILCHREST. Thank you, Mr. Mineta.

    Mr. Franks from New Jersey.

    Mr. FRANKS. No statement, Mr. Chairman.

    Mr. GILCHREST. Mr. Bateman from Virginia.

    Mr. BATEMAN. No, thank you.

    Mr. GILCHREST. Mr. Hayes from Louisiana.
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    Mr. HAYES. No, Mr. Chairman.

    Mr. GILCHREST. We should have had this occurring during the Clean Water Act reauthorization.

    Mr. Laughlin from Texas.

    Mr. LAUGHLIN. Thank you, Mr. Chairman.

    I have a statement that I would ask unanimous consent it be made a part of the record, and I just want to say I am glad we are having these hearings. It is an enormous problem, and we need to get on with the task and clean up all these toxic sites. Thank you, Mr. Chairman.

    Mr. GILCHREST. Without objection, so ordered.

    [Mr. Laughlin's and Mr. Costello's prepared statements follow:]

    [Insert here.]

    Mr. GILCHREST. Mr. Emerson from Missouri.

    Mr. EMERSON. That was a good statement Mr. Laughlin just made. I will associate myself with his remarks and yield back my time.
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    Mr. GILCHREST. Thank you, Mr. Emerson.

    Mr. Latham from Iowa.

    Mr. LATHAM. No, Mr. Chairman.

    Mr. GILCHREST. I guess I am going to make a 30-second comment about the Superfund reauthorization. There is a great deal of controversy surrounding things that have already been mentioned: retroactive liability, joint and several liability, the huge disparity between the total cost of the cleanup—some say $170 billion, some say $270 billion—the economic uncertainty and all its ramifications and the problems that that caused to communities, and environmental concerns, which is what I hope we can focus on, to clear out the complexity of what has caused the problems in the past so that we can clean up the toxic waste dumps and protect the groundwater.

    And it is important for us to set a precedent with this reauthorization of the Superfund act for future problems. We certainly want to clear up the litigation, but we don't want to go back to the problems of retroactive liability 10 years from now. If somebody, certainly from this point on, pollutes, they should be responsible for paying the cost of that pollution.

    Mr. GILCHREST. So, without further ado, the first on our witness panel will be Mr. Gimello, National Governors' Association, from the great Garden State of New Jersey.

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    Mr. Gimello.


    Mr. GIMELLO. Thank you, Mr. Chairman. Good morning, members of the subcommittee. I am pleased to be here today to participate in the dialogue on Superfund reauthorization on behalf of both Governor Whitman and the National Governors' Association.

    Superfund is a subject of great interest and importance to the State of New Jersey. We are a geographically small yet densely populated state. New Jersey currently has the largest number of contaminated sites on the National Priorities List. As such, New Jersey and its sister States have a vital stake in the outcome of this debate.

    This is particularly true as regards the impact on our publicly funded program but also as it relates to our privately funded site remediation program, which currently oversees the remediation of thousands of contaminated sites in the State.

    Although the NPL contains 1,400 sites, the total universe of contaminated sites that States address is nearly 30 times larger than the NPL. Clearly, changes in the Federal program are likely to have important ramifications in State cleanup programs, a fact we urge you to keep in mind as you weigh the various proposals for reform.

    The governors have recommended significant reforms to Superfund in a number of areas. I would like to start by outlining their views on remedy selection.
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    The site remediation program under the Federal Superfund program is particularly cumbersome and slowed by centralized decisionmaking. It should be streamlined by focusing Superfund regulations and guidance more on specifying the desire to end results of cleanup and less on the process of determining these results.

    Amendments that streamline and expedite the remediation process and provide certainty will go a long way towards addressing the overall goals of government, citizens and the private sector in the Superfund debate and should substantially mitigate fears of liability related to cleanup cost.

    Often-heard criticisms of the current Superfund program revolve around issues of certainty in process and standards—how clean is clean?—around the finality of remedial decisions, and around the need for flexibility in remedy selection, including consideration of current and future land use and the appropriate allocation of resources to risk. Addressing these issues will help create the incentives needed to encourage private party remediation of contaminated sites.

    This summer, the governors will formally consider more specific recommendations regarding improvements in remedy selection, but a consensus seems to be developing around the need for a single risk management goal and increased use of generic cleanup standards.

    New Jersey's law currently requires development of remediation standards based on a single risk management goal. The Comprehensive Emergency Response Compensation and Liability Act must be amended to specify clearly defined single point risk management goals for remediation in this country. A national risk exposure level is needed to ensure that all residents of this country, no matter where they live, are protected to the same degree. A single point risk exposure goal will be used to develop cleanup standards based upon defined risk assessment protocols and input parameters.
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    Eliminating the use of the risk of 10 to a minus fourth and 10 to a minus sixth for whole site risks in the National Contingency Plan will greatly increase the pace of cleanup and ensure equal protection for the citizens of this country.

    Generic differential cleanup standards, based upon current and future land use, should be developed to achieve the risk management goal embodied in the CERCLA statute. Land use must be considered in the development of the remediation standards.

    By using different input parameters in the risk assessment models based upon nonresidential or restricted use scenarios, it is possible to develop different standards. These differential standards meet the same risk management goal and are, therefore, equally protective.

    At the same time, the CERCLA statute should provide flexibility for persons conducting cleanups and for governments overseeing cleanups to develop different cleanup standards based upon site-specific considerations. The flexibility to develop site-specific standards using nationally developed risk assessment models to achieve the national risk management goal should be embodied in these reforms.

    State and Federal role. On July 1994, a report was issued by the U.S. EPA and the Association of State and Territorial Solid Waste Management Associations, and that report found, between 1980 and 1992, 17 times more hazardous waste cleanups had been conducted under State programs than under the Federal program.

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    The study further showed that cleanups under the State program were completed in significantly less time and at less expense. Specifically, 68 percent of State cleanups were completed within 1 year of the start of the remedial investigation, as compared with 56 percent at Federal sites. Cleanups under the State programs were conducted at 18 percent of the cost than sites addressed under the Federal program.

    In New Jersey, we are currently overseeing the remediation of over 6,000 contaminated sites. The vast majority of these sites are remediated under the State's spill fund, which is our version of the Superfund program. Our Industrial Site Recovery Act, addresses our brownfield initiative, the Underground Storage Act and, most importantly, our Voluntary Cleanup Program.

    Given these demonstrated capabilities and perspectives, together with supporting statutes and administrative rules, we feel confident in our ability to fully manage a revitalized Superfund program. NGA has proposed all capable States interested in administering cleanups be authorized or delegated either full or partial management of the remediation and emergency removal programs—including those at Federal facilities. This will accelerate cleanup, avoid duplication of efforts, increase efficiency in the private sector and reduce transaction costs.

    It is important that such a program be voluntary. We recommend that EPA maintain a Federal program in States that are unable to or uninterested in pursuing authorization. Also critical to the success of State authorization is adequate funding and flexibility for States.

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    As it applies to voluntary cleanups, as mentioned, the nonNPL sites far outnumber NPL sites and are the primary responsibility of States. Allowing authorized States to absolve parties of potential CERCLA liability upon completion of an adequate cleanup would provide a valuable incentive to responsible parties to cooperate with States. We encourage you to include such a provision in your bill.

    With regard to liability, the Governors support the current liability scheme employed by CERCLA. It provides that monies be returned to the funds following fund-financed cleanups and serves as a strong incentive for parties to voluntarily clean up sites and practice pollution prevention and better waste management. Any modifications to this scheme should be done in a manner that preserves current benefits and addresses potential loss of funding.

    Without these protections, elimination of the current liability scheme could have devastating effect upon both the Federal and State cleanup programs. The States simply do not have the financial resources to assume the costs that have heretofore been borne by responsible parties. If this responsibility were to devolve upon the States without a new funding source, New Jersey, and many of its sister States, would be ill-equipped to comply with an unfunded mandate of this magnitude. Many, if not virtually all, remedial activities would be halted or greatly delayed.

    Although New Jersey favors retaining the basic concept of liability presented in CERCLA, we do agree that certain modifications should be considered to improve the efficiency and fairness of the Superfund program. For example, we favor an amendment exempting so-called de micromis parties, parties that contribute a truly minuscule amount of waste to a site, from CERCLA liability. We also favor a more effective means of enabling government to settle with de minimis parties responsible for small amounts of hazardous waste.
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    CERCLA reform should be amended to include provisions to protect otherwise innocent parties and their successors and assigns from CERCLA liability in an effort to continue the development and expansion of the State voluntary cleanup programs. CERCLA should offer protection from future liability for parties conducting voluntary cleanups who are not otherwise responsible under the Superfund law.

    Much of the criticisms of the CERCLA liability structure is that it unduly increases transaction costs. We can all agree these costs would be better spent on cleanups. The State of New Jersey agrees that this criticism is valid at certain multiple party sites. It is less valid—the criticism—at sites where there are few responsible parties. Therefore, we agree the issue of liability for municipal solid waste landfills should be addressed in the reauthorization debate.

    New Jersey also believes it is imperative to maintain the national resource damage provisions of CERCLA to allow States to require restoration of natural resources injured, lost or destroyed as a result of hazardous substances into the environment.

    Finally, the Governors have recommended that the State cost share for operations and maintenance expenses match the 10 percent cost share States currently pay for cleanup construction costs. We cannot support continuing to require States to pay 100 percent of the operating costs, as that scheme drives EPA to favor less construction-intensive cleanups, thereby shifting the costs to the States.

    In conclusion, Mr. Chairman, amendments to effectuate more timely, consistent and responsible cleanup actions will foster private party participation in remedial process at contaminated sites across the country. Modifying the current liability structure to address transaction costs at municipal solid waste landfills, to encourage voluntary cleanups and the redevelopment of contaminated sites, and to include additional settlement authorities may still be needed in some form. However, we believe that the key to Superfund reform lies with the procedural and standard-setting changes recommended in this testimony. Together, we believe these changes will result in a more effective, efficient and timely national cleanup program.
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    Thank you very much.

    Mr. GILCHREST. Thank you, Mr. Gimello.
    Mr. Colman.


    Mr. COLMAN. Good morning Mr. Chairman and Members of the subcommittee. I am James C. Colman, representing the Association of State and Territorial Sold Waste Management Officials. I am also the Assistant Commissioner of the Waste Sites Cleanup in Massachusetts.

    Waste sites cleanup officials from across the Nation have, through ASTSWMO, put together a comprehensive proposal for Superfund reform which we firmly believe will create an effective and workable Superfund program.

    Our proposal is based on our extensive experience with the Federal Superfund program as it has evolved and, just as important, with the wide variety of State programs that have proven innovative, effective and workable. We believe our proposals will lead to a national program which is cost-effective, flexible and protective of public health and the environment and, at the same time, would better meet the needs of PRPs, communities, States and the Federal Government.
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    I would like to briefly describe three major components of our proposal. A more detailed description is contained in our written testimony. The three components are remedy selection, State role and liability.

    First, remedy selection. We believe revising the remedy selection process is a key to achieving an improved Superfund program. The three key features of our approach are, first, establishment of a national risk goal—in other words, establishment of a national risk exposure level which will ensure that all of our citizens are provided the same level of exposure protection.

    Please note that, as the illustration in our testimony shows, the actual level of cleanup required to meet this goal in a specific site; and, therefore, the cost depends upon the exposures at that specific site. Less cleanup and, therefore, less cost would generally be required at an industrial site than at a residential site.

    Having a single risk goal rather than a range would also reduce transaction costs by eliminating long drawn out debates over where in the range a specific cleanup should be. It would also get regulators out of the position of deciding on a case-by-case basis which people should be exposed to how much from the residual contamination.

    Two. Second feature would be land use considerations. The future use of the site should be an integral and distinct part of the site-specific cleanup decision-making process. The cleanup should be clean enough for the intended land use, not for any possible use. Industrial land, for example, should be cleaned up for industrial purposes, not residential purposes.
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    Third is cost. Cost should be a key consideration in remedy selection when achieving the national risk goal. We proposal a two step process. First, the protective remedies which are determined to be disproportionate in cost would be screened out. Then, of the remaining remedies which are protective, the cost would again be considered along with long- and short-term risk and community acceptance. The final remedy should be one that optimizes cost, risk and community acceptance.

    Component number two would be State role. We believe that States in general can be more flexible, more efficient, more effective and more innovative than the Federal government.

    Therefore, we propose an approach which would, first, allow full or partial delegation or authorization to States; be completely voluntary by each State; have EPA run the program in States that do not volunteer; maximize private party cleanups by encouraging State-run, innovative voluntary cleanup programs and strong enforcement programs; eliminate the national priority list in favor of a joint Federal-State public funding list created on a State-by-State basis; and encourage brownfields or economic redevelopment of contaminated sites.

    With respect to public funding, please note we do not support a 15 percent across the board State share. This could halt and/or prevent cleanups in States that simply cannot afford such a cost.

    Component number three is liability. No matter who runs the program, there has to be adequate funding to actually get the sites cleaned up. Unless the governments—Federal, States and local—are prepared for a massive increase in funding, it would seem the private sector will have to continue to fund cleanups directly.
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    Although there are some fairly extreme situations with which we might all agree are not fair, the retroactive strict joint and several liability scheme we now have appears to be the only viable way of providing this funding. Therefore, we would favor retaining the current system until someone comes up with an approach that would adequately fund cleanups, has those who actually did pollute pay, provides an incentive for pollution prevention and provides an incentive for voluntary cleanups.

    We do agree with my colleague from New Jersey that certain situations, such as the de micromis and deminimus parties and new parties performing voluntary cleanups, require some adjustments.

    In summary, as of 1992, almost 3,000 sites have been remediated under States' authority, and it was estimated States were actively working on 11,000 more sites. This has been accomplished because many States already have the kind of program we are proposing for CERCLA reauthorization.

    As you review the many proposals you will hear, we urge you to strongly consider the proven track record of the States and use the best of what we have to offer. Thank you.

    Mr. GILCHREST. Thank you, Mr. Colman.

    Mr. Strock.

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    Mr. STROCK. Thank you, Mr. Chairman, and distinguished Members. I appreciate being able to appear today on behalf of Governor Wilson and California, and it is also a particular pleasure to get to see Mr. Mineta, who he himself and his constituency are such strong environmental leaders.

    With the written statement I have submitted, Mr. Chairman, what I would propose to do, rather than repeat many of the points that are in agreement, is to emphasize a few points for your consideration.

    I hope the committee would consider up front that Superfund, in addition to its economics problems, presents a whole series of environmental problems.

    The first is the fact that the lack of cost-effective remedies and also the incurrence of tremendous transaction costs are taking money away from other possible environmental investments.

    They also swell the part of our environmental budget that goes to backwards-looking priorities for cleanups and litigation rather than future problems that are now emerging.

    It also gives us tremendous negative incentives that encourage the development of new land rather than redeveloping older industrial areas; and that is, of course, both economically and environmentally problematic.
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    And, finally, it brings, through its many excesses, the whole effort of environmental protection into unnecessary public concern.

    So for all those reasons there are very strong environmental reasons to move quickly on Superfund reform.

    We would stress from California the same three factors that were related previously: one is the need and the great possibilities presented by further responsibility to the States. We think, for many reasons, there are great innovations and possibilities that the States can offer, and they arise primarily from the fact that Superfund is, at base, a land-use statute and, as such, is best handled by State and local government.

