Segment 4 Of 6 Previous Hearing Segment(3) Next Hearing Segment(5)
SPEAKERS CONTENTS INSERTS
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91–722CC
1996
SUPERFUND REAUTHORIZATION
PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.
(104–22)
HEARINGS
BEFORE THE
SUBCOMMITTEE ON
WATER RESOURCES AND ENVIRONMENT
OF THE
COMMITTEE ON
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TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
JUNE 13, 1995 (STATE AND LOCAL PERSPECTIVES)
JUNE 20, 1995 (BUSINESS, INSURANCE, CONTRACTOR PERSPECTIVES)
JUNE 21, 1995 (ENVIRONMENTAL AND COMMUNITY GROUPS)
JUNE 22, 1995 (CBO, GAO, AND SUPERFUND ''THINK TANKS'')
JUNE 27, 1995 (FEDERAL AGENCY PERSPECTIVES)
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
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BUD SHUSTER, Pennsylvania, Chairman
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DON YOUNG, Alaska
WILLIAM F. CLINGER, Jr., Pennsylvania
THOMAS E. PETRI, Wisconsin
SHERWOOD L. BOEHLERT, New York
HERBERT H. BATEMAN, Virginia
BILL EMERSON, Missouri
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
SUSAN MOLINARI, New York
WILLIAM H. ZELIFF, Jr., New Hampshire
THOMAS W. EWING, Illinois
WAYNE T. GILCHREST, Maryland
Y. TIM HUTCHINSON, Arkansas
BILL BAKER, California
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
PETER I. BLUTE, Massachusetts
JOHN L. MICA, Florida
JACK QUINN, New York
TILLIE K. FOWLER, Florida
VERNON J. EHLERS, Michigan
SPENCER T. BACHUS, Alabama
JERRY WELLER, Illinois
ZACH WAMP, Tennessee
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TOM LATHAM, Iowa
STEVEN C. LaTOURETTE, Ohio
ANDREA SEASTRAND, California
RANDY TATE, Washington
SUE KELLY, New York
RAY LaHOOD, Illinois
BILL MARTINI, New Jersey
DAN FRISA, New York
TODD TIAHRT, Kansas
RICHARD H. BAKER, Louisiana
JAMES L. OBERSTAR, Minnesota
NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
WILLIAM O. LIPINSKI, Illinois
ROBERT E. WISE, Jr., West Virginia
JAMES A. TRAFICANT, Jr., Ohio
PETER A. DeFAZIO, Oregon
BOB CLEMENT, Tennessee
JERRY F. COSTELLO, Illinois
PETE GEREN, Texas
GLENN POSHARD, Illinois
BUD CRAMER, Alabama
BARBARA-ROSE COLLINS, Michigan
ELEANOR HOLMES NORTON, District of Columbia
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JERROLD NADLER, New York
PAT DANNER, Missouri
ROBERT MENENDEZ, New Jersey
JAMES E. CLYBURN, South Carolina
CORRINE BROWN, Florida
JAMES A. BARCIA, Michigan
BOB FILNER, California
EDDIE BERNICE JOHNSON, Texas
BILL K. BREWSTER, Oklahoma
KAREN McCARTHY, Missouri
FRANK MASCARA, Pennsylvania
THOMAS C. SAWYER, Ohio
GENE TAYLOR, Mississippi
JUANITA MILLENDER-McDONALD, California
ELIJAH E. CUMMINGS, Maryland
Subcommittee on Water Resources and Environment
SHERWOOD L. BOEHLERT, New York, Chairman
ZACH WAMP, Tennessee, Vice-Chairman
DON YOUNG, Alaska
THOMAS E. PETRI, Wisconsin
HERBERT H. BATEMAN, Virginia
BILL EMERSON, Missouri
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WILLIAM H. ZELIFF, Jr., New Hampshire
THOMAS W. EWING, Illinois
WAYNE T. GILCHREST, Maryland
STEPHEN HORN, California
BOB FRANKS, New Jersey
JACK QUINN, New York
TOM LATHAM, Iowa
STEVEN C. LaTOURETTE, Ohio
BILL MARTINI, New Jersey
BUD SHUSTER, Pennsylvania
(Ex Officio)
ROBERT A. BORSKI, Pennsylvania
ROBERT MENENDEZ, New Jersey
ROBERT E. WISE, Jr., West Virginia
JERRY F. COSTELLO, Illinois
GLENN POSHARD, Illinois
ELEANOR HOLMES NORTON, District of Columbia
JAMES A. BARCIA, Michigan
BOB FILNER, California
BILL K. BREWSTER, Oklahoma
KAREN McCARTHY, Missouri
GENE TAYLOR, Mississippi
ELIJAH E. CUMMINGS, Maryland
JAMES L. OBERSTAR, Minnesota
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(Ex Officio)
Subcommittee on Coast Guard and Maritime Transportation
HOWARD COBLE, North Carolina, Chairman
TILLIE K. FOWLER, Florida
DON YOUNG, Alaska
SUSAN MOLINARI, New York
BILL BAKER, California
VERNON J. EHLERS, Michigan
BUD SHUSTER, Pennsylvania
(Ex Officio)
BOB CLEMENT, Tennessee
ROBERT A. BORSKI, Pennsylvania
PETE GEREN, Texas
ELIJAH E. CUMMINGS, Maryland
JAMES L. OBERSTAR, Minnesota
(Ex Officio)
(ii)
CONTENTS
Proceedings of:
June 13, 1995
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June 20, 1995
June 21, 1995
June 22, 1995
June 27, 1995
July 11, 1995
TESTIMONY
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
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
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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PREPARED STATEMENTS SUBMITTED BY WITNESSES
Colman, James C
Gimello, Richard J.
Harding, Russell J.
Levin, Bennett
Strock, James M.
Thornton, Susan
Weichsel, John
SUBMISSIONS FOR THE RECORD
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
PREPARED STATEMENT SUBMITTED A MEMBER OF CONGRESS
Poshard, Hon. Glenn, of Illinois
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Barth, Richard A.
Kaplan, Dale
Klingenberg, Arnold
Mallen, Michael
McIntire, Lee
Morningstar, Mary P
Reilly, Bernie
Spisak, John F
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SUBMISSIONS FOR THE RECORD
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
PREPARED STATEMENTS SUBMITTED BY WITNESSES
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Florini, Karen
Jackson, Milton
King, Linda Price
Miller, Carl
Smith, Velma M.
Tarpoff, Craig,
Trieste, Marion
Williams, Patricia Randolph
SUBMISSIONS FOR THE RECORD
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
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
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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PREPARED STATEMENTS SUBMITTED BY WITNESSES
Acton, Jan Paul
Clay, Don R
Dyckman, Lawrence J
Frost, Edmund B
Magee, Dr. Richard
Probst, Katherine N
Taylor, Jerry, Director
SUBMISSIONS FOR THE RECORD
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
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Browner, Hon. Carol M
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Davison, Robert
Goodman, Sherri W
Grumbly, Thomas P
Johnson, Barry L., Ph.D
Schiffer, Lois J
SUBMISSIONS FOR THE RECORD
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
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Ewing, Hon. Thomas W., of Illinois
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Mineta, Hon. Norman Y., of California
Traficant, Hon. James A., Jr., of Ohio
PREPARED STATEMENTS SUBMITTED BY WITNESSES
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
SUBMISSIONS FOR THE RECORD
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
ADDITIONS TO THE RECORD
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:
Statement
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.
SUPERFUND REAUTHORIZATION: CBO, GAO, AND SUPERFUND ''THINK TANKS''
THURSDAY, JUNE 22, 1995
House of Representatives,
Subcommittee on Water Resources and Environment,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:25 a.m., in Room 2167, Rayburn House Office Building, Hon. Sherwood L. Boehlert (chairman of the subcommittee) presiding.
Mr. BATEMAN [presiding]. The subcommittee will come to order.
Let me explain that I am in the chair because our chairman and colleague, Congressman Boehlert, has been engaged with the base closure and realignment commission this morning, who apparently have done his bidding and removed Rome Air Force base from the base closure list, and I think attendant to that he has been delayed in getting here. It is a happy justification for his immediate absence. He will join us shortly.
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The chairman has an opening statement and I will leave it to him as to whether he makes it or has it entered into the record when he does arrive.
Now, I call on Mr. Borski for any opening statements he cares to make.
[The prepared statement of Mr. Boehlert follows:]
[Insert here.]
Mr. BORSKI. Thank you, Mr. Chairman.
Let me state I will make my statement a part of the record by unanimous consent, apologize to our witnesses because we are running late.
I do want to compliment the chairman for scheduling this hearing. These hearings, the series, have been particularly informative and I particularly look forward to hearing from our colleagues today.
Thank you, Mr. Chairman.
Mr. BATEMAN. Thank you, Mr. Borski, and your statement will be made a part of the record. It is now my pleasure to recognize under the procedures of the House a member of the committee, William Zeliff.
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Bill, we will be happy to hear from you at this time.
Mr. ZELIFF. Thank you, Mr. Chairman.
With your permission, I would like to yield to my colleague from Connecticut, Nancy Johnson, who has to go back to chair another meeting, so if that is okay, and then I will take up right after she is done.
Mr. BATEMAN. That is more than agreeable and we welcome the gentlelady from Connecticut and my classmate Mrs. Johnson.
TESTIMONY OF HON. NANCY L. JOHNSON, A REPRESENTATIVE IN CONGRESS FROM CONNECTICUT
Mrs. JOHNSON. And I thank my friend, Mr. Zeliff, for allowing me to go first. He, too, has a busy schedule, so it is a sacrifice and I appreciate it.
Mr. Chairman, I want to thank you for the opportunity to speak with the committee today regarding an issue of great importance to my home State of Connecticut, Superfund reform. I have studied this issue for many years as a member of this committee during the 1987 reform and as a member with the lives of many small businesses, local homeowners and senior citizens, deeply damaged by the unfairness of this law.
I have come to the conclusion that we must act swiftly to appeal retroactive and joint and several liability provisions. Just as retroactive tax increases are unjust, so, too, should we take a second look at requiring companies to pay for the cleanup of hazardous waste that they legally disposed of decades ago.
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For example, last year I introduced legislation to amend the Superfund law by removing all municipal landfills currently on the National Priorities List and terminating liability for potentially responsible parties. This proposal would require States to be responsible for submitting a cleanup plan for its municipal sites to EPA which would then be reimbursed—which would then reimburse States for the cost of cleanup.
Unlike the majority of Superfund sites with relatively few PRPs, municipal landfill sites trap hundreds of small contributors and the leachate is, in fact, the product of every user of Oven-Off.
The Barkhamsted Landfill, a model regional landfill constructed and permitted by all State and Federal authorities since its inception in my district, is since 1989 a Superfund site with 60 PRPs. The studies have estimated cleanup costs ranging from $7.5 million to $8.9 million.
This may not seem like a large amount of money here in Congress where recent budget cuts are expressed in billions, not millions. I assure you that to the homeowners, the small businesses and the four small-town governments involved in this Superfund site, these numbers cast a staggering shadow over the property tax increases those folks will be subjected to.
Last year just litigation fees exceeded the total special education budget for rural Colebrook, Connecticut.
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Further, the big PRPs retain expert environmental lawyers who enter into extensive litigation in an effort to reduce their burden of the cleanup costs. The large corporations are insensitive to the burden of the drawn-out legal process on small companies and small towns.
Bankruptcy and job losses have resulted and more are around the corner. This Superfund case with all its costs and the total paralysis it puts on home and business sales has the potential in the near future to literally wipe out the manufacturers of the northwest corridor of Connecticut and with it the nonresidential property tax base of these small towns.
How can we be a great manufacturing Nation, have a strong national economy when we wipe out good, responsible businessmen for things they either never did tragically themselves or when they did them, they were perfectly legal? And another example of the unfair and virtually limitless liability the Superfund law imposes on ordinary folks, I draw your attention to the liability at secondary sites.
Just because a PRP has settled its liability with EPA and other PRPs does not absolve it of further liability. For example, Solvents Recovery Service became a Superfund site in Connecticut, but had sent some of its waste to the old Southington Landfill, the town dump, which was also permitted and so on, which has also become a Superfund site.
Nearly 1300 companies, government agencies and municipalities paid extra to dispose of their hazardous waste at Solvents Recovery Service, a permitted recycler of hazardous substances.
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Finally, after years of costs, they have settled with EPA only to be named PRPs at the town landfill site. Because the waste was co-mingled and it is impossible to determine exactly what waste was passed on to the Southington landfill site, all 1300 PRPs continue to be at risk of incurring further cleanup costs due to actions beyond their control.
Fully 86 percent of all eligible parties accepted EPA's settlement offers, yet due to current Superfund law, their liability problems are not over. As a member of the Ways and Means Committee and the chairman of the oversight committee, I will be watching closely the action that both your committee and the Commerce Committee undertake.
As you know, Ways and Means must reconsider the Superfund tax provisions that expire this year, though we have not yet held hearings on tax provisions. I assure you that both I and Mr. Archer are very committed to reauthorization of Superfund in—this year and will assure that the oversight committee develops a tax mechanism that will support cleanup if you repeal retroactive liability at both the Federal and State levels.
And I would remind you that we are going to have to override State law in this area if we are really going to eliminate the PRP process. The PRP process generally—does now produce money for cleanup. If we are going to eliminate the PRP process, we are going to have to deal with money and what I am really saying to you is I am prepared to deal with that money and I have got backing on my committee to deal with that money.
So, in conclusion, Mr. Chairman, I urge you to move the Superfund reauthorization process through your committee in a timely fashion. It is universally acknowledged that we must enact significant reform in order to redirect efforts toward effective and appropriate cleanup actions and away from the morass of litigation that has tied Superfund in knots and consumed millions of dollars.
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I look forward to working with you on this opportunity—on this reauthorization and I thank you for the opportunity to testify.
Mr. BATEMAN. Thank you very much for appearing and for your very appropriate statement. And knowing the constraints on your time, I am sure that the Members will indulge you and themselves by asking any questions they might have in another setting.
Mrs. JOHNSON. Thank you. I appreciate that very much.
Mr. BATEMAN. With that and without objection from any Members, I will now call on Mr. Zeliff.
TESTIMONY OF HON. WILLIAM H. ZELIFF, JR., A REPRESENTATIVE IN CONGRESS FROM NEW HAMPSHIRE
Mr. ZELIFF. Thank you, Mr. Chairman. And your Freudian slip on mentioning opportunity was right on the mark. It is a great opportunity.
I thank you, Mr. Chairman. I appreciate this opportunity to appear before you and my own subcommittee.
I also appreciate the fact that we are holding these very important hearings, and where the real chairman and I may disagree on some of the remedies for the problems with Superfund, we do agree that we must move quickly to reform the program.
