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STATEMENT OF CAROL M. BROWNER

STATEMENT OF
CAROL M. BROWNER
ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE
SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT
OF THE
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
U.S. HOUSE OF REPRESENTATIVES

May 12, 1999

INTRODUCTION

Good morning Mr. Chairman, and Members of the Subcommittee. I am pleased to have this opportunity to appear before you to discuss H.R. 1300, the "Recycle America's Land Act of 1999," as well as the Agency's record of accomplishments over the past several years in fundamentally improving the Superfund program.

Before addressing the bill or the successes of the current Superfund program, I believe it is important to recognize, from the outset, Superfund's mission. Superfund is an important, and above all, necessary program, dedicated to cleaning up our nation's hazardous waste sites, including those caused by the Federal government, and protecting public health and the environment for citizens no matter where they live in our country. EPA has worked closely with the Agency for Toxic Substances and Disease Registry (ATSDR) in evaluating the impacts of these sites on public health. Superfund site impacts are real. ATSDR studies show a variety of health effects that are associated with some Superfund sites, including birth defects, reductions in birth weight, changes in pulmonary function, changes in neurobehavorial function, infertility and changes in blood cells that are associated with chronic lymphocytic leukemia. EPA also works with other federal agencies to assess the significant adverse impacts Superfund sites have had on natural resources and the environment. Together, the efforts of these agencies, working with EPA, provide the basis for targeting cleanups to protect public health and the environment, and show the need for Superfund.

SUPERFUND PROGRESS

The Superfund program is making significant progress in cleaning up hazardous waste sites and protecting public health and the environment. EPA has significantly changed how the Superfund program operates through three rounds of administrative reforms which have made Superfund a fairer, more effective, and more efficient program. EPA has made considerable progress in cleaning up sites on the National Priorities List (NPL). The Agency has gone from cleaning up 65 sites per year to cleaning up 85 sites per year. As of March 17,1999, 90% of the sites on the final NPL are either undergoing cleanup construction (remedial or removal) or are completed:

By the end of the 106th Congress EPA will have completed construction of all cleanup remedies at approximately 61% of all non-Federal sites currently on the NPL.

In addition, approximately 990 NPL sites have final cleanup plans approved, and approximately 5,600 removal actions have been taken at hazardous waste sites to stabilize dangerous situations and immediately reduce the threat to public health and the environment. Almost 31,000 sites have been removed from the Superfund inventory of potentially hazardous waste sites to help promote the economic redevelopment of these properties.

INCREASING THE PACE OF CLEANUPS

The Superfund program is making significant progress in accelerating the pace of clean up while ensuring protection of public health and the environment. Our analyses clearly show that Superfund cleanup durations have been reduced approximately 20%, or two years on the average. Almost three times as many Superfund sites have had construction completed in the past six years than in all of the prior years of the program combined. In fact, in large part because of our administrative reforms, EPA will have completed construction at more than 85% of the sites on the current NPL by 2005.

The accelerated pace of cleanup is demonstrable. In only two years, FY 1997 and 1998, EPA completed construction at 175 sites -- more than during the first 12 years program (149 sites).

PRIVATE PARTY FUNDING

EPA's "Enforcement First" strategy has resulted in responsible parties performing or paying for approximately 70% of long-term cleanups, thereby conserving the Superfund Trust Fund for sites for which there are no viable or liable responsible parties. This approach has saved taxpayers more than $15.5 billion to date -- more than $13 billion in response settlements, and nearly $2.5 billion in cost recovery settlements.

PROTECTING HUMAN HEALTH AND THE ENVIRONMENT

The accomplishments in protecting human health and the environment are significant. Environmental indicators show that the Superfund program continues making progress in hazardous waste cleanup, reducing both ecological and human health risks posed by dangerous chemicals in the air, soil, and water. The Superfund program has cleaned over 132 million cubic yards of hazardous soil, solid waste and sediment and over 341 billion gallons of hazardous liquid-based waste, groundwater, and surface water. In addition, the program has supplied over 350,000 people at NPL and non-NPL sites with alternative water supplies in order to protect them from contaminated groundwater and surface water.

ADMINISTRATIVE REFORMS

Through the commitment of EPA, State, and Tribal site managers, other Federal agencies, private sector representatives, and involved communities, EPA has made Superfund faster, fairer, and more efficient through three rounds of administrative reforms. Several years of stakeholder response indicates that EPA's Superfund Reforms have already addressed the primary areas of the program that they believe needed improvement. EPA remains committed to fully implementing the administrative reforms and refining or improving them where necessary. EPA will be releasing its Annual Report on the status of Administrative Reforms for fiscal year (FY) 1998 within the next several weeks. Below are some of the highlights from the 1998 Annual Report.

REMEDY REVIEW BOARD

EPA's National Remedy Review Board (the Board) is continuing its targeted review of complex and high-cost cleanup plans, prior to final remedy selection, without delaying the overall pace of cleanup. Since the Board's inception in October 1995, it has reviewed a total of 33 site cleanup decisions, resulting in estimated cost savings of approximately $43 million.