    Whether or not that kind of shift to the States will be done through authorization or delegation, we would appreciate being involved in those considerations. But the key would be for the States to have a true lead role.

    Second, for liability reform, the strict joint and several liability aspects of Superfund, while difficult, are consistent with historical laws on hazardous waste. And we believe those parts of the law have worked well to prevent pollution and lead to immediate cleanup of new spills, of new problems, and the like.

    But we think there are very serious questions about the retroactive component of Superfund, and we urge the committee to very carefully look at that component because we have good reason to think that that has slowed cleanup as much as sped it up.
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    On remedy selection, we would second many of the statements made previously; but I think, again, the key question is not simply how clean is clean, but how long is long enough, particularly for urban areas where much more can be done through the use of cost-effectiveness rules, uniform risk assessment protocols and the like.

    Fourth, I would urge that the committee consider the relentless complexity of Superfund. Many of the problems, I think, of the statute relate from the fact that if you open it to any page you simply don't know what it means. It is impossible to know unless you have spent your life working in it. That is at the root of many of these problems, and I think it is also a weakness in some of the well-intended and thought-through reform proposals. I think we should work very hard to simplify these laws and also to simplify their interaction with other Federal laws, particularly the Resource Conservation and Recovery Act.

    Finally, I would urge the committee, as it does give serious consideration to the State role, to make certain that the Federal role is not merely an abandonment of the States but truly a good, thoughtful turnover that we can jointly operate.

    I would also, in closing, make one more observation about Superfund. In California, as in many other States represented here today, we are often contacted by other countries that are adopting parts of our law. To my knowledge, very few countries are adopting this law. And I think it is a very good warning to us that many of the processes we have adopted here which are being applied toward a universal problem are not serving us well at the present time.

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    Thank you.

    Mr. GILCHREST. Thank you, Mr. Strock.

    Mr. Harding.


    Mr. HARDING. Thank you, Mr. Chairman, members of the committee. My name is Russ Harding, and I am Deputy Director of the Michigan Department of Natural Resources.

    In my capacity, one of my responsibilities are the State cleanup programs in the State of Michigan as well as the Superfund program. We have a large and sophisticated cleanup program in the State of Michigan, and we have a $1 million bond that was passed by Michigan voters several years ago. And in implementing that bond we have developed considerable capability within the State to do cleanups.

    We feel that our program has been far more successful than Superfund. We are at approximately 50 percent of the time taken from time of discovery of a problem until institution of a control measure compared to Superfund. We think that is still too long.

    Several years ago, Governor Engler commissioned a relative risk task force for the State of Michigan to look at environmental risks that we were faced with in the State, to rank those risks, and how we could best spend our limited resources in addressing public health concerns as well as environmental concerns in the State.
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    An interesting finding of that study was that the public health as well as the environmental threat posed from contaminated sites ranked far lower than the problem we were experiencing by nonuse of our brownfield sites in urban areas and the resulting greenfield sites that we were seeing being developed in urban sprawl.

    We have been working for the past 18 months with the mayors of the key cities of the State of Michigan. We have crafted to our current law a number of changes which were signed 2 weeks ago in our State cleanup law by Governor Engler, and I would like to take a few minutes in summary to share with you what I think are exciting changes to our program in areas that you might want to consider as you look at your reauthorization of Superfund.

    I might add the most controversial but most important change is in the area of liability. I would submit to you that the current liability system under CERCLA is grossly unfair. Joint strict and several and retroactive liability is driving up transaction costs. It must be addressed in order to fix many of the problems that are associated with CERCLA.

    We do not have polluter pay. Currently, what we have is deep pocket pay. To address that in Michigan, to maintain polluter pay, what we have done is gone and moved from a strict liability standard to a causation standard, with the fairly simple logic that if you cause a pollution, you ought to pay for cleaning it up. If you didn't cause the pollution, you ought not to be culpable for the cost associated with cleanup.

    It may sound like a novel idea, but one, I think, which is critical if we are to build fairness back in and have the support for funding, in our case at the State level, as well as a program that has accountability and works.
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    We have further addressed liability concerns by exempting out of the chain of title people that would purchase property, of providing for exemptions in the statute for new purchasers, even with contamination that might migrate onto a site. We think those kind of things are absolutely essential.

    I would say in Michigan, certainly in Detroit and our major cities, there is no bigger environmental problem than nonuse of our brownfield sites; and it is something we have to address for the public well-being of our citizens and our public health as well.

    Another area I would certainly agree with my colleagues on is in the area of land use. It is essential that we tailor the remedies to the intended use of the property that is being cleaned up. It does not make sense to try to return to pristine levels. It does not make sense to clean up to a standard—say a residential standard—if it is to be an industrial use.

    One of the major changes in our law is under our former law we had to clean up groundwater whether that groundwater constituted a public health threat or an environmental threat. Currently, under our new amendments and our State cleanup law, we are no longer required to clean up groundwater for the sake of cleaning up groundwater.

    What we do is do an analysis. There is a baseline. When a purchaser of properties comes in, there is a baseline environmental assessment that is required, and liability exemptions can come from that baseline environmental assessment. And we then only clean up the groundwater if, one, it is a public health threat or, two, it is an environmental threat because it is venting to surface waters.
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    We also did change our standards in Michigan at the carcinogen risks. We were one and one million. We have changed to one and 100,000. That splits the range currently in EPA's 10 to the minus four and 10 to the minus six. We think one standard simplifies things.

    We are preparing in Michigan many handbooks of generic remedies and standards in doing the calculations in a more realistic basis, again to drive down the costs.

    I might add that we believe that our estimates are, with these changes, that we will reduce the cost of cleanups by 50 percent; and I would say that is a win for the environment because that will enable us to address many more cleanup sites than we currently are able to do.

    Summing up here, I would like to mention just briefly the area of delegation, because I think that is also absolutely critical.

    I would certainly ask this committee, as you decide the fate of Superfund and the direction that you want to move that program, don't delegate this program to the States. I think that would be a mistake. Authorize the program to the States. We don't need a delegation under the micromanagement of EPA and the current system we have in RCRA and other areas. It is simply not a good allocation of resources in government at the State and local levels. In fact, I would submit it is government at its worst.

    Currently, under the Superfund program, we have much overlap with EPA. We are confusing the public. The State and the Federal Government are saying different things on individual site specifics. I certainly don't think that adds to credibility for the program.
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    So, again, I would ask you to authorize the program to States on a voluntary basis that are willing to assume that, and I believe that you will find that the States will be more innovative, more cost-effective and will get cleanups conducted in a more expeditious manner while protecting public health and the environment.

    Thank you for the opportunity.

    Mr. WAMP [presiding.] Thank you for the testimony of our witnesses.

    And as I join this meeting, as we begin the questioning, I would like to state that one of the reasons I was a little late arriving this morning is I had a town hall meeting in Chattanooga, Tennessee, last night; and my district had a potential Superfund site which was very well attended and well covered.

    But I want to open by saying to our representative of State and local governments today on our panel, with respect to this issue of Superfund reauthorization, that as we look at retroactive liability I would like to open a question to any of our witnesses today whether or not there is a difference or should be a difference with respect to the different parties and PRPs on retroactive liability. Because, in our situation, the Federal Government itself is the primary PRP on our site; and, as a result, the Department of Justice has stonewalled any action for quite some time with regard to this issue.

    I just wonder, as we look at this issue, if you think, any of you, that we should separate these potential contributors into categories or whether the Federal Government should live under the same responsibility that the private sector or the State or local governments might. Anyone?
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    Mr. HARDING. Certainly I believe there should be the same standard for the Federal Government as any other parties. Again, I think that entire issue of liability is central to making this program work. The current system does not work probably very well for the Federal Government, and it doesn't work very well for the States or PRPs either, due to the transaction costs associated with it.

    Mr. WAMP. Mr. Strock.

    Mr. STROCK. I would absolutely agree. It should be exactly the same. And had it been exactly the same longer perhaps the Federal Government would have helped us get the reform faster.

    Mr. GIMELLO. I would echo those sentiments,

    Mr. Chairman.

    Mr. WAMP. Mr. Strock, with respect to retroactive liability, do you think that it actually has slowed the rate of cleanup; is that what we are hearing today?

    Mr. STROCK. I think it is a very real question, yes, because—in at least two ways. One is that there are different types of retroactive liability, of course, depending on the party, how it would be affected and what the equities are. But, in some cases, the parties feel so aggrieved and the additional stakes from the retroactive component are so high, they have perhaps incentive to fight very hard far too long against ultimate settlement.
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    Mr. WAMP. Very good.

    I will now yield to the distinguished Ranking Minority Member, Mr. Borski, for the first round of questions.

    Mr. BORSKI. Thank you, Mr. Chairman.

    Mr. Colman, let me start with you, if I may. Your organization is made up of individuals who actually run the waste programs in the States; is that correct?

    Mr. COLMAN. That is correct.

    Mr. BORSKI. As you probably know, this committee just completed action on the clean water legislation. Would it be a fair comparison to say that your organization, to say that you are to the State solid waste programs what ASIWPCA is to the State clean water programs? You actually run the day-to-day programs?

    Mr. COLMAN. Yes.

    Mr. BORSKI. It appears from you testimony there are three major themes for a successful hazardous waste cleanup program: Retain a strong polluter pays concept in the current law, increase the role of States in remedy selection and implementation, and improve the remedy selection process through the adoption of a single risk goal and the inclusion of land use in the remedy selection process.
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    How do these themes coincide with the reform proposals which were approved by the committee in the last Congress?

    Mr. COLMAN. I can't recall all the details of the last Congress, so I am not sure I can really answer that question effectively.

    Mr. BORSKI. Okay. Maybe you would take a look at that and respond to us in writing if you will.

    Mr. COLMAN. Yes.

    Mr. BORSKI. Do the majority of the States have liability systems similar to the current Superfund system? And are there States who are seeking to abandon these systems?

    Mr. COLMAN. At this point, a majority of the States have a liability scheme similar or exactly the same as the Federal Government. Michigan is the only State I know of now that has actually changed it. There may be a few States considering it, but I think we are all concerned about, if you change it, who is going to pay.

    Perhaps if other States had a billion dollar bond fund to pay for cleanups, they may think about changing it; but few States can afford that amount of money. I think it really comes down to someone has to pay for these cleanups.

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    Mr. BORSKI. If retroactive liability is repealed, would it be possible to maintain an acceptable level and pace of cleanup without increased public funding?

    Mr. COLMAN. Well, if I understand your question correctly, if retroactive liability were repealed and there were no public funding to make up for it, there would be no cleanups at many sites.

    In Massachusetts, the majority of our sites, there was contamination that was put there before 1980, just to pick a date, and if we didn't pay for it and the responsible parties didn't pay for it, it wouldn't get paid for unless and until someone wanted to develop that property and enough money was available in a development deal to pay for it. But that is sort of hit or miss and is not necessarily related to the sites that are the biggest public health and environmental threat.

    Mr. BORSKI. Mr. Gimello, do you want to respond to either of those questions?

    Mr. GIMELLO. I think that is absolutely correct. While there are clearly some difficulties with retroactive liability, especially in multiple party sites, I am at a loss to define an alternative that would fill the gap. It is just that simple. So I would echo Mr. Colman's statements.

    Mr. BORSKI. If retroactive were repealed, then we would have an increased source of funding somewhere or less cleanup.

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    Mr. GIMELLO. Absolutely. One has to follow the dollars, as the saying goes; and the dollars are not there.

    Mr. BORSKI. During debate earlier this year, the House approved language virtually without debate which would make Superfund cleanups in excess of $5 million subject to the cost-benefit requirements of H.R. 1022, the risk assessment and cost-benefit legislation approved by the House. What would these cost-benefit requirements do to the pace of cleanup and would this result in better cleanups?

    Mr. Colman, are you familiar with that.

    Mr. COLMAN. While we think certainly cost benefit is a consideration—it ought to be put into anything that the government does—we think that adding the provisions of that statute on to the Federal—on to us, on to a site-by-site decision-making, could very well slow things down.

    We would prefer to see a system whereby, as I describe, where the costs of the specific remedy are taken into account at a specific site. And, clearly, we should optimize the considerations of cost, risk and community acceptance in terms of a particular site.

    As I understand it—and I don't pretend to be an experts on that statute—but it is really designed to look at overall, very broadly, there is a set of regulations of cost benefit or not; and it really is not appropriate to use that kind of analysis on a site-by-site basis.

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    Mr. BORSKI. Mr. Harding, I wanted to express apologies for Congressman Barcia who wanted very much to be here for your testimony but had plane problems and could not be here. He will be submitting questions for the record. We would ask that you be able to respond to those in writing, if you will.

    Thank you, Mr. Chairman.

    Mr. WAMP. Thank you, Mr. Borski.

    Mr. WAMP. It is the intent of the Chair to alternate between the Majority party and the Minority party for 5 minutes each in order of arrival here today; and, with that, we yield 5 minutes to the distinguished gentleman from Maryland, Mr. Gilchrest.

    Mr. GILCHREST. Thank you, Mr. Chairman.

    I would like to follow up on the question Mr. Borski just asked about cost-benefit analysis and cleaning up these sites because I am not quite sure I understood Mr. Colman's answer. But I want to throw something else into the question for each of you on the panel to answer.

    Cost-benefit analysis is a controversial issue. Retroactive liability is a controversial issue. Can we build into the act the flexibility so a State, if it chooses to use retroactive liability, it can use retroactive liability; and if it chooses to partially use it or completely get rid of it, maybe using the bonds that were discussed here, they could use that?

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    Can we, from your experience, allow the flexibility to have a State determine how it is going to use the cost-benefits analysis and retroactive liability?

    Could each of you respond?

    Mr. GIMELLO. I will try, Mr. Gilchrest.

    I think the flexibility to the States on those issues is precisely what we should be considering.

    In New Jersey, as an example, some of the reforms relative to retroactive liability are incorporated in our current State statutes. We can decide based on the viability of a cleanup and its ability to help us in brownfield areas to limit successor liability under certain circumstance. We build that into how we approach our brownfield cleanup program.

    The cost-benefit analysis, as you indicate, is extremely complex. One of the things I think in New Jersey we shy away from the cost-benefit analysis in this arena is because it is difficult to determine the benefits associated with some of these cleanups. I don't know how one evaluates to the kind of specificity that is required for cost-benefit analysis what an aquifer system is worth to a State. But States struggle with those concepts on a daily basis.

    So I think the flexibility in these kinds of issues is exactly what States need to be successful, and this is—States are the ones that are being successful in this statute. And to continue that is really what I think we should be doing.

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    Mr. GILCHREST. Thank you.

    Mr. Colman.

    Mr. COLMAN. I agree with what Mr. Gimello said. We are looking for the flexibility. I do think you run into some problems with retroactive liability being different in different States. You have companies that are national companies, have sites in very many States, so there may be some practical perception problems there. But, in general, we would advocate that kind of flexibility.

    And in terms of cost benefits, I think, again, that should be something the States should be able to figure out how it wants to value it resources and its groundwater or the level of protection that it wants to have and figure that into the remedy.