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I have been involved with the Superfund program since I was first elected in 1990. Soon after being elected, I learned that I had 14 National Priority List sites in my district and began walking each and every one of those sites. Each site had a potential liability of $25 million to $30 million.
After walking just a few sites, it became very clear to me that the program was an abominable failure and it was not working. Small towns were putting off building new schools or hiring new teachers and small businesses couldn't find the capital to expand and create jobs.
In the city of Londonderry alone, we have three Superfund sites. So you can imagine a small town in New Hampshire, a potential of $90 million that was not going into schools and other important priorities. I then assembled a task force of some 35 Members to study those problems, came up with some suggestions as to how to get the Superfund program back on track.
We came up with a series of recommendations which I then turned into H.R. 4161 last year, the comprehensive Superfund Improvement Act which we introduced into the 103d Congress. While there were many provisions of that legislation to effectively improve the Superfund program, the provision that received the most attention was a provision which eliminated both retroactive and joint and several liability under the Superfund program.
It is my very strong opinion that nearly every problem with the current program can be traced back to the liability standards currently under the law. If we look briefly at the 15-year history of this program, we will see that Superfund was created in 1980 with a trust fund of $1.6 billion to clean up what was then assumed to be a few dozen major waste sites. Congress increased the financing to $10.2 billion in 1986 and then to $15.2 billion in 1990.
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Despite these billions of dollars of taxpayers money being spent for such a laudable cause, we now see a mere 18 percent of Superfund sites have been cleaned up in that same time period. This raises the obvious question of whether or not we are in fact getting our money's worth.
It is obvious to me that we are not getting our money's worth and especially in these days of fiscal responsibility, it makes sense for major reform to make Superfund law more effective and much stronger in terms of total cleanup.
There is one group out there, however, that would argue that we are getting our money's worth.
You can imagine who they are. It is the armies of lawyers who spend years in court arguing every possible detail of Superfund liability. So when we look carefully at why this Congress has spent billions and billions of dollars and see a minuscule amount of action, there should be no question as to the culprit.
It is the current program's unAmerican and unjust liability system.
Ladies and gentlemen, if you like the O.J. Simpson trial, you would just love to see a Superfund trial unfold. Just listen to some of the questions that would have to be answered in the Superfund courtroom case:
Who deposited the waste?
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When was it deposited?
What was the actual toxicity of the waste?
Does toxicity have any bearing on liability?
How much waste did each partner—did each party deposit?
What exactly were the contents of what was deposited?
Was the community involved? If so, should it be held accountable?
Did they actually produce the waste or did they merely own the site?
Should the community's funding priorities be taken into consideration? A new teacher or school instead of an EPA mandated study of remediation cost?
Who pays the share of bankrupt parties? Does that share get split or does it get split at all?
How about the insurance companies? Do their policies cover the activities of the insured? If so, how much?
How does the PRP interpret their insurance policies and how did the insurance companies interpret their policies?
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Should banks and other lenders be exempt from liability for merely holding title to the land?
The list goes on and on and is endless. It should be clear that it is the liability system of Superfund which has brought this program to its knees. We can make all the reforms and changes we want to the Superfund program, but I assure my colleagues that if we do not make major changes to the liability system, we will all be back here again talking about the same thing, having the same conversations in just the next year or 2.
I have advocated the repeal of retroactivity and joint and several liability for several years now and in fact I offered amendments to last year's bill to repeal those liability standards.
There was a large amount of support last year for my idea, but this year we are seeing even more support. It is yet another burst of common sense that has taken over in this Congress since last November.
Allow me to share with my colleagues a paragraph of a letter signed 2 days ago by Chairman Shuster, Bliley and Oxley, the Superfund authorizing committee chairman, and I quote, ''At the heart of Superfund blame game is a system of strict joint and several and retroactive liability. If we, the authorizing committee, are to reform this program and get Superfund cleanup out of the courts and onto these sites, then we must comprehensively reform the current Superfund liability, including a repeal of retroactive liability'', end quote.
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I could not agree more.
In conclusion, I want to work with this committee and others to make this program work. I will soon be introducing legislation which we modeled on my bill from last year, H.R. 4161.
Included in that legislation will be the elimination of retroactive and joint and several liability which will be replaced by a binding fair share allocation system. We will also be putting forward a funding proposal that will clearly show we can pay for such a repeal without raising taxes.
It is based on a program which will transfer—transform the current Superfund tax system into a user-fee system. This will be combined with additional savings from a reform system using EPA's own numbers from last year's debate.
It will also have significant reforms to the remedial reform of Superfund which will bring common sense and rationality back to the system. Let me assure my colleagues that major liability can be done and it has to be done. Retroactivity is unfair, unAmerican and wrong.
The current Superfund law is the best example of bad legislation that I know of. We must and we will put common sense back into the process, get litigation out of the process.
Let's put our resources back into cleanup.
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Let's put common sense back into the laws we make.
Let's reform Superfund now.
Thank you, Mr. Chairman.
Mr. BATEMAN. Thank you, our colleague, Mr. Zeliff.
Let me comment on the debate of tort reform legislation. You may be reminded that I am something of a devotee of common law system which I feel has served this country extremely well for centuries. But when I reflect on the concept within Superfund of joint and several strict liability retroactively, I wonder what the framers of the common law must think have gone wrong with us.
Mr. ZELIFF. You are right on that one.
Mr. BATEMAN. It is an incredible combination of legal liability standards to be conjoined together.
With that, let me ask Mr. Quinn if he would object to come and preside as we turn to Mr. Borski for any questions he may have since I have to go off and make a speech that I don't particularly want to make, probably no one wants to hear.
Mr. ZELIFF. I would like to thank you, Mr. Chairman.
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Mr. BORSKI. Thank you very much.
To my distinguished colleague I just want to ask one question and unfortunately Mrs. Johnson had to run out. It is kind of the same question to her. We are currently spending somewhere in the neighborhood of $3 billion, half of it from the trust fund and half of it that we get from retroactive liability. Are you looking at spending $3 billion for cleanup?
Mr. ZELIFF. We are looking at taking pretty much the existing amount of monies that are there, making those resources more effective and putting them to work in cleanup by getting litigation out of the process. And we think we can do that with a combination of proportional share liability, moving the responsibilities back to the States, providing incentives for the States, getting the remedial process down to 24 months, getting communities involved doing risk assessment, trying to look at some new technology, putting flexibility back into the process. We think that there is enough resources here available as we switch it over to a users' fee to be able to get it cleaned up and to also deal with retroactivity.
Mr. BORSKI. Are we going to save about $3 billion? I am not sure.
Mr. ZELIFF. What I would like to do, what we said is our legislation will address the funding issue. I am not prepared this morning to give you that, but essentially it will involve no increase in taxes.
It will involve existing revenues and we will do everything we can to make existing revenues more efficient by getting out of litigation and putting it into cleanup. We do it by giving more responsibility to the States and local communities.
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We do it by reducing—the woman yesterday said she was thrilled it only took 6 years to come up with an answer on her particular problem. I am not thrilled with 6 years. I think we can do it in a lot less.
We ought to in 24 months come up with a decision, a record of decision on how to clean up a site and we ought to stop all this game playing and all the lawyer frenzy feed and put that money into cleanup. And so there is a lot of waste and inefficiency in existing law.
What we are really trying to say is let's put those existing resources to work, let's make it more efficient, more accountable. And yes we need oversight on EPA as well in the whole process. Somebody's got to be held accountable and I think when that happens, I think the money can go into cleanup.
Mr. BORSKI. Well, the gentleman makes a very good presentation and he is a staunch advocate for his position. Again, my major concern is the dollars. And if we get $1.5 billion from the taxes of the Superfund program now and you are not going to increase taxes and take $1.5 billion out of the system, there leaves a pretty big hole in my view.
Mr. ZELIFF. Well, I accept your challenge and Chairman Boehlert, same challenge to you. If we prove to you we can finance package, what I am hearing you say is right on, you will be a quick supporter.
Mr. BORSKI. I am saying that is one of my problems.
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Mr. ZELIFF. Just wanted to take advantage of my opportunities.
Thank you very much and I appreciate your—the nature of your questions.
Mr. QUINN [presiding]. Sounds more and more like the O.J. trial than you thought, Mr. Zeliff.
Mr. ZELIFF. No, this is more like the Claremont, New Hampshire thing between the Speaker and the President.
Mr. QUINN. Thank you, Mr. Borski. I believe the order in which we appeared Mr. Menendez was here before me. So I would ask if Mr. Menendez has any comments.
Mr. LaTourette.
Mr. LATOURETTE. Thank you, Mr. Chairman.
And Mr. Zeliff, I want to commend you on an outstanding presentation. I just had a couple questions. This is our third or fourth hearing on the question of retroactive liability. There have been differing opinions, actually differing opinions within the business community, which kind of caught me off guard the other day.
And the Superfund Reform 95 group, which I assume you are aware of, has talked about the repeal of retroactive liability, but ties it into a date certain of 1987. Is that something you are looking at?
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Mr. ZELIFF. Right. We are saying it is either December —probably December 31, 1986.
Mr. LATOURETTE. And how would you answer those who have come before the committee and indicated that the repeal of retroactive liability effective at the end of 1986 is fair to some industries and unfair to others?
Mr. ZELIFF. Well, I think the process that we have to do is not look at the special interest but look at what is right. And you know, there is not enough resources to go back, the people have already cleaned up their sites under this really dumb piece of legislation. Unfortunately, we can't compensate them.
There is not enough money out there to be able to go back and trace it from step one from 1980. So unfortunately, they will be a victim of the system.
What we are trying to do is take a very badly flawed law and do something and make it right, and from here on out, you know, what we have done is take a look at those people on retroactivity prior to 19—December 31, 1986. If in fact they did everything that was legal before the passage of the law, they will not be held liable, it will be paid for out of the fund.
That removes a ton of the liability process. Then when you go to the point where you hold people responsible for only their share, proportional share liability, that seems just to be fair and right. This seems to be about the American way of doing business.
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So we have got a mess on our hands. We really ought to do what is right and what is fair. When retroactivity is unAmerican and wrong and we just say we can't change it because we can't afford it, we have to find a way to afford it and change it because it is wrong, not because it appeals or helps a certain class or another class.
Mr. LATOURETTE. I not only appreciate those remarks, the other observation that I just wanted to ask you about in 4161, there were some that suggested that concurrently with the repeal of retroactive liability we should look at—again because of fairness, look at compensating those who have already borne the burden.
Did you look at that issue?
Mr. ZELIFF. I don't see there is any way, frankly. We have looked at that. There is no way we can do that. It is unfortunate.
But the question is it is not a perfect world out there. This is bad legislation. We have hurt people. How long do we keep hurting people when in fact we can say enough is enough? We have to apologize to the people that have been hurt but we don't have to keep hurting people.
So I think while we have to admit our problem and not be able to compensate people, we need to move forward and not keep doing a complete injustice.
Mr. LATOURETTE. I thank my colleague and I commend you for your leadership and look forward to 4161.
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Thank you, Mr. Chairman.
Mr. QUINN. Mr. Zeliff, I, too, want to thank you for your work in this regard, I think your one remark in your testimony where you actually visited the sites in your district and made those stops to see it firsthand comes home for me, too.
In Buffalo and western New York, we have had that situation at Love Canal, in Niagara Falls, that is near my district, where 22,000 tons of chemical waste were dumped into that area near Niagara Falls. I think your efforts to see first hand what is going on are commendable and the leadership you have shone on this issue for many, many years has come to fruition.
I have a longer statement for the record and would also like to ask unanimous consent to insert in the record a collection of statements from constituents back home from my part of New York State.
So without objection, it is so ordered.
[Mr. Quinn's prepared statement follows:]
[Insert here.]
Mr. Zeliff, any closing comments before we move to panel two?
Mr. ZELIFF. No. And just like you, we have a lot of folks in New Hampshire that worked awful hard for the last 3 years, served on this task force. It was open to anybody that wanted to serve.
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We have environmentalists, lawyers. We have PRPs. They have come down here at their own expense. They have testified. They have met with the highest levels of EPA and, you know, I think that last year's attempt at the bill, H.R. 3800, was an attempt to try to put some fairness, but didn't go far enough. And I was glad that, you know, we now have an opportunity this year to do it right and so we won't have to revisit.
So I thank you very much for the opportunity to appear before you.
Mr. QUINN. Thank you very much. I appreciate your time, Congressman.
Our second panel this morning consists of Mr. Eduond Frost, Ms. Katherine Probst, Mr. Don Clay and Mr. Jerry Taylor.
Would those panelists please move forward to the table?
Good morning, everyone. How are you? Thanks for joining us today.
The batting order is Mr. Frost, Ms. Probst, Mr. Clay and Mr. Taylor. So if that is okay with you, we will proceed in that order.
Also, I would like to remind the panelists that we are pleased to have you with us this morning. Your input, your thoughts that you share with us today are very important not only this subcommittee but the full committee and indeed the House of Representatives, as we move toward our discussion on the Superfund.
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I would also like to suggest that each of you try to keep your remarks to about 5 minutes or so and if it is all right with the rest of the committee, I would suggest further that we hear from all of you first before we individually ask our questions.
If that is okay, we would like to you begin, Mr. Frost.
TESTIMONY OF EDMUND B. FROST, ESQ., SENIOR VICE PRESIDENT AND GENERAL COUNSEL, CLEAN SITES, INC.; KATHERINE N. PROBST, SENIOR FELLOW, CENTER FOR RISK MANAGEMENT, RESOURCES FOR THE FUTURE; DON R. CLAY, PRESIDENT, DON CLAY ASSOCIATES, INC., AND FORMER ASSISTANT ADMINISTRATOR, U.S. ENVIRONMENTAL PROTECTION AGENCY OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE; AND JERRY TAYLOR, DIRECTOR, NATURAL RESOURCE STUDIES, CATO INSTITUTE
Mr. FROST. Mr. Chairman and members of the subcommittee, my name is Edmund Frost. I am the senior vice president and general counsel of Clean Sites, which is a nonprofit environmental organization established 11 years ago to encourage, contribute to and accelerate the cleanup of hazardous waste sites in the United States.
Thank you for the opportunity to testify today to present our views on needed Superfund reforms. In 1991, our board of directors launched a major initiative to study how the program was working and to determine what changes were needed in Superfund to make the program work better.
We published our recommendations in February 1994 in a report titled ''A Remedy for Superfund: Designing a Better Way of Cleaning Up America.'' I would like to submit a copy of that report for the committee's information and for the record and we would certainly be glad to supply individual copies to any Members who would like to have an easier opportunity to review it.
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Mr. QUINN. Hearing no objection it is ordered and received.