UPDATING REMEDY DECISIONS

In addition to the work of the Board, EPA has achieved great success in updating cleanup decisions made in the early years of the Superfund program to accommodate changing science and technology. In fact, the Updating Remedy Decisions reform is one of EPA's most successful reforms, based on its frequent use and the amount of money saved. After three years of implementation, more than $1 billion in future cost reductions are estimated as a result of the Agency's review and update of remedies at more than 200 sites. It is important to stress that the future cost reductions described above can be achieved without sacrificing the protection of public health and the current pace of the program.

REMEDY SELECTION

The Superfund program is selecting remedies that require treatment in fewer instances, focusing on treatment of toxic hot spots. Even within the current statutory framework providing for a preference for treatment of waste and permanent solutions to the maximum extent practicable, costs of cleanups are decreasing dramatically because of a number of factors, including: the use of presumptive remedies; the use of reasonably anticipated future land use determinations, which allow cleanups to be tailored to specific sites; the use of a phased approach to defining objectives and methods for ground water cleanups. As a result of these factors, EPA has reduced the cost of cleanup by approximately 20 percent.

PROMOTING FAIRNESSS THROUGH SETTLEMENTS

EPA has addressed the concerns of stakeholders regarding the fairness of the liability system by increasing the use of the Agency's settlement authorities. EPA has negotiated more than 400 de minimis settlements with over 18,000 small volume contributors (66% of these in the last four years), protecting these parties from expensive private contribution suits. EPA continues to use its settlement authority to remove small volume waste contributors from the liability system, responding to the burden third-party litigation can place on parties that made a very limited contribution to the pollution at a site. EPA continues to step in to prevent the big polluters from dragging untold numbers of the smallest "de micromis" contributors of waste into contribution litigation by publicly offering to any de micromis party $0 (i.e., no-cost) settlements that would provide protection from lawsuits by other PRPs. The real success of this approach is to be measured by the untold number of potential lawsuits that have been discouraged.

ORPHAN SHARE COMPENSATION

Since fiscal year 1996, EPA has offered orphan share compensation of over $145 million at 72 sites to responsible parties willing to negotiate long-term cleanup settlements. EPA will continue the process at every eligible site. Through 1998, EPA has collected and placed $399 million in 115 interest bearing special accounts for site specific future work. In addition, over $69 million in interest has accrued in these accounts. This reform ensures that monies recovered in certain settlements are directed to work at a particular site. At a number of sites, this money can make a great difference in making settlements work. In FY98, EPA set aside and then spent more than $40 million of Superfund response money in new settlements for mixed work or mixed funding.

OTHER SUPERFUND PROGRAM ACCOMPLISHMENTS

STATES

EPA continues to work with States and Indian tribes as key partners in the cleanup of Superfund hazardous waste sites. EPA is continuing to increase the number of sites where States and Tribes are taking a lead role in assessment and cleanup using the appropriate mechanisms under the current law. With the May 1998 release of the "Plan to Enhance the Role of States and Tribes in the Superfund Program," the Superfund program is expanding opportunities for increased State and tribal involvement in the program. Fourteen pilot projects with States and Tribes have been initiated through this plan.

COMMUNITY INVOLVEMENT

The Superfund program is committed to involving citizens in the site cleanup process. EPA strives to create an open decision-making process to clean up sites that fully involves the communities, provides the community timely information, and improves the community's understanding of the potential health risks at hazardous waste sites. This is accomplished through outreach efforts, such as holding public meetings and distributing site-specific fact sheets. It has been enhanced through the successful implementation of reforms such as our EPA Regional Ombudsmen who continue to serve as a direct point of contact for stakeholders to address their concerns at Superfund sites, our Internet pages which continue to provide information to our varied stakeholders on issues related to both cleanup and enforcement, as well as our Technical Assistance Grants (TAGs), Community Advisory Groups (CAGs), Restoration Advisory Boards (RABs) and Site-specific Advisory Boards (SSABs).

The TAG program provides eligible community groups with financial assistance to hire technical consultants to assist them in understanding the problems and potential solutions to the contamination problems. EPA has awarded 202 TAGs to various groups since the program's inception in 1988. The Agency plans to publish revisions to the TAG regulation in the Spring of 1999 intended to further simplify the TAG program.

The CAG serves as a public forum for representatives of diverse community interests to present and discuss their needs and concerns related to the Superfund site with Federal, State, Tribal and local government officials. The number of sites with CAGs increased by over 50 percent before the CAG program was officially taken out of the pilot stage. In FY98, 14 new CAGs were created at non-federal facility sites, bringing the total to 47.

COMMUNITY INVOLVEMENT AT FEDERAL FACILITIES

The Superfund Federal facilities response program recognizes that meaningful public participation is dependent on the various stakeholder groups having the capacity to participate effectively. The program has entered into partnerships and awarded cooperative agreement grants to State, local, tribal associations, and community based organizations. The grants focus on training for impacted communities, participation of citizens on advisory boards, access to information and implementation of the Federal Facility Environmental Restoration Dialogue Committee (FFERDC) principles. These grants offer the opportunity to leverage precious resources, build trust and reach a wider audience.