    But I guess my point was that, with respect to Superfund, which is, as was pointed out, the sites themselves are very local, the cost benefit should be done respective within the parameters of that site, so to speak. In other words, once you have a series of potential remedies for a specific site, the costs should definitely be a very important consideration. We should not just be going after the most expensive remedy. We need to temper that with the level of protection and community acceptance and risks that we are looking at.

    Mr. GILCHREST. Thank you. Mr. Strock.

    Mr. STROCK. Yes, Mr. Gilchrest. We would certainly also agree with your view. The key would be to give the States the flexibility.
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    Mr. GILCHREST. I wasn't saying I was advocating that. I was questioning your position on it.

    Mr. STROCK. I was just hopeful. But the key is the bottom-line performance. And, clearly, if States can do it different ways, that would serve all of us better.

    In California, for example, there is a new pilot program that we are now getting candidate sites for that includes arbitration provisions, proportional liability, streamline remedy selection and the like. And we believe that if it works we will give lessons across the country.

    Mr. GILCHREST. Can you send the committee a copy of that pilot program?

    Mr. STROCK. Yes, sir. Will do.

    Mr. GILCHREST. Mr. Chairman, can I have Mr. Harding answer that question? Mr. Harding.

    Mr. HARDING. I would certainly agree, Mr. Gilchrest, with my colleagues. I believe that we indeed do need to have that flexibility. I think you will see innovation occurring at the State level. It is absolutely essential that we do try some different things to make these programs work.

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    We have a real credibility problem in many cases now—certainly, I know, in our State legislature, with many in the public—regarding the time it takes to get cleanups done, and we do need that ability to go in and take innovative measures.

    This country is very diverse. The challenges we are faced with are not the same. I have worked in several States. Certainly, I can tell you groundwater in Arizona is not the same as it is in Michigan. The groundwater in Detroit is not the same issue as it is in the northern part of the State. So we need those kind of flexibilities. We need to go in and make some things happen and demonstrate. In fact, that has been our success in Michigan.

    And we talk about this large bond, but I would also like to mention we are now in the last $45 million unappropriated in that bond. And in order to get really the political support to continue the program, it is essential that we fix the policy, we focus on the funding and say, well, if we limit retroactive or we change one of these things, what happens to us? We may not have the funding.

    I would submit we will have more support for funding of these programs if they work.

    Mr. GILCHREST. Thank you very much.

    Thank you, Mr. Chairman.

    Mr. WAMP. Thank you, Mr. Gilchrest.

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    The Chair recognizes the distinguished Ranking Member of the full Transportation and Infrastructure Committee, Mr. Mineta of California.

    Mr. MINETA. Thank you very much, Mr. Chairman.

    Let me again clarify in my own mind, do all of you feel that we should retain joint and several strict liability with retroactive liability involved?

    Mr. GIMELLO. Speaking for New Jersey and the National Governors' Association, the answer to that question is yes; and I believe there are amendments that can be—within that structure there are amendments that can be offered that make that a more workable situation.

    Mr. MINETA. In terms of the de minimis sites.

    Mr. GIMELLO. Yes, and also the flexibility on the State level, while retaining the concepts to deal within that concepts to——

    Mr. MINETA. Before we get to the flexibility or the next part, let me go back again. Again, Mr. Harding, this is where you differ with your colleagues on the panel, as I understand it.

    Mr. HARDING. That is correct. I believe the liability needs to be changed.

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    Mr. MINETA. Mr. Strock.

    Mr. STROCK. I would differ in part. I would suggest that the strict joint and several component does work well but at the retrospective application is a real question.

    Mr. MINETA. But underlying this it seems to me that if the assumption is that polluter pays, isn't that the equivalent of retroactive liability? If we are to say there is personal responsibility in this happening and so the polluter, therefore, must pay, is that not equal to retroactivity?

    I am not an attorney, so I am just—but I am looking at the testimony and trying to listen, especially this last question that Chairman Wamp had asked about the joint and several as well as the retroactive part of it. That is why it sort of threw me off course here, and I wanted to retrace my ground here to see if I am on firm footing.

    Mr. STROCK. Sir, I would urge there are both theoretical and practical questions about whether or not that does achieve the polluter pays principle.

    On a theoretical level, it depends very much on the circumstance involved, where you had people who might not be in the waste business at all who were doing things legally and then are found liable 10, 15, 20 years later for behavior that was perhaps even ordered, if not sanctioned. That strikes me as a theoretical problem and that varies, though, depending on the issue.

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    Mr. MINETA. Let me ask Mr. Strock about the—Senator Calderon's bill, which now has been signed into law by Governor Wilson. Is it too early to tell yet whether that mechanism is going to work in terms of the arbitration provisions in that bill? Has the process been in place long enough for us to get any type of experience?

    Mr. STROCK. We are just now getting applicants that look very promising, but that is where we are.

    Mr. MINETA. I want to go to the second portion of what I would like to ask about and that is delegation to the States in terms of the responsibility for CERCLA issues or sites.

    Again, I take it that some States are saying, yes, give us the responsibility or give us the flexibility of working the problem in our States. Mr. Harding, you have a different approach, again, here where you say, don't micromanage us with EPA. It is either going to be EPA or the States, but don't delegate it to us and then have EPA micromanage us.

    Mr. HARDING. That is correct. I think I agree substantially with my colleagues. The only thing I am suggesting is that don't use the model that we use in some other environmental programs like RCRA and NPDS and others where we have the large bureaucracy at the regional level which oversees work being implemented by the States. The States needs to be held accountable, be held to the program, but not micromanaged.

    Mr. COLMAN. I think perhaps we are going into a bit of a semantic issue, where Mr. Harding used the word delegation and I used the word delegation. I am not sure we disagree fundamentally.
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    When I used the word delegation, it is just the method of how the State would take over the program. In our view, delegation means that the State relies upon Federal authority. Some States do not have all the details written out in their statute, so they rely on Federal authorities to run the State program. Authorization generally means the State has its own statute complete.

    Neither of us—or, put it the other way, both of us would want to have either the Federal or State government involved, not have the Federal Government micromanage the State. So I don't think there is a disagreement here.

    Mr. MINETA. I will ask, then, in order for us to delegate that, if I can use that word, do we not have to have standards as to whether or not a State—A or C or Z—really is capable of doing the work? Is that where we get into the micromanagement? How do we get away from micromanagement?

    I understand that, but, by the same token, make sure that States are capable. Let's say under the Clean Water Act we know whether States are capable or not of being able to do the job, but there is also some, quote, micromanagement involved. Now, is there a way to avoid micromanagement and, at the same time, say, hey, States, you are really capable of doing this and we would like to delegate it to you?

    Mr. STROCK. There are many possibilities. And, of course, as you are aware, these terms delegation, authorization, I don't think—I would guess, at least, that many in Congress did not foresee that delegation would turn into this total dictating of what the State programs would be as it is in RCRA, for example. So it may not matter so much whether it is delegation or authorization.
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    But, clearly, one option to avoid having in the Superfund a very localized land use situation, to avoid having the government come in and look at the entire State program, would be to have authorization on a site-by-site basis, where, if things go well, they let it go; and then, if things don't go well, there is a tangible reason to remove authority.

    Mr. COLMAN. May I amplify that? I think ASTSWMO's position is that there certainly should be some general criteria that EPA should look at in order to see if a State can run the program, such as the types and numbers of resources available, its programs, its past track record—very general things—but make it fairly easy for a State to apply and make the showing that they meet these standards.

    Then, instead of micromanaging each site the way they do now—and in Massachusetts we actually took over a site. We worked with the PRPs for a year to come up with a solution which we all thought was fine, and EPA said, sorry, we don't like it; you're out of luck. So we never did that again.

    We would say EPA can maybe audit us every 2 or 3 years, look at what we did after we have done it and say, well, you did a good job or not and then continue authorization in that way.

    So we think certainly through an audit or through an audit program, as opposed to like a pre-enforcement review versus post, we think there are ways EPA could and the Federal Government and you in Congress could certainly keep track of the quality of State programs yet let us go out and try it. And if we fail, if a particular State does not work, then there are remedies for that. But don't hamper us before we even get to the gate.
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    Mr. WAMP. Thank you, Mr. Colman.

    Mr. MINETA. Thank you very much, Mr. Chairman.

    Mr. WAMP. Thank you, Mr. Mineta.

    The Chair recognizes the gentleman from New Jersey, Mr. Franks.

    Mr. FRANKS. Mr. Chairman, thank you. I want to ask Mr. Gimello, if I may, a couple of questions.

    Mr. Gimello, how did New Jersey develop a single risk management goal for site remediation and why is that concept important for implementation at the Federal level?

    Mr. GIMELLO. After much debate, it was decided a common risk management goal ensured that the level of protection across the State was being provided to all potentially affected parties and that the flexibility that we need to address the different environs in the State of New Jersey and also the realities of our urban and suburban corridors was to look at the way particular sites and risks associated with that risk managements goal are measured.

    We find that being able to have a goal and provide the citizens of New Jersey with some definition and security as to what that goal is would then allow us to evaluate it on a case-specific basis, provides the efficiencies we need to operate the program.
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    Mr. FRANKS. A number of questions have been posed about the consequences if we were to repeal retroactive liability. New Jersey has a very aggressive, successful Voluntary Cleanup Program. What would the impact on that Voluntary Cleanup Program be in the event of the repeal of retroactive liability?

    Mr. GIMELLO. We have heard from a number of RPs who were once at the negotiating table. Clearly, an element in coming to the table is not only the desire to develop the piece of property and get a Good Housekeeping seal of approval from the State agency, but also a driver, and a recognized driver, is the strict and joint and several liability. Unless one is going to develop a site, that is an incentive: to come to the table, to establish finality and to move on, from a corporate liability point of view.

    So it is a driver. It is there. It keeps people honest and brings them to the table. It does not have to be a hammer, but I think, contextually, it is an important element to our Voluntary Cleanup Program.

    Mr. FRANKS. In your statement, your opening statement, you indicated that the States have succeeded in cleaning up 17 times more sites than the Federal Government. What has been the most critical factor in the ability of the States to have generated that kind of result?

    Mr. GIMELLO. That is an interesting question. I think sheer commitment and the availability of dollars. In New Jersey, our cleanup program has been supported by bond funds from the general public. We have in the history of the program received $1.1 billion from the Federal Government. We leveraged that against, I believe, $285 million worth of bond funds provided by the general public.
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    So I think we were in early, we have tried to be creative, and we have had the money to be able to address these problems quickly. So I think those elements are what has allowed us to have been successful.

    Mr. FRANKS. Thank you, Mr. Chairman.

    Mr. WAMP. If the gentleman would yield—Mr. Franks.

    I just want to point out that what some folks call polluter pays, other people in the industry really call deep pockets.

    If we move away from joint and several liability there are a couple of alternatives: one is arbitration, the other is mediation; one binding, the other nonbinding. In the entire world we are trying to move away from so much litigation; and as we do that in every realm of our society we are trying to move more towards working your agreements out without clogging up our courts and strangling our country with too much litigation. I think this is not an exception, and arbitration and mediation would actually allow for satisfactory resolution of many disputes without so much litigation.

    I know at my town meeting last night I heard over and over again, please gauge your success not by how many studies or how many lawyers are involved but how many cubic yards of material are actually cleaned up. So I think we need to remember that just because we are looking at the possibility of restructuring joint and several liability doesn't mean we are completely walking away from any remedies people may have.
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    At this time, the Chair yields to the soft-spoken and reserved Member from Louisiana, Mr. Hayes.

    Mr. HAYES. Thank you.

    Mr. Strock, if memory is correct—and help us with the institutional memory—weren't you a staff member—Senate staff member—when CERCLA was originally drafted?

    Mr. STROCK. Yes, sir.

    Mr. HAYES. I thought so. From that perspective, I notice that earlier, when comments were made regarding retroactivity, there didn't seem to be a degree in the question—in other words, favor or not favor retroactivity.

    Let me ask the four of you a different question. Does it have to be all-encompassing? In other words, can't you exempt some issues through retroactivity where there is a culpability and other cutoff retroactivity where there is no culpability? Is that something that you can recognize as a degree and not simply 180 or zero? I would ask all of you the same question.

    In other words, the way it was put to you, it is as if you take the present system or nothing. But isn't it possible to craft something that is, in fact, in between those two?
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    Mr. STROCK. I would say that is an excellent point, and there are at least two different ways you can adjust factors that come to mind quickly—or three. One is the date. A second would be the type of party or type of behavior involved that is at issue.

    A second level, you could be balancing your decision on retroactive liability reached with your decision, say, on remedial action.

    So there are several ways you could be adjusting these factors simultaneously, I would suggest.

    Mr. HAYES. I would ask Mr. Gimello the same question, since he said the National Governors' Association had a position, but that is a position that is without a flexibility, to recognize there could be something intermittent in between the two of retroactivity versus none.

    Mr. GIMELLO. I think your point is well taken. And, indeed, in the testimony, as part of the discussions at both the National Governors' Association and some other working with States, as an example, municipal landfills, where we have sort of the hell of liability, if you will, we have recommended that, in those cases, that the liability scheme be changed. So that where you have a number of parties and the transaction costs are almost exponential to the number of parties involved, that a different remedy is involved. So it does not need to be a nothing-or-all proposition.

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    And also, to refine that answer, I would simply say a lot of the reforms can be made, but the construct, if you will, of strict joint and several liability and retroactive liability can be retained and we can fine tune, if you will, the concept as it applies to particular sites.

    So I don't think you have to throw the baby out with the bathwater to achieve the flexibilities we are looking for.

    Mr. HAYES. Mr. Harding, do you want to jump in? Because I wanted to ask you a second question and ask others to respond to it.

    I have the impression from the comment made earlier that, apparently, a significant bond issue was passed by the voters of the State of Michigan in order to handle costs. And I am looking in your testimony where you are talking about a percentage that you call an orphan fund because you don't have a party directly responsible for that. Does the statute in Michigan also take into account the possibility of the nonculpability of parties in line of retroactivity provisions as well? Or does it address that at all?

    Mr. HARDING. We did not address that. It was debated in the legislature, and we decided—the legislature decided not to address retroactivity because we had gone to what I would call somewhat of a middle ground position, actually, in terms of causation standard. If you own or operated at the time of the release, then you are responsible.

    And what that will do in some of the very old releases, that will make it more difficult for the State to prove culpability. So, to some degree, that actually deals with retroactivity. In other cases, where you have one company—say it has been on that site for many, many years. The State is going to have a very strong case. So we didn't specifically deal with that.
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    In terms of orphan share, that is absolutely essential. And I didn't have a chance to mention that in our testimony, but under our prior law we did have an orphan's share, but it was never funded by the legislature because of, again, the joint strict and several aspects and retroactivity aspects of liability. Now, with these changes, we are very optimistic that our legislature is going to fund an orphan's share, and we also have a binding allocation system to implement that. And I think that will be far more effective.

    Mr. HAYES. My time is up.

    Let me ask you a brief question. Was this in the form of legislation that needed to be approved by voters across the State or did it require only a legislative action to create the fund from which these payments come?

    Mr. HARDING. Our original fund was by voters across the State.

    Mr. HAYES. Thank you.

    Mr. WAMP. Thank you, Mr. Hayes.