Thank you.
Mr. FROST. Superfund has been extremely controversial since it began and that controversy has been growing in intensity over the years. Private industry, environmental groups, community organizations, local, State, Federal Government, Members of Congress, even the President agree that the cleanup program needs to be changed.
As we developed our recommendations, it became clear that improving the process of selecting and implementing remedies and reaching settlements for voluntary cleanup were the most important areas where reform needed to be instituted.
Clean Sites proposes an eight-point program of change. Adoption of this program will substantially improve the Superfund process. It will result in faster cleanups, it will save millions of dollars at particular sites and billions and billions of dollars nationwide.
It addresses problems of community alienation and environmental justice. It will reduce the anxiety and conflicts that disrupt the cleanup process at specific sites.
Briefly, our eight points are as follows: first, authorize qualified States to take on the responsibility and authority for ensuring cleanup at most sites. A State that requests authority and has a qualified program that meets Federal criteria should be authorized to take over all of the nonNPL sites in the State and we think also some selected NPL sites.
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Second, establish State voluntary cleanup programs. Such voluntary cleanup programs when run by the States would protect PRPs from double jeopardy, from being—from complying with the State regime and then having the Federal regime still there. People need to be able to respond once and not be subject to dual legislative requirements. Voluntary cleanup, however, should not divert resources from the highest priority sites where you have real risk to public health.
Third, we would expand the opportunities for public participation in cleanup decisions and structure a more cooperative process for stakeholder involvement. Most sites should have a site advisory committee which includes all of the stakeholders.
Meaningful citizen participation as opposed to a mere opportunity to comment, which is the way it works now, will result in faster, more effective cleanups because citizens' concerns will be addressed earlier in the process while there is still an opportunity to establish trust and things haven't become polarized yet.
Fourth, make future site use a fundamental consideration in determining how the site should be cleaned up. Local government, with input from the affected community, should have the primary role in making future use decisions, and after cleanup, properties should be available for beneficial use as planned and new purchasers should be freed from liability for prior contamination.
Fifth, establish a national standard of maximum allowable residual risk, using the risk range specified in the current national contingency plan. That is the intent of the board, the intent of the range which is in the current regulation. The type of cleanup required to meet this general standard would depend at each site on the future land use that was planned and on the specific site conditions.
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Sixth, streamline the process of identifying and designing remedial measures. When PRPs are willing to cooperate, a collaborative process rather than a adversarial process with the bureaucrats can really speed up the design and we have been involved in a couple of test cases where we have cut design time as much as in half.
Seven, provide PRPs with stronger incentives and better tools to reach settlement. An efficient cost allocation system and possibly the ability of settling parties to collect penalties from nonsettlers would really encourage PRPs to come to settlement quickly and to expedite the return of the site to beneficial use.
Eighth, create a national strategy to promote the development of improved technologies that will clean up sites more effectively and at less cost. We think the Federal Government should develop this national strategy and help in coordinating research efforts and funding the development of some of these new technologies.
Federal facilities would be an ideal place to try out these new technologies and if you were able to develop and—and have confidence in some of the new cost effective technologies out of this sort of program, then they could be used nationwide by other people and it might really bring down the cost of remedial measures and allow people to go forward more quickly.
Although these eight points address distinct issues, they are all closely related. As a package they define an integrated program for change, a program which by requiring both statutory and administrative modifications will substantially alter the entire cleanup process and help it to achieve its goals more quickly, more effectively and at less cost.
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Thank you for asking me to appear this morning.
Mr. QUINN. Thank you, Mr. Frost. We appreciate your comments and the summary of all eight of those points will be very helpful to the committee. I thank you.
Ms. Probst, you are next. I would ask you to do what you just did, move the microphone a little closer for all the people in the audience to hear you.
We are pleased to have you with us.
Ms. PROBST. Thank you. My name is Kay Probst and I am a senior fellow at the Center for Risk Management at Resources for the Future.
Our association does not lobby and does not take positions on legislation or regulations or policy matters as an organization. And unlike many other think tanks, we have never been characterized as Republican, Democrat, liberal or conservative, a distinction of which my colleagues and I are very proud.
I want to stress that the views I present today are mine and mine alone based on research I have conducted on the Superfund program over the past 8 years. My testimony today focuses on only one of the many issues that Congress must wrestle with, the implications of eliminating retroactive liability.
When Congress created Superfund in 1980, there was little appetite even then for using general revenues to finance cleanups. Instead, Congress enacted new excise taxes on both the chemical and oil industries and later added a broad corporate environmental task, earmarking the revenues for cleanup trust funds.
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It gave the Government the right to hold liable for cleanup virtually anyone having any connection to the site, including current and past owners of the site, as well as those who generated the hazardous substances in the first place. Insurers have been brought into the Superfund liability net, as well as responsible parties have sued their insurers for reimbursement understand their policies generating sizable legal costs.
It is understandable that some would find the law's liability scheme unfair and seek to change it. As we are now 15 years into the program, however, it is crucial that we examine the implications of changing the current liability scheme on needed trust fund revenues and the pace and protectiveness of the site cleanup program.
In our recent book footing the bill for Superfund cleanups, my colleagues and I estimated that eliminating liability for hazardous substances disposed before 1987 at multi-party sites would require an annual increase in trust fund revenues of $1.4 billion, which is a doubling of the currents trust fund appropriations.
If retroactive liability were eliminated for all substances disposed of before 1987, trust fund revenues would need to be increased by over $2 billion.
What happens if the trust fund is not increased to cover the additional costs?
Other things being equal, the average length of time for Superfund cleanup would more than double from its current pace of 12 years to a mind-numbing 25 years. Changes that lengthen rather than accelerate the time it takes to clean up sites are not at all what those living near those sites wants to here. Alternatively, Congress could elect to scale back the extent of cleanup and this is more certainly the most likely option.
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Here I would offer a cautionary note. First of all, cleanup standards are the most important issue for Congress to address in reauthorizing Superfund as the amount of money spent on cleaning up sites far outweighs the amount going to transactions cost. This discussion should not be constrained by the need to make sure that the total cost of the program is precisely the same as current funding levels.
In addition, regardless of what changes, if any, are made to cleanup standards, it will be years before new regulations are written and actually affect the cost of remedies being implemented. We should not kid ourselves that eliminating retroactive liability and shifting responsibility for cleanups to the government is going to lead to cheaper, faster cleanups.
If Congress releases private companies from Superfund liability, this would actually increase the cost of site cleanups as private sector cleanups are approximately 20 percent less expensive than the government's. Shifting responsibility for cleanups to the public sector will add $3.4 billion to the total cost of cleaning up sites on the current NPL.
This is just about equal to the savings that are likely to be reaped in reduced transactions costs. Suppose Congress is willing to consider higher Superfund taxes in exchange for eliminating retroactive liability. Several principles should guide the thinking here.
The three taxes created to stock the trust funds raise only about $1.3 billion annually. Each of these taxes generate their own form of transactions costs called compliance cost, the time, effort and out-of-pocket expenses necessary to calculate tax liability and file the proper forms. The compliance cost of these taxes could well rival transaction costs incurred as a result of current liability standards.
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Congress should not fall into the trap of trying to make sure that any new taxes come from those industries who are benefiting from change in the Superfund liability scheme. While it may make everyone feel better if they believe that the cost of new taxes being proposed will be borne by those who nominally pay the tax it just isn't true.
In reality most taxes are passed on to all of us as consumers in the force of higher prices. For each new tax Congress adds to make the new financing scheme appear fairer, the net result is increased compliance costs.
Finally, there is the question of what kind of message would be sent to those who must comply with environmental laws if, after 15 years, the rules are now changed, and those who did comply with the law are rewarded while those who did suffer the consequences.
If companies are not reimbursed for site study and cleanup costs they have incurred to clean up sites on the NPL this would send a clear message it is okay to wait to see if Congress is really serious when it enacts new environmental laws because maybe they will be changed in the future.
Even if PRPs are reimbursed and this would require even larger increases in the trust fund, it is still a troubling signal to send regarding the sanctity of our Nation's laws, not only to corporate America but to State and local governments as well.
Thank you very much for inviting me to testify here today.
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Mr. QUINN. Thank you, Ms. Probst. We appreciate your input and also the time frame that you got it in under the 5 minutes.
Thanks very much.
Ms. PROBST. I tried.
Mr. QUINN. Mr. Clay, would you continue, please?
Mr. CLAY. Thank you, Mr. Chairman.
I am pleased to be here today. I am Don Clay. I have had the opportunity to implement the Superfund program between 1989 and 1993 and in time reflect on the fun I had doing that since then. So my perspective today is as one who has tried to implement the program so I have come to you as I tried to do it, gave it a shot and teed up the issues, I think.
I commend the chairman, the whole committee, on the broad approach of all points of view and reflect back on the more warmer reception we had in this committee than in some of the other committees because you are more used to dealing with large, cumbersome programs.
I want to cover several areas today. My thoughts are a bridge in the gap between liability, cost effectiveness and remedy selection. A few observations how I think it might be useful to fix the remedy selection process and why I think that is the key to the issue, and then some general observations on other things that might be useful to look at.
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The key to fixing Superfund I think is to fix the remedy selection process. We need to have remedies that—where we can have—that are more cost effective than we have now where the risk reduced is somewhat commensurate with the cost of reducing it.
I think if we can reduce the cost of fixing it, then the liability problem or who pays is at least easier, is very intractable as you have heard from many of the witnesses already. But if you have to raise less money, it has got to be easier to do that.
I believe we have to shift from the contamination orientation to a risk-based one. So while I, among others, used to ask the question of how clean is clean, I think now perhaps that is the wrong question. We need to shift to ask is the site really safe.
We need to have more of a risk orientation. How clean is clean implies cleanup itself is a goal and I really think it ought to be is the site safe. And that is still oversimplified because there you have got to ask what is safe over what sort of time, and you have to ask the community, make sure they believe it is safe, and you may have to go back and revisit it; but, again, away from the cleanup for cleanup sake and more into a risk focus.
How do you do that? I would start out, I would eliminate the preference for permanence. I would eliminate the preference for treatment. I would certainly relook at the ARARs and I would at least look at eliminating relevant or appropriate part of that.
I think too often these requirements have unnecessarily increased the cost of cleanups with little or no benefit to the public protection of human health or the environment. You need to ensure realistic risk assessment, which is in the eye of the beholder, and you have to make sure you use realistic land assumptions about the future use of the lands.
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Other observations I have is you have got to set realistic goals. You have got to make sure of the goals you want and you have to clearly articulate what Congress expects in the program, because in many cases, you get conflicting goals and then keep score and people tend to go to what you have in mind.
For example, the 1986 amendments said it was very important to start things, but you can start things for a nickel, finishing them up is harder than that. So don't say start them.
If you want to finish things, you ought to put those kind of goals in there. We seem to be wrapped up in process in Superfund a lot.
I am not a lawyer, but do we have the right people involved? Has everybody had a chance to participate? There are three sets of lawyers, is everybody happy? This, that and the other. We lose track we are trying to clean up and make things better.
I am a supporter now, was at the time, of more State and local government, the option of a greater role. This is the last environmental statute where you don't have it delegated to the States and I think you really have to go back and look at that. This is a lot of land-use decisions and that is best done at that area.
I know when I went to my first Superfund site, I was out on Long Island, I looked around, I thought why am I here? I looked around at some partially built condominiums. The answer turned out to be I was bringing $35 million.
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Beyond that, there was no value added from somebody from Washington being up there saying what should happen. It was a community problem. The National Priority List is counterproductive. It seemed like a good idea at the time. We revised it while I was there. But it just casts such a stigma.
You need some simpler, less burdensome way of sorting through. Being on or off the National Priority List has become such a big deal that I think it is counterproductive. And finally, whatever you do I think you need to save the response program, the fast response, the nonremediation part. It has been quite successful, quite a success story.
I think something like 4,000 have been done. A vast majority of the risk has been taken care of that. You want to make sure whatever you do that you don't do that.
The conclusion then I think you can bridge the cost effectiveness liability scheme starting out with remedy selection. Do that, I think the other will be easier. I think you ought to focus on the risk involved and not just on cleanup for cleanup things.
If you make a better, more rational remedy selection, I think you will have an easier job. And then finally, I urge you to define the goals of the program, how you expect the goals of the program to be judged over time, make them clear and then hold people accountable for them.
Thank you, Mr. Chairman. Pleased to answer your questions. I note right on time.
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Mr. QUINN. Thanks, Mr. Clay. I know a couple of us will have some questions for all of you when you are finished. I appreciate your testimony.
Mr. Taylor.
Mr. TAYLOR. Thank you Mr. Chairman.
My name is Jerry Taylor of the Cato Institute. And in the course of preparing for these hearings today, it occurred to me that the best definition of a target-rich environment is to be given 5 minutes to discuss the subject of Superfund.
I am really not here this morning to discuss how Superfund ought to be reauthorized or how it might best be reformed. My focus this morning is on why this law ought to be removed, root and branch, from the federal code.
Reform is not the proper discussion, I believe. I think the proper discussion is elimination of this law. The problems with Superfund are legion and surveyed in my written testimony.
There is quite literally nothing good to say about the law. So let me spend a few minutes this morning to briefly detail the worst of the laws problems before I turn to an agenda for repeal.
First of all, the joint and several liability standard as you have heard from several witnesses, not only today but probably over the last several years, are grossly unjust and blatantly violate the Fifth Amendment's guarantee of due process.
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PRPs are presumed guilty until proven innocent. Simple unsubstantiated accusations are enough to indict companies as PRPs.
Innocent parties who were not only complying with the law but were completely unaware of any harmful consequences of their activity are held criminally liable for their actions after the fact. Companies are held liable even when their practices were absolutely dictated by State and Federal authorities.
They might be required to put the waste in a certain facility back in the 1960s and now they are criminally liable for that act? It is hard to believe that if this had nothing to do with hazardous waste and it had anything to do with any other liability question, this law would not have been tossed out on its ear by the Supreme Court long ago.
Superfund has become a pernicious but stealthy engine which also redistributes income from the poor to the wealthy. There is a myth out there that Superfund is an example of an attempt to remedy environmental injustice, that somehow Superfund sites are located in low income arenas. That is simply not true.
Political scientist John Hird of the University of Massachusetts, Amherst, recently published a book for Johns Hopkins University in which he had much original research in which he found, ironically enough, the more economically advantaged a county, the more likely it is to have a Superfund site. And the higher the poverty level, the less likely a site will be found.