The Superfund Federal facilities response program is a strong proponent of involving communities in the restoration decision- making process and recognizes that input from Restoration Advisory Boards (RAB) and Site-Specific Advisory Boards (SSAB) has been essential to making response decisions and, in some cases, reducing costs. Increasing community involvement, Restoration Advisory Board/Site-Specific Advisory Board support (RAB/SSAB) and partnering with states, tribes and other stakeholders is a high priority activity for FFRRO. There are over 300 RABs and 12 SSABs throughout the country.

REVITALIZING AMERICA'S LAND

BROWNFIELDS

EPA not only cleans up toxic waste sites through the Superfund program but also helps communities clean up and develop less contaminated brownfields sites. The Brownfields Initiative plays a key role in the Administration's goal of building strong and healthy communities for the 21st century. The Initiative represents a comprehensive approach to empowering States, local governments, communities, and other stakeholders interested in environmental cleanup and economic redevelopment to work together to prevent, assess, safely clean up, and sustainably reuse brownfields. Brownfields are abandoned, idled, or under-used industrial and commercial properties where expansion or redevelopment is complicated by real or perceived contamination. Brownfields sites exist in this country, affecting virtually every community in the nation.

The General Accounting Office has estimated that there are over 450,000 brownfields properties across America. The Administration believes strongly that environmental protection and economic progress are inextricably linked. Rather than separate the challenges facing these communities, our brownfields initiative seeks to bring all parties to the table -- and to provide a framework for them to seek common ground on the whole range of challenges: environmental, economic, legal and financial. The EPA brownfields pilot grants are forming the basis for new and more effective partnerships. In many cases, city government environmental specialists are sitting down together with the city's economic development experts for the first time. Others are joining in -- businesses, local residents, community activists.

BROWNFIELDS ASSESSMENT PILOTS

The Brownfields Assessment Pilots form a major component of the Brownfields Initiative since its announcement in a little more than 4 years ago. Since that time, significant environmental results had already been achieved. The Agency has selected 250 assessment pilots funded at up to $200,000 to local communities across the Nation to chart their own course towards revitalization. These pilots are seen as catalysts for change in local communities, and often spur community involvement in local land use decision-making. These pilots, along with targeted state and EPA efforts, resulted in the assessment of 398 brownfields properties, cleanup of 71 properties, redevelopment of 38 properties, and a determination that 273 properties did not need additional cleanup.

REVOLVING LOAN FUNDS

We are also building on another aspect of our program which began in 1997. This program will award a "second-stage" type of brownfields pilot. Those pilots known as the Brownfields Cleanup Revolving Loan Fund (BCRLF) Pilots are designed to enable eligible States, cities, towns and counties, Territories, and Indian Tribes to capitalize revolving loan funds to safely cleanup and sustainably reuse brownfields. EPA's goal is to select BCRLF pilots that will serve as models for other communities across the nation. In the 1997 fiscal year, EPA's budget for brownfields included $10 million to capitalize BCRLFs. That early first round of BCRLF pilots is maturing. Twenty-three (23) pilots are now in various stages of development. This year we are planning to make a second round of BCRLF pilot awards. We have determined that these new pilots would benefit from an increased capitalization and we are planning to fund approximately 63 new pilots in fiscal year 1999 at up to $500,000 each. The application deadline recently closed on March 8, 1999, and we will be considering these applications in regional panel and Headquarters evaluations and reviews. The Agency anticipates announcement of the award of these new pilots by June. Pilot applicants are being asked to demonstrate evidence of a need for cleanup funds, ability to manage a revolving loan fund, ability to ensure adequate cleanups, and a commitment to creative leveraging of EPA funds with public-private partnerships and matching funds/in-kind services.

SHOWCASE COMMUNITIES

The Brownfields Showcase Communities project is another component of the Brownfields Initiative. It represents a multi-faceted partnership among federal agencies to demonstrate the benefits of coordinated and collaborative activity on brownfields in 16 Brownfields Showcase Communities. The designated Showcase Communities are distributed across the country and vary in size, resources, and community type.

JOB TRAINING

To help local citizens take advantage of the new jobs created by assessment and cleanup of brownfields, EPA began another demonstration pilot program - the Brownfields Job Training and Development Demonstration Pilot program in 1998. Last year we awarded 11 pilots to applicants located within or near one of our assessment pilot communities. Colleges, universities, non-profit training centers, and community job training organizations, as well as states, Tribes and communities were eligible to apply. This year we are planning to award an additional 10 pilots.

The Brownfields Initiative has also generated significant economic benefit for communities across America. By the end of fiscal year 1998, 410 cleanup jobs and 2,110 other jobs had been created as a result of the program. Pilot communities had already reported a leveraged economic impact of over $1.1 billion.