    The Chair recognizes the gentleman from Virginia, Mr. Bateman.

    Mr. BATEMAN. Thank you, Mr. Chairman. And thank the witnesses for their presentation this morning. I think it has been very helpful.

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    One of the things that I would be interested in, in view of the statement with regard to the official position of the National Governors' Association—I don't want to take the time with it this morning, but I would be very interested in the processes by which the Governors' Association came to that judgment in favor of supporting retroactive joint and several and strict liability. Frankly, I am a little surprised that, if that is the position of the National Governors' Association, that I have not heard a great deal of the controversy that must have surrounded that pronouncement. So I am interested in the process.

    Another observation I would like to make is that your terminology, which has since been commented upon, about don't delegate, authorize or vice versa, to me, that came through originally as being more of a semantic distinction than anything that is especially helpful to us. And yet the concept by which we structure the law so that it is done appropriately to avoid the micromanagement and yet to be effective is of great concern.

    So any further thoughts and suggestions or at least outlines of the structure, changes in the law, that you think would be the effective methodology would be of great interest to me and I think to all of the committee.

    The other thing I would like to make an observation about and I would like your comments on, my experience with Superfund, RCRA, CERCLA is that no one seems to have been happy with the law, the status of the law, almost from the inception, certainly not through the present time. It occurs to me that maybe a part of the major disaffection was the way the program has worked, is that it has been driven to a large extent by considerations which were economic as opposed to considerations of protection of public health and safety.

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    If you have protected public health and safety—and the costs of doing that are very, very high—can we, as a society, afford to be expending additional billions of dollars just in order to say that we have protected or reconstituted an economic value to various property holdings or real estate; whether it be in the context of the present owner, whether it is in the context of the municipality, the State would like this site for this purpose, that purpose or the other purpose because it generates economic activity, if you have already provided—you are taking care of all public health and safety problems?

    How much has excessive emphasis on economic valuation and considerations been a part of making the Superfund so expensive that a large portion of the people that I represent don't think they can afford the current regime?

    Mr. GIMELLO. Let me address one question that you raised quickly on the NGA policy. That is a standing policy that has been in place for 2 years, and the language has been, will be voted on again, I understand, at the end of June. So, right now, that clearly is the policy and it works its way up through subcommittee development, and the association is due to vote on that again early this summer.

    Mr. BATEMAN. We will await the results of the further deliberations.

    Mr. HARDING. I guess it has been my experience that economic considerations probably tend to have the reverse affect from what you have described, Mr. Bateman.

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    I think as we look at the remedies selected, as we look at the risks and the public health issues, we need to be realistic in comparing those risks realistically in protecting the public health. And I think quite often where we have the opportunity for a win-win situation, where we can develop brownfield sites, say, for an industrial application, as an example, it quite often is much more cost effective to choose a remedy there that protects worker health, which is less conservative than, say, residential. So we need to try to marry those two together for a more cost-effective program.

    Mr. BATEMAN. Well, let me, if I may, Mr. Chairman, just comment.

    I find no validity at all to this business that if it is an industrial site that is okay, you can accept the jeopardy for the health and safety of the work force. I think that is a ridiculous notion. That is as much a part of the public health concern as any other. Yet I am not at all persuaded that we have not pursued—a lot of your rhetoric this morning seems to confirm it—that we are doing things in the name of a cleaner situation without any corresponding trade-off relative to the cost. And that most of you seem to agree that we have not done as good a job of cost-benefit analysis as rationally and responsibly ought to have been done.

    I don't think the question is one of should there be cost-benefit analysis or should there not be cost-benefit analysis. How good and how sound is your approach to making those kinds of judgments?

    Mr. COLMAN. May I respond?
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    Mr. WAMP. Yes.

    Mr. COLMAN. That is one of the areas that the States have taken a big lead from the Federal Government. It is partly a cost-benefit analysis, but it is also I think what the States have done have put into place remedy selection approaches that require cleanups to be tailored to the use to which the site is going to be put.

    So it doesn't mean the workers at an industrial site are less protected. It means that if they are not drinking the groundwater, and you blacktop it, and all they are doing is parking their cars and walking to the factory door, that the cost to protect them is much less than is the cost to protect someone in a residential area.

    I think the States have really gone far out on that issue, and it is one of the reasons I think why States have been successful, because we have not held out for unrealistic cleanups that have no relationship to the way the land is going to be used. And so it is not directly a cost-benefit analysis, but it is for cost-benefit reasons we do that.

    It seems pretty obvious to us, and I think most of the States that have these programs have that type of flexibility in them already. That is why we continue to push to try to figure out how to make that always work better.

    Mr. WAMP. Thank you, Mr. Colman. Thank you, Mr. Bateman.

    And the Chair recognizes the gentleman from Texas, Mr. Laughlin.
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    Mr. LAUGHLIN. Thank you, Mr. Chairman.

    Mr. Harding, as I understood your testimony, you are not in favor of delegating authority to the States, yet it sounds like your State has taken it upon itself to address some of these problems.

    Is that in the area of delegated responsibility? Or I think you said you would not object to the States being authorized to do something. Does it follow on the authorized side of the equation?

    Mr. HARDING. Currently there is no opportunity for delegation in Superfund, as you know. And as I explained earlier, the model that we are looking for whether you call it delegation or authorization, and I certainly think I have made an impact with that semantics, it sounds like. The key concept here is, again, that we are held to a performance-based, standard post-audit. We ought to be accountable. We should run an accountable program. But we are not managed in a real-time sense that we don't have States—we have 50 employees, 40 to 50 employees in the State of Michigan routinely interfacing with many more than that in our regional office, EPA's regional office in Chicago. And we quite often spend our time second-guessing each other. We go out to public hearings. We don't always agree. Then we are spending time in duplication.

    In fact, we are at the point in Michigan now if we are not able to run the program, again, under an accountable, performance-based system, if Congress does not authorize that ability in the future, we will probably turn that program back to EPA and just let them run it.
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    Mr. LAUGHLIN. Mr. Colman, since you are here representing the States, I want to ask you if there is any minimally acceptable program or level of a program that States would consider appropriate for them? And if so, are there any programs that the States feel like they should not or could not administer if delegated?

    Mr. COLMAN. Well, I think we have to look at the level of resources the State has. There have been concerns expressed about the type of public participation that that State may have. I think that there should be broad criteria States should be required to meet. Whether you call it authorization or delegation, really, is not the critical issue.

    I think there are some States that could handle the entire program. Certainly New Jersey—probably he could speak for himself—but they would be able to if they wanted to. Massachusetts could. Then there are other States as well.

    There are some States that are very good at portions of the program, such as doing site assessments, but may not have the skills or the resources yet to be able to handle large remediation construction projects. So that is why we have argued for full or partial delegation/authorization.

    I think you would find a number of States, if it were set up in a way that was attractive to States and was not a rigid command and control situation from EPA, a number of States would be happy to take this program over.

    Mr. LAUGHLIN. It is my understanding there are examples of similar Superfund sites with similar contamination that wind up with different cleanup levels being enforced.
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    Mr. Colman, would you address how we could deal with current inconsistency in the establishment of cleanup levels at different Superfund sites?

    Mr. COLMAN. That is precisely why the organization I represent feels so strongly about a single national risk goal which would set the overall risk that a site would be allowed, that would have to be cleaned up to protect people from.

    Now, the actual level of cleanup at a site in order to achieve that risk level could vary amongst different sites. But that would not be inconsistent. The example I used earlier, the level of cleanup required for the exact same contaminants for the exact same exposure level at an industrial site would be much less in general than at a residential site, although both the kids playing in the playground and the workers working in that facility would have the same risk exposure.

    Mr. LAUGHLIN. Well, if I rely upon a single national target risk goal, what about the cases where it is just too expensive for a single target risk goal?

    Mr. COLMAN. Well, in my experience, there is always some way to reduce exposure and it does not necessarily have to to be a permanent solution that will last forever. Sometimes there are solutions you can do for now that will reduce the exposure.

    And, again, if you want to clean something up for a residential use, you probably should be ready to spend a little more money if you are going to have kids playing in the dirt than you would at an industrial area. So as a practical matter, that at least in Massachusetts tends to get worked out on a case-by-case basis.
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    You can always work out exposure. You can supply drinking water standards. You can cap a site. You can fence a site. In some cases you can move people off a site. We have done that. We have supplied alternative water systems. There are ways to do it. But the States, I think, have shown their flexibility in coming up with generally cost-effective solutions to these problems.

    Mr. LAUGHLIN. Mr. Chairman, would you bear with me for one more question because it fits in with where I am going.

    Mr. WAMP. Certainly.

    Mr. LAUGHLIN. Mr. Harding, in your written testimony you say your State exempted new purchasers from liability or making them culpable on contaminated properties. Did you all consider in any way exempting those polluters who under today's law are polluters but at the time they did whatever they did they were following the State law and the Federal law and whatever action has now brought about them being considered a polluter? If you can answer that briefly, why you did or didn't.

    Mr. HARDING. We did not. We did consider, our legislature did consider exempting retroactive liability and chose again not to do that, but again to go to a causation standard. I think the primary rationale there was we felt that eliminating retroactive liability could have severe financial impacts.

    What we were concerned about, we thought a bigger problem was some of the strict provisions of the liability that brought in people that didn't actually cause the problems, particularly troublesome for future redevelopment of brownfields. So we chose to focus in that area.
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    Again, I would characterize that as probably a middle ground between the current liability system under CERCLA and total removal of retroactive. So I think it is somewhere in between. We those to go that way instead.

    Mr. LAUGHLIN. Thank you, Mr. Chairman.

    Mr. WAMP. You thank you, Mr. Laughlin.

    The chair recognizes the gentleman from Iowa, Mr. Latham.

    Mr. LATHAM. Thank you, Mr. Chairman.

    The term ''polluter pays,'' I guess I would like to know, under the current Superfund, do you believe that it is actually the polluter that ends up paying or is it the person with the deepest pockets? And aren't a lot of the, quote, ''polluters,'' and I guess similar to what Mr. Laughlin talks about, and I would like to your term, Mr. Gimello, PLO, as far as the Good Housekeeping Seal of Approval, that people who had that in the past, who were doing everything by the law and now they are, quote, ''polluters,'' what protection is there in the future?

    This Congress, obviously, is subject to change around here. Coming back 5 years from now and saying that whatever is the seal of approval this year, 5 years from now, is not the same and so now that person is is, quote, a ''polluter'' again.

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    I guess, basically, if there is one thing in Superfund, is everything is tied up in litigation. We are spending all our money in court rather than cleaning up sites.

    Mr. GIMELLO. I will take a stab at the last part of your question, if I may, first. I think for the future, as is often the case, and particularly the case in the environmental field, the marketplace, I think, has taken care of the future. Right now people do not accept simply, I am sending waste to a place that is licensed.

    Now, if I am going to send waste to a facility that has a license from the Federal or State government, before I do that I send auditors, I send my lawyers, I send people experienced to check out not that they are just following the letter of the law, but the kinds of provisions that I need to protect my company and my shareholders from future liability are in place.

    So I think we have learned a lot as a country about how to evaluate that risk, and for the future it is being I think managed well.

    In terms of does the polluter pay, it is clearly the case, first of all, if you are not a polluter, you are not in the mix. So in my mind, it is a question of degree, very often. Deep pockets, do they pay more? I think that is a fair statement.

    Mr. LATHAM. Isn't every citizen potentially, then, a polluter?

    Mr. GIMELLO. I think that is a fair statement as well, and is reflected in the scheme. If we carry this to its logical conclusion, all of us with septic systems have contributed to the degradation of the groundwater. That is certainly true. So that is what makes it, I think, a thorny problem.
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    But deep pockets? I think those who have no liability are not paying. I think as a general proposition I feel comfortable making that statement.

    Mr. LATHAM. Mr. Harding.

    Mr. HARDING. Well, I believe that deep pockets do pay and that is not to say that deep pockets don't pollute, and I think polluters do pay but it has been our practical experience that many, many times when a company is convinced that legally they were only responsible for a portion or perhaps none, but quite often a portion of that pollution, and feel they are being treated unfairly they will seek redress in the courts.

    That is just fundamental that when you are treated unfairly or perceive you are, you will seek legal remedy. It is not uncommon, we have had as many as 3- to 400 people being identified by the major companies as contributing. From a practical standpoint, it is impossible for the system to deal with that. So what we end up with is either mired down in high-transaction costs and time being spent in litigation, or we end up just settling for some portion with the deep pocket.

    Mr. COLMAN. I think another consideration here is that not all sites are the same. There are certainly those sites with maybe several hundred potentially responsible parties. But there are also—probably the vast majority of sites are with maybe three, four, five potentially responsible parties, and it is much more clear that whether it was legal or not at the time those people in fact took some actions which resulted in contamination. And many of them are not, where they took the waste to a somebody else, some other licensed places where they put it in their own backyard. Maybe it wasn't illegal to do it at the time, but it wasn't necessarily the best thing to do at the time.
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    I think the question becomes, should the general taxpayer pay for when someone just dumped it out in their backyard 20, 25 years ago and contaminated groundwater or soil?

    I think there are some fundamental fairness issues on that side as well. As a practical matter, though, many of the larger sites, it ends up being mixed funding anyway. Because if the Federal or State government go forward and do the work, we never get 100 percent of our costs back. We always get some percent on the dollar. So it ends up being a mixed funding of public money and private money anyway at most sites.

    Mr. WAMP. Thank you, Mr. Latham.

    Mr. LATHAM. Thank you.

    Mr. WAMP. The chair recognizes the gentleman fresh from New Hampshire, Mr. Zeliff.

    Mr. ZELIFF. Thank you, Mr. Chairman.

    We have, unfortunately, probably one of the highest-density Superfund sites in the country. And I would like to direct some of my questions to Mr. Gimello in his capacity first in New Jersey, and then also in the capacity of representing the National Governors' Association.

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    You mentioned $1.1 billion of Federal funds. If you could just review and add to that the amount of money that the State and the private PRPs, what kind of a number are we talking total?

    Mr. GIMELLO. I am not sure I can quantify RP costs. We don't track them as well as we would like to. But we have leveraged the $1.1 billion with approximately $285 million in public bond funds.

    Mr. ZELIFF. Okay. Can you come up with some kind of a percentage of the amount of money of that pot that goes into litigation?

    Mr. GIMELLO. Well, those dollars—no, I can't, actually.

    Mr. ZELIFF. Would you say it is 90 percent?

    Mr. GIMELLO. No, I would say it is much lower than that. I would think it is fair to say my cost is—I carry probably a complicated case, since I have to pay for the attorney general to represent the State of New Jersey, somewhere in the 10 to 20 percent range, I am guessing.

    Mr. ZELIFF. And then the Federal money, you know, there is the Justice Department monies in there and throughout the system, but how much actually gets to cleanup?

    Mr. GIMELLO. Of the $1.1 billion, the vast majority of those dollars are hard cleanup dollars. That is remedial investigations, that is preliminary assessments, that is construction. Those dollars are hard dollars that are given to the States for specific phases of a remedial process.
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    Mr. ZELIFF. Would you agree with the statement, The bottom line for any Superfund reform is to get money away from the lawyers and into the cleaning up of the sites?