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After examining great volumes of data, Hird concluded, quote, what has never been conveyed is that virtually all Americans are paying for Superfund cleanups and probably regressively through higher product prices on mostly chemical and petroleum products. Thus, although Superfund is defended by grass-roots proponents as a populist reaction to the excesses of big business, the net effect of cleaning up abandoned waste sites is most likely to redistribute resources regressively from consumers and taxpayers chiefly to wealthier communities to bring up property values.
Second, I would argue that Superfund is at best utterly ineffectual at mitigating human health risk and protecting the environment. At worst, it does positive harm to both man and nature.
As Thomas Grumbly of Clean Sites, an engineering firm, noted recently, there have been about 2600 emergency actions undertaken since 1980 under Superfund and those actions, quote, have probably eliminated most of the immediate health risk posed by abandoned hazardous waste sites. The reason for that is the Superfund is directed mostly at eliminating future risk if the site were used as a residential housing development.
There are virtually no risks associated with current exposures. That was brought up quite pointedly by a recent study by the National Research Council. They found after examining the published literature that they could neither, quote, confirm nor refute the belief that Superfund sites present a risk to nearby communities.
Of course, it is always difficult to prove a negative, but after investing some $30 billion in one of the most expensive public works programs in national history, it is somewhat shocking to learn that there is no evidence that any good has been accomplished at all.
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There was a recent report looking at existing risk by UB in New England. The report examined 1,570 potentially harmful hazardous waste sites, only 59 of which were on the NPL. And that report estimated that just four cancer risks currently existed in all of New England from those 1500 sites.
William Cooper, an ecologist at Michigan State University, conceded, quote, if you had to do it—he was referring here to Superfund cleanup—on risk alone, you wouldn't spend any money on these things. I find that rather interesting.
Superfund is also a problem because the remedy selection process is not necessarily accomplishing anything; in fact, it might be doing harm. Superfund cleanups frequently expose workers to harmful chemicals, create hazard in the transport of waste, and shift environmental contamination to other media.
As again the National Research Council reported recently, remediation might, quote, create more of a hazard than would be caused by leaving such materials undisturbed. Similarly, the General Accounting Office found the facilities receiving and treating wastes are themselves responsible for serious violations of EPA regulations.
A recent study by the accounting firm Arthur D. Little found chromium and mercury, two frequently targeted chemicals in Superfund remediation, are virtually impossible to remove from normal soil and groundwater aquifers with current treatment technologies.
This is a great unreported story. Oakridge National Laboratory found the same thing. An EPA working group in 1991 found the same thing.
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There is nobody who can show there is any good thing done by these cleanups whatsoever; in fact, there is much evidence that environmental harm is actually being caused.
Anyway let's go to the—what does all this mean? Again, I conclude that Superfund should be removed root and branch from the Federal code and Congress should turn responsibility for remediation over to the States where it belongs. These sites are classic local problems.
A site in Nevada does not have national implications. It doesn't affect anybody in Chicago. And each site is a unique facility with its unique problems, with its own soil hydrology, with its own aquifer problems and has to be addressed individually.
The concept of subsidiarity demands that these things be dealt with at the local level. At best, I would recommend that Congress establish some sort of revolving grant fund which would aid the transition of cleanup to these States with virtually no or very, very minimal standards for cleanups and we on for there.
I see my time has elapsed and I am available for any questions.
Thank you again.
Mr. QUINN. Thank you, Mr. Taylor.
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And thank all of the panelists for trying to abide by our time frame. We are going to have some votes later on this morning so we appreciate your testimony and the information that you place in the record and that you can stay for questions.
That is probably most helpful to the Members. And one of the beauty of having panels is we hear information from both sides from reviewing and giving it to the States to the Federal Government ought to be involved because that is our purpose here that we hear all sides of the story.
Finally, Mr. Frost, just to get back to one of your comments and one of your eight points that you mentioned, I believe you talked a little bit about States' voluntary cleanup and moving—in that direction.
Can you comment for just a minute or two about that and what kind of cost, if any, even when you are talking about voluntary cleanup?
Mr. FROST. Well, what the States need to do to be able to have effective voluntary cleanup programs is they need to have the authority. If you have a Federal program which has authorized or delegated to States—and people use that word differently, but what I mean is that the State takes over the program and the State laws are the ones that are applicable and the Federal—in the case of an adequate and qualified State program, then the Federal law would not be applicable.
Part of that State program ought to be to encourage people to do voluntary cleanup and that means they have got to have an administrative system or mechanism where people can bring in their cleanup plans and programs, that somebody in the State is going to be available to review them and give a certificate of completion at the end so that future purchasers are assured—future users are assured that there is no longer any cleanup liability on the site.
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Mr. QUINN. When you talk about the State encouraging that kind of activity, how might a State like New York State where I represent encourage that to happen voluntarily?
Mr. FROST. Well, I think that what they would have to do really is have a good service of reviewing—they would have to have reasonable remedial standards because people aren't going to come forward voluntarily.
Mr. QUINN. That is for sure.
Mr. FROST. And then face some kind of really ridiculous remedial standard. So it has to be a reasonable remedial standard.
And then they have got to be able to promptly review what the company proposes to do and be able to certify it as having been done properly and completed when it is finished. And that requires some governmental capacity on the part of the State.
Because people don't want to—you know, sometimes people will do a cleanup just on their own and not get any release from liability, et cetera. But the property is still likely to just sit there fallow because it can't be sold and it can't really be put to reuse.
But if you have got an effective, voluntary cleanup program, then people will be able to come into the State government, get their remedial plans approved, have some supervision, get a certificate of completion and then that property can go back into the real estate market, and this is important for urban centers, which are trying to revitalize their cores.
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Mr. QUINN. Absolutely.
Mr. FROST. And so voluntary cleanup really is the way that it is done. I think people talk about the success of the program and everything. You really haven't judged what has taken place without understanding and having a measure of the amount of voluntary cleanup. Right now strict joint and several liability I think does motivate a lot of voluntary cleanup. I believe the difficulty of getting reasonable cleanup plans approved and getting a certificate of completion is of substantial impediment to—
Mr. QUINN. Thank you.
Mr. FROST. Voluntary cleanup programs are best done at the State level.
Mr. QUINN. Thank you. Appreciate your response.
Mr. Clay, very briefly, you make mention of the point of that National Priority List and all the anxiety that goes with that. You suggest, I think, in part of your statement that that be done away with. Do you suggest any options to replace that or take its place?
Mr. CLAY. It depends on how much you delegate to the States if you need a national system or not. Clearly, you need something that you can low key go through. But you have got to get rid of the stigma. You have got to go through low key and in fact assess the risk, to see if you want to do everything. I hope that is the State so there is not a big list of ones that are a problem, the stigma comes to it.
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Mr. QUINN. I am wondering outloud about being low key. Those of us in elected office, I am always concerned about constituents, residents think that when you low key anything that you have got something to hide, you don't want the public to know all the information and all the details. And it is a difficult balance and it has to be balanced.
Mr. CLAY. You have to involve the public. You don't propose a list and say these are the ones, the worst sites in the State and so on and so forth.
The amount of stigma that originally people with a lot of problems in Mr. Zeliff's district in New Hampshire because people originally thought this was a way to get money and they wanted listing sites and good news. That doesn't happen anymore. People will do anything, let me—I will clean it up, I will do anything if you just keep me off the National Priority List which has a stigma not just for the site itself but for the whole community involved.
Mr. QUINN. Right.
Mr. CLAY. You get into bank loans and what have you.
Mr. QUINN. I agree.
Mr. CLAY. You would have to work on it. I don't have the exact answer. It is something where you don't publish a list that these are the sites. Certainly you have to do some sort of assessment of the site, hopefully at a State level, not at a national level, on the voluntary cleanup.
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Mr. QUINN. Sure.
Mr. CLAY. I would observe several States have very good programs that already work. Illinois is good, New Jersey is not bad, Oregon, Washington. And the certificate of—the States not going to come back, the Federal Government is not going to come back and require you do more and that is very important to those people.
Mr. QUINN. Thank you very much.
Mr. Borski.
Mr. BORSKI. Thank you, Mr. Chairman.
Mr. Taylor, let me start with you, if I may, sir.
You advocate a repeal of the current statute and the distribution of the accumulated trust funds. It is estimated at the end of this year there will be about $3.4 billion.
Do you think that is sufficient funding to take care of the existing 1200 Superfund sites and, if not, how do you propose to fund any shortcomings?
Mr. TAYLOR. Well, in a perfect world this is a State responsibility and Federal taxpayers, frankly, should have very little to do with it. But since we do have $3.4 billion, I recommend we hand it out to the States to cushion the transition to State undertaking of the program.
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So I would suggest that that is probably sufficient for the purposes of what we are talking about, which is basically cushioning the States from an immediate assumption of obligation. But let me caution you, I don't mean to suggest by saying that we should distribute this money to the States for the first several years of this program that this necessarily indicates that I would concede that there ought to be any Federal role here whatsoever.
These are local problems and I simply do not see why taxpayers from Florida should have to bail out local communities in, you know, a far part of the country for a local problem. These are local matters. The concept of subsidiarity, which our country was founded upon, suggest that local problems ought to be dealt with by local officials. This is just a way of transitioning that.
Mr. BORSKI. Ms. Probst, do you favor the repeal of retroactive liability?
Ms. PROBST. I try to stay agnostic on it.
Mr. BORSKI. Do you think if we did repeal retroactive liability that there is enough money to adequately fund the program?
Ms. PROBST. Not at current cleanup standards and perhaps not even for some of the proposals that are being made to lessen site cleanup standards, no.
Mr. BORSKI. Mr. Clay, same question. I will get to you, sir.
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Mr. CLAY. I have taken the position as an implementer you can implement any of them as long as you have the money. As Mr. Zeliff said early on, you have got to go back and figure out how you are going to pay for it.
I think from an implementation standpoint you can repeal or not repeal. It is very frustrating dealing with the problems you have and there is a hidden cost because everything you are doing is always going to end up in liability.
You can get frustrated with the lawyers. So I have not taken a position one is better than the other. If you were starting over again, which you are not—clearly you would never start down this path, I think. But that is—that is the wonderful advantage of hindsight of looking back. You are there now, you have got one that did, you have gone for a distance. The question is how do you transition to something else. Big problems. But from an implementation standpoint, repeal or nonrepeal can be implemented.
Mr. BORSKI. What about the $1.5 billion, is that enough to run an acceptable program in your view?
Mr. CLAY. No, no. You really have to worry about the money. That is my judgment. Not the program you are running now.
Now, you can save money if you go to the remedy selection. If you do that you are going down now—now clearly you are going to be going more into containment, keeping the problem from spreading and looking to the future and there is a long-term tail with that.
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I don't mean to imply that if you do away with permanence in treatment that there is not a consequence. But I think you can do that. So perhaps if you can get enough of that, if you change the remedy selection, perhaps, but I don't know. You have to take a look and see what you can save first.
Mr. BORSKI. I appreciate greatly your testimony on the remedy selection. We are going to take a good hard look. I think there are a lot of good suggestions there. But I guess my question to you would be if we can squeeze some money out by changing the remedy selection, shouldn't that go to more cleanups?
Mr. CLAY. I would tend to do that, yes. I think—there is more than just human health involved, too. I disagree with a little bit with my colleague at the end. I agree the response program has been very effective and that is where most of the risk reduction is done.
Society values a lot of groundwater and groundwater protection even though you are not drinking it right now so there is no risk. I think people, society as a whole, nonpartisan, likes the idea of clean groundwater and is willing to spend some amount of resources on that.
So I have shared the frustration of trying to clean up groundwater from fowling the whole nest. So I think there are values to remediation beyond just the immediate risk of the health, and I think society ought to spend some amount of money on that.
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Mr. TAYLOR. If I can for just one moment.
Mr. BORSKI. Excuse me, sir.
Mr. CLAY. I am sorry.
Mr. BORSKI. Sir, excuse me. Let Mr. Frost answer.
Mr. FROST. These are personal views, not Clean Sites views because we don't really have a position on repeal of retroactive liability. But I guess I would note that the responsibility of owners and operators for stewardship of their land is not a retroactive liability.
It is a common law liability and that common law liability was strict joint and several. And so I am somewhat surprised as I listen to some of the rhetoric about the liability scheme.
It is a very tough and hard scheme on some people and I think the unfairness quite often makes it difficult to move the program forward. If you—if you want to repeal the liability scheme and rely on some kind of public works program or other public funding, I think you would have to put into your calculation the amount of voluntary—let's say ''voluntary cleanup'' that you would use, because there are a lot of people out there that are cleaning up their back 40 and taking care of it, just getting after it who are doing it because they don't want to face that liability scheme, and I think that you would lose some very substantial amount of corporate stewardship regarding their land holdings if you eliminated the liability system.
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My only thoughts about where you might look if you wanted to—if you wanted to work on improving the liability system, I would offer that you could have your staff pull out the Superfund bill that came out of the House Commerce Committee in the spring of 1980.
It was the Staggers' committee then, and they had a bipartisan compromise that came out of that committee and as—as a committee print, it was—it dealt with some of these problems about allocation and about strict liability and defenses and things like that in a pretty interesting way. And it might be that if you turn back—this is just pure recollection, I think it was maybe H.R. 4086, but if you looked at that, you might find some interesting ideas there about how you could improve the liability system without just throwing it out.
Mr. BORSKI. You want to respond to the second part of that question. Can we run a program on $1.5 billion if we do lose it?
Mr. FROST. Without a—as a public works program, I would think not.
Mr. BORSKI. At the level of $1.5 billion.
Mr. FROST. And I think even—even assuming substantial reform and remedial requirements, it is still going to cost money to get the hot spots and to—and to—and when you—there are many, many locations which do require cleanup which have not really surfaced yet because they have been essentially warehoused behind fences and are not—there is a lot to go through still and $1.5 billion would not be enough.
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Mr. EWING [presiding]. Mr. Poshard.
Mr. POSHARD. Thank you, Mr. Chairman.
Mr. Taylor, I apologize for getting here late. I just got in on the end of your testimony but I wanted to ask you a couple things. Is it my understanding then that your organization, if given and choice, would prefer to do away with Superfund altogether or give it back to the States? Which of those are preferable to you?
Mr. TAYLOR. Well, our organization doesn't have positions on policy issues. I am testifying on my own behalf today. That having been said, our position is that this is not a Federal matter. This is a local matter.
If there are risks being presented by sites, they are local matters of concern and ought to be dealt with by local officials. That is as far as it goes for this Congress.
Now, if you were to ask me if I were a local official or State legislator would I recommend my own State Superfund program, perhaps I would recommend something along those lines. But the State taxpayers and the local taxpayers ought to be taking care of it.