RECYCLING SUPERFUND SITES

Contaminated sites may be an economic drain on local economies, can lower property values, and can act as a disincentive for new industries to move into communities. Once cleaned up, many Superfund sites have gone on to new, productive, and economically beneficial reuse. We believe that there are opportunities for many such sites. While some sites are not suitable for unrestricted reuse, many can be "recycled." Many NPL sites are valuable properties -- they reside near waterways, railroads or major transportation routes. They are in parts of town ready for redevelopment.

A logical outgrowth of the Brownfields redevelopment work is an increased emphasis on the reuse of Superfund sites. Recycled Superfund sites may be redeveloped for a variety of uses, including commercial/industrial, recreational, and ecological projects. Sites are being cleaned up across the Nation. Major redevelopment and reuse is occurring.

Successful reuse is being demonstrated at the Industriplex site, in Woburn, Massachusetts. Through a private/public partnership this site will become a regional transportation center with over 200,000 square feet of retail space and potentially over 750,000 square feet of hotel and office space. An open land and wetlands preserve will also be created as a part of the "recycling" of this site. Another example of reuse at Superfund sites is the Anaconda Smelter NPL site, in Anaconda, Montana, which has become the Old Works Golf Course, a world-class Jack Nicklaus golf course. At other Superfund sites, major national corporations, including Netscape, Target stores, Home Depot stores and McDonalds, have established businesses. Sites have been redeveloped into athletic fields, community parks and wetland and habitat preserves as well.

Preliminary analyses indicate that more than 150 sites are in actual or planned reuse, supporting thousands of jobs and generating revenue for States and local communities and creating thousands of acres of new recreational and ecological green space. EPA continues to make strides in spurring the beneficial reuse of Superfund sites.

BARRIERS TO REUSE

At some sites, the potential threat of CERCLA liability may in some circumstances be a barrier to the reuse of contaminated sites. EPA is continuing its efforts to negotiate prospective purchaser agreements and issue comfort/status letters in order to clarify CERCLA liability at sites and facilitate reuse of contaminated properties. Through FY98, EPA has entered into 85 Prospective Purchaser Agreements (PPAs) to facilitate beneficial reuse and has also issued over 250 comfort/status letters in order to clarify Federal Superfund interest in sites.

In the summer and fall of 1998, EPA undertook a survey effort to gather information on the impacts of the PPA process. Preliminary survey data (for PPAs completed through June 1998) indicate that redevelopment projects cover over 1252 acres, or 80% of the property secured through PPAs. EPA regional personnel estimate that nearly 1600 short-term jobs (e.g., construction) and over 1700 permanent jobs have resulted from redevelopment projects associated with PPAs. An estimated $2.6 million in local tax revenue for communities nationwide have resulted from these projects. In addition, EPA regional staff estimate that PPAs have resulted in the purchase of over 1500 acres of contaminated property and have spurred redevelopment of hundreds of thousands of adjacent acres.

FEDERAL FACILITY REDEVELOPMENT

Through EPA's Base Realignment and Closure (BRAC) program over 850 base closure documents have been reviewed at 108 major closing military bases. These BRAC documents articulate the environmental suitability of the property for lease or transfer.

Wurtsmith Air Force Base, located on more than 5,000 acres in northeast Michigan, stood ready for more than 70 years to support strategic bombing operations worldwide. In this capacity, the base managed supplies of aircraft fuel, mechanical cleansers, solvents, and paints, some leaked into the soil and subsequently the groundwater.

The decision to close the base was made in 1993. A Base Closure Team (BCT), consisting of representatives from EPA, the Air Force, and the Michigan Department of Environmental Quality was formed to clean up the site. In an effort to expedite cleanup and minimize cost, an innovative technology, in situ enhanced bioremediation, was implemented to treat the contaminated groundwater. Using this innovative technology, the BCT shaved more than $500,000 and four years off the original cleanup estimate of $1.5 million and 10 years.

To enhance economic redevelopment, the BCT focused its attention on reuse options for the base. Working with the Northeast Michigan Community Service Agency, the BCT enabled approximately 150 low-income families to move into base structures, which replaced substandard housing in six counties. The BCT earned national recognition for this unique reuse plan.

REAUTHORIZATION

The success of EPA's administrative reforms and the resulting improvements in the Superfund program have fundamentally altered the need for Superfund reauthorization legislation. In the 103rd Congress, the Clinton Administration proposed a five-year reauthorization of Superfund that reflected program needs at that point in time. When Congress did not pass Superfund legislation, EPA implemented a series of reforms administratively. Accordingly, the legislative provisions proposed by the Administration in the 103rd Congress are now very out of date, and the five-year authorization period that would have been provided in that bill has now ended. Many of the provisions in that bill, and in subsequent Superfund reform bills, were designed to fix problems that have been addressed through the Superfund Administrative Reforms. As the result of the progress made in cleaning up Superfund sites in recent years, and the program improvements resulting from administrative reforms, there is no longer a need for comprehensive legislation. Comprehensive legislation could actually delay clean ups, create uncertainty and litigation, and undermine the current progress of the program.