    Mr. GIMELLO. Amen to that.

    Mr. ZELIFF. Would you agree the only real way to do that is to eliminate retroactive liability?

    Mr. GIMELLO. I would not, sir.

    Mr. ZELIFF. I say that with a smile.

    Mr. GIMELLO. I was actually prepared for that. I would not agree. I think that there are steps we can take short of obliterating the construct of joint and several and strict liability that will give us the efficiencies we need to move forward.

    Mr. ZELIFF. Are you saying that—is that a position at this point that is being held fast by the national governors?

    Mr. GIMELLO. At this point that is the standing policy, yes.

    Mr. ZELIFF. Do you see them reviewing that?

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    Mr. GIMELLO. Very shortly.

    Mr. ZELIFF. In what direction do you see them coming?

    Mr. GIMELLO. Right now there is a proposal currently circulating that the governors, that I believe is to be voted on at the end of this month that calls for—end of July—that calls for retaining that concept.

    Mr. ZELIFF. How do you mix that with just the whole idea of holding somebody responsible for something that was passed in, let's say 1980, and in fact holding people responsible for things they did that were legal before the bill was passed? Isn't that a little un-American and wrong?

    Mr. GIMELLO. I think it is problematic. I would not agree with that characterization. But I think what Jim says is sort of the debate we went around the first time. If I am a company and I, under current law, took material and put it in my backyard, and 20 years later we find out that in some way society is now threatened by that, I am hard pressed to determine who picks up that bill if it is not the responsible party, whether or not they did it believing it was okay to do it or not.

    I don't think the taxpayers should bear that cost. The company who did it either avoided costs by doing it or received some benefit, and while it may have been legal at the time, there isn't an alternative to step in in place of that responsible party and, therefore, I think they bear the cost.

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    Mr. ZELIFF. And in terms of the proportional liability scheme versus joint and several, you don't—the governors feel that that is a fair process and going after deep pockets is the only way they can get the job done.

    Mr. GIMELLO. I think as a practical matter, when we get to the point of these arguments in court and burn up so many legal dollars, what happens as a practical matter is that some court of law decides what the proportional share is. So I think that is happening now anyway.

    Very rarely do you see at a multiple party site the majority of them walk away and two people are left holding the bag. There is some proportional share that is usually decided by the court of law. That may not be efficient, but I don't think that it is not happening. I am sorry for the double negative. It is not happening.

    Mr. ZELIFF. I think the Superfund law is full of double negatives.

    Mr. Harding, would you care to comment on joint and several?

    Mr. HARDING. Well, again, I firmly believe that in order to drive transaction costs down, we have to deal with the fairness issue. I suspect many States have a real concern whether it is retroactive liability, or whatever the issue regarding liability, that they somehow could get hung with the cost of the cleanups without some way to fund that. So that is a real concern, but I don't think it ought to be a concern, again, to continue with a system that does not work very well.
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    So retroactive liability is one way to get there. As I mentioned, causation standards are other approaches. But I do think you really need to deal with that.

    Mr. ZELIFF. Okay. Let met ask this to all four of you. If we are going to really do a different way, if we all admit—or maybe you don't admit, but in my book the Superfund law as it currently exists is the most screwed up, worst example of the Federal Government gone a mess. Does anybody agree with that?

    Mr. HARDING. I agree that it certainly doesn't work very well.

    Mr. ZELIFF. Would anybody disagree with the statement?

    Mr. STROCK. Only when you said worst. That takes some thought.

    Mr. ZELIFF. In our business it is at least a good example.

    Mr. STROCK. It is certainly up there.

    Mr. ZELIFF. For me, at least, I look at retroactivity and the whole liability scheme as the process that is driving the costs. Now, if we are going to change that, and I assume you are pretty much for having the States take over a major role and perhaps getting the remedial process down to 18 months, that would solve a problem.

    I started walking my sites in New Hampshire when I got elected in 1990, and it was 8 years before they even did anything about it and it will be another 8 years before anything is done. So in these 16 years, all of a sudden EPA started to follow me around, and we viewed them, and all of a sudden things started getting done and we started moving the process forward.
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    And the waste and inefficiency—and maybe you can individually comment on maybe three questions. One is, what would you like to see EPA's role be? If they are going to delegate the process to the States, for those States that want the role on a voluntary basis, what minimum responsibilities should they have to see it is done properly?

    Second, how long do you think the remedial process should take?

    And then, third, what incentives, since we are in this private-sector incentive business these days, what incentives could there be for the States and the local communities in the funding formula somehow to get it done quickly and effectively and without waste and inefficiency?

    Just start right across the board, if you would, until my time runs out.

    Mr. WAMP. Mr. Zeliff, if it is okay with you, I might recommend those questions be answered in writing. We are going to keep the record open for a certain number of days following this hearing today, and since we do have a follow-up panel and two other questioners in line, if that is acceptable to you, we would ask they submit them.

    Mr. ZELIFF. That would be great. I see the red light is on, so that would be appropriate.

    [Mr. Zeliff's prepared statement follows:]

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    [Insert here.]

    Mr. WAMP. Submit the answers in writing, if you would, for the gentleman from New Hampshire, and I might add the more extinguished Members on the other side took that as a challenge to find other programs to compete with the Superfund, and RTC immediately came from mind from our Ranking Member, Mr. Mineta here.

    The Chair recognizes the gentleman from New Jersey, Mr. Martini.

    Mr. MARTINI. Thank you, Mr. Chairman. And my apologies to the panelists for my not being able to be here to hear your testimony, and my welcome to Commissioner Gimello from New Jersey.

    I have a more detailed statement that I will submit for the record, Mr. Chairman, but I want to focus in on my own personal experience as a county level official in the State of New Jersey. And during that tenure, it was a short tenure, but during that time, obviously, Superfund relief and the implementation of the Superfund Act and cleanups—and we had several sites in Passaic County that was paramount in the minds of most of the people in our district—and it clearly was, to me, a situation in which the perception that the average person had out there about the Superfund process was consistent with the reality. Their perception was that this was a cumbersome program which was not working and which the costs, unfortunately, all too much of the dollar that was spent, each dollar, the percentage of it, was going to litigation, administration, and evaluation and studies, and not to the actual remediation of the sites.

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    I think they were right. Their perception was consistent with what, in fact, is the case with Superfund. We touched on it a moment ago, and maybe there is a couple other areas. I know we have talked a lot about the expense and the litigation process, but in my own experience there was also a considerable expense in the engineering end and the evaluation end.

    I don't know if you have that statistic available, but I know personally and hands-on how much those evaluations would cost, the time it took to get them, the difference of opinions amongst the engineers and evaluators as to the appropriate way to clean up the site.

    So while it is commonplace here to attribute it all to the lawyers—and I agree a lot of it deserves to be attributed to the system, more than just the lawyers, to the litigation process—I think we also have to be mindful of the costs involved with the evaluation studies and the engineering consulting firms, et cetera, and how they go about their business of determining how to clean up a site.

    So, by way of a question, I don't know if you have that percentage. I have heard all kinds of numbers as to the percentage of dollars that go to legal and go to engineering and go to administration and then ultimately what is left for remediation. Do you have that statistic available for the public and for myself?

    Mr. COLMAN. I don't have that statistic, though I would point out here that there are many ways States have gone to reduce those costs as well. For example, in Massachusetts, we gave out cleanup numbers for the 107 most common chemicals that we find at sites and said, If you want to clean up—they are admittedly conservative—but if you want to clean up to those numbers and don't worry about doing a lot of evaluation, don't worry about doing a lot of studies, take that number, save your money, don't do expensive risk assessments, that is fine. If you think you would save money in the long run by developing your own risk numbers, you can do that too.
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    But by giving people a choice, we think that is one of the major streamlining things we have done and I think other States have done similar things. There are lots of things by putting out options for responsible parties to take, if you don't want to do a lot of transaction or engineering, do this, take this way, you can save a lot of money that way.

    So I am sorry I don't have a statistic, but it is probably not since engineers don't get paid anywhere as much as lawyers, it is probably a lot less.

    Mr. STROCK. Mr. Martini, there are several good studies. The Rand Corporation did a particularly thorough study that indicated much higher transaction costs than were suggested earlier. And I can just say based on my own experience, being on the enforcement end, defense side in these situations, it is outrageous and unprecedented, and this is far too polite.

    Mr. MARTINI. I would agree with that assessment, and those are the comments we hear continuously at the local


    One or two other quick points and it was a follow-up to my colleague from New Hampshire's questions with respect to retroactivity.

    It just came to mind now—and I think this might be analogous. Something for us to think about. This Congress is in the process of implementing product liability reform, and in that process we are putting in place a provision which would put a statute of repose on products. So that a product of 15 or 20 years would not be the subject of a product liability litigation. It would be beyond or too far removed in time.
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    Again, the theory being that before that time the costs would be assessed to the general public, the cost of someone who is hurt by that product would be assessed to the general public because the manufacturer at that time did not have allegedly the standard of law applicable to make him liable.

    That may be the theory behind some of the thoughts about minimizing or about addressing retroactivity; that at some point—this is not my opinion at this point, but certainly we are doing it in one area, in product liability—we are saying that at some point it is not the liability and cost of the manufacturer but, rather, it is a shared liability by the general public. And perhaps that is the rationale behind this dealing with retroactivity.

    But I see my time is up. Let me just conclude by saying what we do need is, obviously, more flexibility in this process, and certainly timeliness is the issue that I saw all the time. The time it takes to clean up a site. And so I am looking forward to working with my Chairman and this committee to address Superfund. It is much needed in our State and throughout the country.

    [Mr. Martini's prepared statement follows:]

    [Insert here.]

    Mr. WAMP. Thank you, Mr. Martini.

    The Chair recognizes the gentleman from Illinois, Mr. Poshard.
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    Mr. POSHARD. Thank you, Mr. Chairman. And I apologize, I came in this morning and just got in and am late to the committee hearing. I didn't get a chance to read the testimony of the folks before us now, but I know there is a lot of concern and I know what we debated last year and will continue to debate this year in the reauthorization has to do with the process, particularly the legal and litigative process and so on.

    But I would like to diverge from that for just a moment, if I could, and just ask a question of you folks. Because I have a concern in my district right now with respect to the method of some of the Superfund cleanup sites and particularly incinerators, and I just want to ask you a question. I know this is not what the meeting is about in particular, but representing States which have a considerable number of cleanup sites, as you do, what has been your experience with this?

    Do you have any incinerators being advocated by EPA for certain sites in terms of cleanup? What are the numbers? Have you had any experience with their effectiveness? What is the public response to them? Can you give me any comments on that?

    Mr. COLMAN. In Massachusetts, we have at least three sites where incineration was proposed. In two of them the incineration went forward, one with some community opposition—well, there was actual division in the community. The members of the community that had worked for several years on developing the alternatives were generally more supportive of incineration than the ones who came in late.

    On another situation, in Bedford Harbor, which is one of the largest Superfund sites we have, and maybe in the country, of its kind, EPA pushed strongly for incineration and we put together, the State put together a group with a professional mediator facilitator, got all the groups together and had a discussion and incineration was then taken off the table.
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    So we have had kind of both experiences and it depends a lot on the situation and what other alternatives are available. In the case where incineration went forward, there was no other alternative that would get it done as quickly and as completely and with as little disruption. In the one where it did not go forward, it became apparent that incineration, while when it was proposed seemed really good by EPA, upon reflection by a larger group, there were other alternatives which they would prefer to have and the trade-offs were acceptable to them.

    Mr. POSHARD. Were the results on the site where incineration went forward generally positive?

    Mr. COLMAN. It has now just begun incineration, and, so far, it is positive in that our monitoring has shown no significant contamination outside the bounds of the site caused by the incineration.

    Mr. POSHARD. Would anyone else like to comment on that in their respective areas?

    Mr. GIMELLO. We have one large now active incineration operation at one of our larger sites in South Jersey that is addressing a large pool of organic chemicals, literally a pool of chemicals, and it was decided that this was the most cost-effective and the quickest way. There was community opposition to that decision.

    It is being monitored by the State and also an ad hoc community group, and I think it is actually working very well, is our experience right now.
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    Mr. POSHARD. Okay. Anyone else?

    Mr. HARDING. A similar experience. It can be very viable but it is difficult for public acceptance.

    Mr. POSHARD. Thank you.

    Mr. Chairman, if I may ask unanimous consent to submit an opening statement for the record.

    [Mr. Poshard's prepared statement follows:]

    [Insert here.]

    Mr. WAMP. Without objection. And thank you, Mr. Poshard.

    We are going to recognize Mr. Borski for a closing question and then move quickly to our second panel to accommodate the scheduling request of our next panelists.

    Mr. BORSKI. Thank you, Mr. Chairman.

    I wanted to ask specifically—and this can be a yes or no answer I hope for each of our panelists, some have answered already and I want to firmly, for the record, understand—does the National Governors' Association support repeal of retroactive liability?
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    Mr. GIMELLO. No.

    Mr. BORSKI. Does the States of New Jersey?

    Mr. GIMELLO. No, it does not.

    Mr. BORSKI. Does ASTSWMO support repeal?

    Mr. COLMAN. No, it does not.

    Mr. BORSKI. Does the State of Massachusetts?

    Mr. COLMAN. At this point, no, if there is no other viable alternative.

    Mr. BORSKI. Does the State of California support repeal of retroactive liability?

    Mr. STROCK. I cannot give you a one-word answer. We think it ought to be examined because it looks to us like it is not doing the service that the strict joints and several is, so we think it should be examined closely, and we considered——

    Mr. BORSKI. And, Mr. Harding.

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    Mr. HARDING. The State of Michigan doesn't have a firm position on that, but we would be similar to California. We would be quite concerned about again having fairness built in, and retroactive liability could do that.

    Mr. BORSKI. And, Mr. Harding, I wanted to just ask you further, I know that the attorney generals from 40 States signed a letter recently supporting retention of retroactive liability and I believe the Attorney General of Michigan signed that letter. Do you know if he has changed his mind since then, or is it in play.

    Mr. HARDING. I don't think so. Our Attorney General likes to have what I would say is a fairly easy situation in terms of dealing with the potentially responsible parties, and much of the funding of his agency, certainly that we pay for, comes through cost recovery. So I think he certainly has a vested interest in that regard.

    Mr. BORSKI. Okay. Thank you, Mr. Chairman.

    Mr. WAMP. Thank you.

    We would dismiss this panel and thank you very much, panelists, and ask the next panel to convene as our distinguished Chairman returns.

    Mr. BOEHLERT. [presiding.] Our next panel consists of Susan Thornton, former Mayor Pro Tem of Littleton, Colorado; Bennett Levin, Commissioner, Pennsylvania Department of Licenses and Inspections from Philadelphia; and John Weichsel, Town Manager from Southington, Connecticut. This is our local government panel.
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    I want to thank all the panelists for participating, and let me again apologize to the previous panelists for my absence. I was over at the Senate testifying before the Base Realignment and Closing Commission, some important proceedings going on over there that impact on my district and our national security.

    We will start with Ms. Thornton. You are up first.


    Ms. THORNTON. Good morning. As you have said, I am former Mayor and now Mayor Pro Tem of the City of Littleton, Colorado. We are a community of about 35,000 people located in the southern part of the Denver metro area.