There should be a laboratory of democracy here where each State can experiment with their own approaches on Superfund; many States have been very successful. And for the most part, I think it is misleading to ask, well, with the three-odd billion dollars, whatever we have, would be able to currently fund Superfund at the State level. Well, the problem is we are cleaning up sites only because 1 day if they are used for residential developments they might be a threat. Why would—why can't we allow local communities to say, look, we just won't use it for local residential development. We will wall it off and we will use it for industrial use.
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Mr. POSHARD. You answered my question.
Let me get to other—let me get to another question to you, because I find your testimony fascinating in a way. But I didn't realize this was you testifying individually. I thought this was your testimony as Director of the Natural Resource Studies for the Cato Industry.
Mr. TAYLOR. I just want to clarify we are a 501(C)(3) organization that doesn't lobby for or against legislation, but when I am asked to testify, I do.
Mr. POSHARD. In your statement, you say that to deny that cost is relevant to regulatory policy is implicitly to deny the reality of economic scarcity and the corresponding reality of opportunity cost. Money spent on the Superfund risk is money not spent on something else including the ability to protect public health in other ways, et cetera.
Mr. TAYLOR. Right.
Mr. POSHARD. Will you elaborate on that a little bit? Because that is a huge issue out here with respect to many things, not just Superfund.
We are $4.8 trillion in debt. We are spending 21 cents of every tax dollar this year and the interest on that debt. We can't possibly meet every existing need pertaining to health or even other issues in this country. So on the scale of one to 10 in meeting those kinds of needs that exist across the spectrum, where do you put Superfund and can you just elaborate on that?
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Mr. TAYLOR. Sure. Actually, this has been discussed in several science advisory board reports at EPA, Unfinished Business in 1987 and Reducing Risk in the early 1990s. Both of those reports indicated that Superfund and groundwater contamination were rather low-level environmental problems compared to other problems.
A point Mr. Clay brought up is worth discussing in this context. He suggested that groundwater remediation is something the American people want and it is something worth investing our time in. Well, again, every single study that seriously examined the issue found not only that we haven't the faintest idea that we are doing any good, but there is no evidence we have remediated any groundwater aquifer despite the billions we have spent.
In fact, there is a lot of evidence to suggest we are doing more harm than good. By the very process of pumping, treating and refilling that aquifer, we are driving pollutants deeper into the aquifer, causing even more of a pollution problem. Legislation should not be about good intentions. Legislation isn't symbolic.
It actually has real impact. And simply because we want to deliver a symbolic message that we care and if we are doing more harm to the environment than if we had done nothing, I don't think anyone deserves a pat on the back in Congress.
Mr. POSHARD. Okay. Again, so just—I want to ask the same thing. Let's give other people time to answer that question also. So it is a low priority for you.
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Mr. TAYLOR. It is a low priority and the money we are spending remediating a low priority problem and not necessarily doing any good is money we are not spending on other health care problems or police protection or other environmental threats that deserve our attention.
Mr. POSHARD. Okay. I appreciate that.
Would anyone else want to comment on that?
Yes, sir, Mr. Frost and then Mr. Clay.
Mr. FROST. I have done a lot of work on real site remediation programs over the last 15 years, and sometimes the groundwater treatment is very important and very effective in terms of protecting resources that communities rely on. And when you have got a drinking water aquifer that has been contaminated and people are going to need to use it, it needs to be cleaned up.
And sometimes you have people remediating groundwater based on hypotheticals where there is not really any—any purpose, and it needs to be a site-specific determination. These—these remedial matters need to be based on some common sense and some practicality. But what Mr. Taylor suggests is that groundwater treatment has never been of any use and it is probably harmful doesn't strike me as having anything to do with the reality of the situation I have worked with in the field.
Mr. POSHARD. Thank you, Mr. Frost.
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Mr. Chairman, may I ask Mr. Clay to answer that question?
Mr. EWING. Yes.
Mr. POSHARD. Go ahead, Mr. Clay.
Mr. CLAY. I was one of the authors of the ''Unfinished Business'' Mr. Taylor referred to in 1987. I did the cancer subgroup. And I agree at the time and still agree that Superfund was at best a medium priority problem and clearly I think we can spend less money there. I would clearly make sure, as I said in my statement, say to save the response program because I think that is a very effective program, the first $200 million.
Beyond that, it is up to Congress to debate how much more you want to spend. So to get back to Mr. Borski's question, do you want to spend a billion-and-a-half, you can do almost anything you want to. You can run a program at almost any level you want to. I would suggest at least over 200 million to the States.
The groundwater as an issue is quite right, Mr. Taylor is quite right. Oftentimes the original assumption was groundwater was sort of everything mixed up, you pump it up, treat it and it goes away.
It is not that way. You have the dense liquids. Chemicals go down and they don't mix. They just go down and they run with gravity. The groundwater is going uphill, the chemical is going downhill.
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In general, though, you don't make the problem worse. They are very careful. They are very cautious.
Second, you can keep it from spreading even if you can't pump it up, which gets you into perhaps the role of the government is to invest in technology to maybe clean it up someday. You can keep it from spreading. You generally don't make it worse.
Occasionally you can if you are not careful, you can do that. But I do think it is worth it. It is a value that Congress is paid to make those kind of tradeoffs. I think you can run it at almost any level.
But I would certainly save the response. That is where you have the immediate problem. The remediation, restoring the thing is something that can be done competing with other priorities.
Mr. POSHARD. Thank you, sir.
Thank you, Mr. Chairman.
Mr. EWING. Ultimate fairness to Mr. Poshard, we are trying to share the chair today.
Mr. POSHARD. Thank you.
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Mr. EWING. I guess I am next on the list here. I am sorry, I didn't get to hear all your testimony. I think I know where Mr. Taylor would be on this.
But the rest of you know as a nonscientific person who is representing people who are personally affected by the Superfund law, not just as taxpayers but as those who may be the recipient of it, it appears to me that this legislation does not provide for any practical cleanup in many cases.
The Superfund program is impractical—and therefore we have litigated and we have stalled and we have spent many, many dollars for things that didn't clean up the environment.
Would any of you like to refute that or agree with it? Start with you, Mr. Frost.
Mr. FROST. I think that over the years the extremely stringent remedial standards, which are kind of the—which are hypothetically required, have—have caused a great problem. The people—when people understand that the level of cleanup, you know, getting all of the soil down to some ridiculously low level even though it would never expose or hurt somebody or treating ground water very expensively when it is not going to be used or when indeed if it ever were used it could be treated at the point of withdrawal, the waste of money in order to meet pristine standards has created a whole lot of conflict and a lot of litigation and conflict has to do with the remedial scheme and the way that has somehow gotten askew.
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And I think that the public also doesn't trust it because when the communities come together and they understand this struggle, they don't—they are not seeing practical and common sense measures which quickly respond to the real risk. My view is much like Don Clay, is that if you get the remedial program fixed up—and that needs to start with some statutory changes to Section 121 and Don had the right list, the preference for treatment and permanence and the ARARs is where you start.
If you have got the remedial program fixed up and if that was an example for the States in their own program, then I believe that there would be much less litigation, settlements would be a lot easier, transaction costs would go down. People find it—corporate people find it a lot easier to pay for things that are wise and necessary than they find to pay for things that are foolish and wasteful.
And you would get settlements much more quickly. So I would start with fixing up the remedies and after you do that and have a vision of how that is going to work, then it is going to be much easier to make the changes in the liability scheme which are necessary to produce fairness and efficiency.
Mr. EWING. Would you put the liability scheme on hold until we get the horse in front of the cart?
Mr. FROST. I think the liability scheme will continue to be debated. I don't think anybody could put it on hold.
But I think—I would hope that the congressional committees would really work on the remedial and program elements first and that is getting the right remedial scheme and getting the process more—very substantial delegation to the States. And when you do those, then—then the debate about the liability, which has been ongoing, is going to be—is going to be simplified.
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And it would—I have seen it in the past that people find it so easy to get wound up about liability issues, justice, fairness, all these things, that the liability things are driving—are in the driver's seat and the remedial issues don't get solved.
Mr. EWING. Mr. Clay.
Mr. CLAY. The thrust of my testimony was in fact that I think you have to fix the remedy scheme first. I think we have wasted money. I think the 1986 amendments with the permanence and treatment and the ARARs didn't add a lot to public health and safety.
I will go on to say also though risk isn't the problem, isn't the whole problem, that you have with Superfund, you have a lot of outrage of people that—if you—if people live near a site, they are very angry about it.
They know they live near the site. They are very angry. They didn't cause it.
They feel that their health is being impacted, their property values are clearly being impacted and what have you. You compare that with the ozone problem and you can generally go out in Washington, DC, on any given day and ask them how many times was D.C. in nonattainment for ozone last year and the answer is no one knows. I don't know now, I don't watch that.
But it was probably—so that is a bigger problem. But if you live next to a Superfund site you know it, you are angry about it, you want to fix it. And if you go back again to the unfinished business and compare that with the Roper poll where do people perceive the risk to be, the highest risk to the country is always hazardous waste sites—hazardous and abandoned sort of go back and forth—which is not where the experts think it is, but they are in fact mad about it and they want something done about it.
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Mr. EWING. Yes, sir. And D.C. was noncompliance yesterday, I believe.
Mr. CLAY. How many last year?
Mr. EWING. I have no idea.
Mr. CLAY. Same here and I live here.
Mr. EWING. If you listen to the radio, they will tell you that day.
Mr. CLAY. They will tell you if it is going to be that day. But you know, the seeds are out, your lungs are turning to leather and you don't care.
Mr. EWING. You are shaking your head. Do you want to add to that?
Mr. FROST. I think I really support what Don said which is that the Congress has got to wrestle with the cleanup standard. What happened to EPA now is the law is pretty clear it wants relatively stringent cleanups, although frankly EPA has managed to move away from that. If you look at what they do, there are a lot of institutional controls and a lot of containment.
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I think if Congress wants a risk-based standard as opposed to cleaning up contamination, they ought to say so. What happens now is there is a lot of criticism of the agency for spending all this money and yet it is pretty clear under the law that they are supposed to spend all this money. And I think this issue of do you want contamination cleaned up versus do you want to keep people from the site, which is what containment means, is the critical policy issue.
I also think a lot of people think contamination ought be cleaned up. It is a moral value that we should not contaminate the land. An economic theory would suggest that people value it highly, that it is worth paying for as a country. And I think that is a choice that Congress needs to make. We can have a containment program, although most people are sort of weary of institutional controls, meaning keeping people off the site.
It is not clear that those things really work over time. But I think it is the most important issue. I don't think liability will go away.
My one comment on liability is I think Congress is kidding itself if it thinks you can get rid of joint retroactive liability at the Federal level and the States are going to do a whole hell of a lot. I mean, the reason the States are doing something is to keep the Feds out.
The reason there is voluntary cleanup is to keep the Feds out. So when you take away the Federal program, in fact, the States will all follow suit, we won't have any program.
So I think Congress needs to think pretty carefully. Do they want no program or do they want a program at some level?
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Mr. EWING. Thank you. My time is up.
Mr. Horn.
Mr. HORN. Thank you, Mr. Chairman.
I have listened with interest to your various suggestions. Let me get back to one area that I think concerns all of us that is overriding.
We have heard from States, municipalities, companies affected by the excessive cost and cleanup that many feel we should at least partially eliminate retroactive liability to relieve the financial burden and the quagmire of litigation that goes on. What I would like to know is, is there any way to first solve some of the liability problem that is obvious if there is an industrial site in the older parts of the Nation that might well have been owned by one company and its predecessor companies for 50 years, 100 years, no problem there.
It is when you have this multiple ownership over the years and we are still sitting around arguing over who is responsible for what when we aren't completely sure. Does it make any sense to put an arbitrary limit on multiple ownership in terms of the most recent 50 years or the most recent 25 years or what?
Is there a way we could get at this problem to quit all the litigation and start going about cleaning up the sites?
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What is the suggestion?
Ms. Probst.
Ms. PROBST. I testified about this before. If what you wanted is to get rid of transaction costs and that was your main objective, and putting the insurance litigation aside for the moment, you would just take co-disposal landfills or large multiparty sites out of the liability system. And if you did that, you would probably get 80 percent of the transaction costs out of the system.
It is not fair, but I don't think any of the alternatives are fair. I mean somebody pays who wasn't paying and if you don't compensate past people who have paid—so it is one way that you could get rid of a lot of the, quote, bad things about the liability system and keep the good parts. Some people will then say, well, why should they get out and not us?
I think there is not an alternative that has been proposed on liability that is fair to everyone. So yes, you could just declare certain landfill sites, recycling to be out of liability and do it that way. Again, somebody will tell you it is not okay, but—
Mr. HORN. How do you make that criterion?
How do you write a law that gives guidance to know exactly what one should do as the implementing agency?
How would you write it?
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Ms. PROBST. I guess I would write it as a facility that accepted hazardous substance or waste on a fee for service. I wouldn't try to do it on a single owner definition because you will never be able to do it. There are subsidiary corporations. And it is something we didn't analyze in the NPL.
I think there has probably got to be public records whether you have charged money for hazardous substances or waste. And those are both commercially owned as well as publicly owned. It doesn't differentiate whether it is the town of Southhampton or WMX.
It would treat them equally, which is kind of nice. So I guess if I were going to do it, not being a lawyer, I would do it on that basis because they must have a permit that says they were allowed to take waste that would include—I would craft it to include recycling because there are about 90 recycling sites. So, again, taking in waste or hazardous substances on a fee-for-service basis would get you most of the big multiparty sites.
Mr. HORN. How about those nonmultiparty sites?
What would you do with a typical plant, so forth, that might be there now? It is 30, 40 years old and maybe the plant site has had five different owners and maybe they are obvious, but maybe some of the damage was done before there was the plant there. It might have had other types of disposal, we are not sure.
Ms. PROBST. Right.
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Mr. HORN. How do we handle those?
Ms. PROBST. Personally, I think if you start trying to deal with those as well you get into definitions that are so difficult to defend and so difficult to understand, they are going to be litigated.
I mean, if I were carving out, which is what you are talking about, some portion of the site, I would want a definition that is pretty unambiguous. I think if you try to do this, the site changed hands, you are going to get companies that sold it to their own subsidiaries. You are going to get into a mess that you should just eliminate liability if that is what you want to do.
I mean, I do think there is a choice of do you want to keep liability or do you want to get rid of it, or do you just want to carve out what is an easily, relatively easily identifiable subset.
When you talk about those kinds of companies, you know, if you take—WMX, for example, has bought up tons of other companies. What do you do with that?
I think that that is a very messy area. And if you want to get rid of those as well, then you might say, well, do a different approach where you really gut the liability system. It is just too messy.
Mr. HORN. How many of you think Ms. Probst's idea is a good one?
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Ms. PROBST. I am sorry?
Mr. HORN. I am asking how many of you think her idea is a good one or do you see some problems with it?