Legislation to support the President's Budget is needed to reinstate the Superfund taxes, and provide EPA with access to mandatory spending. As part of Superfund reauthorization, the Administration would support targeted liability relief for qualified parties that builds upon the current success of the Superfund pro

EXPIRATION OF TAX

The Superfund tax authority expired December 31, 1995. The President's fiscal year (FY) 2000 Budget requests reinstatement of all Superfund taxes (including excise taxes on petroleum and chemicals, and a corporate environmental tax). The Trust Fund balance (unappropriated balance) was roughly $2.1 billion at the end of fiscal year 1998. The Trust Fund balance will be approximately $1.3 billion at the end fiscal year 1999.

H.R. 1300 - THE RECYCLE AMERICA'S LAND ACT

The Administration has reviewed H.R. 1300. While I was pleased to see that improvements have been made since the introduction of H.R.2727 last year, the Administration strongly opposes H.R. 1300 in its current form. Superfund legislation should be narrowly targeted and build upon the success of Superfund Administrative Reforms. Legislation should focus on provisions that have generated a broad consensus. Unfortunately, significant provisions in H.R. 1300 lack this consensus.

REMEDIES LESS PROTECTIVE

In general, provisions in the bill's remedy title represent some movement from previous bills towards the Administration's position that the existing program is working well. Unfortunately, H.R. 1300's remedy title weakens current law and could result in a Superfund program that would not adequately protect human health and the environment.

GROUNDWATER NOT PROTECTED

Contaminated ground water is a problem at more than 85 percent of Superfund sites. With roughly fifty percent of the U.S. population relying on ground water for their drinking water, the Administration strongly believes that this critical resource must be protected. The citizens of this nation want and deserve a safe and reliable supply of water for drinking and household use, industry and agriculture, recreation, and many other beneficial uses, and to know that they will continue to have such a supply available for future generations.

H.R. 1300 replaces the current Superfund program goal to restore contaminated ground water to beneficial uses, wherever practicable, with a much lower standard. Under H.R. 1300, there is no requirement to clean up ground water to beneficial use. Further, remedies selected under H.R. 1300 would not keep contaminated ground water from spreading to uncontaminated ground water. By including the term "reasonable point of compliance," the bill invites disputes over whether drinking water standards should be met in the groundwater or at the tap -- potentially delaying cleanup and leaving valuable groundwater resources unprotected. Superfund legislation should not weaken the goal of restoring ground water to beneficial uses, wherever practicable.

Under the current program, EPA is using "smart" ground water remediation to provide appropriate levels of protection at lower cost. In the early days of the program, we relied almost solely on extraction and treatment of ground water to achieve cleanup objectives. In 1995, 60% of our ground water cleanup decisions reflect extraction and treatment being used in conjunction with other techniques, such as bioremediation, underground treatment walls, or monitored natural attenuation, which is often used to reduce low levels of contaminants. In 1995, about 25% of Superfund ground water remedies included monitored natural attenuation of contamination.

OVEREMPHASIS ON COST AT EXPENSE OF LONG TERM PROTECTION

Superfund cleanups must be protective of human health and the environment over the long term. H.R. 1300 would weaken this goal by an over emphasis on cost considerations. The bill adds to the mandate in current law for "cost-effective" remedies a new requirement to balance the "reasonableness of the cost of the remedy" when evaluating remedial alternatives, evaluate "risk reduction benefits" for each alternative and applies a weaker preference for treatment to source materials while removing the preference for treatment for groundwater remedies. While EPA supports the selection of cost effective remedies, these provisions when taken together, inappropriately elevate the role of cost over human health and environmental protection, thereby decreasing the current emphasis on long-term protection. The bill could drive cleanup decisions toward containment remedies and less treatment, particularly of groundwater. H.R. 1300 could result in less long term protection of human health and the environment, and less productive reuse of Superfund sites.

UNENFORCEABLE INSTITUTIONAL CONTROLS

H.R. 1300 jeopardizes protection of human health and the environment by allowing the use of unenforceable institutional controls. Under H.R. 1300, institutional controls are enforceable only when a "significant portion" of the protectiveness of the remedy is based on institutional controls and the enforcement of easements is conducted under CERCLA section 106. H.R.1300 also prevents EPA from requiring new site owners to comply with institutional controls established for the site by exempting current owners as "innocent parties."

CLEANUPS MAY BE DELAYED

Under H.R. 1300 new and confusing provisions and terminology regarding ground water, risk assessment, treatment, beneficial use, and cost will delay cleanups and generate costly new litigation. For example, new risk assessment terms and requirements may require EPA, States, and contractors to change the way a Superfund cleanup remedy is chosen. New risk provisions requiring consideration of information, regardless of reliability or quantity and quality (representativeness), is unnecessary and will delay remedy selection decisions.

New terminology could also cause time consuming and costly litigation as the meaning and relevance of new terms are fought over in the courts. For example, defining when data is "reasonably obtainable" would be debated and litigated, leading to delayed cleanups.