    Mr. BOEHLERT. Excuse me, would you mind pulling the mike closer because I want to hear clearly what you are saying.

    Ms. THORNTON. I do apologize. I am the one with the scheduling problem and hoping I can catch a plane this afternoon. We are doing budget hearings tonight in Littleton, and although not nearly on the scope of what you deal with, they are important to us. So it would be good if I can be there. I apologize if I have to run.
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    I am pleased to be here today to present testimony on behalf of eight organizations. We represent thousands of cities, towns, counties, and school boards across the United States. These organizations are the American Communities for Cleanup Equity, the International City Managers Association, the Municipal Waste Management Association, the National Association of Counties, the National Association of Towns and Townships, the National League of Cities, the National School Boards Association, and the U.S. Conference of Mayors.

    We live and work closely with citizens who are impacted by Superfund sites and believe we are well qualified to provide the subcommittee with a truly representative view of how Superfund affects our communities.

    I am going to ask that our written statement be made a part of the record, and, in addition, our member organizations would like to submit comments on the issues that are most important to them. And we request these also be made a part of the hearing record, please.

    My testimony today will focus on the issue of local government liability under Superfund. That is a problem that has saddled us with millions and millions of dollars of legal costs and liability simply because we either owned or operated municipal landfills or we sent ordinary garbage or sludge to landfills that were then also used by generators and transporters of hazardous waste. If I could, I would like to give you a couple of examples.

    My community is residential and we jointly operate a sewer treatment plant with another small residential community called Englewood, Colorado. From 1977 to 1980, at the direction of the EPA and the Colorado Department of Health, we sent our sludge, sewage sludge from this plant to the Lowry landfill. Unfortunately, the landfill also accepted some highly toxic materials and it became a Superfund site. Littleton alone has paid over $3.2 million in settlement of transaction costs and a number of insurance claims are still eating up our taxpayers' dollars.
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    And there is an ironic twist to this story. Since 1980, our sewage sludge has gone to eastern Colorado. It has been used as a fertilizer to grow the wheat we ate in our breakfast toast this morning, and this sludge, which cost so much time and money, is so clean that in 1989 we received a plaque from the EPA for its beneficial reuse. It is a large plaque, so I have brought a photostat of it if anyone would like to see this. It is quite an adventure explaining to citizens how this plaque and being sued under Superfund makes sense.

    Ours is not an isolated story, unfortunately. Recently 24 California cities paid $5 million in legal fees and assumed a liability of $34 million to settle litigation at the operating industry's site in Monterey. At that site, 200 million gallons of liquid hazardous waste were poured over municipal garbage.

    To pay these costs, the California cities had to eliminate police, fire and public safety personnel, cut libraries, parks and recreation budgets, and increase taxes in the form of garbage surcharges. It seems ironic to me that school districts should be sucked into this, but more than 200 school districts have been named the Superfund lawsuits across the country.

    Another troublesome example comes from Maryland, where a Federal Court has found a sanitation district liable for leaks from its sewer pipes after a dry cleaner improperly dumped hazardous substances down the drain. The elimination of retroactive liability would not resolve this type of problem.

    As you know, we have come close to having a broad-based consensus to eliminating the municipal liability issue and we hope you will again provide local governments with legislative relief from these unjust liability costs. But we don't want to leave you with the wrong impression.
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    While there are problems with the current program—you have heard many of them—we do not believe it should be abandoned. Our citizens look to the program for protection from serious environmental threats.

    There have been calls to radically restructure Superfund by eliminating retroactive liability and converting it into a taxpayer pays program, and we have several concerns about such an approach. First, we wonder if it would afford effective and comprehensive relief.

    It is our understanding that the elimination of retroactive liability might be extended only to a certain date, possibly 1987. That is one of the things we have heard. But what about liability for local governments after that date? I don't know the amount, but that could still be considerable, and we might still have huge transaction costs.

    Second, would such an approach ensure that there are adequate funds for effective and timely cleanup? This is a key for us. Above all else, we represent citizens. Many of us have Superfund sites in our communities and it does no good for us to say we have eliminated liability if we have to tell our citizens that the sites will continue to endanger their health.

    We also do not understand how savings and transaction costs that are being claimed, which would mainly be to private parties, how those would be translated into public cleanup funds. Since nobody seems to want to raise taxes—heaven knows we don't at the local level—how in the world will we find the billions of dollars needed for cleanup? And cleanup is essential. We must not abandon this program.

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    Thank you. I see my time is up. We look forward to working with you in any way we can.

    Thank you, Mr. Boehlert.

    Mr. BOEHLERT. Thank you very much, Mayor.

    Thank you, Commissioner.

    Mr. LEVIN. Mr. Chairman and Members of the committee, I guess it is good afternoon by now. My name is Bennett Levin. I am the Commissioner of the Department of Licenses and Inspections for the City of Philadelphia.

    The department which I administer is responsible for a rather extensive demolition program in the City of Philadelphia. We are charged with the maintenance of abandoned, vacant, dilapidated buildings. I have the responsibility for the cleaning and sealing of these buildings. I have the responsibility for ordering the demolition of these buildings. This part of the department's operations represents one of the city government's most sought after and appreciated constituent services.

    During the three and a half years of the Rendell administration, the Department has spent over $30 million of city taxpayer-generated funds. This is not grant money, this is not money coming from anywhere else, but comes right out of taxes that our citizens pay, demolishing vacant and abandoned structures.

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    This department also has established an excellent relationship with the State of Pennsylvania's Department of Environmental Resources and has coordinated several major demolitions for cleanup efforts either funded by or overseen by the Department of Environmental Resources. We also administer a small demolition program funded by the State's Department of Community Affairs which targets demolition of abandoned industrial buildings in one of our enterprise zones.

    There are over 30,000 vacant and abandoned residential structures as well as over 700 vacant and abandoned industrial and commercial buildings in our city. The city faces $100 million in demolition expense to remove these abandoned buildings and an unestimable cost to clean up the sites after the demolitions occur.

    Every vacant structure in the City of Philadelphia can be considered either a warehouse for drugs or a shooting gallery. The city's decline from its position as America's workshop and its conversion to a service industry base has brought many abandoned industrial buildings into the department's inventory.

    The demolition process, which has been expanded to allow the imminently dangerous definition to also include the danger posed to the health, safety and public welfare which results from drug use to be equivalent to that danger posed to the public's health, safety, and welfare from a deteriorated structural element.

    The department has embarked on an aggressive attempt to accelerate the demolition of abandoned structures. This effort has been credited by my counterpart, Fire Commissioner Hairston, as being the one single greatest cause in the substantial reduction of fire calls by our fire department.
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    Current environmental regulation places the city in a tenuous but not unique circumstance of having invested taxpayers' money to abate the nuisances created by unsafe structures and at the same time creating brownfields with no apparent mechanism to ensure quick turnaround from either the standpoint of the recovery of the expenditures of the demolitions or the ability to foster new economic development.

    Fiscal practice in the City of Philadelphia is to allow my department to recycle any monies which it recovers from the demolition effort in order to enable it to purchase more demolitions within a given fiscal year. In other words, if I have $10 million in my budget to spend for demolitions and I can collect a million dollars somewhere along the line from having abated the demolition from the responsible party, I can use that to demolish another million dollars' worth of buildings in that year.

    The city's commitment to demolition as an ongoing investment in our neighborhoods is apparent from this year's expenditures. The fiscal year 1995 budget allowed me to spend approximately $10 million for demolition. However, my permit and fee income exceeded my revenue obligations by over $4 million, and, as a result, this month, the 11th month of the fiscal year, the Rendell administration has allowed me to use $2.5 million of that surplus to increase my obligation level in order to fund a total of $12.5 million worth of demolitions.

    With this great commitment to reducing public nuisances, we are hard-pressed to find people willing to take the risk to recycle land due to the unlimited joint strict and several liabilities which they may be inheriting as an entity who would become a new purchaser.
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    The city has been successful in working with the Environmental Protection Agency in developing caps on the liability to a new purchaser with regard to cleanup and responsibility. However, such agreements require protracted negotiations which result in large legal fees that often become deal killers and scare away potential reusers of the property.

    We also have some questions as to whether the city itself becomes jointly and severally liable due to fact it has undertaken abatement activities to remove nuisances, but then again may appear within the chain of title due to the fact it places a municipal lien on the property for the recovery of the cost.

    Regrettably, most of these large, vacant, abandoned structures which are prime candidates for demolition are located in the city's most impacted and poorest neighborhoods. Those neighborhoods, which offer little hope for employment, offer few opportunities for youth and have a horribly eroded tax base.

    We need practical and reasonable guidelines for the level to which the land must be restored. We need guidelines that will allow the land to be, in essence, encapsulated and the restoration keyed to the intended use.

    We have entire communities which have now been denuded of industrial structures due to the efforts of both the city and the State, and the city's efforts to remarket the properties through the redevelopment authority, Philadelphia Industrial Corporation, community development corporations or other agencies are being thwarted by environmental policy, which is viewed as not only unrealistic but also unreasonable.
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    Not only has the city made an investment in the demolition, but there has been a loss in the tax base and no opportunities created for anything to go back that would encourage employment, neighborhood stabilization and a reasonable reuse of the land.

    Demographics of a city such as Philadelphia with the county population base requires a rational approach be taken in assessing the potential for land reuse. The city has too great an investment and a highly developed infrastructure in sewage treatment plants, water utilities, gas utilities, electric utilities, as well as public transit to allow the land to lie fallow, unproductive and stripped vacant of its economic potential.

    Not only are we creating nothing but we are also contributing to the economic genocide of our neighborhoods by not being allowed reasonable options and afforded the opportunity to take reasonable risks with regard to creating economic opportunities.

    Where there are no jobs, there is poverty. Where there is poverty, there is the abandonment of housing. If abandonment of housing causes only more misery for those people trapped in those neighborhoods and all too quickly, the cancer of abandonment metastasizes and spreads from block to block to block.

    We are hard-pressed to maintain decent housing stock. There are people that have been born, reared in these neighborhoods which have been impacted by industrial demolitions but have chosen to stay not only for the economic reasons, but also for reasons that these neighborhoods are their roots. There is a sense of community, and there is a level of comfort which they enjoy. Without the ability to create economic opportunity for youth, these neighborhoods will slowly atrophy and die.
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    The problems of economic redevelopment in our city are magnified by unrealistic environmental requirements which only heighten all the negatives one associates with bringing back manufacturing jobs back to the city and creating employment opportunities for those people that are semiskilled and possess limited experience as well. High taxes, crime, substance abuse, and the quality of the work force are only the first hurdles one must cross when considering the specifics of relocation, or creating employment opportunities into the older neighborhoods of the city.

    Unrealistic environmental risks makes abandonment attractive and reuse financially prohibitive. Our citizens need the following: They need reasonable limits to liability and financial responsibility, they need cost-effective cleanup remedies, they need standards based upon anticipated use and they need scientific risk assessment and they need the development and implementation of remediation processes which are both technologically and financially sound.

    Thank you very much for your attention. Some of this has been edited out. I'm sure you have it in print copies.

    Thank you.

    Mr. BOEHLERT. Thank you very much, Commissioner.

    Mr. Weichsel.

    Mr. WEICHSEL. Thank you, Mr. Chairman. Can you hear me all right?
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    Mr. BOEHLERT. Yes, I can.

    Mr. WEICHSEL. Mr. Chairman, I want to thank you and the other Members of the subcommittee for the opportunity to testify on Superfund.

    In Southington, Connecticut, we view Superfund as a community problem. It is not just an environmental issue, a public health issue, a local government issue, or a business issue.

    Before going further, may I just say your comments, Mr. Chairman, at the very beginning of this meeting, I want to associate myself 100 percent with them. They were excellent, and I can save myself and you a lot of time by calling the attention to the committee to your opening remarks.

    Mr. BOEHLERT. Thank you very much.

    Mr. WEICHSEL. The frustrations we in Southington and other communities across the country have experienced under Superfund led the formation of local government for Superfund reform in 1993.

    I am the vice chairman of LGSR, a national coalition of 112 governments and 28 States. LGSR believes that meaningful reform should consider the effects of a Superfund site on the entire community and its economy. From this perspective, it makes more sense to eliminate the conflict over liability and direct society's energy toward resolving the problem and cleaning up high priority sites.
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    Most importantly, one must fix the flawed liability system to make this program work. LGSR supports Superfund Reform 95, the leading broad-based coalition currently advocating changes to the liability system. The cornerstone of our approach is the elimination of retroactive liability under Superfund for disposal activities prior to 1987.

    We strongly believe that our proposed reforms represent the best approach to reduce the litigation and waste associated with the Superfund program.

    I, by the way, side with the group that said the Superfund was the worst. I don't know much about RTC or whatever that was, but I rank Superfund as all league all-star.

    Congress should guarantee every citizen who lives near a Superfund site a law that will remove the risk from that site in an expeditious manner. Fourteen or 15 years of delays, cleanups and inefficiencies and an enormous transaction cost resulting from Superfund's retroactive strict joint and several liability system should be enough to convince everyone of the need for comprehensive reform.

    The present site-by-site fund-raising system is at the heart of the problems with Superfund, and any legislative proposal that fails to address this key element will allow the blame game to continue for people who obeyed the law at the time of their actions.

    For example, actions undertaken by a local government, such as operating a city landfill, may cost that government and in turn the local taxpayers thousands or even millions and millions of dollars, even though it was in the public interest for the government to provide that waste disposal facility.
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    The site-specific retroactive liability system has made it virtually impossible for local governments to fulfill their four major responsibilities at Superfund sites, which are, one, eliminating the risk in a timely manner; two, protecting the local economy and tax base; three, returning polluted, not productive land to productive taxable status when that is practicable, which is not always the case; and, four, controlling costs at these sites.

    The current Superfund law, in particular its liability system, impedes rather than facilitates the attainment of these goals.

    I would like to—I have presented you a paper for the record and I am going to summarize as your staff member asked. Let me go to one case study which I know really well, Southington, Connecticut. We ran a land—excuse me, it was a dump in the old days, later a landfill, from 19—well, let's be candid. It was a dump in the 1920s and 1930s; that is what they were. We ran it from 1920 to 1967. It closed 13 years before there was a Superfund law.

    Now, to deem us a polluter is a perversion of common sense. We were not polluters. We followed the laws of the day. The State health departments inspected our facility on a quarterly basis. If there was any minor transgression, it was fixed: Papers blowing out of it, or whatever. We followed the laws of the day. We were not polluters.

    In 1987, we were deemed a PRP. And Mr. Zeliff was asking questions about the lawyers. He can put mine on his list. In the 7 years we have been involved, we have spent $3 million on lawyers and on consultants. No cleanup to date.

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    By the way, a ROD has come out on our program and we cannot wait. Reform in 1996 will be too late for us, so we respectfully and urgently ask you to move forward this year, this very year, and I believe you are of a mind to do so.

    To give you an idea, we are a town of 38,500. Now, this is like two Damocles swords hanging over our head: One, a cap for $16 million. And then they are going to watch the site and we might be asked to clean up the groundwater. And that could range anywhere from $50 to $80 million, notwithstanding the fact that even if we did that, the area is classified with what we call GB in our State, which means you cannot drink from it anyhow. We have lawsuits from people on site and from people off site and so on.