Mr. FROST. I think that once you have a pretty clear vision of how extensive the remedies are going to be and you know where the burdens are going to fall and you can have a good judgment about where things will be either unfair or, you know, beyond the capability of one or another, you can go back to the liability system and do some fine tuning.
I would offer, getting to my suggestion, the way the bill came out of the Staggers' committee in 1980, before it was amended on the House Floor, would be—it would be kind of a neutral place to look and that bill had an allocation scheme rather than joint and several, a mandatory allocation scheme and it had more defenses for—for innocent people than the bill did after it wound up passed by the House.
If you look at that bill, that might be a place to see how legislative language has been crafted to deal with some of those problems. I think you can—you could go through and if—you might reach a judgment that under the common law that is developed, lenders need some additional relief in order to make them feel safe in advancing money to finance Brownfield cleanup and there are—there have been some pretty well thought out lender liability provisions that give them protection but don't give away the store.
It may be that municipalities are going to need some relief just because of the overwhelming burdens that could be placed on the city governments. And you know, those are going to be legislative judgments, but how much relief the municipalities are going to need will be very much dependent on what you come up with as a remedial scheme.
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Mr. HORN. Does either Mr. Clay or Mr. Taylor want to comment on this exchange?
Mr. CLAY. Without taking a position on where you should start doing carve-outs, I would endorse her opinion making it as litigation-proof as you can. And that is a change for me because when I started in government many years ago, I always thought you would leave it to the discretion of the administrator or the executive branch.
But having seen the amount of litigation that spawns, whatever rule you would have, I would urge you to make it simple and put it in the statute. While that violates my sense of how public policy should be made, as the pragmatic person implementing it, that is the only way you are going to make it happen.
So I don't endorse the idea of let's see if we carve it out, make it go away. But if you were going to do it, do it by the legislation and put it there. Look for where will they litigate? Because if we have lawyers, they will come. And so you have got to—you have got to worry about that.
Mr. HORN. Mr. Taylor, you want to comment?
Mr. TAYLOR. Well, just briefly.
I think that when we discuss whether so-and-so ought to be liable or not or who ought to be liable or not, we should think along the lines of making the guilty pay or the responsible pay and not just how many deep pockets can we tap into because we don't want to spend the public's money directly.
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We want to spend it indirectly through higher tax or higher prices at the sales point. Look, it seems to me then if you have got a situation like a recycling facility, the owner of the recycling facility at the time that created the mess ought to be liable. That just stands to reason.
That is western jurisprudential thought. The idea that the guy who drove the truck to deliver cans to that recycling facility ought to be reliable is hooey. It isn't hooey in Superfund, it is the law, but it does not make any sense to anybody. The idea that a company that sells their materials to a recycling facility five States away ought to again be liable under joint and several liability would strike no one on the face as particularly fair.
Joint and several liability was originally having to do with the idea that, well, if you have, for example, five people going to rob a bank and the guy who drove the getaway car didn't actually involve himself in the bank robbery should be liable well, of course and joint and severally says it should.
Not the way it has been applied in Superfund. I think that just from a position of due process and justice that the liability standard today is absolutely indefensible and what we ought to do with it ought to be from that standpoint, not how can we figure out a way to tap into deep pockets and how can we make this a conflict-free situation.
Mr. HORN. Thank you very much, Mr. Taylor.
I want you to know anything we do in this subcommittee will pass the common sense test. We all agree that Superfund was well intended, it strives to meet worthy objectives, but there is need for a significant reform and we are going to be about that business, reforming Superfund. In the final analysis, I hope we will come up with something that pass your common sense test as well as mine.
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Mr. Borski.
Mr. BORSKI. I thank you, Mr. Chairman.
Mr. Frost, you testified that citizen involvement will expedite cleanups, yet Mr. Clay in his testimony said that public participation can delay cleanups.
Mr. FROST. I think it is a matter of when and how you involve them. If you have got a site that is perceived by the neighbors to impact them, then it would be a very good idea to get them involved right in the beginning because that is how you are going to be able to build trust and that is how you are going to be able to get people to understand that they are going to be protected.
And I had one experience with citizen involvement, I happened to be the number-one dump site on the NPL when it first came out. There was a threat to the Minneapolis drinking water intake system and what we did in order to effectuate a voluntary cleanup is we got the citizens involved in every way we could right from the beginning.
We made all of our engineering processes and all of our documents available and really just ran an open book and finally had a long hearing before the Minnesota Citizens Pollution Control Board and I thought that the early citizen participation was critical to our being able to move forward quickly with a voluntary cleanup because if the people in Minnesota had distrusted us, we would have been shut down. And I think, you know, I think it is—
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Mr. BORSKI. Appreciate that.
Mr. FROST. I have a personal belief that early sunshine is a way to—is a way to get the public to agree to common sense remedies.
Mr. BORSKI. Mr. Clay, did you want to respond?
Mr. CLAY. Sure. I have mixed—I am mixed about that, obviously. I had tried it both ways. As a matter of fact, I gave money to Clean Sites as I was leaving the government to try to support that to get people to say that—assert this happens and it doesn't necessarily happen.
My point in the testimony was though that if you want me to go faster and do this, then I can go faster if I don't do that. I will in the longer term. I think if you are going to go, as Kate said, to a containment-type approach, I think you have to involve the community.
I think the community has to accept the community, it is safe to do that. I am not against that. I am saying it is a conflicting goal.
Do you want to go fast? Do you want to involve people. If you want to involve people, fine, but don't say go faster. Involving people takes time. Maybe over the long run it doesn't, but I have yet to see the data that in fact over the long run that is true.
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Mr. FROST. My experience is idiosyncratic.
It is just what I have run across over the years.
Mr. BORSKI. Mr. Clay, let me ask what criteria would you recommend for determining whether a State is qualified to administer the Superfund program and for determining which NPL sites would be handled by the State and which by the Federal Government?
Mr. CLAY. Go with the qualified one first. I would have fairly minimal requirements at the State.
I think there is too much second guessing of whether the EPA at the State is qualified or not. So I would have some basic standards, their own statutes, things like that and some sort of system in place.
But I would not have a great detailed check list. Which sites from the NPL would be handed over is a question of how much money you are going to give them and what kind of transition that you can go through. So in terms of the qualifications, minimal qualifications, too much Federal oversight and second guessing States they have, clearly a statute, some sort of a program, a desire to do it. I think a lot of States are not necessarily happy to do this. I mean, you should not just listen to the States that that say, hey, give me the program.
Those are States that are running well-run programs. Other States don't want it. They have very few sites. They don't want to get involved, they don't think they have the talent, so on and so forth.
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So don't think all States are going to come running even if you offer them money because some will not. You have to have some sort of hybrid system.
Mr. FROST. On page 18 of the recommendations we published last year, we said that the criteria ought to be technical capability, funding and staffing, legal authority, enforcement process and judicial remedies, public participation provisions and protection of human health and the environment consistent with the goals of Superfund. A qualified State ought to be able to have all those.
Mr. BORSKI. Thank you.
Mr. FROST. So that is what our board thought last year and it certainly makes sense to me.
Mr. BORSKI. Thank you, Mr. Chairman.
Mr. BOEHLERT [presiding]. Thank you.
Thank the panelists very much for your input. We will very carefully weigh your words of wisdom.
We are going to do our best and, Mr. Taylor, we want to come up with something that, as I indicated before, passes the common sense test.
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Thank you. Let me ask the third panel for an informal caucus, if you could come up here for a moment, Dr. Magee, Mr. Acton and Mr. Dyckman. We have a vote in the House right now so I am trying to see what our panelists' schedules are like.
What we are going to, since we have a vote on right now and since there are people that have busy schedules, we are going to recess until 1:15. That will give the panelists and others a chance to grab a bite and that will give us a chance to go over and vote.
Mr. BOEHLERT. The committee will be back in session.
Our third and final panel, I thank you for your indulgence of our schedules, Dr. Richard Magee, Director of the Northeast Hazardous Substance Resource Center, Newark, New Jersey; Dr. Jan Paul Acton, Assistant Director, Natural Resources and Commerce Division, Congressional Budget Office; and Mr. Laurence J. Dyckman, Associate Director, Environmental Protection Issues, Resources, Community and Economic Development Division for the General Accounting Office.
Gentleman, you may—any guests at the table?
Ms. Butler, you are with?
Ms. BUTLER. GAO.
Mr. DYCKMAN. This is Sharon Butler. She is the environment—she is from our Chicago regional office. She is the evaluator in charge of the work that I am going to be testifying on today.
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Mr. BOEHLERT. Super. And welcome to the committee. The panel will go in the order that they are announced.
Is it Dr. Magee?
You will be first.
TESTIMONY OF DR. RICHARD MAGEE, DIRECTOR, NORTHEAST HAZARDOUS SUBSTANCE RESEARCH CENTER; JAN PAUL ACTON, ASSISTANT DIRECTOR, NATURAL RESOURCES AND COMMERCE DIVISION, CONGRESSIONAL BUDGET OFFICE, ACCOMPANIED BY DR. PERRY BEIDER; AND LAURENCE J. DYCKMAN, ASSOCIATE DIRECTOR, ENVIRONMENTAL PROTECTION ISSUES, RESOURCES, COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY SHARON BUTLER, EVALUATOR
Mr. MAGEE. Thank you, Mr. Chairman, members of the subcommittee. I am Dr. Richard Magee, Director of EPA's Northeast Hazardous Substance Research Center, a consortium of seven universities in which the New Jersey Institute of Technology, or NJIT as we call it, is the lead institution.
I would like to thank the members of the subcommittee for allowing me to submit testimony for the record on behalf of the Nation's five hazardous substance research centers or what we call five HSRCs. In particular, I would especially like to thank Congressman Franks for his commitment and support of NJIT's efforts in the Superfund cleanup.
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The five HSRCs form a peer-reviewed, competitively established, broad-based, comprehensive national research base which supports all the Federal regions and involves 27 universities and 17 States and the District of Columbia. The Superfund Amendments and Reauthorization Act of 1986 authorized EPA to establish these centers.
I might point out based on some of the earlier testimony this morning, Mr. Chairman, it was then that the government—we talked about the role of government investing in technology, took place. Since their inception in 1989, the centers have achieved a high level of success and hence is one aspect of the act that is working well and you can take credit for it.
I would like to share with you what the HSRCs do, their accomplishments, their vision and their request for continuing assistance. The HSRCs are unique primarily because they were established to solely support Superfund research and technology development.
The HSRCs are a new paradigm for university-based research integrated with technology transfer efforts and which research is collaborative and interdisciplinary, is focused and coordinated to ensure a significant impact on challenging problems, spans basic research to technology demonstration and is conducted using a long-term interdisciplinary strategic research and technology development plan.
In short, the HSRC's focus on the basic science and engineering that are fundamental to understanding the environmental processes required for design and development of innovative remediation technologies. And by that I mean technologies that are faster, better and cheaper.
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Environmental remediation technology developed by the HSRC have progressed from the concept and laboratory stage to field demonstration at Superfund sites around the country. The centers' technology and transfer training programs which include training videos, short courses, technical briefings, workshops, technology seminars and technology design manuals are reaching the mainstream of the U.S. environmental restoration community.
Without question, the HSRCs are recognized nationally as critical resources for solving hazardous waste management problems through the use of science and technology. As one example, last year the HSRCs conducted over 200 research projects which included one-half of EPA's entire research projects on bioremediation.
What is our vision for the future, Mr. Chairman?
The HSRC program is playing a major role in helping the Nation meet the challenge and vision for Superfund. That is knowledgeable, timely and affordable control and management of the risk posed by hazardous waste. To accomplish this public mandate, the HSRC program over the next 5 years is committed to the following four objectives: one, improved characterization of hazardous waste sites.
One of the major problems today is adequately characterizing these sites so the proper remediation technology can be chosen. In one of the centers—in fact, it is our center—we have developed field methodization technologies that have estimated to save the Navy $10 million, this site that was way behind in remediation cleanup in Arizona.
Second, to develop, demonstrate and commercialize five new affordable environmental remediation technologies. In other words, Mr. Chairman, add more and better tools to the tool chest to get on with the job.
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Third, develop new risk management strategies which, if successful, we believe will serve to reduce and save billions in Superfund costs.
You heard a lot this morning in the testimony of the need for not only cleanup, but the need for appropriate risk management strategies, and I believe if we are going to tackle this problem and solve it, we not only need the tools to clean up, we also need the tools to adequately manage these sites.
And finally, provide the technology transfer to the risk management and remediation communities.
How can you help? The Hazardous Substance Research Program, we believe, is a cost effective and measured response to the challenge of cleaning up our Nation's Superfund sites. However, the program has not been able to keep pace with the enormous demand and subsequent growth of activities at the five centers.
An important factor in the centers' growing financial demands is the cost of conducting field demonstrations of research technologies and the central activity for transferring critical research information and findings to the field. These costs were not considered in the initial legislation.
Moreover, training and technology transfer activities related to risk management and remediation has increased substantially. With the continued support of Congress and EPA, the centers have tremendous potential to continue to contribute to the Nation's overall Superfund program.
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We, therefore, respectfully request the subcommittee's continuing investment in the HSRC program as a viable solution to managing more efficiently and effectively the Nation's remediation efforts. Specifically, the HSRC seek an increase of funding from $5 million to $15 million a year authorized for 5 years.
While the federal assistance sought for this initiative is not insignificant, we are convinced it will pay significant dividends far in excess of the initial investment. Moreover, we are seeking a modification of the current Federal funding match formula in section 311(d) of the Superfund Act which requires the HSRC to provide a 20 percent nonFederal match for all funds received to allow funds from other Federal sources to be matched as provided for under the authority of those sources.
Mr. Chairman and members of the subcommittee, your past support has not only allowed the HSRC to contribute to solving what appears to many to be the insurmountable challenge of cleaning up America, but has provided the Nation with cost effective and unique technologies to approach the Superfund challenge.
I ask for your continued support.
Thank you for your consideration of my request. I will be happy to answer any question you may have.
Mr. BOEHLERT. Thank you very much, Dr. Magee. I would point out our colleague, Congressman Franks, has been one of your strongest advocates and he has convinced the subcommittee it is not a question if you will receive funding but rather how much. And I must compliment you on being so modest, only a 200 percent increase.
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No, we will get to—I want to advise all the panelists that your entire statements will appear in the record as presented and we would ask, as Dr. Magee did, that you try summarize and keep it to close to 5 minutes. Don't get nervous if the red light goes on because this subject is far too important to be restricted by time. But in deference to my colleagues who have other activities and other places, we would try to keep it on schedule.
Next, Dr. Acton.