H.R. 1300 prevents EPA from ordering an owner to clean up a non-NPL site that is being cleaned up under a State voluntary cleanup program even when EPA has determined that the site presents an "imminent and substantial endangerment" to public health. The bill creates an unprecedented hurdle before EPA can order a cleanup, requiring a demonstration of "immediate risk" or a request from a state. "Immediate risk" is a new standard that appears in no other major environmental statute. In fact, the "imminent and substantial endangerment" standard now in CERCLA is the same standard that is used in RCRA, SDWA, CAA, and CWA.

THE LIABILITY PROVISIONS WILL INCREASE LITIGATION AND EXEMPT MANY PARTIES WHO SHOULD PAY FOR CLEANUP

The Administration is encouraged by some of the changes you have made in the liability area since introducing H.R. 2727 in the 105th Congress. Unfortunately, the liability provisions in H.R. 1300 remain unacceptable, requiring judicially supervised allocations at many sites where they are unwarranted, and significantly increasing transaction costs. In addition, while H.R. 1300 attempts to address the need for limitations on liability for prospective purchasers, innocent landowners and contiguous property owners, H.R. 1300 goes beyond these needed reforms and includes a number of overly broad liability exemptions which may result in the transfer of responsibility for large cleanups to the Trust Fund. Thus, H.R. 1300 will increase transaction costs and litigation, and will exempt many parties who should help pay for the costs of cleanup.

H.R. 1300 WOULD REQUIRE COSTLY TIME CONSUMING ALLOCATIONS, DIVERTING RESOURCES FROM CLEANUP

Lessons learned from EPA allocation pilots have shown that prescriptive, mandatory allocations can prevent reaching timely settlements. The Administration recognizes that changes have been made to the prescriptive nature of the allocations process in H.R. 2727, however, the allocation process in H.R. 1300 remains overly burdensome. In addition, because of the broad nature of eligible sites and the fact that each allocation requires EPA to file a judicial action to initiate the process, significant resources, both administrative and judicial, will be necessary to implement the requirements of H.R. 1300.

Of greatest concern is the structure of allocations, which requires EPA to file a judicial cost recovery action to initiate the process. We believe the requirement to sue parties is completely contrary to the concept of using allocations to promote settlements and avoid litigation. In addition, this requirement undermines the current bar on pre-enforcement review, which allows EPA to focus its efforts on cleanups, instead of first litigating its remedy decisions. By forcing the government to initiate cost recovery actions to begin the allocation process, H.R. 1300 allows parties to argue remedy issues before a court prior to settlement, which would significantly delay cleanups. In order to avoid such cleanup delays, EPA would have to forego settlement and fully perform the response action before initiating cost recovery, placing a serious drain on Superfund Trust Fund resources. In addition to the problems with pre-enforcement review, it is unclear who EPA would be required to name as defendants in cost recovery suits. EPA may have to sue all parties, including de minimis, de micromis, or even exempt parties for the allocator to determine all shares of liability. EPA has long sought to protect these parties from costly and time consuming information requests and a lengthy allocations process.

Because the language of H.R. 1300 provides for an allocation for eligible "response actions" expected to cost in excess of $2 million, many sites will require multiple allocations. Sites with large removal response actions may require an allocation for the removal, as well as a later allocation for the remedial response. Since the Remedial Investigation/Feasibility Study (RI/FS) is also a response action, sites with large, complex RI/FS work, could yield additional mandatory allocations. These multiple allocations would likely involve disputes among the same parties arguing over the same issues. For example, after years of negotiations over Operable Unit 1 between EPA and 18 PRPs at the York Oil Superfund Site in Franklin County, NY that settled over $20 million in cleanup and past costs, a mandatory allocation for the second Operable Unit, valued at about $4 million, could undermine all of EPA and the parties' efforts to settle this site.

H.R. 1300 attempts to address the Administration's concerns over reopening existing Superfund settlements and orders. However, we are uncertain whether the language as written meets this intended purpose. We believe that in cases where an allocation may be required and a party has entered into a prior settlement for other response actions at the site, those parties may have an opportunity to argue before the allocator that their previous settlements were in excess of their share and request a "rebate" or adjustment in the settlement subject to the allocation based on the prior settlement amount. This could result in a de facto reopening of prior settlements.

In addition, H.R. 1300 would require allocations at numerous other sites where an allocation is simply not necessary. For example, under H.R. 1300, even where the majority of parties at a site agree to settle without an allocation, an allocation would be required unless there is a private allocation that resolves all parties' shares and eliminates contribution litigation. Thus, a single party can force the overwhelming majority of cooperating PRPs at a site into an allocation.

The bill has no limitation on the types of response actions covered by allocations. Allocations would be required at owner/operator only sites, or even at sites with just one viable party. The requirement for an allocation at owner/operator sites could amount to a windfall for these parties at an enormous cost to the Superfund Trust Fund. At many of these sites, the owner acquired the property at a reduced purchase price to reflect the presence of contamination at the site and with the intent to continue the same or similar operations that gave rise to the contamination. It is consistent with long-standing principles of law and not unfair to hold landowners responsible for the hazardous conditions on their property.