    My time is running. Let me quickly at least outline what we consider what you should do to correct this program.

    You must eliminate retroactive liability. You must replace joint and several liability with proportional liability. On the post-retroactive period, EPA should uniformly identify PRPs, not just go against the few deep pockets.

    You should require right in your own legislation that risk assessments be reasonable. No more of this eating dirt for 70 years and other such nonsense. These unrealistic assumptions that build up the cost for no benefit in many cases.

    You should require cost-benefit analysis, which I believe, and I am not up on all of your activities, but I believe you have done that in other areas, and you must require reasonable remedy selection.
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    There is a lot of talk about costs. You could reduce the costs if we did not make every site in the country ready for a day care and nursery center. And a small matter, you could eliminate oversight billings which is sorts of salt in the wounds.

    I have gone through it rather quickly. I will be glad to answer questions, as I know the other panelists would also.

    Thank you very much, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much. And I am going to ask Mr. Borski for the first questions because he has to remove himself to go over to the Senate and testify before the committee.

    Mr. Borski.

    Mr. BORSKI. I thank you very much, Mr. Chairman.

    I want to start with Commissioner Levin and I know he will understand that I do have to run over for the base closure meeting. Unfortunately, in this business, all too often we have to be in two or three different places at the same time and that is very important, obviously, to the city.

    I want to first congratulate Commissioner Levin on the job he does as the Commissioner of Licenses and Inspections.
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    Mr. LEVIN. Thank you.

    Mr. BORSKI. The mayor of the city of Philadelphia has received enormous accolades and all of them well deserved for being America's mayor, for the outstanding job he has done, but he couldn't do that outstanding job without dedicated people like yourself who have come out of retirement to serve the public. I can't imagine you have worked as hard in private industry as you do now for the city of Philadelphia and it is greatly appreciated.

    Mr. LEVIN. Thank you.

    Mr. BORSKI. The issues of industrial redevelopment are certainly crucial to the City of Philadelphia. We need all the jobs we can get and we can't get them if all our land is locked up. If we were to adopt the five recommendations in your testimony, what would that mean to the economy of the City of Philadelphia.

    Mr. LEVIN. It would mean a—it would be very substantial. It would mean that the agencies that are—that are empowered with the ability to convey property, make deals, encourage economic development would have a much larger pool to deal with because they would have a realistic basis to proceed. It would also help the community development corporations who had maybe wanted to develop a shopping center on a piece of ground to do so with some reasonable expectations that they are going to be able to succeed.

    Right now, you talk about the cost of the lawyers, right now the fear of just being drug into a—into a horrible morass stops people from trying to deal with these tremendously viable, otherwise viable sites that we are creating because nobody wants to be the first one into the pool.
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    Mr. BORSKI. Commissioner Levin, you said these sites could be used for redevelopment or rehabilitation. What kind of activities would likely be attracted to these sites if they could be used?

    Mr. LEVIN. There is, for instance, shopping centers, distribution centers, warehousing. There is a whole area of economic development that does not rely solely on manufacturing that takes advantage of the city's location, the highway system, the rail system, the river that can come back.

    At North Philadelphia Station, we just demolished the former National Biscuit Factory, it was a hulking eight-story building, cost the city three and a half—$350,000 to demolish. That is going to be part of commercial development that Amtrak hopefully will undertake a North Philadelphia station.

    Tomorrow night, I am going down to a community meeting where we are going to spend a million three of taxpayer money to demolish one building. We hope to get something back there so we get that property back on the tax rolls and it is not just another short dump.

    I have a big problem with short dumps. I had to adopt the philosophy whenever we do a demolition now, the fences would get stolen so we use jersey barriers. We physically put concrete barriers up to try to stop short dumping. So if you can get the property back in some reasonable hands, people that will do something with it, it affects the quality of life of the entire neighborhood.

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    Mr. BORSKI. Have you seen flexibility or a willingness to help on these issues from EPA officials that you deal with?

    Mr. LEVIN. Well, we had the Publicker site where we had some excellent cooperation where they put a cap on the liability of the new—the new owner. We have had some excellent cooperation on the sovereign oil site where some Coast Guard funding was in because of dealing with the seepage into the sewer system.

    We have excellent cooperation with the State's Department of Environmental Resources. So yes, we are getting some pretty good cooperation, but it is the fear, it is the fear that nobody wants to go near this stuff because of the unknown, and that is what is absolutely strangling any kind of development in the city.

    Mr. BORSKI. Can you tell us about some specific cases where developers were scared away?

    Mr. LEVIN. We have developers on—on the American street corner and as you go through the process and the State has been very, very, very helpful in the funding the demolition, funding cleanups, but as you go through the process, it is very, very difficult because the unknown makes the—makes the move to the suburbs, the churning up of the farmland a very, very attractive alternative. We have this problem every day. We try to get people interested and all of a sudden they are enticed someplace where they don't have the environmental risk.

    Mr. BORSKI. Thank you very much, Mr. Commissioner.
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    Mr. Chairman, again let me thank you very much for your courtesy and I look forward to working with you. Thank you.

    Mr. BOEHLERT. I would just like to say this is a precedent setter. You are the first person from Pennsylvania and specifically from Philadelphia to come before this subcommittee and a Member has, where Mr. Borski hasn't taken advantage of the opportunity to point out that two former Philadelphia greats, Mike Schmitt and Richie Ashburn are being inducted into the Baseball Hall of Fame this year. Thank you very much.

    Let me ask Mr. Weichsel, would you support Superfund reform that took municipal landfills that also received industrial waste completely out of the program with no Federal liability? Of course there wouldn't be any Federal funds, either.

    Mr. WEICHSEL. Well, obviously a half a loaf is better than none and that would help me, my town if we were removed. But if, when you read—have a chance to read my paper, there are other communities, Hastings, Nebraska is an example, has been caught in this with seven subsites, only some of them which are garbage-receiving areas. There were grain elevators, coal gasification plants. So I really must respectfully say daunting as the task is, you really have to look at it and say, guys, we made a mistake, retroactive liability is unconscionable and, therefore, we are going to change it completely.

    Now I don't run Congress. If you good folks say the best we are going to do for you is eliminate yourself, my taxpayers would say John, grab it. Obviously it is a compromise and I know compromise occurs in this body appropriately enough. But I really would hope you would look at total removal of retroactive liability.
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    I can't explain it to my taxpayers. They think, you know, it is mad. It just defies common sense. So yes, if we got out, naturally Southington taxpayers would stop asking. But you have 400 sites throughout the country—well 1,200 on the NPL list. Retroactivity is not fair, it is not right, and I urge you to repeal it.

    Mr. BOEHLERT. Well, a number of people would argue that, of a number of less attractive alternatives, this is the most attractive, the retroactive liability, because I can understand your logic and your reasoning. But look at it from the other point of view. Everyone in America who didn't participate in any way, shape, or manner is going to be asked to pay for the cleanup if we eliminate retroactive liability.

    How are we going to pay for it?

    Mr. WEICHSEL. Mr. Chairman——

    Mr. BOEHLERT. You want to raise the taxes?

    Mr. WEICHSEL. Mr. Chairman, our position is that with the existing environmental taxes which, incidentally, are really not on everybody, they are essentially on the business community, only a very small part of the quarter of the $250 million is from the general fund, mostly it is on business taxes, our position is that if you will do the reforms we talk about, reasonable remedy selection, getting rid of the transaction cost for this money that you would be—we estimate then the cost would be about $2.3 billion per year, we will do more in 5 years than you have done in 15 years with this flawed system. The same taxation system—and I know nobody up there wants to increase taxes and I don't want you to. You will accomplish a tremendous amount, I assure you of that.
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    Mr. BOEHLERT. Well, the problem is, I hope you would keep somewhat of an open mind in this, as I have tried to, because I don't think the numbers add up and we are working on them. We are working them over, believe me. I think all of us up here would like to, just like that, eliminate retroactive liability if we could, but we have not yet found a way to finance the program if we do. So keep an open mind and we will be coming back to you folks.

    Mr. WEICHSEL. Well, we certainly want the landfills removed. I think anybody—anybody must agree to that. The gentleman from New Jersey told me they agree with that, though his language up here was a little bit bureaucratic. I hope that the group understood he was saying eliminating them.

    Yes, I will keep an open mind, Mr. Chairman. But what I have seen, this is an indefensible public policy. I have been in this business 40 years and I can't think of any laws—I don't know your RTC law too well. But I know of no law that gives such animosity, such aggravation. I mean, there is a reason for it. The law is not a good law. We have laws of red lights, people obey them. We have laws on locking the doors, they obey them, they smile about them, okay. The reason people don't like this law is it is not a good law.

    Mr. BOEHLERT. Well, not to be argumentative, but I would suggest that you probably are supportive of the objective of the law.

    Mr. WEICHSEL. Yes, sir, absolutely to clean up the sites.

    Mr. BOEHLERT. I think what probably most offends you and, incidentally, I am simpatico with all the panelists because I am a former local government official as a county executive, so I know exactly where you are coming from. But it is the implementation that is causing so much heartburn.
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    Mr. Levin, would you care to address the question?

    What eliminating would you support, reform that would eliminate municipal landfills that received industrial waste from Federal liability, wouldn't receive any Federal funds but be eliminated.

    Mr. LEVIN. My answer is yes, because in Mr. Borski's district, there is a company by the name of the Gilbert Spruance Company and they were forced out of business because they sent something years ago to a landfill. You had retroactive liability. They got into the—into the ring and they couldn't afford the legal bills. The man said, fine, I just give up. It was before I even bought the company. I am not putting any more money in, you know, and 50 or 60 people were out of work the next week. And I think it has devastating effects, the human dimension to a lot of people that are affected by it.

    And the one point I would like to make, I was at a White House conference hosted by Temple University several months ago talking about the impact of environmental legislation in the neighborhood and it wasn't till 3:00 in the afternoon till they finally heard from somebody in the neighborhood saying what this is doing to the community.

    Now, we had the lawyers talking to the bureaucrats and the administrators and it was a very cozy conversation until there was some down-home input of what is happening. And then Mr. Borski can tell you there were 50 or 60 people out of work because of retroactive liability from way, way long ago, it takes on a very human dimension and it is not that the money that—that the municipalities have to pay to defend themselves, to go to court and deal with the process, it is those people who don't have a job any longer. And that is the tragedy, that is the human tragedy of some of the things we are trying to deal with that we would like to see corrected.
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    Mr. BOEHLERT. Well, there is a very serious potential for human tragedy if we don't do a better job of cleaning up these toxic waste sites. We are going to have a lot of not just jobs lost, but lives lost. It is a very serious health and environmental issue.

    Mr. LEVIN. Why should a man who goes out and invests in a business and tries to keep that business going be liable for something that happened long, long ago and see his entire investment go away? It is easier to buy tax-free bonds than take those kind of risks and that is exactly what is happening.

    You are driving people out of the market because entrepreneurial people, small-business people don't want to take the risk because they can't afford the burden that the legal system poses on them in defending this. The earlier panel today discussed, well, it is no problem that if you—if you are not proportional, you don't pay. You are still going to pay the lawyers. It can bankrupt you.

    Mr. BOEHLERT. Believe me I can understand, and I am very sensitive to what you are saying and you say it very eloquently, but I would point out last year that we very carefully crafted a compromise that was supported by, among others, the National Federation of Independent Business which is the largest organization in America representing small business, that retained retroactive liability not because we wanted to embrace it, not because any of us were in love with it, but we found that to be the best of a bad lot, so to speak.

    Why should someone in Tacoma, Washington have to pay up for cleaning a toxic waste site in my district in New York? They had nothing to do with it. But—well, we will go on. We are going to discuss it.
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    Ms. Thornton, would you care to address the question?

    Ms. THORNTON. Yes. The removal of the co-disposal sites, I will admit to the self-interest here, the people I am representing today. Sounds very promising to us. It meets one of our criteria, which is the elimination of the liability for local governments, our ability to do the things we need to do, the essentials.

    It also has the potential to, it seems to me, to protect small businesses in our communities, people like Mrs. Malino and her pizza parlor at the Ludlow Landfill. I know Mr. Boelhert is very well aware of that situation.

    Mr. BOEHLERT. The Ludlow Landfill, incidentally, is in my district so I am very much aware of that. We made some changes. We forced EPA to the wall to make some changes.

    Ms. THORNTON. The question that we would retain, because these sites in our backyards in our communities, is whether there would be enough funding for cleanup. And if that were the case, then I think it is a very promising approach.

    Mr. BOEHLERT. Thank you.

    Mr. Poshard.

    Mr. POSHARD. Thank you, Mr. Chairman.
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    I just want to describe the scenario that happened in my hometown and then just to clarify your positions on that with respect to joint and several and risk assessment. I had a small—it was a small shop, but a motor repair shop, in my hometown, and for a number of years they took all of their small engines, like lawn mowers and that sort of thing which they didn't want to mess with.

    They sent them to a neighboring town about 50 miles away to another shop that repaired those engines and so on and all they did was transport them over there and come and pick them up and they did it as a service to their customers more than anything else. A few years ago, we found out that the shop in the neighboring town 50 miles away had gone under and had been dumping oil all over the place with large amounts of PCB and some metal contamination and so on.

    In the meantime, the folks that own the small shop in my hometown had retired, they were in their early 70s, came back on them for joint and several to the tune of nearly $100,000, a couple of them were already in nursing homes, their spouses and so on. They didn't have the money to pay this and they didn't even know that there was a problem being created in the shop to which they were sending their small engines.

    Now, I just want to make sure what you are saying. Are you saying then that the owners, the retired owners of the small shop in my town that had been sending out their small engine repair, should not be subject to any responsibility for the cleanup of that site?

    I just want to know. I am not sure——

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    Mr. WEICHSEL. What year are we talking about, sir?

    Mr. POSHARD. I am sorry?

    Mr. WEICHSEL. What year is of some importance.

    Mr. POSHARD. Oh, this happened over a period of 20 years they sent.

    Mr. WEICHSEL. The last year that they sent anything would be what?

    Mr. POSHARD. Well, it was probably 1990s and had been going on since the early 1970s.

    Now, the second thing I want to ask you is this: With respect to the neighboring city where this occurred, the city maintains that there is no real risk at this site, at least not currently, to the water supply, to the area around it where people live and so on and so forth, and they think that there should be some, maybe, proportional cleanup but they should not have to go through the cost and so on of getting people—because this is affecting the city and the economics of the city right now with this huge suit hanging over this former business' head.

    They feel like there should be risk assessment here, and there should be maybe proportional consideration with respect to cleanup, but that since this apparently does not impose any immediate risk, they—they have—they really believe in the risk assessment concept.
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    What are your positions on both of those things? Should the guy in my hometown be responsible at this point in time for part of the cleanup? And should the—should the people in the neighboring city be subjected to some sort of risk assessment to see if in fact the limited resources that we have can go toward cleaning that up?

    Ms. Thornton?

    Mr. WEICHSEL. I am sorry.

    Ms. THORNTON. As you may know or may not, I was—served as the representative of local governments on the national commission on Superfund and we met over a period of about a year and a half. I can tell you the two most difficult issues were liability and how clean is clean, and everyone has a different idea of what that threshold ought to be. So finding consensus on that is very, very difficult.