Mr. ACTON. Mr. Chairman and members of the Subcommittee, I am pleased, on behalf of the Congressional Budget Office (CBO), to participate in your review of the Superfund program. With me is Dr. Perry Beider, who has been involved in all of CBO's Superfund analyses.
As requested, my testimony today will focus on likely effects of establishing a cutoff for Superfund liability. My written statement also discusses the current distribution of spending within the Superfund budget and the consequences of not reauthorizing the program's dedicated taxes.
Liability under the Superfund law currently is retroactive. That is, potentially responsible parties, or PRPs, are held liable for cleanup regardless of when sites were contaminated with hazardous substances. Some proposals would relieve parties of liability for actions that took place before December 1980 when the Congress enacted the original statute. Other proposals call for release from liability for pre-1987 actions.
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Proponents of a liability cutoff date want to eliminate the perceived unfairness of retroactivity and to reduce or eliminate the ''transaction costs'' of funding cleanup through a liability-based system. Reduction in transaction costs would be a gain in efficiency for the Nation as a whole.
The main trade-off inherent in a liability cutoff is that it would shift cleanup responsibility from the PRPs to the Federal Government, thus requiring some mix of cost savings, increased Federal spending, and reduction in the pace of cleanup. At this point, I must depart from my written statement to note some new information we received on Tuesday, June 20, from the Environmental Protection Agency (EPA).
My written statement observed the shortage of some key data and noted that CBO was actively seeking additional information with which to confirm or improve our existing analysis, particularly in regard to our assumption that PRP cleanup spending is 50 percent higher than reported in EPA's estimates. We made that assumption on the basis of previous reports that the agency's cleanups end up costing an average of 50 to 60 percent more than originally estimated, in part because additional contamination is discovered as cleanup proceeds.
Some people have challenged our analysis on the grounds that EPA's experience may differ from the PRPs' experience. However, the EPA figures themselves now seem to be the key issue. They are based on a formula involving the cost growth of the median project rather than on the dollar-weighted average cost growth over all projects in the data set.
When we learned this, CBO asked EPA to reexamine its data and calculate the dollar-weighted average. The preliminary results we received on Tuesday which had not been reviewed by EPA management suggested that the average cost growth may be closer to 30 percent than to 50 or 60 percent overall. In addition, some recent projects show essentially zero cost growth.
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If these preliminary findings hold up under closer scrutiny of the data and methods, we will revise our data accordingly. Yet, regardless of whether the best cost growth analysis turns out to be 50 percent, 30 percent, or even zero, it will still be true that a liability cutoff would yield, under favorable conditions, large percentage savings in the transaction costs of the present system. But there is no free lunch. Introducing a liability cutoff would significantly increase the cleanup burden facing the Federal Government. Let me illustrate these points.
First, in our existing analysis, repealing liability for pre-1987 actions saves the Nation as much as $1.1 billion annually in transaction costs, mainly from the private sector. The Federal Government faces a net increase in its cleanup burden, building up to $1.6 billion per year plus potential one-time costs for reimbursing PRPs. Those one-time costs could be as much as $7.5 billion for ongoing expenses under existing cleanup commitments and $6 billion for past costs. CBO's calculations assume that little investigation or litigation occurs over the legality of past actions.
If, instead, cost growth is 30 percent rather than 50 percent, the estimated savings in transaction costs are reduced to roughly $1 billion per year, and the increased Federal burden would be $1.4 billion per year rather than the $1.6 billion that I just cited. Potential reimbursement costs are $6.5 billion for ongoing costs and $5.3 billion for past costs.
Even if zero cost growth is assumed for current PRP projects, a 1987 cutoff would still shift $1 billion in annual cleanup responsibility to the Federal Government. Using an alternative cutoff date of December 31, 1980, would be somewhat less costly in terms of the increased demands on Federal cleanup resources, but it would also be less effective in reducing transaction costs.
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Again, assuming that illegal activity is a relatively minor cause of contamination at Superfund sites, we estimate that private and Federal transaction costs would fall about 50 percent and 30 percent, respectively, compared with 90 percent under the 1987 cutoff. The shift in cleanup responsibility to the Federal Government would build up to $1.3 billion per year assuming 50 percent cost growth, $1.1 billion per year with 30 percent cost growth, and roughly $800 million with no cost growth. The potential cost of reimbursing PRPs would lie between $3.7 billion and $5.5 billion for ongoing cleanup work and $3.2 billion and $4.4 billion for past work.
EPA data suggest that illegal activities may have played some role at one-third to one-half of non-Federal Superfund sites. If PRPs remain exposed to significant shares of liability at a considerable fraction of sites because their behavior is thought to have been illegal, the savings and transaction costs could be greatly reduced or even eliminated.
This concludes my oral statement. I would be happy to answer any questions that the Subcommittee might have.
Mr. BOEHLERT. Thank you very much. And now our final panelists, Mr. Dyckman.
Mr. DYCKMAN. Thank you, Mr. Chairman.
As you know, congressional interest has increasingly focused on the use of risk assessments as a way of controlling Federal spending on environmental problems. In the Superfund program, a risk assessment is conducted for every site on the National Priorities List, but questions remain about how EPA assesses the risks to human health and uses these assessments in cleaning up Superfund sites.
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Given these questions, I will discuss today the preliminary results from our ongoing review for this subcommittee on the extent to which EPA uses its human health risk assessments, as compared to Federal and State standards, in deciding both whether and how extensively to clean up a Superfund site. I will also touch briefly on whether standards themselves are based on quantitative estimates of risk and on the extent to which EPA follows its guidance in conducting risk assessments.
First, our preliminary results suggest that EPA's risk assessments do play a substantive role in determining whether a site needs to be cleaned up. In total, we looked at the decisions for 225 sites and at 84 percent or 188 of these sites, EPA's decisions were consistent with the risk levels reported in the risk assessments; that is, in the majority of the cases where the risks were significant, EPA decided that cleanup was necessary; where the risks were low, EPA decided cleanup was not necessary.
Our charts, on display, break down these data in somewhat more detail. In the pie unshaded area of the chart on the left, you can see that at 172 of the 200 sites EPA decided clean up was necessary, the risks were significant. In the unshaded area of the pie chart on the right, you can see that at 16 of EPA's no-action sites, sites that didn't need cleanup, the risks were low.
You will notice the shaded areas. These are the minority of cases, 37 in total, where EPA's decisions were not consistent with the results of the risk assessments. Again, as the pie chart on the left shows, EPA decided to clean up 28 sites where the risk assessment had indicated that the risks were low. And as the pie chart on the right shows, EPA decided no action was necessary at nine sites where the risk assessment had indicated significant risks.
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EPA told us that there are several reasons why it might remediate when the calculated risks are low.
One significant reason is the requirement in the current Superfund law that EPA comply with Federal and State standards, ARARs, that set numerical limits on the levels of toxic chemicals in the environment. At the Pacific Coast pipeline site in California, for example, EPA decided to clean up the groundwater because four contaminants were above Federal and State drinking water standards.
According to the risk assessment, though, the risks were well within the range EPA considers acceptable; that is, the chance of an additional case of cancer was less than one in 10,000 and there was no significant risk of any other illness.
For various reasons, EPA might decide not to clean up a site even when the risk appears to be significant by the calculations in the risk assessment.
Forv example, the chemicals at the site might be expected to degrade into harmless by-products in the near future, or certain assumptions made in the risk assessment might not be true.
Now, let me discuss cleanup levels. We found that Federal and State standards often dictate the extent of cleanup. Since standards require more conservative cleanup levels than risk assessments, cleanups based on standards could potentially be more expensive.
Our results are shown in the bar chart on display, as well as in my written statement, which you should have in front of you. At 139 sites for which we had data, standards determined the cleanup levels at about 100 of the sites and risk assessments at 40.
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More standards exist for groundwater than for soil. For groundwater, maximum contaminant levels from the Safe Drinking Water Act are used. So, when we broke these data down by types of media, we found that standards were used more often for groundwater than for soil to determine cleanup levels.
It is important to recognize that by using standards to determine cleanup levels, EPA is not ignoring risk. Federal maximum contaminant levels are derived from their own quantitative estimates of risk, although the risk-based levels are modified to take into account the cost and feasibility of meeting the standards.
EPA also uses its guidance on lead and PCB levels in soil to establish cleanup levels. This guidance, too, is based on quantitative estimates of risk, taking into account exposure levels. Our ongoing review also shows that State standards may be based on risk although they tend to vary. For example, some States have developed risk-based formula from which they derive cleanup levels for groundwater, while other States may require that at least some kinds of contamination be removed entirely. Exposure levels are not taken into account.
Finally, let me summarize the results of a study we completed last year on how risk assessments are conducted in the Superfund program. We found that in general, EPA risk assessments followed the ageny's guidance but that they were inconsistent in several technical respects. According to EPA, inconsistencies are to be expected. Risk assessment is not an exact science, and, consequently, EPA allows its staff considerable latitude to use their professional judgment.
But where the data are missing or inconclusive, EPA needs to explain what effects these gaps may have on the estimates of risks. We found that most of the risk assessments we examined did not do this.
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EPA officials have acknowledged that the risk assessments could do a better job of ensuring this kind of communication.
Mr. Chairman, that concludes my statement. I will be happy to answer any questions.
Mr. BOEHLERT. Thank you very much.
I want to thank all of you for adhering to the request that you condense your presentation. The full statements, as I indicated, will appear in the records in their entirety and our Members will be studying them.
Normally, the chair opens up with questions, but I am going to defer my questioning and recognize the champion on Capitol Hill of the HSRCs, Mr. Franks of New Jersey.
Mr. FRANKS. Mr. Chairman, I appreciate very much your yielding.
Mr. Chairman, I think there is a good deal still of misunderstanding about the source of funding for HSRCs. And, Mr. Magee, can you tell us, is the Federal Government in fact the sole source of funds for the HSRC and, if not, could you describe more fully the funding sources?
Mr. MAGEE. No, there is also some industrial funding sources. There is a match requirement on the base funding. There is some State funding. And then there is numerous Federal agencies.
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It is the—the Federal Government is a player but many Federal agencies have bought into the program because of the resources they have. So we have some industry funds, we have got some State funds, and we also then have Federal funds.
Mr. FRANKS. Could you describe the level of participation or some of the industries that have chosen to join with you in these efforts?
Mr. MAGEE. Well, I think there is a lot depending on the nature of the sites. In some cases, for example, there is a site in Michigan which involves quite a few PRPs that—I don't know if I want to get involved with the specific nature but had a TCE site involvement in the cleanup of that particular site.
I do know some of the major companies, such as Dow and others, that are doing surfactant-based research or supporting surfactant-based research through the center on the basis of cleaning up. Those are some examples that come to mind.
Mr. FRANKS. As you develop new technologies, do you get any royalties from the technologies that emerge from your work?
Mr. MAGEE. Technologies within the Federal Government can be licensed outside. They can go to small businesses. In some cases, we have technologies that have been licensed to small businesses and they are starting out and using those technologies which then come back, and depending on the universities, are jointly shared by the academic researchers and the universities, as well.
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Mr. FRANKS. One last question. Would changes to Superfund that would allow remedies to be selected on a site-specific, risk-assessment basis and changes that would remove requirements that currently are imposed by State and Federal governments generic standards, remove those generic standards, would it encourage the use and development of more innovative technologies in your judgment?
Mr. MAGEE. I think the answer is yes. I think we need as much flexibility as possible in looking at matching technologies to the risk at a particular site.
I think in some cases we are going to find that risk management technologies—and we are making some advances, for example, in what is called intrinsic bioattenuation, which is almost natural bioremediation which shows some great sites once we do some cleanup down to a particular level. That is an option.
I believe we are going to find in other cases that the technologies in our toolbox are insufficient to really economically address some of these sites and we may have to isolate and manage those sites for some time until we can afford to go ahead and clean them. I know in some of the testimony earlier this morning there was—there were a couple comments to the idea of the need to invest in technology.
I believe one of the major problems in this area—and liability is an issue and the other issues are not to be downplayed in any way, is that this is a relatively new field when you come to think about it. And the technological challenges of cleaning up some of these sites are immense. And it is only recently are we starting to learn for example that pump and treat, for example, which was the preferred way of treating groundwater, is just not going to make it, we will be pumping and treating forever.
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And we are starting to develop technologies that can now address for example the dado zone, which is where the contaminant is, to remove the contaminant. We are now learning ways to treat, rather than pumping and treat, treat the aquifer in place, some of the research coming out of the research centers. These are real. These are being used.
We have technologies that have moved out of the laboratory, and address a specific problem at the Hanford site, radioactive buried waste sites, major, major problems, okay, and we need these—these tools if we are going to go ahead and cost effectively both manage and remediate these sites and some will be managed and some will be remediated, in my judgment.
Mr. FRANKS. Mr. Chairman, I want to thank Dr. Magee for being here and I appreciate particularly your willingness to yield.
Thank you very much.
Mr. BOEHLERT. You are entirely welcome.
Thank you for your contribution.
Mr. Borski.
Mr. BORSKI. Thank you Mr. Chairman.
Mr. Acton, let me ask you a couple questions, if I may. Can savings from reforms in remedy selection or changes in cleanup standards be sufficient to offset losses in revenues to the trust fund in the event of retroactive liability repeal?
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Mr. ACTON. It would be possible to offset losses if there was sufficiently sweeping change in the liability system and if other cost savings were introduced into the program. They could take the form of Congress just authorizing more money out of general revenues.
It could take the form of less demanding remedies or it could take the form of extending the pace at which Superfund sites are cleaned up. However, based on the analysis that we have done, even with the revised numbers that I just indicated to you, it is unlikely that all but the most sweeping changes in the liability system would be sufficient by themselves to keep the program going as it is now with the cleanup and the pace that it now has.
Mr. BORSKI. So is it possible to implement a Superfund program which meets the expectation of the public if retroactive liability is repealed and no increase in funding of any other sort is in its place?
Mr. ACTON. I would defer to you and other elected representatives to know precisely what the expectations of the public are. They are diverse.
One of the points of view put forth is, of course, that if the objective of Superfund cleanups is to protect health and the human environment, some alternative remedies may do that just as effectively as those in use today. As your previous panel indicated, however, there is frequently a desire to do something about the Superfund sites that is independent of the risks that seem to be involved because people are concerned that they are living next door to an environmental hazard or is affecting their property values. I am not sure that all of those needs could be met.
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Mr. BORSKI. If we could assume savings in the Superfund program through any number of suggestions that we have heard through the process here, would you think they would be better used to speed up further cleanups or to repeal retroactive liability?