LIABILITY EXEMPTIONS ARE OVERBROAD AND WILL INCREASE COSTS AND LITIGATION

The Administration supports liability reform for small volume contributors and generators and transporters of household municipal solid waste. Such reform should take the form of clearly defined exemptions or limitations on liability to ensure that the transaction costs imposed on these parties is minimized. As introduced, however, H.R. 1300 will be extremely difficult to implement, will generate new litigation and will result in significant transaction costs. Further, many of the liability provisions are OVER BROAD, exempting parties that should remain responsible for the cost of cleanup.

OVERBROAD MUNICIPAL SOLID WASTE EXEMPTION

The Administration cannot support the bill's exemption for municipal solid waste (MSW) generators and transporters, which unreasonably expands the Agency's current MSW policy by exempting parties that sent wastes that are "substantially similar" to household wastes, "notwithstanding differences in volume." This language creates significant problems. First, the "notwithstanding differences in volume" language provides large volume, commercial generators and transporters of waste with a full release from liability for enormous amounts of waste. Second, the "substantially similar" language is broader than EPA's MSW policy, which refers to waste that is "essentially the same" as household waste. It will be difficult at many sites to determine whether a party sent "substantially similar" material and, at many sites, there will be time consuming and costly disputes and litigation about who's exempt and who's not. Also, highly toxic hazardous substances may be "substantially similar" to household wastes in some form or use. Thus, H.R. 1300 could exempt parties who disposed of large volumes of the most hazardous substances that created the Superfund site simply because those wastes are "substantially similar" to less toxic materials in a household waste stream.

Finally, because the exemption applies at all sites, many PRPs may view the MSW exemption as applying to sites at which there is no municipal waste at all -- such as the Fox River site in Wisconsin, where PCB-contaminated paper products, which could be argued to be "substantially similar" to household paper wastes, resulted in the contamination of the Fox River. Lengthy and expensive litigation would certainly occur over these issues.

OVERBROAD INNOCENT LANDOWNER EXEMPTION

Additional provisions threaten increased litigation and transaction costs. The new "innocent owner" provision permits any owner of a contaminated site to avoid liability if the current owner did not "cause or contribute" to the release and he exercised "appropriate care." This provision effectively replaces strict liability with a new causation and appropriate care standard. This new standard would be difficult, if not impossible, to prove because of the "toxic soup" of waste that exists at most Superfund sites. In many cases, this provision would exempt experienced and knowledgeable large parties, that acquired hazardous wastes sites with full knowledge of site conditions. In some cases, these may be the only parties available to conduct cleanups.

OVERBROAD SMALL BUSINESS EXEMPTION

The Administration is concerned with the small business exemption in H.R. 1300, particularly because the exemption is available to a small business that contributed large amounts of highly toxic wastes. While the bill does provide a limitation for conduct caused by gross negligence or intentional misconduct, this limitation is a significantly lower standard than the current standard of strict liability, and could result in costly and time consuming litigation to determine negligence.

EPA has made significant efforts to administratively address the concerns of small businesses by offering ability to pay, de minimis and de micromis settlements, as well as developing a municipal solid waste settlement policy. To date, EPA has entered into de minimis settlements with more than 18,000 parties and continues to take into consideration a party's ability-to-pay in our settlement processes. In addition, the Administration's legislative proposals for innocent landowners, prospective purchasers, contiguous property owners and small quantity generators of household MSW would provide further liability protection for parties.

OVERBROAD RECYCLING EXEMPTION

Finally, while the Administration has supported exempting parties for legitimate recycling transactions, H.R. 1300 goes too far. First, in previous legislative proposals, the allocated shares of liability attributable to recyclers were not shifted to the Superfund Trust Fund but rather were borne by other responsible parties at the site. H.R.1300 would shift the share of cleanup responsibility attributable to these parties to the Trust Fund. Second, the Administration continues to oppose exempting parties who disposed of used oil. There are fundamental differences between used oil and other materials addressed under the bill's recycling provisions. "Recycling" of used oil commonly involves the burning the oil, which leaves large volumes of heavy metals and contaminants behind.

Further, the bill's provisions extend the used oil exemption to essentially all petroleum products and could provide liability exemptions to large shipyards, ports and motor pools. Some used oil sites have been virtual pools of contamination that have been extremely harmful to the environment and difficult to clean up. Many of the parties at these Superfund sites should remain liable for the cleanup for which they are responsible. Targeted legislative provisions protecting small businesses, small volume parties, and parties with limited ability to pay should address the liability issues at these sites.

EPA's ENFORCEMENT AUTHORITY IS RESTRICTED

The Administration strongly opposes any limits on the President's CERCLA section 106 authority to issue cleanup orders, which is central to getting Superfund sites cleaned up. H.R. 1300 contains several provisions that place unacceptable restrictions on this authority. First, under H.R. 1300, EPA's authority to issue orders under section 106 would be significantly limited by the new thresholds and terms in the Voluntary Cleanup portions of H.R. 1300, such as "immediate risk" or "immediately required to prevent, limit, or mitigate an emergency."