    Our position is that these decisions need to—on cleanup really need to be tailored to future land use. You heard some discussion this morning about that. But they need to be based on local land use planning that's determined by citizens and local governments. We really feel there should be permanent protection.

    I do think we have to be flexible in terms of risk and risk assessment, but decisions should not—about cleanup should not be made just based on cost. That is a real concern, that we may come to that, and I think that would be a—Mr. Boelhert has said a real tragedy, we would have additional costs down the line in human as well as financial terms.
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    Mr. POSHARD. Mr. Chairman, may I ask the other panelist to respond?

    Mr. BOEHLERT. Sure.

    Mr. LEVIN. I don't believe that the Federal Government should become the local zoning officer and I think that there is a grave risk that they—that might happen. I think the land use and what the land use will be is basically a local issue and then the level, the remediation level or the level which is going to be maintained consistent with local land use policy.

    The second—in answer to your first question, I don't think the people in your town are any more—should be any more liable than the person who manufactured the engine. I mean, I think there has to be common sense. I know in the department that I administer, tough regulators, you know, we affect everybody is life in the City of Philadelphia, we have attempted to take a common sense approach to things and it has been very, very successful in changing the perception of my department. And I think the same thing goes with your question.

    You know, do these people send this engine to this repair facility somewhere else, you know, with reliance that they were a good repair facility and, I mean, just because you ship somebody—something somewhere, you shouldn't be ultimately responsible. And that is what—that is the Gilbert Spruance story, the same story again.

    I think we need common sense. I think that would go a long, long way. I think—because you could extend this and everybody would be liable, the guy on the production line, the guy who sold you the aluminum that goes into the casting because you all contributed to the product.
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    Where does it end? I think it has to end where there is either culpability or responsibility for the act that created the responsibility.

    Mr. WEICHSEL. I agree with that, the last gentleman, and I believe with Ms. Thornton, that certainly common sense would tell you that mom and pop in the nursing home, or even if they weren't yet in a nursing home, that they were innocent in their action and they shouldn't do it. Now bear in mind our program does say if you are secure pre-1987, if you followed the law. Now, the way you describe that, what is the next town the next door down?

    Mr. POSHARD. It is a neighboring town.

    Mr. WEICHSEL. All right, the neighboring town, they may have broken laws even of that day, then they would be responsible. If they didn't break the law and they are being named as a Superfund site, then we would say reasonable risk assessment. If a presumptive remedy can be gotten, if it is only $100,000, that is peanuts. If you can talk about a presumptive remedy, then okay. And, again, liability should be proportional on people on that basis, not someone in your town who sent them some innocent stuff.

    If I very quickly could take a moment, in my State we had dentists, they gave their—the used amalgam to a recycler. What could be better for the environment. Guess what? The recyclist separated it, took out the valuable material, the silver, I guess it would be, threw the other stuff on the ground. They came after him. He bankrupted, and they went after dentists for half a million dollars each.
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    So of course common sense, as the gentleman indicated, would say in your town they are innocent, the retroactive date is of some importance, having followed the law is of great importance. If it is, then post-retroactive period, yes, you have to look at some responsibility. But pre-1987, we would say no.

    Mr. POSHARD. Thank you.

    Thank you, Mr. Chairman.

    Mr. BOEHLERT. I would point out that in last year's bill we were concerned about mom and pop being in the nursing home so we had provisions for de minimus and de micromis and we are looking at that once again because the little guy always seems to take it in the chin and we want to prevent that as much as humanly possible.

    Mr. WEICHSEL. Yes, Mr. Chairman, if I might just respond, last year's bill was not comprehensive. It basically left my group of owner/operators pretty much out in the cold and we would ask you to not go back through last year's tracks. This is a new session. Last year what we would have been protected by was something called ability to pay.

    I do a lot of negotiating with unions, and one of the factors in our State is ability to pay. And I want to tell you, there is no end to a town's ability to pay. They just say raise taxes. So that ability to pay was a nightmare for us and I hope you do not revisit that. There is no basic distinction between Ms. Thornton's group that is basically a generator/transporter group, our group which are owner/operators, towns and cities. There should not be a dichotomy among those two groups.
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    Ms. THORNTON. If I might, sir, could I just point out if I understand correctly, last year's compromise legislation or almost legislation did provide for smaller cities that were owner/operators, communities under 100,000 had a cap. It was the larger communities that were owner/operators that he is referring to and certainly I think we would hope there would be better ways to move to protect the larger cities.

    We would point out that virtually every municipality that I am aware of that runs a land—has run a landfill is also a generator and transporter of its own trash and possibly sewage sludge.

    Mr. BOEHLERT. Well, as former President Johnson used to say, come, let us reason together. And when I want to reason together, I always look at the vice chairman of this subcommittee, Mr. Wamp.

    Mr. WAMP. Thank you, Mr. Chairman.

    I have a question for Mr. Levin and Ms. Thornton. Ms. Thornton, during the joint and several discussion we had with our last panel and the discussion around the term ''polluter pays,'' the inference was made that the nonpolluter doesn't pay, and I just wondered from your perspective from the city, municipality standpoint is that really true? Or are there cases, just because the city services the property in question or services the people in question, the site in question, they are not brought into the potential liability as well?

    Ms. THORNTON. Well, certainly we don't really consider ourselves, we as local governments, school districts, et cetera, as polluters. If you look at all the studies, any harmful material in our sludge, in our MSW is infinitesimal, wouldn't be on the Superfund list. So certainly we are paying and don't consider ourselves polluters. I kind of lost my train of thought here.
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    Mr. WAMP. How often are cities and municipalities considered PRPs?

    Ms. THORNTON. How are they considered?

    Mr. WAMP. How often are they?

    Ms. THORNTON. Always. The other thing that has been interesting to me is hearing discussions about deep pockets because we have had those who generated the hazardous waste and brought us into lawsuits call us the deep pockets as municipalities and say to us, astonishingly, well, it is not a problem for you. We can't raise our prices on our product but you being municipalities, you can just raise your taxes.

    Mr. BOEHLERT. Just raise taxes. Nothing to it.

    Ms. THORNTON. They haven't been to my community if you think they can just raise taxes. Is there a vote on that? All in favor say aye.

    Ms. THORNTON. So I guess you are asking if there are entities that municipalities have been drawn in for other reasons. Some of our municipalities, for example, have done nothing more than issue a business license to a trash hauler, allow somebody to use your street to haul trash. Many of us don't do our own trash, you know. We let private industry do that and yet we still end up in first, second, third, sixth-party lawsuits.

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    Mr. WAMP. The whole concept of joint and several liability is very onerous to your local government.

    Ms. THORNTON. It is and it isn't. I will tell you why it isn't. To the extent it isn't, it is the hammer that gets people together. I will come back to the bottom line, we have got to have money for cleanup. You don't have that hammer, and you don't have retroactive liability, where will the funding for cleanup to protect our citizens come from?

    Mr. WAMP. Mr. Levin, if you will, let me share for the committee's sake and for your response, again, that I had a town hall meeting, Mr. Chairman, last night in Chattanooga, Tennessee at Chattanooga Creek, which is a very unfortunate circumstance. We have quite a polluted area there now and it is a very distressed area.

    And last night I heard from the citizens and I think it is worthwhile today, first and foremost, of course, they would like to see cubic yards of material remediated there instead of just studies and legal fees spent and time elapsed, years elapsed with no remediation whatsoever.

    But they also said last night, we wish there was some way—and this is just citizens, poor citizens, most of them, really, really poor citizens saying we wish there was a way that you could compensate the people whose health has been damaged as a result of this kind of heavy manufacturing over time. That is very difficult to determine.

    There are studies under way right now by the State of Tennessee trying to determine exactly who has been injured and what level they have been injured and it is really very difficult because there are other forces that have to be sifted out to determine whether or not this pollution was a direct result of this contamination on this site.
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    But the other thing that they said is, since you can't really determine how we have been affected, we definitely have lost jobs, we have lost our community. All you have to do is drive through it, you don't have to have a health study or an expert to come and say that this is a dilapidated area now. It is called Alton Park on the south side of Chattanooga and Chattanooga is a beautiful city now and really environmentally on the move, but this is one little problem we had that is not a little problem and we had this meeting last night.

    It is a perfect brownfield redevelopment opportunity, not just from the Coke and chemical sites that have been there, but from a huge glass company that was the first bottler of Coca-Cola in the country, made the glass right there in that area and it has been shut down now for a number of years and the entire area dramatically needs brownfield redevelopment.

    Mr. Levin, I know you have discussed this and that is one of your primary reasons for being here today, but it sure does seem to me that these dollars, not just in direct cleanup, could be redirected from legal fees into brownfield reclamation.

    Mr. LEVIN. I would like to make two points in response—in responding to you. The first point is the money that you would probably save in litigation from the private sector side would absolutely, in my opinion, be available for development because that money has to have some place to go. The second issue I—the second response I have is I made reference to this building that I am going to demolish for a million two.

    Now, the mayor has made a decision in Philadelphia when he allowed me the extra $2.5 million to go forward to do things we would not have done in the ordinary course of business because of funding, our own funding problems, and we are moving this building to the top of the list. I have never spent more than 350 or $400,000 to do a demolition. Now I am doing one for a million two, a million three.
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    It is going to the top of the list and we will litigate it later and try to get a responsible party later, but we are not going to allow the blight to destroy another neighborhood if we can scrape together the pennies to put it together. And hopefully tomorrow night when I go to a community meeting, the community will sign a contract with me and the contract will say that in consideration of the citizens of the City of Philadelphia spending a million 270, the community agrees to adopt the site, work with the city to maintain and keep it clean, make sure it doesn't become a dump, and there has got to be community participation.

    And the mayor was very, very pointed that when we are investing in our communities, our communities have to be stakeholders with us. They have to be our partners. You know, and that is the way we are going to go ahead and do some of these things without getting involved in seeking the immediate responsible party.

    So we are going to spend our money and then we are going to litigate about it afterwards and collect the money, but we are not going to let another community choke while we are paying the lawyers and going through that process. So I mean, there is—if there is a will, there is really a way. Of course it requires some money. But we have to get this common sense. We have to get away from the insanity and we are all choking on the insanity right now.

    Mr. WAMP. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you. And Ms. Thornton, never let it be said that any Member of Congress doesn't keep his or her word. We promised to get you out by 1:15. We are going to make that. I have one final question.
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    What can we do, what do you recommend that we do to ensure that local governments have a greater role in the remedy selection issue?

    Mr. WEICHSEL. I think that speaks for itself. The nature of remedy selection should—should call for some sign-off by our local government at the home of the—that houses the Superfund site. And we know the land use. We know the reuse. If you use reasonable risk assessment and reasonable remedy selection or propose, the community could say yes, that is the towns or cities could say yes, this is good or no, go to plan B or plan C. So you could have actual sign-off.

    Mr. BOEHLERT. In effect, you would give local governments a veto?

    Mr. WEICHSEL. Well, that is up to you. At the very least, consultation on it, have it a matter of record what the town's position is.

    Ms. THORNTON. I would agree and I would—I was very interested to hear the first panel, the discussion about the States perhaps assuming more role in this. We would really want to be sure that we had our—active in hopefully equal participants with the States if you move in that direction so that they are not—they don't become dictators, either. But you are right, we have the ultimate responsibility for land use planning and for our citizens' health and we do want to be plugged in there as strongly as possible.

    Mr. BOEHLERT. On a consultation basis or would you go so far as to give a veto?
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    Ms. THORNTON. I am going to hedge on that a little bit again. It is up to you. And I don't know that our organization, our groups have firm policy on that and I know they all want to submit statements, so perhaps that is a question we can ask all of the organizations I am here speaking for today.

    Mr. BOEHLERT. All three of you of different States, what is your experience with the State. Do you think there is adequate consultation and cooperation, or do you find from the State capital that you get dictates from on high?

    Mr. WEICHSEL. In this program?

    Mr. BOEHLERT. In this program.

    Mr. WEICHSEL. In our State they have not really been involved. They have been on the sidelines, has been pretty much viewed a Federal program, Federal Superfund law, so they have been not too active so I would just say they are kind of on the sidelines.

    Mr. LEVIN. Our, at least my personal involvement with the State has been in the cleanup effort and trying to put together their cleanup with my demolition. It has impacted on the community. The State has been very, very cooperative. I think I said earlier, the city does not look for the Federal Government to become its zoning officer with regard to land use and I think, yes, maybe we have to say what really goes on in our land, maybe we have to have a veto.

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    Maybe there has to be some strong input because, at our level, we have become ultimately responsible for the cost. And to add—you said what could be done, my opinion, the most sensible thing that could be done is that when you consider whatever the law will be to take into consideration the people of your district who are not as well organized as some of these other groups are, and the impact of what you are doing on their daily life because these people pay a horrible toll for regulations that are the best example of the worst kind of unfunded mandate. I really think that a sympathetic approach based upon the impact, personal impact of people who are trapped at these sites would be one of the best things that you can do.

    Mr. WAMP. Will the gentleman yield?

    Mr. BOEHLERT. By all means.

    Mr. WAMP. For one other question. I don't mean to keep you here too long. But it raises that entire continuum on the devolution of Superfund and Federal programs back to the State and the local government. What is your gut-level response to the possibility of block granting these funds back to the States or do you believe that this is one of those areas that you can't expect the States to accommodate cleanup efforts, not just a veto on the local level but literally State cleanup efforts with Federal dollars just flowing back to the States and the States being responsible for the cleanup efforts? And I think I know what your answer is, but I would like to hear it.

    Ms. THORNTON. I would—again, it is making sure we would have adequate Federal funding for cleanups. I believe we should have some minimum standards, at least, to make sure there is no race to the bottom, if you will, by the States, would depend on the ability of individual States. I think you heard that earlier. But we as the local level certainly could not tolerate it if a State decided simply to do nothing. I mean, that is another fear, sort of the flip side of what we are seeing here, what you are hearing about as the way the law is crafted today.
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    Mr. LEVIN. I think that your proposal, based upon the way I happen—my department works with my State agency, be very acceptable. If there was some mandated standards, you know, but if there was a block grant going to the State, I mean, we are working with the State every day. The State gives me demolition money. The State works with me on cleanup. I mean, I have a perfectly reasonable relationship with my State's Department of Environmental Resources.

    Mr. WEICHSEL. I am just a little unclear. Are you saying don't change the law and just have the Federal Government give some grants as subsidies to the States?

    Mr. WAMP. I am just talking possibilities and theoreticals. If you really look at the overall—while we are looking at reauthorization, look at all your possible options.

    Mr. WEICHSEL. To be candid with you, as I hear that, I don't think that would work too well. I think it would have been better if we were to address the reforms I mentioned in my prepared and my summary remarks, change the law fundamentally, let the existing taxes pay for it on that basis and you will be better off than shuffling money back and forth and then will get into difficulties at your end of it, not so much ours.

    Mr. WAMP. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you. I want to thank all the panelists. Our next hearing will be Tuesday, June 20, this room. Business insurance and contractors will give us their perspective.
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    This hearing is adjourned.

    [Whereupon, at 1:08 p.m., the subcommittee was adjourned.]

    [Insert here.]

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