Mr. ACTON. The Congressional Budget Office by its charter does not make recommendations with respect to legislation. Speeding further cleanups and repealing retroactive liability are clearly two of the prominent alternatives that should be considered in the Congressional debate. I would be remiss if I did not point out, however, that addressing the deficit is something that CBO also routinely introduces into this kind of consideration.
Mr. BORSKI. What would be the likely effects on the removal program from repealing retroactive liability in your review?
Mr. ACTON. I am sorry?
Mr. BORSKI. The likely effects on the removal program.
Mr. ACTON. We have not studied the removal program in detail for its technical accomplishments, but I know it is widely viewed as one of the very effective components of the Superfund program. Both in its original form, which was relatively narrow—that is, limited in dollars and limited in time—and in its expanded form, which has a higher dollar ceiling—I believe it is $2 million—the removal program has been regarded as a very successful component of Superfund.
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Dr. Beider also notes that particularly under the enforcement-first policy that EPA introduced a couple of years ago, an increasing fraction of removals— perhaps on the order of one-third at this point are being carried out by the PRPs themselves.
Mr. BORSKI. So if retroactive were repealed.
Mr. ACTON. We might lose that one-third of removals—and the fraction is growing that are occurring in the private sector now.
Mr. BORSKI. Mr. Dyckman, can I turn to you? Should decisions on the need for cleanup and on the extent of cleanup be risk assessment or risk management decisions? And if they are risk management decisions, do you think EPA properly takes relevant factors into account and makes the proper risk management decisions?
Mr. DYCKMAN. Decisions on the need for cleanup and the extent of cleanup are risk management decisions that, necessarily, take into account a complex of factors, not just the estimates of human health risks developed in the risk assessment. The data I cited in my statement would indicate that EPA does take thr relevant factors into account in making these decisions, including the requirements of the law, techical issues surrounding the nature of the contamination (for example, whether the chemicals are likely to degrade in the near future), and site-specific information (for example, whether erosion is causing a landfill to break down).
Mr. BORSKI. With regard to setting cleanup standards, were EPA's hands essentially tied due to the law or did EPA generally use the flexibility available under the law?
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Mr. DYCKMAN. In some respects, EPA's hands are tied. EPA is required to comply with Federal and State standards that set numerical limits on the level of chemicals in various environmental media. In Particular, the agency must comply with those State standards that are more stringent than the corresponding Federal standards—for example, State standards restricting the level of contamination in groundwater used stringent than the maximum contaminant levels established under the Safe Drinking Water Act. As I mentioned in my testimony, in deciding to clean up the groundwater at the Pacific Coast Pipeline site, EPA used the Federal and State requirements as the criterion, even though the risk assessment indicated there was no significant risk. But EPA does take local conditions into account. At the Chem-Form site—the other example I cited in my testimony—EPA took into account, among other things, the fact that the groundwater, and consequently, decided that cleanup was unnecessary. I would describe EPA's decisionmaking, then, as a combination of locally based decisionmaking from a risk standpoint, with an infusion of national standards, ARARs—somewhere between the two alternatives you offered.
Mr. BORSKI. Okay, thank you, sir.
Thank you, Mr. Chairman.
Mr. BOEHLERT. Thank you very much.
Mr. Horn.
Mr. HORN. Thank you, Mr. Chairman. This morning I suggested to a panel that one option obviously with the retroactive liability situation is to sort of pick a year and say what would be the effect if you had everybody sort of excused and recused prior to that year unless there had been a single ownership of the property where it was very clear that a corporation did something over 80 years or 100 years.
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Have you got any optimum date other than the 1981 and 1987 dates?
I ask that of GAO and CBO which might be the best year where we could direct most of the resources at solving the problem rather than the euphemism of transaction costs and litigation fees. And if so, what would that be?
What comes to mind as you immersed yourself in the problem as the most optimum date for a cutoff, if you will?
Mr. ACTON. There are two considerations that are raised with your question, Congressman. One is the issue of fairness, and the other is the question of costs to the Federal Government. We could workup a number of alternative cases, and perhaps in consultation with your staff, we could select some that would be particularly attractive to you.
One of the reasons that some parties are drawn to 1980 as a possible cutoff date is the logic that says that one standard purpose of liability schemes is to change people's behavior, and clearly a firm cannot retroactively change behaviors that took place before the laws were even on the books. That reasoning certainly produces one legitimate date for the public discussion.
I think 1987, was chosen relatively arbitrarily by the parties who put forth that suggestion. Its main appeal is that it takes a large fraction of the sites out of consideration. So whatever benefits are associated with reducing the impact of the liability-based system, according to CBO's calculations the 1987 cutoff takes in more than 90 percent of the sites or 90 percent of the waste. And in between those two dates you can get almost anything you like.
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I don't think there are other any compelling reasons for selecting one date over another as being optional.
Mr. BEIDER. I would like to add a couple of points, if I may.
One is that the 1987 date has the advantage of eliminating most of the litigation and transaction costs associated with insurance coverage issues because of changes that have been introduced into the policy language by 1986. If you wanted to use other dates, the savings would start to fall off. We estimate that you would save as much as 90 percent of the transaction costs savings with a 1987 date. By the time you take the cutoff back to 1981, the savings that we are estimating there is probably on the order of 45 percent to 55 percent assuming that legality is not a significant portion of the problem at the Superfund sites. If you try and push it back much before 1981, the savings would be even lower.
Mr. HORN. GAO have any comment?
Mr. DYCKMAN. I am sorry, Mr. Horn, but we haven't looked into the issue of retroactive liability in the same degree as our sister agency.
Mr. HORN. So do you have any suggestions—here is where I am coming from. I don't have any cases in mind. I am a free agent on this.
I think I am the typical citizen that is frustrated that says, folks, why are we spending so much money on anything but cleaning up sites? How do we get the job done in some semi-rational manner and get on with it? That is really where I am coming from.
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What gets us moving ahead to clean up the sites and get the show on the road? It is as simple as that and I am open to suggestions that if GAO after immersing itself says, hey, there is another approach here you ought to be thinking about, I would welcome it.
Mr. DYCKMAN. I have thought about this issue because about 6 years ago, I was in charge of the GAO's reviews of Superfund. I moved on to something else in GAO and have recently gone back auditing environmental programs.
The issues weren't that dissimilar in the 1988–1989 time period when stakeholders, insurance companies in particular, complained about many of these same things. We have done some reviews of transactions costs, as you might know, which show that roughly one-third of the expenditures to date, based on our review of Fortune 500 companies, are spent on transaction costs and that really is unfortunate from the perspective of the taxpayer.
The intention was never to create a program with such a large amount of money—billions of dollars—going for noncleanups purposes. We haven't made progress on this issue in 15 years or so. I don't mean to sound like I am on a soapbox, but the question is where do we go from here. It is a very complex issue because you have so many cleanups in progress, you have the issue of whether to reimburse the PRPs that have already paid and you have settlements in progress.
How do you handle those? What date do you go back to in terms of deciding?
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Another option—and I don't know if CBO has looked into this—is creating a none-retroactive liability for any new PRPs that come to the table. Thus disregarding what has occurred in the past. That is another option. But GAO hasn't looked at any of the options in the depth necessary to make an informed judgment. I am sorry.
Mr. HORN. Mr. Magee, as an outsider, do you have any thoughts on this?
Mr. MAGEE. Yeah. I work on quite a few industries and research centers and economics is a big driving force and they tell me if I come up with technologies that cost $100, $150 to $200 a ton, they are not interested. They can't afford those kind of technologies.
When I can bring in technological approaches that start getting me under $50 a ton down to $30 a ton, their interest picks up. There is a greater motivation.
I don't in any way want to underestimate these other issues and obviously I bring the technological hat to the table. But, frankly, we don't have a lot of cost-effective technologies that we can use. And the number of sites that have been cleaned up, we have gotten some closure, we use simple things like the soil vapor extraction which is the cheapest of all the technologies. It is a great technology. It has very, very limited application, however.
Where the challenge is where you get the economics down on some of these technologies or come up with ways, then I believe you are going to go ahead and do it. It is one for the Federal Government to spend $800 a ton to do in situ vitrification of radioactive waste at Hanford, but there are not too many industries or the Nation can't be doing a lot of $800 a ton remediation.
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We have got technologies. We have got a technology that can clean up any, I believe, almost every problem you have. I just don't think the Nation can afford to pay the price for those technologies.
Mr. BOEHLERT. Thank you, Mr. Horn.
I want to commend all three of you because you have very skillfully fielded questions from the panel—from our side. We are trying very hard to help get you to help us establish policy and you are sticking to the numbers.
So you do that with a great degree of skill. It is like Shakespeare, retroactive liability, to be or not to be, and we are looking for someone who can come before us and say yeah, you should do it for the following reasons or no, you shouldn't do it for the following reasons without a vested interest and it is—it is tough.
Mr. Borski and I have some real reservations about retroactive liability being repealed because, quite frankly, we don't see how you would pay for a program and coin it at the level where you have to continue it to do what I think the American people want us to do and I don't see anybody marching over here from the Ways and Means Committee volunteering to raise a whole bunch of new taxes to pay for the program.
So it is a very, very difficult question to deal with. And we are sort of disappointed that you haven't got all the magic answers for us. Let's proceed.
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Dr. Acton, you conclude that if Congress repeals retroactive liability there could be a funding shortfall as high as $1.6 billion annually with a 1987 retroactive liability repeal date. That is your high end number.
What is your low end number?
Mr. ACTON. The low-end number might be as low as $800 million a year, which would arise from the more favorable circumstances of zero cost growth and very limited investigation of illegal activities in the past. Beyond that, of course, if you addressed remedy selection or adjusted the pace of the program, conceivably the cost could be even lower.
Mr. BEIDER. That $800 million figure is—
Mr. BOEHLERT. Put the mike closer.
Mr. BEIDER. Sorry. That $800 million figure is for a 1981 cutoff. The lowest we go at this point for a 1987 cutoff would be $1 billion per year.
Mr. BOEHLERT. What is it? One more time?
Mr. BEIDER. One billion dollars per year.
Mr. BOEHLERT. Okay, fine. In your statement, Dr. Acton, you estimate approximately 55 percent of the Superfund budget in 1994 went to direct cleanup.
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On the other hand, EPA claims that 70 percent of the trust fund appropriations goes to cleanup. Can you explain that discrepancy?
Mr. ACTON. We are probably just noting different elements drawn from the same budget data. I think EPA is including some of the oversight and general support and administration that is associated with the program.
I certainly do not want to suggest that you can run a Superfund program without any central office, without the building in which people exist and without some oversight of private party cleanups, and that is probably the basic source of difference between the two sets of numbers. EPA may also be including some of its research and development and some investigation costs.
Mr. BOEHLERT. Dr. Magee.
Mr. MAGEE. Let me just add under that investigation cost I think it is important, if you look at a lot of the cost, site characterization is a big cost in this program. And it is a big cost for two reasons. The cost of doing the field sampling sent into the laboratories kind of cold where you think they are getting data back that may not be representative or you may have hot spots or cold spots going back the second and third time.
That is a big cost to this problem. And it is also a bigger cost if you don't take enough data and you pick a remediation technology based on data that incorrectly characterizes the site and that is why we have targeted that. If you read any of the reports, you see what is being spent as a key area to make an impact in this overall program, better ability to characterize, do field measurements, rapid field measurements to characterize sites both during the remediation stage and also during the investigation stage.
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Mr. BOEHLERT. Mr. Dyckman, you are not going to be off the hook. Let me ask you this. Based on the data you have collected thus far, would cleanup costs significantly decrease if cleanup standards and remedies were based solely on site-specific risk assessment?
Mr. DYCKMAN. They would decrease but I have trouble with the word ''significant'' because I don't have the exact figures. We know that cleaning up to the levels of ARARs requires more stringent cleanups, and a more stringent cleanup generally means a more expensive cleanup.
EPA itself has testified that if you did away with the ''revelant and appropriate'' part of ARARs and adopted other reforms, such as narrowing the preference for treatment to ''hot spots'', you could reduce cleanup costs between 19 and 25 percent a year and save private parties $400 million a year.
We haven't evaluated or audited those figures but EPA officials themselves have cited them in testimony. So the answer is, yes, there would be a reduction in the cost. The exact amount is unknown.
Mr. BOEHLERT. You are no doubt familiar with a recent report from Brattle, Brattle, IRRI, and its cost savings from remedy reforms and that report concludes that remedy reforms and eliminating the preference for treatment and the requirement to meet ARARs, and taking into account future land use, will result in a 35 percent savings.
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Is this consistent with the results of your study?
Mr. DYCKMAN. I can't say it is consistent because our study didn't look at cost savings. It is in the right direction.
Again, I don't mean to be elusive, but I really don't have a basis for determining the accuracy of the figure. The cost would go down. Exactly how much, depends on the type of model and the assumptions that are used. We haven't evaluated that study.
Mr. BOEHLERT. Dr. Beider.
Mr. ACTON. Without meaning to quibble with our GAO colleagues here. I would like to offer two thoughts for the subcommittee's deliberations.
We should distinguish risk assessment as a methodology from the level of risk that is selected or a criterion for cleanup. One could adopt a risk-based method of selecting remedies with such extremely high standards that it would result in a more expensive program than the one we have today. I do not suggest that simply as an academic exercise.
As our ability to measure particles in smaller and smaller quantities increases, it is possible to lower arbitrarily the amount of residual that we are willing to tolerate. So let us be careful to distinguish between mandating risk assessment while maintaining the prevailing standards and mandating risk assessment while also introducing some benefit/cost considerations.
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That is the main thought I wanted to add.
Mr. BEIDER. Mr. Chairman, I have begun to read the BRATTLE study but have not finished it yet. It looks like a solid piece of work as far as I can tell at this point. However, I would like to offer a comment on it that Kate Probst made to me earlier in the hearing today. She said that it appeared to her that the cases analyzed by the group in that study tended to be smaller, less expensive cleanups than the average cleanup handled under Superfund. Because a disproportionate amount of the Superfund dollars are going to a few very expensive cleanups, it would be important to know whether the study's results would hold equally well for the larger cleanups before trying to extrapolate those results to the full National Priorities List.
Mr. BOEHLERT. Thank you, and thank all of you very much. We are sort of—you are sort of saved by the bell as there is now another call to the House. We will go over and be over there for a while.
I thank you very much for your outstanding testimony. I hope you will be prepared to field any questions we might be submitting in writing and respond, if you will, in a timely manner. Very serious business we are about and we always welcome all the expert advice we can get.
Once again, thank you all very much.
The next hearing of the committee will be Tuesday, the 27th of June when we will have the Administrator of EPA, Carol Browner, and other representatives of other Federal agencies, same room, 10:00—9:30?—10:00. This hearing is adjourned.
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[Whereupon, at 2:15 p.m., the subcommittee was adjourned.]
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