The limited exceptions to the bar on EPA's authority unreasonably restrict our ability under current law to provide strong enforcement response to an "imminent and substantial endangerment to public health or welfare or the environment". The phrase "imminent and substantial endangerment" is a term of art in American environmental law appearing in nearly every major environmental statute including the Clean Air Act (§303), the Clean Water Act (§504), The Safe Drinking Water Act (§1431), RCRA (§7002 and 7003), and CERCLA (§106). The Administration believes that this is an appropriate and understood threshold for Federal action under all Federal environmental laws, including CERCLA. To modify this threshold in certain circumstances is unnecessary and will result in lengthy and expensive litigation over the new terms proposed in H.R.1300.

RESTRICTION ON FEDERAL CLEANUP ORDERS

H.R. 1300 also requires that EPA must demonstrate that a party is liable under section 107(a) prior to issuing any cleanup order under section 106. It is not EPA policy to issue orders to parties that it believes are not liable. However, it is possible that the actions of non-liable parties can interfere with the cleanup. It is essential that EPA retain the authority to issue all orders necessary to ensure successful implementation of the response action. If a recipient of an order is not liable, the party may obtain reimbursement from the Trust Fund. This provision of the bill would also require EPA to make complicated fact-specific determinations before requiring a party to undertake a cleanup - even in an emergency. Further, some parties might argue that disputes over the adequacy of EPA's information is "sufficient cause" to resist compliance with the cleanup orders, generating litigation and delaying cleanup.

H.R. 1300 LIMITS FEDERAL SAFETY NET

The voluntary cleanup provisions in Title 1 of H.R. 1300 do not meet the basic principle Congress relied upon to protect public health and the environment in the Superfund program: to ensure protection for all Americans wherever they live. The bill fails to set even minimal standards for the protection of public health and the environment that state cleanups must meet, while providing liability relief to anyone who is conducting or has completed a cleanup action under a state program. Since state cleanup requirements vary widely, the Administration believes it is unwise to relieve parties from federal liability without sufficient safeguards.

The Administration recognizes and supports the continued growth of State and Tribal regulatory and voluntary cleanup programs that are cleaning up hazardous waste sites. We fully support better coordination between federal agencies and the States and Tribes. EPA/State relationships in the Superfund program have evolved into flexible working partnerships that assign sites responsibilities in a mutually supportive way. Total funding provided to States by EPA typically exceeds $150 million per year. A recent GAO study report supports the position that CERCLA and a strong Federal cleanup program are important to the States --

"...a number of stakeholders, including state officials, said that a lessening of the Superfund program's more rigorous cleanup requirements or liability standards could negatively affect the State programs." -- "State Cleanup Practices" report 99-39, December 1998

Strong cleanup standards and enforcement authorities at the Federal level strengthens State programs and State activities by leveraging governmental cleanup resources. In addition, it provides concerned citizens the assurance that public health and the environment is protected by a Federal safety net --- that the polluter who helped cause the toxic waste site, is responsible for contributing to the cleanup.

EPA Memoranda of Agreement (MOA) with State voluntary cleanup programs (VCP) provide sufficient assurances to parties that, except in limited circumstances, where they are performing a cleanup under a State VCP that has a MOA with EPA, the Agency will not perform a removal or remedial action at the site. The limited circumstances where EPA may respond are clearly articulated within the MOA and are generally limited to the instance of an "imminent and substantial endangerment," where the response action under a VCP is inadequate, or when a state requests EPA's intervention.

EPA's ABILITY TO RECOVER IT'S COSTS IS RESTRICTED

H.R. 1300 inserts a new "not unnecessary" standard for cost recovery which will make it difficult, and much more costly, for EPA to recover all of its response costs at sites. This new standard will increase litigation in what is essentially, a settled area, and will, at a minimum, be extremely burdensome to the government, as well as to the courts. The new standard changes the current standard that allows EPA to recover all costs not inconsistent with the NCP to one of any costs not unnecessary and not inconsistent with the NCP. This change would allow courts to second-guess EPA's judgment as to each individual cost flowing from the implementation of a properly selected remedy.

Finally, the Administration is concerned with additional provisions of the liability title in H.R. 1300, including, but not limited to, the inclusion of special interest exemptions for "dipping vats," the unitary executive provisions, and the unreasonable time limits in the expedited settlement process.

CONCLUSION

The Superfund program has been fundamentally improved through administrative reforms and is faster, fairer, and more efficient. The significant progress the Clinton Administration has achieved in protecting public health and the environment through the clean up of toxic waste sites must not be undermined by the passage of Superfund legislation based upon outdated information and ideas. EPA's administrative reforms, and the resulting Superfund cleanup progress, have eliminated the need for comprehensive Superfund legislation. We look forward to working with Congress to reinstate the Superfund taxes and enact the narrowly targeted Superfund legislation that I described in my testimony that builds upon the success of administrative reforms.

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